Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-14733 | ||
Entity Registrant Name | LITHIA MOTORS INC | ||
Entity Incorporation, State or Country Code | OR | ||
Entity Tax Identification Number | 93-0572810 | ||
Entity Address, Address Line One | 150 N. Bartlett Street, | ||
Entity Address, City or Town | Medford, | ||
Entity Address, State or Province | OR | ||
Entity Address, Postal Zip Code | 97501 | ||
City Area Code | 541 | ||
Local Phone Number | 776-6401 | ||
Title of 12(b) Security | Common stock without par value | ||
Trading Symbol | LAD | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,896,163 | ||
Entity Common Stock, Shares Outstanding | 27,338,411 | ||
Documents Incorporated by Reference | The Registrant has incorporated into Part III of Form 10-K, by reference, portions of its Proxy Statement for its 2023 Annual Meeting of Shareholders. | ||
Entity Central Index Key | 0001023128 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Portland, Oregon |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and restricted cash | $ 246.7 | $ 174.8 |
Accounts receivable, net of allowance for doubtful accounts of $3.1 and $3.7 | 813.1 | 685.5 |
Inventories, net | 3,409.4 | 2,385.5 |
Other current assets | 161.7 | 63.9 |
Total current assets | 4,630.9 | 3,309.7 |
Property and equipment, net of accumulated depreciation of $526.8 and $422.6 | 3,574.6 | 3,052.6 |
Operating lease right-of-use assets | 381.9 | 395.9 |
Finance receivables, net of allowance for estimated losses of $69.3 and $25.0 | 2,187.6 | 803.3 |
Goodwill | 1,460.7 | 977.3 |
Franchise value | 1,856.2 | 799.1 |
Other non-current assets | 914.7 | 1,809 |
Total assets | 15,006.6 | 11,146.9 |
Current liabilities: | ||
Floor plan notes payable | 627.2 | 354.2 |
Floor plan notes payable: non-trade | 1,489.4 | 835.9 |
Current maturities of long-term debt | 20.5 | 223.7 |
Trade payables | 258.4 | 235.4 |
Accrued liabilities | 782.7 | 753.6 |
Total current liabilities | 3,178.2 | 2,402.8 |
Deferred revenue | 226.7 | 191.2 |
Deferred income taxes | 286.3 | 191 |
Non-current operating lease liabilities | 346.6 | 361.7 |
Other long-term liabilities | 207.2 | 151.3 |
Total liabilities | 9,755.5 | 6,483.7 |
Redeemable non-controlling interest | 40.7 | 34 |
Equity: | ||
Preferred stock - no par value; authorized 15.0 shares; none outstanding | 0 | 0 |
Common stock - no par value; authorized 125.0 shares; issued and outstanding 27.3 and 29.5 | 1,082.1 | 1,711.6 |
Additional paid-in capital | 76.8 | 58.3 |
Accumulated other comprehensive loss | (18) | (3) |
Retained earnings | 4,065.3 | 2,859.5 |
Total stockholders’ equity - Lithia Motors, Inc. | 5,206.2 | 4,626.4 |
Non-controlling interest | 4.2 | 2.8 |
Total equity | 5,210.4 | 4,629.2 |
Total liabilities, redeemable non-controlling interest and equity | 15,006.6 | 11,146.9 |
Long-term debt excluding notes payable | ||
Current liabilities: | ||
Current maturities of long-term debt | 20.5 | 223.7 |
Long-term debt, less current maturities | 5,088.3 | 2,868.1 |
Notes payable | ||
Current liabilities: | ||
Long-term debt, less current maturities | $ 422.2 | $ 317.6 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 3.1 | $ 3.7 |
Property and equipment, accumulated depreciation | 526.8 | 422.6 |
Finance receivables, allowance for estimated losses | $ 69.3 | $ 25 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock shares authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock shares issued (in shares) | 27,300,000 | 29,500,000 |
Common stock shares outstanding (in shares) | 27,300,000 | 29,500,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Total revenues | $ 28,187.8 | $ 22,831.7 | $ 13,126.5 |
Cost of sales: | |||
Total cost of sales | 23,035.4 | 18,572.7 | 10,902.2 |
Gross profit | 5,152.4 | 4,259 | 2,224.3 |
Financing operations (loss) income | (4) | 11 | 6.5 |
Asset impairments | 0 | 1.9 | 7.9 |
Selling, general and administrative | 3,044.1 | 2,480.8 | 1,437.9 |
Depreciation and amortization | 163.2 | 124.8 | 92.3 |
Operating income | 1,941.1 | 1,662.5 | 692.7 |
Floor plan interest expense | (38.8) | (22.3) | (34.4) |
Other interest expense | (129.1) | (103.4) | (71.6) |
Other (expense) income, net | (43.2) | (52) | 61.8 |
Income before income taxes | 1,730 | 1,484.8 | 648.5 |
Income tax provision | (468.4) | (422.1) | (178.2) |
Net income | 1,261.6 | 1,062.7 | 470.3 |
Net income attributable to non-controlling interests | (4.8) | (1.7) | 0 |
Net income attributable to redeemable non-controlling interest | (5.8) | (0.9) | 0 |
Net income attributable to Lithia Motors, Inc. | $ 1,251 | $ 1,060.1 | $ 470.3 |
Basic earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.38 | $ 36.81 | $ 19.74 |
Shares used in basic per share calculations (in shares) | 28.2 | 28.8 | 23.8 |
Diluted earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.17 | $ 36.54 | $ 19.53 |
Shares used in diluted per share calculations (in shares) | 28.3 | 29 | 24.1 |
Cash dividend paid per share (in dollars per share) | $ 1.61 | $ 1.36 | $ 1.22 |
New vehicle retail | |||
Revenues: | |||
Total revenues | $ 12,894.5 | $ 11,197.7 | $ 6,773.9 |
Cost of sales: | |||
Total cost of sales | 11,314.8 | 9,979.2 | 6,313 |
Used vehicle retail | |||
Revenues: | |||
Total revenues | 9,425 | 7,255.3 | 3,998.4 |
Cost of sales: | |||
Total cost of sales | 8,599.6 | 6,428.6 | 3,552.4 |
Used vehicle wholesale | |||
Revenues: | |||
Total revenues | 1,425.2 | 957.1 | 310.9 |
Cost of sales: | |||
Total cost of sales | 1,440.6 | 913.7 | 300.2 |
Finance and insurance | |||
Revenues: | |||
Total revenues | 1,285.4 | 1,051.3 | 579.8 |
Service, body and parts | |||
Revenues: | |||
Total revenues | 2,738.8 | 2,110.9 | 1,348.7 |
Cost of sales: | |||
Total cost of sales | 1,275.8 | 1,000.4 | 631.9 |
Fleet and other | |||
Revenues: | |||
Total revenues | 418.9 | 259.4 | 114.8 |
Cost of sales: | |||
Total cost of sales | $ 404.6 | $ 250.8 | $ 104.7 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,261.6 | $ 1,062.7 | $ 470.3 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment | (16.8) | (1.1) | 0 |
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0 | 1.8 | 4.4 | (5.6) |
Total other comprehensive income (loss), net of tax | (15) | 3.3 | (5.6) |
Comprehensive income | 1,246.6 | 1,066 | 464.7 |
Comprehensive income attributable to non-controlling interest | (4.8) | (1.7) | 0 |
Comprehensive income attributable to redeemable non-controlling interest | (5.8) | (0.9) | 0 |
Comprehensive income attributable to Lithia Motors, Inc. | $ 1,236 | $ 1,063.4 | $ 464.7 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Gain (loss) on cash flow hedges, tax (expense) benefit | $ (0.7) | $ (1.6) | $ (2) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST - USD ($) $ in Millions | Total | Common stock | Common stock Class B | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Retained earnings Adjustments | Noncontrolling Interest | ||
Beginning balance at Dec. 31, 2019 | $ 1,467.7 | $ 20.5 | [1] | $ 0.1 | [1] | $ 46 | $ (0.7) | $ 1,401.8 | $ (4.8) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 11.6 | 11.6 | ||||||||
Issuance of stock in connection with employee stock plans | 13.3 | |||||||||
Class B common stock converted to class A common stock | 0.1 | (0.1) | ||||||||
Repurchase of class A common stock | (34.4) | (16.2) | ||||||||
Equity issuances, net of issuance costs | 777.1 | |||||||||
Foreign currency translation adjustment | 0 | |||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0 | (5.6) | (5.6) | ||||||||
Net income | 470.3 | 470.3 | ||||||||
Dividends paid | (29.1) | |||||||||
Ending balance at Dec. 31, 2020 | 2,661.5 | 788.2 | [1] | 0 | [1] | 41.4 | (6.3) | 1,838.2 | $ 0 | |
Redeemable non-controlling interest, ending balances at Dec. 31, 2020 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 17.8 | 16.9 | ||||||||
Issuance of stock in connection with employee stock plans | 25.9 | |||||||||
Repurchase of class A common stock | (230.7) | |||||||||
Equity issuances, net of issuance costs | 1,110.4 | |||||||||
Foreign currency translation adjustment | (1.1) | (1.1) | ||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0 | 4.4 | 4.4 | ||||||||
Net income | 1,062.7 | 1,060.1 | 1.7 | |||||||
Dividends paid | (38.8) | |||||||||
Contribution (distribution) of non-controlling interest | 1.1 | |||||||||
Ending balance at Dec. 31, 2021 | 4,629.2 | 1,711.6 | [1] | 0 | [1] | 58.3 | (3) | 2,859.5 | 2.8 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Acquired redeemable non-controlling interest | 33.1 | |||||||||
Net income attributable to redeemable non-controlling interest | 0.9 | |||||||||
Redeemable non-controlling interest, ending balances at Dec. 31, 2021 | 34 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 22.6 | 18.5 | ||||||||
Issuance of stock in connection with employee stock plans | 36.1 | |||||||||
Repurchase of class A common stock | (688.3) | |||||||||
Equity issuances, net of issuance costs | 0 | |||||||||
Foreign currency translation adjustment | (16.8) | (16.8) | ||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0 | 1.8 | 1.8 | ||||||||
Net income | 1,261.6 | 1,251 | 4.8 | |||||||
Dividends paid | (45.2) | |||||||||
Contribution (distribution) of non-controlling interest | (3.4) | |||||||||
Ending balance at Dec. 31, 2022 | 5,210.4 | $ 1,082.1 | [1] | $ 0 | [1] | $ 76.8 | $ (18) | $ 4,065.3 | $ 4.2 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Acquired redeemable non-controlling interest | 0.8 | |||||||||
Net income attributable to redeemable non-controlling interest | 5.8 | |||||||||
Redeemable non-controlling interest, ending balances at Dec. 31, 2022 | $ 40.7 | |||||||||
[1]Prior to June 7, 2021, common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred in connection with the elimination of our classified common stock structure following the conversion of all Class B common stock to Class A common stock. |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Gain (loss) on cash flow hedges, tax (expense) benefit | $ (0.7) | $ (1.6) | $ (2) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 1,261.6 | $ 1,062.7 | $ 470.3 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Asset impairments | 0 | 1.9 | 7.9 |
Depreciation and amortization | 172.7 | 127.3 | 92.4 |
Stock-based compensation | 41.1 | 34.7 | 23.2 |
Loss on redemption of senior notes | 0 | 10.3 | 0 |
Gain on disposal of other assets | (0.1) | (2.5) | (1.7) |
Net disposal gain on sale of stores | (66) | 0 | (16.6) |
Unrealized investment loss (gain) | 39.2 | 66.4 | (43.4) |
Deferred income taxes | 95.2 | 43.1 | 17.2 |
Amortization of operating lease right-of-use assets | 55.4 | 39 | 28.9 |
(Increase) decrease (net of acquisitions and dispositions): | |||
Trade receivables, net | (131.6) | (147.1) | (113.5) |
Inventories | (923) | 674.6 | 228.8 |
Finance receivables, net | (1,363) | (640.8) | (114.1) |
Other assets | (138.3) | 61 | 12.9 |
Increase (decrease) (net of acquisitions and dispositions): | |||
Floor plan notes payable | 273.3 | 116.1 | (204.1) |
Trade payables | 25.3 | 78.4 | 28.2 |
Accrued liabilities | (2.3) | 233 | 113.1 |
Other long-term liabilities and deferred revenue | 50.4 | 39.1 | 15.1 |
Net cash (used in) provided by operating activities | (610.1) | 1,797.2 | 544.6 |
Cash flows from investing activities: | |||
Notes receivable issued | 0 | 0 | (12.5) |
Principal payments received on notes receivable | 0 | 0 | 25 |
Capital expenditures | (303.1) | (260.4) | (167.8) |
Proceeds from sales of assets | 16.6 | 3.3 | 6.5 |
Cash paid for other investments | (11.8) | (10.3) | (11.2) |
Cash paid for acquisitions, net of cash acquired | (1,243.6) | (2,699.3) | (1,503.3) |
Proceeds from sales of stores | 212.1 | 76.3 | 57.5 |
Net cash used in investing activities | (1,329.8) | (2,890.4) | (1,605.8) |
Cash flows from financing activities: | |||
Borrowings (repayments) on floor plan notes payable: non-trade, net | 737.9 | (685.3) | (20.6) |
Borrowings on lines of credit | 12,160.8 | 2,830.6 | 1,825.4 |
Repayments on lines of credit | (10,137) | (2,505.2) | (1,935.4) |
Principal payments on long-term debt and finance lease liabilities, scheduled | (51.2) | (32.5) | (29.4) |
Principal payments on long-term debt and finance lease liabilities, other | (171.7) | (486.5) | (6.3) |
Proceeds from issuance of long-term debt | 113.3 | 817.4 | 606.5 |
Principal payments on non-recourse notes payable | (193.5) | (26.8) | 0 |
Proceeds from issuance of non-recourse notes payable | 298.1 | 344.4 | 0 |
Payment of debt issuance costs | (11.8) | (14.7) | (10.8) |
Proceeds from issuance of common stock | 36.1 | 1,136.2 | 790.4 |
Repurchase of common stock | (688.3) | (230.7) | (50.6) |
Dividends paid | (45.2) | (38.8) | (29.1) |
Payments of contingent consideration related to acquisitions | (7.2) | (1.4) | (0.3) |
Other financing activities | (4.4) | 0 | 0 |
Net cash provided by financing activities | 2,035.9 | 1,106.7 | 1,139.8 |
Effect of exchange rate changes on cash and restricted cash | (3) | 2.5 | 0 |
Increase in cash and restricted cash | 93 | 16 | 78.6 |
Cash and restricted cash at beginning of year | 178.5 | 162.5 | 84 |
Cash and restricted cash at end of year | 271.5 | 178.5 | 162.5 |
Reconciliation of cash and restricted cash to the consolidated balance sheets | |||
Cash | 168.1 | 153 | 160.2 |
Restricted cash from collections on auto loans receivable | 78.6 | 21.8 | 2.3 |
Cash and restricted cash | 246.7 | 174.8 | 162.5 |
Restricted cash on deposit in reserve accounts, included in other non-current assets | 24.8 | 3.7 | 0 |
Total cash and restricted cash reported in the Consolidated Statements of Cash Flows | 271.5 | 178.5 | 162.5 |
Supplemental cash flow information: | |||
Cash paid during the period for interest | 209.9 | 130.1 | 107.7 |
Cash paid during the period for income taxes, net | 449.3 | 369.1 | 135 |
Floor plan debt paid in connection with store disposals | 29.5 | 8.7 | 38.4 |
Non-cash activities: | |||
Debt issued in connection with acquisitions | 0 | 355.6 | 0 |
Contingent consideration in connection with acquisitions | 22.4 | 0.9 | 14.3 |
Debt assumed in connection with acquisitions | 0.7 | 4 | 0 |
Acquisition of finance leases in connection with acquisitions | 78.2 | 0 | 227.5 |
Right-of-use assets obtained in exchange for lease liabilities | $ 44.7 | $ 171.8 | $ 55.4 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Business We are the premier automotive retailer in North America, offering a wide selection of vehicles across global carmakers and providing a full suite of financing, leasing, repair, and maintenance options. In 2022, we were ranked 158 on the Fortune 500. As of December 31, 2022, we operated 296 locations representing 48 brands in two countries, across 28 U.S. states and three Canadian provinces. We offer vehicles through our comprehensive network of locations, e-commerce platforms, and captive finance division. Our “Growth Powered by People” strategy drives us to innovate and continuously improve the customer experience, providing consumer optionality to interact wherever, whenever, and however they desire. In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. Based on this evaluation, we reclassified Financing Operations Income for the comparative periods from the “Corporate and Other” category to conform to current year presentation and consolidated our Domestic, Import, and Luxury sections into a new Vehicle Operations segment. Basis of Presentation The accompanying Consolidated Financial Statements reflect the results of operations, the financial position and the cash flows for Lithia Motors, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Cash and Restricted Cash Cash is defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable that are restricted for repayment on borrowings on our securitization facilities before being unrestricted. Accounts Receivable Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within five • Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. Receivables are recorded at invoice and do not bear interest until they are 60 days past due. The historical losses related to these balances are immaterial.The long-term portion of accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets. See Note 2 – Accounts Receivable. Finance Receivables Finance receivables consist of auto loan and lease contracts originated through our Financing Operations, which are secured by the vehicles we sell. Interest income on finance receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. More than 98% of the portfolio is aged less than 60 days past due with less than 2% on non-accrual status. As of December 31, 2022, the allowance for credit losses related to auto loan and lease receivables was $69.3 million and was included in finance receivables, net. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and reasonable and supportable forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon the earlier of reaching 120 days past due status, the repossession of the vehicle, or the determination that the account is uncollectible. See Note 5 – Finance Receivables. Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the lower of cost (first-in, first-out) or market method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction to cost of sales as the related vehicles are sold. Parts purchase discounts that we receive from the manufacturer are reflected as a reduction in the carrying value of the parts purchased from the manufacturer and are recognized as a reduction to cost of goods sold as the related inventory is sold. See Note 3 – Inventories and Floor Plan Notes Payable. Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives on the straight-line basis. Leasehold improvements made at the inception of the lease or during the term of the lease are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years The cost for maintenance, repairs and minor renewals is expensed as incurred, while significant remodels and betterments are capitalized. In addition, interest on borrowings for major capital projects, significant remodels, and betterments is capitalized. Capitalized interest becomes a part of the cost of the depreciable asset and is depreciated according to the estimated useful lives as previously stated. For the years ended December 31, 2022, 2021 and 2020, we recorded capitalized interest of $2.6 million, $2.0 million and $1.6 million, respectively. When an asset is retired, or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is credited or charged to income from operations. Leased property meeting certain criteria are recorded as finance leases. We have finance leases for certain locations, expiring at various dates through August 1, 2037. Our finance lease right-of-use assets are included in property and equipment on our Consolidated Balance Sheets. Amortization of finance lease right-of-use assets is computed on a straight-line basis over the term of the lease, unless the lease transfers title or it contains a bargain purchase option, in which case, it is amortized over the asset’s useful life and is included in depreciation expense. Finance lease liabilities are recorded as the lesser of the estimated fair market value of the leased property or the net present value of the aggregated future minimum payments and are included in current maturities of long-term debt and long-term debt on our Consolidated Balance Sheets. Interest associated with these obligations is included in other interest expense in the Consolidated Statements of Operations. See Note 8 – Commitments and Contingencies. Long-lived assets held and used by us are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We consider several factors when evaluating whether there are indications of potential impairment related to our long-lived assets, including store profitability, overall macroeconomic factors and the impact of our strategic management decisions. If recoverability testing is performed, we evaluate assets to be held and used by comparing the carrying amount of an asset to future net undiscounted cash flows associated with the asset, including its disposition. If such assets are considered to be impaired, the amount by which the carrying amount of the assets exceeds the fair value of the assets is recognized as a charge to income from operations. See Note 4 – Property and Equipment. Goodwill Goodwill represents the excess purchase price over the fair value of net assets acquired which is not allocable to separately identifiable intangible assets. Other identifiable intangible assets, such as franchise rights, are separately recognized if the intangible asset is obtained through contractual or other legal right or if the intangible asset can be sold, transferred, licensed or exchanged. Goodwill is not amortized but tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying amount of the reporting unit more likely than not exceeds fair value. We have the option to qualitatively or quantitatively assess goodwill for impairment. We test our goodwill for impairment on October 1 of each year. In 2022, we evaluated our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment. See Note 6 – Goodwill and Franchise Value and Note 14 – Fair Value Measurements. Franchise Value We enter into agreements (franchise agreements) with our manufacturers. Franchise value represents a right received under franchise agreements with manufacturers and is identified on an individual store basis. We evaluated the useful lives of our franchise agreements based on the following factors: • certain of our franchise agreements continue indefinitely by their terms; • certain of our franchise agreements have limited terms, but are routinely renewed without substantial cost to us; • other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers terminating franchise agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time; • state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise; • we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and • as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the franchise agreements acquired with the dealerships we purchase based on the understanding and industry practice that the franchise agreements will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our franchise agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We evaluated our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise value for impairment is each individual store. We test our franchise value for impairment on October 1 of each year. In 2022, we evaluated our franchise value using a qualitative assessment process. If the qualitative factors discussed above determine that it is more likely than not that the fair value of the individual store’s franchise value exceeds the carrying amount, the franchise value is not impaired and the second step is not necessary. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying value, then a quantitative valuation of our franchise value is performed and an impairment would be recorded. See Note 6 – Goodwill and Franchise Value and Note 14 – Fair Value Measurements. Variable Interest Entities and Securitization Transactions We maintain a revolving funding program composed of warehouse facilities that we use to fund auto loans receivable originated by our Financing Operations. We use term securitizations to provide long-term funding for most of the auto loans receivable initially funded through the warehouse facilities. In these transactions, a pool of auto loans receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. The securitization trusts established in connection with asset-backed securitization transactions are variable interest entities (VIEs). We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize these term securitizations as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the non-recourse funding vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the non-recourse funding vehicles. See Note 2 – Accounts Receivable, Note 5 – Finance Receivables, and Note 9 – Credit Facilities and Long-Term Debt for additional information on auto loans receivable and non-recourse notes payable. Restricted Cash on Deposit in Reserve Accounts The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its creditors. In the event that the cash generated by the related receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities. Advertising We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Additionally, manufacturer cooperative advertising credits for qualifying, specifically-identified advertising expenditures are recognized as a reduction of advertising expense. Advertising expense and manufacturer cooperative advertising credits were as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Advertising expense, gross $ 299.9 $ 197.8 $ 121.3 Manufacturer cooperative advertising credits (46.3) (35.6) (23.9) Advertising expense, net $ 253.6 $ 162.2 $ 97.4 Contract Origination Costs Contract origination commissions paid to our employees directly related to the sale of our self-insured lifetime lube, oil and filter service contracts and auto loan receivable originations are deferred and charged to expense in proportion to the associated revenue to be recognized. Legal Costs We are a party to numerous legal proceedings arising in the normal course of business. We accrue for certain legal costs, including attorney fees and potential settlement claims related to various legal proceedings that are estimable and probable. See Note 8 – Commitments and Contingencies. Stock-Based Compensation Compensation costs associated with equity instruments exchanged for employee and director services are measured at the grant date, based on the fair value of the award. If there is a performance-based element to the award, the expense is recognized based on the estimated attainment level, estimated time to achieve the attainment level and/or the vesting period. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of non-vested stock awards is based on the closing price of our common stock on the date of grant. We account for forfeitures of stock-based awards as they occur. See Note 13 – Stock-Based Compensation. Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties are recorded as income tax provision in the period incurred or accrued when related to an uncertain tax position. See Note 15 – Income Taxes. We account for all taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction (i.e., sales, use, value-added) on a net (excluded from revenues) basis. Concentration of Risk and Uncertainties We purchase substantially all of our new vehicles and inventory from various manufacturers at the prevailing prices charged by auto manufacturers to all franchised dealers. Our overall sales could be impacted by the auto manufacturers’ inability or unwillingness to supply dealerships with an adequate supply of popular models. We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. In the event that manufacturers are unable to supply the needed level of vehicles, our financial performance may be adversely impacted. We depend on our manufacturers to deliver high-quality, defect-free vehicles. In the event that manufacturers experience future quality issues, our financial performance may be adversely impacted. We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. Our sales volume could be materially adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles. We also receive incentives and rebates from our manufacturers, including cash allowances, financing programs, discounts, holdbacks and other incentives. These incentives are recorded as accounts receivable in our Consolidated Balance Sheets until payment is received. Our financial condition could be materially adversely impacted by the manufacturers’ or distributors’ inability to continue to offer these incentives and rebates at substantially similar terms, or to pay our outstanding receivables. We enter into franchise agreements with the manufacturers. The franchise agreements generally limit the location of the dealership and provide the auto manufacturer approval rights over changes in dealership management and ownership. The auto manufacturers are also entitled to terminate the franchise agreement if the dealership is in material breach of the terms. Our ability to expand operations depends, in part, on obtaining consents of the manufacturers for the acquisition of additional dealerships. See also “Goodwill” and “Franchise Value” above. We have a variety of syndicated credit facilities with several of the included financial institutions also providing vehicle financing for certain new vehicles, vehicles that are designated for use as service loaners and mortgage financing. These credit facilities are the primary source of floor plan financing for our new vehicle inventory and also provides used vehicle financing and a revolving line of credit. The terms of the facilities extends through various dates through April 2026. At maturity, our financial condition could be materially adversely impacted if lenders are unable to provide credit that has typically been extended to us or with terms unacceptable to us. Our financial condition could be materially adversely impacted if these providers incur losses in the future or undergo funding limitations. See Note 9 – Credit Facilities and Long-Term Debt. We anticipate continued organic growth and growth through acquisitions. This growth will require additional credit which may be unavailable or with terms unacceptable to us. If these events were to occur, we may not be able to borrow sufficient funds to facilitate our growth. Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and related notes to financial statements. Changes in such estimates may affect amounts reported in future periods. Estimates are used in the calculation of certain reserves maintained for charge-backs on estimated cancellations of service contracts; life, accident and disability insurance policies; finance fees from customer financing contracts and uncollectible accounts receivable. Estimates are also used in our allowance for loan and lease losses, which represents the net credit losses expected over the remaining contractual life of our finance receivables. Because net loss performance can vary substantially over time, estimating net losses requires assumptions about matters that are uncertain. The allowance for loan and lease losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Determining the appropriateness of the allowance for loan and lease losses requires management to exercise judgement about matters that are inherently uncertain, including the timing and distribution of net losses that could materially affect the allowance or loan and lease losses and, therefore, net earnings. We also use estimates in the calculation of various expenses, accruals and reserves, including anticipated losses related to workers’ compensation insurance; anticipated losses related to self-insurance components of our property and casualty and medical insurance; self-insured lifetime lube, oil and filter service contracts; discretionary employee bonuses, the Transition Agreement with Sidney B. DeBoer, our Chairman of the Board; warranties provided on certain products and services; legal reserves and stock-based compensation. We also make certain estimates regarding the assessment of the recoverability of long-lived assets, indefinite-lived intangible assets and deferred tax assets. We offer a limited warranty on the sale of most retail used vehicles. This warranty is based on mileage and time. We also offer a mileage and time based warranty on parts used in our service repair work and on tire purchases. The cost that may be incurred for these warranties is estimated at the time the related revenue is recorded. A reserve for these warranty liabilities is estimated based on current sales levels, warranty experience rates and estimated costs per claim. The annual activity for reserve increases and claims is immaterial. As of December 31, 2022 and 2021, the accrued warranty balance was $0.3 million and $0.6 million, respectively. Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These market data points include our acquisition and divestiture experience and third-party broker estimates. Revenue Recognition The following describes our major product lines, which represent the disaggregation of our revenues to transactions that are similar in nature, amount, timing, uncertainties and economic factors. New Retail Vehicle and Used Retail Vehicle Sales Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectibility is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state law. Service, Body and Parts Sales Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $284.3 million and $239.0 million as of December 31, 2022, and December 31, 2021, respectively; and we recognized $44.6 million and $35.0 million of revenue in the years ended December 31, 2022, and December 31, 2021, respectively, related to our opening contract liability balances. Our contract liability balance is included in accrued liabilities and deferred revenue. Finance and Insurance Sales Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract under the standard. Our contract asset balance was $12.5 million and $9.6 million as of December 31, 2022, and December 31, 2021, respectively; and is included in trade receivables and other non-current assets. Segment Reporting Historically, the Company had determined that operating segments were individual store locations, which were aggregated into reportable segments of Domestic, Import, and Luxury. This conclusion was primarily based on the chief operating decision maker’s (CODM’s) review of individual store results to assess performance and allocate resources, along with economic similarities within Domestic, Import, and Luxury stores. In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. The Company has experienced rapid growth in size as well as new expansion into synergistic business lines, transforming the way the business is managed. Considering the Company’s growth, evolution of its business model, and change in Company structure during 2022, management reevaluated its reporting segments and determined the operating segments (and reportable segments) as of December 31, 2022 are Vehicle Operations and Financing Operations. Based on this evaluation, we reclassified Financing Operations Income for the comparative periods from the “Corporate and Other” category to conform to current year presentation and consolidated our Domestic, Import, and Luxury segments into a new Vehicle Operations segment. We determined our operating segments based on how the CODM reviews our operating results in assessing performance and allocating resources. The Financing Operations segment includes DFC, our captive finance company that serves as a lender for Lithia vehicle sales, and the Pfaff Leasing business acquired in 2021. The Vehicle Operations segment includes our retail automotive, recreational |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: December 31, ($ in millions) 2022 2021 Contracts in transit $ 432.5 $ 304.9 Trade receivables 122.6 125.5 Vehicle receivables 105.4 106.6 Manufacturer receivables 151.9 120.5 Other receivables, current 3.8 31.7 816.2 689.2 Less: Allowance for doubtful accounts (3.1) (3.7) Total accounts receivable, net $ 813.1 $ 685.5 The long-term components of accounts receivable and allowance for doubtful accounts were included as a component of other non-current assets in the Consolidated Balance Sheets. |
Inventories and Floor Plan Note
Inventories and Floor Plan Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories and Floor Plan Notes Payable | INVENTORIES AND FLOOR PLAN NOTES PAYABLE The components of inventories consisted of the following: December 31, ($ in millions) 2022 2021 New vehicles $ 1,679.8 $ 812.9 Used vehicles 1,529.3 1,418.3 Parts and accessories 200.3 154.3 Total inventories $ 3,409.4 $ 2,385.5 The new vehicle inventory cost is generally reduced by manufacturer holdbacks and incentives, while the related floor plan notes payable are reflective of the gross cost of the vehicle. December 31, ($ in millions) 2022 2021 Floor plan notes payable: non-trade $ 1,489.4 $ 835.9 Floor plan notes payable 627.2 354.2 Total floor plan debt $ 2,116.6 $ 1,190.1 Floor Plan Notes Payable We have floor plan agreements with manufacturer-affiliated finance companies for certain new vehicles and vehicles that are designated for use as service loaners. The interest rates on these floor plan notes payable commitments vary by manufacturer and are variable rates, ranging up to 6.01% as of December 31, 2022. Borrowings from and repayments to manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows. Floor Plan Notes Payable: Non-Trade See credit facilities discussion in Note 9 – Credit Facilities and Long-Term Debt for more information on our floor plan commitments. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, ($ in millions) 2022 2021 Land $ 1,149.9 $ 965.6 Building and improvements 2,027.8 1,748.5 Service equipment 185.8 159.9 Furniture, office equipment, signs and fixtures 650.3 507.3 4,013.8 3,381.3 Less accumulated depreciation (526.8) (422.6) 3,487.0 2,958.7 Construction in progress 87.6 93.9 $ 3,574.6 $ 3,052.6 Long-Lived Asset Impairment Charges We recorded no impairment charges in 2022, 2021, and 2020 associated with property and equipment. The long-lived assets were tested for recoverability and were determined to have a carrying value exceeding their fair value. |
Goodwill and Franchise Value
Goodwill and Franchise Value | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Franchise Value | GOODWILL AND FRANCHISE VALUE The following is a roll-forward of goodwill: ($ in millions) Vehicle Operations Financing Operations Consolidated Balance as of December 31, 2020 ¹ $ 593.0 $ — $ 593.0 Additions through acquisitions 2 395.5 — 395.5 Reductions through divestitures (11.2) — (11.2) Balance as of December 31, 2021 ¹ 977.3 — 977.3 Additions through acquisitions 3 483.4 17.0 500.4 Reductions through divestitures (17.9) — (17.9) Currency translation 0.7 0.2 0.9 Balance as of December 31, 2022 ¹ $ 1,443.5 $ 17.2 $ 1,460.7 (1) Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. (2) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $395.5 million of goodwill. (3) Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $500.4 million of goodwill. Our purchase price allocation for the 2022 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 16 – Acquisitions. The following is a roll-forward of franchise value: ($ in millions) Franchise Value Balance as of December 31, 2020 $ 350.2 Additions through acquisitions 1 459.7 Reductions through divestitures (8.9) Reductions from impairments (1.9) Balance as of December 31, 2021 799.1 Additions through acquisitions 2 1,088.4 Reductions through divestitures (33.6) Currency translation 2.3 Balance as of December 31, 2022 $ 1,856.2 (1) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $459.7 million of franchise value. (2) Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $1,088.4 million of franchise value. Our purchase price allocation for the 2022 acquisitions are preliminary and is not yet allocated to our segments. See Note 16 – Acquisitions. |
Finance Receivables
Finance Receivables | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Finance Receivables | FINANCE RECEIVABLES Our finance receivables are comprised of auto loan and lease receivables. Our auto loan receivables include amounts due from customers related to vehicle sales financed through DFC and Pfaff Leasing, secured by the related vehicles. Lease receivables include amounts related to vehicles leased through Pfaff Leasing, also secured by the related vehicles. These amounts are presented net of an allowance for estimated losses. December 31, ($ in millions) 2022 2021 Asset-backed term funding $ 482.1 $ 331.2 Warehouse facilities 1,383.9 279.6 Other managed receivables 390.9 217.5 Total finance receivables 2,256.9 828.3 Less: Allowance for finance receivable losses (69.3) (25.0) Finance receivables, net $ 2,187.6 $ 803.3 Our allowance for finance receivable losses represents the net credit losses expected over the remaining contractual life of our managed receivables. During 2022, provision expense and net charge-offs increased primarily due to the higher volume of originations and resulting growth in the finance receivables balance. Also a contributing factor is the 3-4 month lag between charge-off and recovery. Collectively these factors drove an overall increase in the allowance. The allowances for credit losses related to finance receivables consisted of the following changes during the period: Year Ended December 31, ($ in millions) 2022 2021 Allowance at beginning of period $ 25.0 $ 12.9 Charge-offs (62.0) (16.6) Recoveries 19.1 8.8 Provision expense 87.2 19.9 Allowance at end of period $ 69.3 $ 25.0 See Note 1 – Summary of Significant Accounting Policies for additional information on the allowance for credit losses related to finance receivables. Ending finance receivables (principal balances) by FICO score: As of December 31, 2022 Year of Origination ($ in millions) 2022 2021 2020 Total <599 1 $ 63.0 $ 30.3 $ 4.8 $ 98.1 600-699 652.6 243.4 27.2 923.2 700-774 575.9 97.9 10.0 683.8 775+ 369.5 21.5 4.5 395.5 Total auto loan receivables $ 1,661.0 $ 393.1 $ 46.5 2,100.6 Other finance receivables (1) 156.3 Total finance receivables $ 2,256.9 As of December 31, 2021 Year of Origination ($ in millions) 2021 2020 Total <599 1 $ 53.3 $ 9.5 $ 62.8 600-699 386.5 50.0 436.5 700-774 149.2 17.3 166.5 775+ 30.3 7.0 37.3 Total auto loan receivables $ 619.3 $ 83.8 703.1 Other finance receivables (1) 125.2 Total finance receivables $ 828.3 (1) Includes legacy portfolio, loans that are originated with no FICO score available, and lease receivables. |
Net Investment in Operating Lea
Net Investment in Operating Leases | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Net Investment in Operating Leases | NET INVESTMENT IN OPERATING LEASES Net investment in operating leases consists primarily of lease contracts for vehicles with individuals and business entities. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned. Net investment in operating leases was as follows: December 31, ($ in millions) 2022 2021 Vehicles, at cost (1) $ 92.2 $ 66.0 Accumulated depreciation (1) (7.6) (0.9) Net investment in operating leases $ 84.6 $ 65.1 (1) Vehicles, at cost and accumulated depreciation are recorded in other non-current assets, on the Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate to third parties. The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets: December 31, ($ in millions) 2022 2021 Operating lease liabilities: Current portion included in accrued liabilities $ 51.7 $ 49.0 Noncurrent operating lease liabilities 346.6 361.7 Total operating lease liabilities 398.3 410.7 Finance lease liabilities: Current portion included in current maturities of long-term debt 2.0 16.3 Long-term portion of lease liabilities in long-term debt 54.4 37.3 Total finance lease liabilities 56.4 53.6 Total lease liabilities $ 454.7 $ 464.3 Finance lease right-of-use assets: Total finance lease right-of-use assets (1) $ 75.9 $ 58.7 Weighted-average remaining lease term: Operating leases 7 years 8 years Finance leases 10 years 11 years Weighted-average discount rate: Operating leases 4.31 % 4.12 % Finance leases 4.85 % 2.42 % (1) Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation. The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows: Year Ended December 31, ($ in millions) 2022 2021 Operating lease cost (1) $ 77.9 $ 53.1 Variable lease cost (2) 5.6 3.5 Amortization of finance lease right-of-use assets 4.2 5.9 Interest on finance lease liabilities 3.7 4.2 Sublease income (7.5) (6.4) Total lease costs $ 83.9 $ 60.3 (1) Includes short-term and month-to-month lease costs, which are immaterial. (2) Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate. Rent expense, net of sublease income, for all operating leases was $41.2 million for the year ended December 31, 2020. This amount is included as a component of selling, general and administrative expenses in our Consolidated Statements of Operations. As of December 31, 2022, the maturities of our operating and finance lease liabilities were as follows: ($ in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2023 $ 70.5 $ 4.6 2024 63.7 10.2 2025 59.7 22.2 2026 50.2 2.9 2027 44.6 3.0 Thereafter 235.6 26.9 Total minimum lease payments 524.3 69.8 Less: present value adjustment (126.0) (13.4) Total lease liabilities $ 398.3 $ 56.4 Charge-Backs for Various Contracts We have recorded a liability of $147.6 million as of December 31, 2022 for our estimated contractual obligations related to potential charge-backs for vehicle service contracts and other various insurance contracts that are terminated early by the customer. We estimate that the charge-backs will be paid out as follows: Year Ending December 31, ($ in millions) 2023 $ 79.9 2024 41.1 2025 18.6 2026 6.4 2027 1.4 Thereafter 0.2 Total $ 147.6 Lifetime Lube, Oil and Filter and At Home Valet Contracts We retain the obligation for lifetime lube, oil and filter service contracts and at home valet contracts sold to our customers and assumed the liability of certain existing lifetime lube, oil and filter contracts. These amounts are recorded as a contract liability. At the time of sale, we defer the full sale price and recognize the revenue based on the rate we expect future costs to be incurred. As of December 31, 2022, we had a contract liability balance of $284.9 million associated with these contracts and estimate the contract liability will be recognized as follows: Year Ending December 31, ($ in millions) 2023 $ 58.5 2024 47.0 2025 37.5 2026 29.8 2027 24.0 Thereafter 88.1 Total $ 284.9 The contract liability balance is recorded as components of deferred revenue and accrued liabilities in our Consolidated Balance Sheets. Self-insurance Programs We self-insure a portion of our property and casualty insurance, vehicle open lot coverage, medical insurance and workers’ compensation insurance. Third parties are engaged to assist in estimating the loss exposure related to the self-retained portion of the risk associated with these insurances. Additionally, we analyze our historical loss and claims experience to estimate the loss exposure associated with these programs. As of December 31, 2022 and 2021, we had liabilities associated with these programs of $67.4 million and $56.4 million, respectively, recorded as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets. Litigation We are party to numerous legal proceedings arising in the normal course of our business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course of business will have a material adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with certainty. |
Credit Facilities and Long-term
Credit Facilities and Long-term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-term Debt | CREDIT FACILITIES AND LONG-TERM DEBT Below is a summary of our outstanding balances on credit facilities and long-term debt: December 31, ($ in millions) Maturity Dates 2022 2021 Long-term debt: Used and service loaner vehicle inventory financing commitments Various dates through Apr 2026 $ 877.2 $ 500.0 Revolving lines of credit Various dates through Apr 2026 927.6 129.9 Warehouse facilities Various dates through Nov 2025 930.0 90.0 Total lines of credit 2,734.8 719.9 Real estate mortgages Various dates through Jan 2043 580.1 592.9 Finance lease obligations Various dates through Aug 2037 56.4 53.6 4.625% Senior notes due 2027 Dec 2027 400.0 400.0 4.375% Senior notes due 2031 Jan 2031 550.0 550.0 3.875% Senior notes due 2029 Jun 2029 800.0 800.0 Other debt Various dates through Jan 2024 16.6 1.9 Total long-term debt outstanding 5,137.9 3,118.3 Less: unamortized debt issuance costs (29.1) (26.5) Less: current maturities (net of current debt issuance costs) (20.5) (223.7) Long-term debt, less current maturities $ 5,088.3 $ 2,868.1 Non-recourse notes payable Various dates through Apr 2030 $ 422.2 $ 317.6 Credit Facilities US Bank Syndicated Credit Facility On November 21, 2022, we amended our existing syndicated credit facility (USB credit facility), comprised of 20 financial institutions, including eight manufacturer-affiliated finance companies, maturing April 29, 2026. This USB credit facility provides for a total financing commitment of $3.75 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $4.5 billion. The allocation of the financing commitment is for up to $800 million in used vehicle inventory floorplan financing, up to $1.5 billion in revolving financing for general corporate purposes, including acquisitions and working capital, up to $1.4 billion in new vehicle inventory floorplan financing, and up to $50 million in service loaner vehicle floorplan financing. We have the option to reallocate the commitments under this USB credit facility, provided that the aggregate revolving loan commitment may not be more than 40% of the amount of the aggregate commitment, and the aggregate service loaner vehicle floorplan commitment may not be more than the 3% of the amount of the aggregate commitment. All borrowings from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities. Our obligations under our USB credit facility are secured by a substantial amount of our assets, including our inventory (including new and used vehicles, parts and accessories), equipment, accounts receivable (and other rights to payment) and our equity interests in certain of our subsidiaries. Under our USB credit facility, our obligations relating to new vehicle floor plan loans are secured only by collateral owned by borrowers of new vehicle floor plan loans under the USB credit facility. The interest rate on the USB credit facility varies based on the type of debt, with the rate of one-day SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.10% for new vehicle floor plan financing, 1.40% for used vehicle floor plan financing, 1.20% for service loaner floor plan financing, and a variable interest rate on the revolving financing ranging from 1.00% to 2.00% depending on our leverage ratio. The annual interest rates associated with our floor plan commitments are as follows: Commitment Annual Interest Rate at December 31, 2022 New vehicle floor plan 5.51% Used vehicle floor plan 5.81% Service loaner floor plan 5.51% Revolving line of credit 5.41% Under the terms of our USB credit facility, we are subject to financial covenants and restrictive covenants that limit or restrict our incurring additional indebtedness, making investments, selling or acquiring assets and granting security interests in our assets. Under our USB credit facility, we are required to maintain the ratios detailed in the following table: Debt Covenant Ratio Requirement As of December 31, 2022 Fixed charge coverage ratio Not less than 1.20 to 1 5.81 to 1 Leverage ratio Not more than 5.75 to 1 1.36 to 1 Bank of Nova Scotia Syndicated Credit Facility On June 3, 2022, we entered into a syndicated credit agreement with The Bank of Nova Scotia as agent (BNS credit facility), comprised of six financing institutions, including two manufacturer-affiliated finance companies. The BNS credit facility provides for a total financing commitment of approximately $1.1 billion CAD, including a working capital revolving credit facility of up to $100 million CAD, a wholesale flooring facility for new vehicles up to $500 million CAD, used vehicle flooring facility of up to $100 million CAD, wholesale leasing facility of up to $400 million CAD, and daily rental vehicle facility up to $25 million CAD. Commitment Annual Interest Rate at December 31, 2022 Wholesale flooring facility 5.76% Used vehicle flooring facility 6.01% Daily rental facility 5.96% Wholesale leasing facility 6.06% Working capital revolving facility 6.01% All Canadian facilities other than the wholesale flooring facility, which is a demand facility, mature on June 3, 2025. The credit agreement includes various financial and other covenants typical of such agreements. As of December 31, 2022, we were in compliance with all such covenants. Wells Fargo Syndicated Real Estate Facility On November 30, 2022, we amended our existing syndicated real estate backed facility with Wells Fargo Bank, National Association, as agent (WFB credit facility), which includes eight financial institutions, including two manufacturer affiliated finance companies, maturing July 14, 2025. The WFB credit facility currently provides a total financing commitment of up to $216.2 million in working capital financing for general corporate purposes, including acquisitions and working capital, collateralized by real estate and certain other assets owned by us. The interest rate on the WFB credit facility uses Daily Simple SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 2.00%-2.50% based on our leverage ratio. The WFB credit facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties by us. Financial covenants include requirements to maintain minimum fixed charge coverage ratio and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with U.S. Bank National Association as administrative agent. As of December 31, 2022, no amounts were outstanding on the WFB credit facility. Ally Real Estate Facility On December 28, 2022, we amended our existing real estate backed facility with Ally Bank (Ally Capital in Hawaii, Mississippi, Montana and New Jersey), as lender. The credit agreement matures on September 12, 2025 and provides for a revolving line of credit facility (Ally credit facility) of up to $300 million and is secured by real estate owned by us. The Ally credit facility will bear interest at a rate per annum equal to the greater of 3.00% or the prime rate designated by Ally Bank, minus 40 basis points. The Ally credit facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties. Financial covenants, including the requirements to maintain minimum fixed charge coverage ratio and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with US Bank National Association as administrative agent. The covenants restrict us from disposing of assets and granting additional security interests. As of December 31, 2022, no amounts were outstanding on the Ally credit facility. JPM Warehouse facility On November 17, 2022, we amended our existing securitization facility for our auto loan portfolio (JPM warehouse facility) with JPMorgan Chase Bank, as administrative agent and committed lender, and Chariot Funding LLC, as conduit lender. The JPM warehouse facility provides initial commitments for borrowings of up to $1.0 billion and matures on July 29, 2024. The interest rate on the JPM warehouse facility varies based on JPM’s Commercial Paper rate plus 1.70%. As of December 31, 2022, we had $785.0 million drawn on the JPM warehouse facility. Mizuho Warehouse facility On November 1, 2022, we entered into a loan agreement, establishing a securitization facility for our auto loan portfolio (Mizuho warehouse facility), with Mizuho Bank Ltd. as administrative agent and account bank. The Mizuho warehouse facility provides initial commitments for borrowings of up to $500 million and matures on November 1, 2025. The interest rate on the Mizuho warehouse facility varies based on the Daily Simple SOFR rate plus 1.30%. As of December 31, 2022, we had $145 million drawn on the Mizuho warehouse facility. Non-Recourse Notes Payable DFC auto loans receivable are temporarily funded through our warehouse facilities until they can be funded through non-recourse asset-backed term transactions. These non-recourse funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable. We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles. In August 2022, we issued $298.1 million in non-recourse notes payable related to the asset-backed term funding transaction. Below is a summary of outstanding non-recourse notes payable issued: ($ in millions) Balance as of December 31, 2022 Initial Principal Amount Issuance Date Interest Rate Final Distribution Date LAD Auto Receivables Trust 2021-1 Class A $ 115.0 $ 282.8 11/19/21 1.30% 08/17/26 LAD Auto Receivables Trust 2021-1 Class B 18.3 18.3 11/19/21 1.94% 11/16/26 LAD Auto Receivables Trust 2021-1 Class C 26.0 26.0 11/19/21 2.35% 04/15/27 LAD Auto Receivables Trust 2021-1 Class D 17.2 17.2 11/19/21 3.99% 11/15/29 LAD Auto Receivables Trust 2022-1 Class A 207.2 259.7 08/09/22 5.21% 06/15/27 LAD Auto Receivables Trust 2022-1 Class B 15.5 15.5 08/09/22 5.87% 09/15/27 LAD Auto Receivables Trust 2022-1 Class C 23.0 22.9 08/09/22 6.85% 04/15/30 Total non-recourse notes payable $ 422.2 $ 642.4 Senior Notes Below is a summary of outstanding senior notes issued: ($ in millions) Principal Amount Earliest Redemption Date % Currently Redeemable Current Redemption Price Maturity Date Interest Payment Dates 4.625% Senior notes due 2027 $400.0 12/15/22 100% 102.313% 12/15/27 Jun 15, Dec 15 4.375% Senior notes due 2031 550.0 10/15/25 40% 104.375% 01/15/31 Jan 15, Jul 15 3.875% Senior notes due 2029 800.0 06/01/24 40% 103.875% 06/01/29 Jun 1, Dec 1 Total senior notes $1,750.0 On August 1, 2021, we redeemed in full the aggregate $300 million principal amount of our 5.250% senior notes due 2025 at a redemption price equal to 102.625% of the principal amount of the notes plus accrued and unpaid interest thereon. This early redemption resulted in a $10.3 million loss on extinguishment of debt, presented as a component of “Other (expense) income, net” in our Consolidated Statement of Operations for the year ended December 31, 2021. Real Estate Mortgages, Finance Lease Obligations, and Other Debt We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from 3.0% to 8.0% at December 31, 2022. The mortgages are payable in various installments through July 1, 2038. December 31, 2022, we had fixed interest rates on 71.7% of our outstanding mortgage debt. We have finance lease obligations with some of our leased real estate. Interest rates related to this debt ranged from 2.5% to 8.5% at December 31, 2022. The leases have terms extending through August 2037. Our other debt includes sellers’ notes and debt associated with our Pfaff Leasing operations. The interest rates associated with our other debt ranged from 2.3% to 10.0% at December 31, 2022. This debt, which totaled $16.6 million at December 31, 2022, is due in various installments through February 28, 2029. Future Principal Payments The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2022 was as follows: Year Ending December 31, ($ in millions) 2023 $ 26.7 2024 74.8 2025 74.1 2026 49.3 2027 473.8 Thereafter 1,688.9 Total principal payments $ 2,387.6 This table does not include future payments related to revolving lines of credit, non-recourse notes payable, and other debt associated with our Pfaff Leasing operations. |
401(k) Profit Sharing, Deferred
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Postemployment Benefits [Abstract] | |
Summary Related to SERP | 401(K) PROFIT SHARING, DEFERRED COMPENSATION AND LONG-TERM INCENTIVE PLANS We have a defined contribution 401(k) plan and trust covering substantially all full-time employees. The annual contribution to the plan is at the discretion of our Board of Directors. Contributions of $29.9 million, $18.8 million, and $9.0 million were recognized for the years ended December 31, 2022, 2021 and 2020, respectively. Employees may contribute to the plan if they meet certain eligibility requirements. We offer a non-qualified deferred compensation and supplemental executive retirement plan (the “SERP”) to provide certain employees the ability to accumulate assets for retirement on a tax deferred basis. We may, depending on position, also make discretionary contributions to the SERP. These discretionary contributions could vest immediately or over a period of up to seven years based on the employee’s age. Additionally, a participant may defer a portion of his or her compensation and receive the deferred amount upon certain events, including termination or retirement. The following is a summary related to our SERP: Year Ended December 31, ($ in millions) 2022 2021 2020 Compensation expense $ 1.1 $ 1.4 $ 1.2 Total discretionary contribution $ 1.0 $ 0.9 $ 0.9 Guaranteed annual return 5.00 % 5.00 % 5.00 % As of December 31, 2022 and 2021, the balance due to participants was $63.0 million and $51.9 million, respectively, and was included as a component of other long-term liabilities in the Consolidated Balance Sheets. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTSWe account for derivative financial instruments by recording the fair value as either an asset or liability in our Consolidated Balance Sheets and recognize the resulting gains or losses as adjustments to accumulated other comprehensive income (loss). We do not hold or issue derivative financial instruments for trading or speculative purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss (AOCI) in stockholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. To hedge the business exposure to rising interest rates on a portion of our variable rate debt, we entered into a five-year, zero-cost interest rate collar, with an aggregate notional amount of $300 million, effective June 1, 2019. This instrument hedges interest rate risk related to a portion of our $1.6 billion of non-trade floor plan notes payable. The table below presents the liabilities related to the zero-cost interest rate collar: ($ in millions) Accrued Liabilities Other Long-Term Liabilities Other Non-Current Assets Total Balance as of December 31, 2019 $ (0.1) $ (0.9) $ — $ (1.0) Amounts reclassified from AOCI to floorplan interest expense 1.8 — — 1.8 Loss recorded from interest rate collar (4.3) (5.1) — (9.4) Balance as of December 31, 2020 (2.6) (6.0) — (8.6) Amounts reclassified from AOCI to floorplan interest expense 2.8 — — 2.8 Loss recorded from interest rate collar (2.1) 5.3 — 3.2 Balance as of December 31, 2021 (1.9) (0.7) — (2.6) Amounts reclassified from AOCI to floorplan interest expense 0.7 — (2.7) (2.0) Gain recorded from interest rate collar 1.2 0.7 2.7 4.6 Balance as of December 31, 2022 $ — $ — $ — $ — We also entered into four other, immaterial and offsetting, derivative arrangements that do not qualify for hedge accounting. These are related to a securitization facility, effective October 2, 2020 and June 15, 2021. We purchased and sold offsetting interest rate caps, all of which are 5-years long with notional amounts totaling $298 million. As of December 31, 2022, the balance in all four agreements was an offsetting $22.1 million and was located in other current assets and accrued liabilities, respectively. See Note 14 – Fair Value Measurements for information on the fair value of the derivative contracts. |
Equity and Redeemable Non-contr
Equity and Redeemable Non-controlling Interest | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity and Redeemable Non-controlling Interest | EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST Common Stock The shares of common stock are not convertible into any other series or class of our securities. Holders of common stock are entitled to one vote for each share held of record. Repurchases of Common Stock Repurchases of our common stock occurred under repurchase authorizations granted by our Board of Directors and related to shares withheld as part of the vesting of restricted stock units (RSUs). On November 1, 2022, our Board of Directors approved an additional $450 million repurchase authorization of our common stock. This new authorization is in addition to the amount previously authorized by the Board for repurchase. Share repurchases under our authorization were as follows: Repurchases Occurring in 2022 Cumulative Repurchases as of December 31, 2022 Shares Average Price Shares Average Price Share repurchase authorization 2,428,850 $ 276.42 6,904,781 $ 173.59 As of December 31, 2022, we had $501.4 million available for repurchases pursuant to our share repurchase authorization. In addition, during 2022, we repurchased 56,911 shares at an average price of $296.86 per share, for a total of $16.9 million, related to tax withholdings associated with the vesting of RSUs. The repurchase of shares related to tax withholdings associated with stock awards does not reduce the number of shares available for repurchase as approved by our Board of Directors. The following is a summary of our repurchases in the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Shares repurchased pursuant to repurchase authorizations 2,428,850 756,883 563,953 Total purchase price ($ in millions) $ 671.4 $ 214.8 $ 46.1 Average purchase price per share $ 276.42 $ 283.75 $ 81.71 Shares repurchased in association with tax withholdings on the vesting of RSUs 56,911 54,318 30,620 Dividends We declared and paid dividends on our common stock as follows: Quarter declared Dividend amount per share Total amount of dividends paid ($ in millions) 2020 First quarter $ 0.30 $ 7.0 Second quarter 0.30 6.8 Third quarter 0.31 7.1 Fourth quarter 0.31 8.2 2021 First quarter $ 0.31 $ 8.2 Second quarter 0.35 9.3 Third quarter 0.35 10.6 Fourth quarter 0.35 10.6 2022 First quarter $ 0.35 $ 10.3 Second quarter 0.42 11.9 Third quarter 0.42 11.6 Fourth quarter 0.42 11.4 ATM Equity Offering Agreement On July 24, 2020, we entered into an ATM Equity Offering SM Sales Agreement with BofA Securities, Inc. and Jefferies LLC acting as sales agents and/or principals and Bank of America, N.A. and Jefferies LLC acting as forward purchasers, pursuant to which we may offer and sell, from time to time through the sales agents, shares of our common stock, no par value, having an aggregate gross sales price of up to $400.0 million. To date, no sales have been made under the program. Redeemable Non-controlling Interest |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION 2009 Employee Stock Purchase Plan The 2009 Employee Stock Purchase Plan (the “2009 ESPP”) allows for the issuance of 3.0 million shares of our common stock. The 2009 ESPP is intended to qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Compensation Committee of the Board of Directors. Eligible employees are entitled to defer up to 10% of their base pay for the purchase of stock, up to $25,000 of fair market value of our common stock annually. The purchase price is equal to 85% of the fair market value at the end of the purchase period. Following is information regarding our 2009 ESPP: Year Ended December 31, 2022 Shares purchased pursuant to 2009 ESPP 157,507 Weighted average per share price of shares purchased $ 218.59 Weighted average per share discount from market value for shares purchased $ 38.57 As of December 31, 2022 Shares available for purchase pursuant to 2009 ESPP 1,151,846 Compensation expense related to our 2009 ESPP is calculated based on the 15% discount from the per share market price on the date of grant. 2013 Stock Incentive Plan Our 2013 Stock Incentive Plan, as amended, (the “2013 Plan”) allows for the grant of a total of 3.8 million shares in the form of stock appreciation rights, qualified stock options, nonqualified stock options, restricted share awards and restricted stock unit awards (RSUs) to our officers, key employees, directors and consultants. The 2013 Plan is administered by the Compensation Committee of the Board of Directors and permits accelerated vesting of outstanding awards upon the occurrence of certain changes in control. As of December 31, 2022, 943,888 shares of common stock were available for future grants. As of December 31, 2022, there were no stock appreciation rights, qualified stock options, nonqualified stock options or restricted share awards outstanding. Restricted Stock Unit Awards RSU grants vest over a period of time up to four years from the date of grant. RSU activity was as follows: RSUs Weighted average per share grant date fair value Balance, December 31, 2021 466,860 $ 159.85 Granted 138,420 294.32 Vested (147,441) 110.77 Forfeited (41,961) 164.88 Balance, December 31, 2022 415,878 224.00 We granted 18,080 time-vesting RSUs to members of our Board of Directors and employees in 2022. Each grant entitles the holder to receive shares of our common stock upon vesting. A portion of the RSUs vest over four years, beginning on the second anniversary of the grant date, for employees and vests quarterly for our Board of Directors, over their service period. Certain key employees were granted 120,340 performance and time-vesting RSUs in 2022. Of these, 48,979 shares were earned based on attaining various target levels of operational performance. Based on the levels of performance achieved in 2022, a weighted average attainment level of 50.9% for these RSUs was met. These RSUs will vest over four years from the grant date. Stock-Based Compensation As of December 31, 2022, unrecognized stock-based compensation related to outstanding, but unvested RSUs was $16.5 million, which will be recognized over the remaining weighted average vesting period of 2.4 years. Certain information regarding our stock-based compensation was as follows: Year Ended December 31, 2022 2021 2020 Per share intrinsic value of non-vested stock granted $ 294.32 $ 312.83 $ 130.89 Weighted average per share discount for compensation expense recognized under the 2009 ESPP 38.57 50.58 22.97 Fair value of non-vested stock that vested during the period ($ in millions) 110.8 107.5 108.5 Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense ($ in millions) 41.1 34.7 23.2 Tax benefit recognized in Consolidated Statements of Operations ($ in millions) 12.4 11.9 3.7 Cash received from options exercised and shares purchased under all share-based arrangements ($ in millions) 34.4 29.6 14.8 Tax deduction realized related to stock options exercised ($ in millions) 43.7 41.8 13.6 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories: • Level 1 - quoted prices in active markets for identical securities; • Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and • Level 3 - significant unobservable inputs, including our own assumptions in determining fair value. We determined the carrying value of accounts receivable, trade payables, accrued liabilities, finance receivables, and short-term borrowings approximate their fair values because of the nature of their terms and current market rates of these instruments. We believe the carrying value of our variable rate debt approximates fair value. We have investments primarily consisting of our investment in Shift Technologies, Inc. (Shift), a San Francisco-based digital retail company. Shift has a readily determinable fair value following Shift going public in a reverse-merger deal with Insurance Acquisition, a special purpose acquisition company, in the fourth quarter of 2020. We calculated the fair value of this investment using quoted prices for the identical asset (Level 1) and recorded the fair value as part of other non-current assets. An additional component of our investment in Shift consists of shares in escrow subject to release upon certain market conditions being met. The fair value of this component of our investment in Shift is measured using observable Level 2 market expectations at each measurement date and is recorded as part of other non-current assets. For the year ended December 31, 2022, we recognized a $39.2 million unrealized investment loss related to Shift, which was recorded as a component of other (expense) income, net, compared to a $66.4 million unrealized investment loss for the year ended December 31, 2021. We have fixed rate debt primarily consisting of amounts outstanding under our senior notes, non-recourse notes payable, and real estate mortgages. We calculated the estimated fair value of the senior notes using quoted prices for the identical liability (Level 1). The fair value of non-recourse notes payable are measured using observable Level 2 market expectations at each measurement date. The calculated estimated fair values of the fixed rate real estate mortgages and finance lease liabilities use a discounted cash flow methodology with estimated current interest rates based on a similar risk profile and duration (Level 2). The fixed cash flows are discounted and summed to compute the fair value of the debt. We have derivative instruments consisting of an offsetting set of interest rate caps. The fair value of derivative assets and liabilities are measured using observable Level 2 market expectations at each measurement date and is recorded as other current assets current liabilities and other long-term liabilities Nonfinancial assets such as goodwill, franchise value, or other long-lived assets are measured and recorded at fair value during a business combination or when there is an indicator of impairment. We evaluate our goodwill and franchise value using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the carrying value exceeds the fair value, we would further evaluate for potential impairment using a quantitative assessment. The quantitative assessment estimates fair values using unobservable (Level 3) inputs by discounting expected future cash flows of the store. The forecasted cash flows contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, working capital requirements, and cost of capital, for which we utilize certain market participant-based assumptions we believe to be reasonable. We estimate the value of other long-lived assets that are recorded at fair value on a non-recurring basis on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income and replacement cost approaches. Because these valuations contain unobservable inputs, we classified the measurement of fair value of long-lived assets as Level 3. There were no changes to our valuation techniques during the year ended December 31, 2022. Below are our assets and liabilities that are measured at fair value on a recurring basis: As of December 31 2022 2021 ($ in millions) Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3 Investments Shift Technologies, Inc. $ 1.8 $ 1.8 $ — $ — $ 40.9 $ 40.4 $ 0.5 $ — Derivatives Derivative assets 22.1 — 22.1 — 6.4 — 6.4 — Derivative liabilities 22.1 — 22.1 — 8.9 — 8.9 — Fixed rate debt (1) 4.625% Senior notes due 2027 400.0 364.0 — — 400.0 420.0 — — 4.375% Senior notes due 2031 550.0 448.3 — — 550.0 583.0 — — 3.875% Senior notes due 2029 800.0 656.0 — — 800.0 815.0 — — Non-recourse notes payable 422.2 — 411.8 — 317.6 — 316.8 — Real estate mortgages and other debt 489.0 — 399.0 — 477.6 — 488.7 — (1) Excluding unamortized debt issuance cost No impairment charges were recorded in 2022. During the third quarter of 2021, we recognized asset impairments of $1.9 million related to the franchise value associated with certain dealership locations indicating carrying values less than fair values. These locations were subsequently sold in the fourth quarter of 2021. In the second quarter of 2020, we recognized asset impairments of $4.4 million and $3.5 million related to the franchise value and goodwill, respectively, associated with certain dealership locations indicating carrying values less than fair values. Certain of these locations were subsequently sold in the fourth quarter of 2020, with the remainder sold in 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income Tax Provision The income tax provision was as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Current: Federal $ 269.2 $ 266.2 $ 108.9 State 105.5 111.6 50.3 Foreign (0.9) 1.2 — 373.8 379.0 159.2 Deferred: Federal 73.4 38.2 17.6 State 13.5 3.8 1.4 Foreign 7.7 1.1 — 94.6 43.1 19.0 Total $ 468.4 $ 422.1 $ 178.2 At December 31, 2022, we had income taxes receivable of $33.6 million included as a component of other current assets in our Consolidated Balance Sheets. At December 31, 2021, we had income taxes payable of $43.0 million included as a component of accrued liabilities in our Consolidated Balance Sheets. The reconciliation between amounts computed using the federal income tax rate of 21% and our income tax provision is shown in the following tabulation: Year Ended December 31, ($ in millions) 2022 2021 2020 Federal tax provision at statutory rate $ 363.3 $ 311.7 $ 136.2 State taxes, net of federal income tax benefit 76.9 85.4 40.4 Non-deductible items 5.0 4.8 2.8 Permanent differences related to stock compensation (2.4) (2.6) (0.5) Net change in valuation allowance 25.0 25.3 0.5 General business credits (2.6) (2.3) (1.3) Foreign Rate Differential 1.4 0.5 — Other 1.8 (0.7) 0.1 Income tax provision $ 468.4 $ 422.1 $ 178.2 Deferred Taxes Individually significant components of the deferred tax assets and (liabilities) are presented below: December 31, ($ in millions) 2022 2021 Deferred tax assets: Deferred revenue and cancellation reserves $ 126.6 $ 95.3 Allowances and accruals, including state tax carryforward amounts 71.3 69.1 Lease liability 103.2 107.6 Credits and other 5.1 1.8 Net operating losses 27.9 3.7 Valuation allowance (51.4) (26.4) Total deferred tax assets 282.7 251.1 Deferred tax liabilities: Inventories (39.2) (20.1) Goodwill (157.7) (112.3) Property and equipment, principally due to differences in depreciation (233.0) (185.9) Right of use asset (99.0) (103.7) Prepaid expenses and other (40.1) (20.1) Total deferred tax liabilities (569.0) (442.1) Total $ (286.3) $ (191.0) We consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. As of December 31, 2022, we had a $51.4 million valuation allowance recorded associated with our deferred tax assets. Of the total valuation allowance, $34.0 million relates to our investment in Shift Technologies Inc. (Shift) and $17.4 million relates to state net operating losses generated in current and previous years. The Shift valuation allowance increased $9.7 million in the current year as a result of reduction in Shift valuation during the year, the benefit of which is not expected to be realized. The state NOL valuation allowance increased $15.3 million in the current year as a result of losses incurred, the benefits of which are not expected to be realized. As of December 31, 2022, we had state net operating loss (NOL) carryforward amounts totaling approximately $17.4 million, tax effected, with expiration dates through 2042. We believe that it is more likely than not that the benefit from certain state NOL carryforward amounts will not be realized. In recognition of this risk, we have recorded a valuation allowance of $17.4 million on the deferred tax assets relating to these state NOL carryforwards as discussed above. As of December 31, 2022, we had Canadian net operating loss (NOL) carryforward amounts totaling $10.5 million, tax effected, with expiration dates through 2042. We have taken the position that we intend to indefinitely reinvest the earnings of our Canadian subsidiaries to ensure there is sufficient working capital to expand operations in Canada. Accordingly, we have not recorded a deferred tax liability related to foreign withholding taxes on approximately $72.9 million of undistributed earnings of these Canadian subsidiaries as of December 31, 2022. Approximately $3.6 million of tax would be payable upon the remittance of these undistributed earnings. Unrecognized Tax Benefits The following is a reconciliation of our unrecognized tax benefits for December 31, 2022, 2021, and 2020: ($ in millions) Balance, December 31, 2020 $ 0.2 Increase related to tax positions taken - current year 0.1 Balance, December 31, 2021 0.3 Increase related to tax positions taken - current year 0.3 Balance, December 31, 2022 $ 0.6 Open tax years at December 31, 2022 included the following: Federal 2019 - 2022 States (30) 2018 - 2022 Canada 2021 - 2022 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONS In 2022, we completed the following acquisitions: • In January 2022, John L. Sullivan Chevrolet, John L. Sullivan Chrysler Dodge Jeep Ram, and Roseville Toyota in California. • In March 2022, Sahara Chrysler Dodge Jeep Ram, Desert 215 Superstore, and Jeep Only in Nevada. • In May 2022, Sisley Honda in Canada. • In June 2022, Esserman International Volkswagen & Acura in Florida. • In June 2022, Henderson Hyundai Superstore in Nevada. • In June 2022, Lehman Auto Group in Florida. • In July 2022, Elk Grove Ford in California. • In September 2022, Wilde Honda, Wilde Subaru, Wilde Chrysler Dodge Jeep Ram, Wilde Toyota, and Wilde East Towne Honda in Wisconsin. • In October 2022, Seattle Airstream Adventures and Spokane Airstream Adventures in Washington. • In October 2022, Portland Airstream Adventures and Ultimate Airstream Adventures in Oregon. • In October 2022, Bay Area Airstream Adventures and South Bay Airstream Adventures in California. • In October 2022, Boise Airstream Adventures in Idaho. • In November 2022, Meador Chrysler Dodge Jeep Ram in Texas. • In December 2022, Denver Exotics in Colorado. • In December 2022, Glenn's Freedom Chrysler Jeep Dodge Ram in Kentucky. Revenue and operating income contributed by the 2022 acquisitions subsequent to the date of acquisition were as follows: Year Ended December 31, ($ in millions) 2022 Revenue $ 1,404.0 Operating income 66.9 In 2021, we completed the following acquisitions: • In February 2021, Fields Chrysler Jeep Dodge Ram and Land Rover Orlando in Florida. • In March 2021, Fink Auto Group in Florida. • In March 2021, Avondale Nissan in Arizona. • In April 2021, The Suburban Collection in Michigan. • In April 2021, Planet Honda in New Jersey. • In May 2021, Superstore Auto Group in Nevada. • In May 2021, Center BMW and Center Acura in California. • In June 2021, Southwest Kia Group in Arizona. • In June 2021, Herrin-Gear Toyota in Mississippi. • In June 2021, Michael’s Subaru and Michael’s Toyota in Washington. • In July 2021, Koby Subaru in Alabama. • In August 2021, Rock Honda in California. • In August 2021, Pfaff Automotive Partners in Canada. • In September 2021, Curry Honda in Georgia. • In September 2021, Orange Coast Chrysler Dodge Jeep Ram Fiat in California. • In November 2021, Coral Springs Audi and Fort Lauderdale Audi in Florida. • In November 2021, Pfaff Harley-Davidson in Canada. • In December 2021, Elder Ford of Tampa in Florida. • In December 2021, Elder Ford of Troy and Elder Ford of Romeo in Michigan. All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition. The following tables summarize the consideration paid for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date: Year Ended December 31, ($ in millions) 2022 2021 Cash paid, net of cash acquired $ 1,240.8 $ 2,697.5 Contingent consideration 3.9 — Redeemable non-controlling interest — 33.1 Debt issued — 356.0 Total consideration transferred $ 1,244.7 $ 3,086.6 Year Ended December 31, ($ in millions) 2022 2021 Trade receivables, net $ 0.2 $ 1.3 Inventories 228.3 626.2 Franchise value 63.7 — Goodwill 30.1 — Property and equipment 379.9 767.5 Other assets 639.1 1,726.2 Floor plan notes payable (0.7) (4.0) Debt and finance lease obligations (78.5) — Other liabilities (17.4) (30.6) Total net assets acquired and liabilities assumed $ 1,244.7 $ 3,086.6 The purchase price allocations for the 2022 acquisitions are preliminary as we have not obtained all of the detailed information to finalize the opening balance sheet related to real estate purchased, leases assumed and the allocation of franchise value to each reporting unit. Management has recorded the purchase price allocations based on the information that is currently available. We expect substantially all of the goodwill related to acquisitions completed in 2022 to be deductible for federal income tax purposes. The purchase price allocations for the 2021 acquisitions were finalized in 2022, including amounts posted to contingent consideration, real estate, franchise value, and goodwill, reducing the amounts posted to “Other assets” shown in the table above. We account for franchise value as an indefinite-lived intangible asset. We recognized $15.0 million and $20.2 million, respectively, in acquisition related expenses as a component of selling, general and administrative expenses in the Consolidated Statements of Operations in 2022 and 2021, respectively. The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the year: Year Ended December 31, ($ in millions, except for per share amounts) 2022 2021 Revenue $ 29,748.1 $ 26,200.5 Net income 1,338.2 1,236.9 Basic net income per share 47.47 42.95 Diluted net income per share 47.25 42.64 These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have been adjusted to reflect the following: depreciation on a straight-line basis over the expected lives for property, plant and equipment; accounting for inventory on a specific identification method; and recognition of interest expense for real estate financing related to stores where we purchased the facility. No non-recurring pro forma adjustments directly attributable to the acquisitions are included in the reported pro forma revenues and earnings. |
Net Income Per Share of Common
Net Income Per Share of Common Stock | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Common Stock | NET INCOME PER SHARE OF COMMON STOCK We compute net income per share using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding common shares underlying equity awards that are unvested or subject to forfeiture. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the common shares issuable upon the net exercise of stock options and unvested RSUs and is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumed the conversion of Class B common stock, while the diluted net income per share of Class B common stock did not assume the conversion of those shares. Prior to June 7, 2021, our common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred pursuant to an amendment and restatement of our Articles of Incorporation in connection with the elimination of our classified common stock structure following the conversion of all Class B common stock to Class A common stock. Prior to the reclassification, except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock were identical. Under our Articles of Incorporation, the Class A and Class B common stock shared equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation that would adversely alter the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year were allocated based on the contractual participation rights of the Class A and Class B Common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis. Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS: Year Ended December 31, 2022 2021 2020 ($ in millions, except for per share amounts) Common stock Class A Class B Class A Class B Net income from continuing operations applicable to common stockholders $ 1,251.0 $ 1,059.5 $ 0.6 $ 460.9 $ 9.4 Reallocation of distributed net income due to conversion of class B to class A common shares outstanding — — — 0.6 — Conversion of class B common shares into class A common shares — 0.6 — 8.8 — Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted $ 1,251.0 $ 1,060.1 $ 0.6 $ 470.3 $ 9.4 Weighted average common shares outstanding – basic 28.2 28.8 — 23.3 0.5 Conversion of class B common shares into class A common shares — — — 0.5 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.1 0.2 — 0.3 — Weighted average common shares outstanding – diluted 28.3 29.0 — 24.1 0.5 Basic earnings per share attributable to Lithia Motors, Inc. $ 44.38 $ 36.81 $ 36.81 $ 19.74 $ 19.74 Diluted earnings per share attributable to Lithia Motors, Inc. $ 44.17 $ 36.54 $ 36.54 $ 19.53 $ 19.53 The effects of antidilutive securities on Class A and Class B common stock were evaluated for the years ended 2022, 2021, and 2020 and were determined to be immaterial. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTSWe operate in two reportable segments: Vehicle Operations and Financing Operations. Our Vehicle Operations consists of all aspects of our auto merchandising and service operations, excluding financing provided by our Financing Operations. Our Financing Operations segment provides financing to customers buying and leasing retail vehicles from our Vehicle Operations. All other remaining unallocated corporate overhead expenses and internal charges are reported under “Corporate and Other”. Asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented. Certain financial information on a segment basis is as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Vehicle operations revenue $ 28,187.8 $ 22,831.7 $ 13,126.5 Vehicle operations gross profit 5,154.3 4,263.9 2,225.0 Floor plan interest expense (38.8) (22.3) (34.4) Vehicle operations selling, general and administrative (3,260.0) (2,568.0) (1,559.6) Vehicle operations income 1,855.5 1,673.6 631.0 Financing operations interest margin: Interest, fee, and lease income 134.1 45.9 13.9 Interest expense (52.2) (4.8) (1.5) Total interest margin 81.9 41.1 12.4 Selling, general and administrative (32.0) (18.2) (8.9) Total pre-provision income 49.9 22.9 3.5 Provision for loan and lease losses (44.4) (9.4) 3.0 Depreciation and amortization (9.5) (2.5) — Financing operations (loss) income (4.0) 11.0 6.5 Total segment income for reportable segments 1,851.6 1,684.5 637.4 Corporate and other 213.9 80.4 113.2 Depreciation and amortization (163.2) (124.8) (92.3) Other interest expense (129.1) (103.4) (71.6) Other income (expense), net (43.2) (52.0) 61.8 Income before income taxes $ 1,730.0 $ 1,484.8 $ 648.5 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSUS Bank Syndicated Credit FacilityOn February 9, 2023, we entered into a Fourth Amendment to our Fourth Amended and Restated Loan Agreement with U.S. Bank National Association as agent for the lenders, and each of the lenders party to the agreement, as lenders. Among other changes, the Fourth Amendment increases the total financing commitment from $3.75 billion to $4.5 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $5.5 billion. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements reflect the results of operations, the financial position and the cash flows for Lithia Motors, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Cash, Restricted Cash, and Cash Equivalents | Cash and Restricted CashCash is defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable that are restricted for repayment on borrowings on our securitization facilities before being unrestricted |
Accounts Receivable | Accounts Receivable Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within five • Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. |
Finance Receivables | Finance Receivables Finance receivables consist of auto loan and lease contracts originated through our Financing Operations, which are secured by the vehicles we sell. Interest income on finance receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. More than 98% of the portfolio is aged less than 60 days past due with less than 2% on non-accrual status. As of December 31, 2022, the allowance for credit losses related to auto loan and lease receivables was $69.3 million and was included in finance receivables, net. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and reasonable and supportable forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon the |
Inventories | Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the lower of cost (first-in, first-out) or market method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction to cost of sales as the related vehicles are sold. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives on the straight-line basis. Leasehold improvements made at the inception of the lease or during the term of the lease are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years The cost for maintenance, repairs and minor renewals is expensed as incurred, while significant remodels and betterments are capitalized. In addition, interest on borrowings for major capital projects, significant remodels, and betterments is capitalized. Capitalized interest becomes a part of the cost of the depreciable asset and is depreciated according to the estimated useful lives as previously stated. For the years ended December 31, 2022, 2021 and 2020, we recorded capitalized interest of $2.6 million, $2.0 million and $1.6 million, respectively. When an asset is retired, or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is credited or charged to income from operations. Leased property meeting certain criteria are recorded as finance leases. We have finance leases for certain locations, expiring at various dates through August 1, 2037. Our finance lease right-of-use assets are included in property and equipment on our Consolidated Balance Sheets. Amortization of finance lease right-of-use assets is computed on a straight-line basis over the term of the lease, unless the lease transfers title or it contains a bargain purchase option, in which case, it is amortized over the asset’s useful life and is included in depreciation expense. Finance lease liabilities are recorded as the lesser of the estimated fair market value of the leased property or the net present value of the aggregated future minimum payments and are included in current maturities of long-term debt and long-term debt on our Consolidated Balance Sheets. Interest associated with these obligations is included in other interest expense in the Consolidated Statements of Operations. See Note 8 – Commitments and Contingencies. |
Goodwill | Goodwill Goodwill represents the excess purchase price over the fair value of net assets acquired which is not allocable to separately identifiable intangible assets. Other identifiable intangible assets, such as franchise rights, are separately recognized if the intangible asset is obtained through contractual or other legal right or if the intangible asset can be sold, transferred, licensed or exchanged. |
Franchise Value | Franchise Value We enter into agreements (franchise agreements) with our manufacturers. Franchise value represents a right received under franchise agreements with manufacturers and is identified on an individual store basis. We evaluated the useful lives of our franchise agreements based on the following factors: • certain of our franchise agreements continue indefinitely by their terms; • certain of our franchise agreements have limited terms, but are routinely renewed without substantial cost to us; • other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers terminating franchise agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time; • state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise; • we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and • as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the franchise agreements acquired with the dealerships we purchase based on the understanding and industry practice that the franchise agreements will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our franchise agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We evaluated our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise value for impairment is each individual store. |
Variable Interest Entities and Securitization Transactions | Variable Interest Entities and Securitization Transactions We maintain a revolving funding program composed of warehouse facilities that we use to fund auto loans receivable originated by our Financing Operations. We use term securitizations to provide long-term funding for most of the auto loans receivable initially funded through the warehouse facilities. In these transactions, a pool of auto loans receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. The securitization trusts established in connection with asset-backed securitization transactions are variable interest entities (VIEs). We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize these term securitizations as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the non-recourse funding vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the non-recourse funding vehicles. |
Restricted Cash on Deposit in Reserve Accounts | Restricted Cash on Deposit in Reserve Accounts The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its creditors. In the event that the cash generated by the related receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities. |
Advertising | AdvertisingWe expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Additionally, manufacturer cooperative advertising credits for qualifying, specifically-identified advertising expenditures are recognized as a reduction of advertising expense. |
Contract Origination Costs | Contract Origination CostsContract origination commissions paid to our employees directly related to the sale of our self-insured lifetime lube, oil and filter service contracts and auto loan receivable originations are deferred and charged to expense in proportion to the associated revenue to be recognized. |
Legal Costs | Legal Costs We are a party to numerous legal proceedings arising in the normal course of business. We accrue for certain legal costs, including attorney fees and potential settlement claims related to various legal proceedings that are estimable and probable. See Note 8 – Commitments and Contingencies. |
Stock-Based Compensation | Stock-Based Compensation Compensation costs associated with equity instruments exchanged for employee and director services are measured at the grant date, based on the fair value of the award. If there is a performance-based element to the award, the expense is recognized based on the estimated attainment level, estimated time to achieve the attainment level and/or the vesting period. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of non-vested stock awards is based on the closing price of our common stock on the date of grant. We account for forfeitures of stock-based awards as they occur. See Note 13 – Stock-Based Compensation. |
Income and Other Taxes | Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties are recorded as income tax provision in the period incurred or accrued when related to an uncertain tax position. See Note 15 – Income Taxes. |
Concentration of Risk and Uncertainties | Concentration of Risk and Uncertainties We purchase substantially all of our new vehicles and inventory from various manufacturers at the prevailing prices charged by auto manufacturers to all franchised dealers. Our overall sales could be impacted by the auto manufacturers’ inability or unwillingness to supply dealerships with an adequate supply of popular models. We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. In the event that manufacturers are unable to supply the needed level of vehicles, our financial performance may be adversely impacted. We depend on our manufacturers to deliver high-quality, defect-free vehicles. In the event that manufacturers experience future quality issues, our financial performance may be adversely impacted. We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. Our sales volume could be materially adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles. We also receive incentives and rebates from our manufacturers, including cash allowances, financing programs, discounts, holdbacks and other incentives. These incentives are recorded as accounts receivable in our Consolidated Balance Sheets until payment is received. Our financial condition could be materially adversely impacted by the manufacturers’ or distributors’ inability to continue to offer these incentives and rebates at substantially similar terms, or to pay our outstanding receivables. We enter into franchise agreements with the manufacturers. The franchise agreements generally limit the location of the dealership and provide the auto manufacturer approval rights over changes in dealership management and ownership. The auto manufacturers are also entitled to terminate the franchise agreement if the dealership is in material breach of the terms. Our ability to expand operations depends, in part, on obtaining consents of the manufacturers for the acquisition of additional dealerships. See also “Goodwill” and “Franchise Value” above. We have a variety of syndicated credit facilities with several of the included financial institutions also providing vehicle financing for certain new vehicles, vehicles that are designated for use as service loaners and mortgage financing. These credit facilities are the primary source of floor plan financing for our new vehicle inventory and also provides used vehicle financing and a revolving line of credit. The terms of the facilities extends through various dates through April 2026. At maturity, our financial condition could be materially adversely impacted if lenders are unable to provide credit that has typically been extended to us or with terms unacceptable to us. Our financial condition could be materially adversely impacted if these providers incur losses in the future or undergo funding limitations. See Note 9 – Credit Facilities and Long-Term Debt. We anticipate continued organic growth and growth through acquisitions. This growth will require additional credit which may be unavailable or with terms unacceptable to us. If these events were to occur, we may not be able to borrow sufficient funds to facilitate our growth. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and related notes to financial statements. Changes in such estimates may affect amounts reported in future periods. Estimates are used in the calculation of certain reserves maintained for charge-backs on estimated cancellations of service contracts; life, accident and disability insurance policies; finance fees from customer financing contracts and uncollectible accounts receivable. Estimates are also used in our allowance for loan and lease losses, which represents the net credit losses expected over the remaining contractual life of our finance receivables. Because net loss performance can vary substantially over time, estimating net losses requires assumptions about matters that are uncertain. The allowance for loan and lease losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Determining the appropriateness of the allowance for loan and lease losses requires management to exercise judgement about matters that are inherently uncertain, including the timing and distribution of net losses that could materially affect the allowance or loan and lease losses and, therefore, net earnings. We also use estimates in the calculation of various expenses, accruals and reserves, including anticipated losses related to workers’ compensation insurance; anticipated losses related to self-insurance components of our property and casualty and medical insurance; self-insured lifetime lube, oil and filter service contracts; discretionary employee bonuses, the Transition Agreement with Sidney B. DeBoer, our Chairman of the Board; warranties provided on certain products and services; legal reserves and stock-based compensation. We also make certain estimates regarding the assessment of the recoverability of long-lived assets, indefinite-lived intangible assets and deferred tax assets. |
Fair Value of Assets Acquired and Liabilities Assumed | Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. |
Revenue Recognition | Revenue Recognition The following describes our major product lines, which represent the disaggregation of our revenues to transactions that are similar in nature, amount, timing, uncertainties and economic factors. New Retail Vehicle and Used Retail Vehicle Sales Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectibility is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state law. Service, Body and Parts Sales Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $284.3 million and $239.0 million as of December 31, 2022, and December 31, 2021, respectively; and we recognized $44.6 million and $35.0 million of revenue in the years ended December 31, 2022, and December 31, 2021, respectively, related to our opening contract liability balances. Our contract liability balance is included in accrued liabilities and deferred revenue. Finance and Insurance Sales Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract under the standard. Our contract asset balance was $12.5 million and $9.6 million as of December 31, 2022, and December 31, 2021, respectively; and is included in trade receivables and other non-current assets. |
Segment Reporting | Segment Reporting Historically, the Company had determined that operating segments were individual store locations, which were aggregated into reportable segments of Domestic, Import, and Luxury. This conclusion was primarily based on the chief operating decision maker’s (CODM’s) review of individual store results to assess performance and allocate resources, along with economic similarities within Domestic, Import, and Luxury stores. In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. The Company has experienced rapid growth in size as well as new expansion into synergistic business lines, transforming the way the business is managed. Considering the Company’s growth, evolution of its business model, and change in Company structure during 2022, management reevaluated its reporting segments and determined the operating segments (and reportable segments) as of December 31, 2022 are Vehicle Operations and Financing Operations. Based on this evaluation, we reclassified Financing Operations Income for the comparative periods from the “Corporate and Other” category to conform to current year presentation and consolidated our Domestic, Import, and Luxury segments into a new Vehicle Operations segment. We determined our operating segments based on how the CODM reviews our operating results in assessing performance and allocating resources. The Financing Operations segment includes DFC, our captive finance company that serves as a lender for Lithia vehicle sales, and the Pfaff Leasing business acquired in 2021. The Vehicle Operations segment includes our retail automotive, recreational vehicles (RV), and motorcycle franchises that sell new vehicles, used vehicles, parts, repair and maintenance services, and vehicle finance and insurance products. Corporate and other revenue and income include unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other operating segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden a stand-alone dealership would experience. Examples of these internal allocations include internal rent expense, internal floor plan financing charges, and internal fees charged to offset employees within our corporate headquarters that perform certain dealership functions. |
Reclassifications | Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency and comparability between periods presented. We reclassified certain components within our Consolidated Balance Sheets and Consolidated Statements of Cash Flows, to present activity and balances associated with Finance Receivables and Non-Recourse Notes Payable. We also reclassified components of our Consolidated Statements of Operations to present Finance Operations Income, and to change our presentation of segment reporting. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2022, the FASB issued an accounting pronouncement (ASU 2022-02) related to troubled debt restructurings (TDRs) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We plan to adopt this pronouncement and make the necessary updates to our vintage disclosures for the interim period beginning January 1, 2023, and aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Estimated Useful Lives | The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years Property and equipment consisted of the following: December 31, ($ in millions) 2022 2021 Land $ 1,149.9 $ 965.6 Building and improvements 2,027.8 1,748.5 Service equipment 185.8 159.9 Furniture, office equipment, signs and fixtures 650.3 507.3 4,013.8 3,381.3 Less accumulated depreciation (526.8) (422.6) 3,487.0 2,958.7 Construction in progress 87.6 93.9 $ 3,574.6 $ 3,052.6 |
Schedule of Advertising Expense and Manufacturer Cooperative Advertising Credits | Advertising expense and manufacturer cooperative advertising credits were as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Advertising expense, gross $ 299.9 $ 197.8 $ 121.3 Manufacturer cooperative advertising credits (46.3) (35.6) (23.9) Advertising expense, net $ 253.6 $ 162.2 $ 97.4 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Receivables | Accounts receivable consisted of the following: December 31, ($ in millions) 2022 2021 Contracts in transit $ 432.5 $ 304.9 Trade receivables 122.6 125.5 Vehicle receivables 105.4 106.6 Manufacturer receivables 151.9 120.5 Other receivables, current 3.8 31.7 816.2 689.2 Less: Allowance for doubtful accounts (3.1) (3.7) Total accounts receivable, net $ 813.1 $ 685.5 December 31, ($ in millions) 2022 2021 Asset-backed term funding $ 482.1 $ 331.2 Warehouse facilities 1,383.9 279.6 Other managed receivables 390.9 217.5 Total finance receivables 2,256.9 828.3 Less: Allowance for finance receivable losses (69.3) (25.0) Finance receivables, net $ 2,187.6 $ 803.3 |
Inventories and Floor Plan No_2
Inventories and Floor Plan Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The components of inventories consisted of the following: December 31, ($ in millions) 2022 2021 New vehicles $ 1,679.8 $ 812.9 Used vehicles 1,529.3 1,418.3 Parts and accessories 200.3 154.3 Total inventories $ 3,409.4 $ 2,385.5 |
Schedule of Debt | December 31, ($ in millions) 2022 2021 Floor plan notes payable: non-trade $ 1,489.4 $ 835.9 Floor plan notes payable 627.2 354.2 Total floor plan debt $ 2,116.6 $ 1,190.1 Below is a summary of our outstanding balances on credit facilities and long-term debt: December 31, ($ in millions) Maturity Dates 2022 2021 Long-term debt: Used and service loaner vehicle inventory financing commitments Various dates through Apr 2026 $ 877.2 $ 500.0 Revolving lines of credit Various dates through Apr 2026 927.6 129.9 Warehouse facilities Various dates through Nov 2025 930.0 90.0 Total lines of credit 2,734.8 719.9 Real estate mortgages Various dates through Jan 2043 580.1 592.9 Finance lease obligations Various dates through Aug 2037 56.4 53.6 4.625% Senior notes due 2027 Dec 2027 400.0 400.0 4.375% Senior notes due 2031 Jan 2031 550.0 550.0 3.875% Senior notes due 2029 Jun 2029 800.0 800.0 Other debt Various dates through Jan 2024 16.6 1.9 Total long-term debt outstanding 5,137.9 3,118.3 Less: unamortized debt issuance costs (29.1) (26.5) Less: current maturities (net of current debt issuance costs) (20.5) (223.7) Long-term debt, less current maturities $ 5,088.3 $ 2,868.1 Non-recourse notes payable Various dates through Apr 2030 $ 422.2 $ 317.6 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years Property and equipment consisted of the following: December 31, ($ in millions) 2022 2021 Land $ 1,149.9 $ 965.6 Building and improvements 2,027.8 1,748.5 Service equipment 185.8 159.9 Furniture, office equipment, signs and fixtures 650.3 507.3 4,013.8 3,381.3 Less accumulated depreciation (526.8) (422.6) 3,487.0 2,958.7 Construction in progress 87.6 93.9 $ 3,574.6 $ 3,052.6 |
Goodwill and Franchise Value (T
Goodwill and Franchise Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a roll-forward of goodwill: ($ in millions) Vehicle Operations Financing Operations Consolidated Balance as of December 31, 2020 ¹ $ 593.0 $ — $ 593.0 Additions through acquisitions 2 395.5 — 395.5 Reductions through divestitures (11.2) — (11.2) Balance as of December 31, 2021 ¹ 977.3 — 977.3 Additions through acquisitions 3 483.4 17.0 500.4 Reductions through divestitures (17.9) — (17.9) Currency translation 0.7 0.2 0.9 Balance as of December 31, 2022 ¹ $ 1,443.5 $ 17.2 $ 1,460.7 (1) Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. (2) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $395.5 million of goodwill. (3) Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $500.4 million of goodwill. Our purchase price allocation for the 2022 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 16 – Acquisitions. |
Schedule of Franchise Value | The following is a roll-forward of franchise value: ($ in millions) Franchise Value Balance as of December 31, 2020 $ 350.2 Additions through acquisitions 1 459.7 Reductions through divestitures (8.9) Reductions from impairments (1.9) Balance as of December 31, 2021 799.1 Additions through acquisitions 2 1,088.4 Reductions through divestitures (33.6) Currency translation 2.3 Balance as of December 31, 2022 $ 1,856.2 (1) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $459.7 million of franchise value. (2) Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $1,088.4 million of franchise value. Our purchase price allocation for the 2022 acquisitions are preliminary and is not yet allocated to our segments. See Note 16 – Acquisitions. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Receivables | Accounts receivable consisted of the following: December 31, ($ in millions) 2022 2021 Contracts in transit $ 432.5 $ 304.9 Trade receivables 122.6 125.5 Vehicle receivables 105.4 106.6 Manufacturer receivables 151.9 120.5 Other receivables, current 3.8 31.7 816.2 689.2 Less: Allowance for doubtful accounts (3.1) (3.7) Total accounts receivable, net $ 813.1 $ 685.5 December 31, ($ in millions) 2022 2021 Asset-backed term funding $ 482.1 $ 331.2 Warehouse facilities 1,383.9 279.6 Other managed receivables 390.9 217.5 Total finance receivables 2,256.9 828.3 Less: Allowance for finance receivable losses (69.3) (25.0) Finance receivables, net $ 2,187.6 $ 803.3 |
Schedule of Allowance for Credit Losses | The allowances for credit losses related to finance receivables consisted of the following changes during the period: Year Ended December 31, ($ in millions) 2022 2021 Allowance at beginning of period $ 25.0 $ 12.9 Charge-offs (62.0) (16.6) Recoveries 19.1 8.8 Provision expense 87.2 19.9 Allowance at end of period $ 69.3 $ 25.0 |
Financing Receivable Credit Quality Indicators | Ending finance receivables (principal balances) by FICO score: As of December 31, 2022 Year of Origination ($ in millions) 2022 2021 2020 Total <599 1 $ 63.0 $ 30.3 $ 4.8 $ 98.1 600-699 652.6 243.4 27.2 923.2 700-774 575.9 97.9 10.0 683.8 775+ 369.5 21.5 4.5 395.5 Total auto loan receivables $ 1,661.0 $ 393.1 $ 46.5 2,100.6 Other finance receivables (1) 156.3 Total finance receivables $ 2,256.9 As of December 31, 2021 Year of Origination ($ in millions) 2021 2020 Total <599 1 $ 53.3 $ 9.5 $ 62.8 600-699 386.5 50.0 436.5 700-774 149.2 17.3 166.5 775+ 30.3 7.0 37.3 Total auto loan receivables $ 619.3 $ 83.8 703.1 Other finance receivables (1) 125.2 Total finance receivables $ 828.3 (1) Includes legacy portfolio, loans that are originated with no FICO score available, and lease receivables. |
Net Investment in Operating L_2
Net Investment in Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule Of Net Investment In Lease | Net investment in operating leases was as follows: December 31, ($ in millions) 2022 2021 Vehicles, at cost (1) $ 92.2 $ 66.0 Accumulated depreciation (1) (7.6) (0.9) Net investment in operating leases $ 84.6 $ 65.1 (1) Vehicles, at cost and accumulated depreciation are recorded in other non-current assets, on the Consolidated Balance Sheets. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease-Related Liabilities Recorded on the Balance Sheet | The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets: December 31, ($ in millions) 2022 2021 Operating lease liabilities: Current portion included in accrued liabilities $ 51.7 $ 49.0 Noncurrent operating lease liabilities 346.6 361.7 Total operating lease liabilities 398.3 410.7 Finance lease liabilities: Current portion included in current maturities of long-term debt 2.0 16.3 Long-term portion of lease liabilities in long-term debt 54.4 37.3 Total finance lease liabilities 56.4 53.6 Total lease liabilities $ 454.7 $ 464.3 Finance lease right-of-use assets: Total finance lease right-of-use assets (1) $ 75.9 $ 58.7 Weighted-average remaining lease term: Operating leases 7 years 8 years Finance leases 10 years 11 years Weighted-average discount rate: Operating leases 4.31 % 4.12 % Finance leases 4.85 % 2.42 % (1) Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation. |
Schedule of Lease Costs | The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows: Year Ended December 31, ($ in millions) 2022 2021 Operating lease cost (1) $ 77.9 $ 53.1 Variable lease cost (2) 5.6 3.5 Amortization of finance lease right-of-use assets 4.2 5.9 Interest on finance lease liabilities 3.7 4.2 Sublease income (7.5) (6.4) Total lease costs $ 83.9 $ 60.3 (1) Includes short-term and month-to-month lease costs, which are immaterial. (2) Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate. |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2022, the maturities of our operating and finance lease liabilities were as follows: ($ in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2023 $ 70.5 $ 4.6 2024 63.7 10.2 2025 59.7 22.2 2026 50.2 2.9 2027 44.6 3.0 Thereafter 235.6 26.9 Total minimum lease payments 524.3 69.8 Less: present value adjustment (126.0) (13.4) Total lease liabilities $ 398.3 $ 56.4 |
Schedule of Maturities of Finance Lease Liabilities | As of December 31, 2022, the maturities of our operating and finance lease liabilities were as follows: ($ in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2023 $ 70.5 $ 4.6 2024 63.7 10.2 2025 59.7 22.2 2026 50.2 2.9 2027 44.6 3.0 Thereafter 235.6 26.9 Total minimum lease payments 524.3 69.8 Less: present value adjustment (126.0) (13.4) Total lease liabilities $ 398.3 $ 56.4 |
Schedule of Estimated Charge Backs | We estimate that the charge-backs will be paid out as follows: Year Ending December 31, ($ in millions) 2023 $ 79.9 2024 41.1 2025 18.6 2026 6.4 2027 1.4 Thereafter 0.2 Total $ 147.6 |
Schedule of Deferred Revenue | As of December 31, 2022, we had a contract liability balance of $284.9 million associated with these contracts and estimate the contract liability will be recognized as follows: Year Ending December 31, ($ in millions) 2023 $ 58.5 2024 47.0 2025 37.5 2026 29.8 2027 24.0 Thereafter 88.1 Total $ 284.9 |
Credit Facilities and Long-te_2
Credit Facilities and Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Balances on Credit Facilities and Long-term Debt | December 31, ($ in millions) 2022 2021 Floor plan notes payable: non-trade $ 1,489.4 $ 835.9 Floor plan notes payable 627.2 354.2 Total floor plan debt $ 2,116.6 $ 1,190.1 Below is a summary of our outstanding balances on credit facilities and long-term debt: December 31, ($ in millions) Maturity Dates 2022 2021 Long-term debt: Used and service loaner vehicle inventory financing commitments Various dates through Apr 2026 $ 877.2 $ 500.0 Revolving lines of credit Various dates through Apr 2026 927.6 129.9 Warehouse facilities Various dates through Nov 2025 930.0 90.0 Total lines of credit 2,734.8 719.9 Real estate mortgages Various dates through Jan 2043 580.1 592.9 Finance lease obligations Various dates through Aug 2037 56.4 53.6 4.625% Senior notes due 2027 Dec 2027 400.0 400.0 4.375% Senior notes due 2031 Jan 2031 550.0 550.0 3.875% Senior notes due 2029 Jun 2029 800.0 800.0 Other debt Various dates through Jan 2024 16.6 1.9 Total long-term debt outstanding 5,137.9 3,118.3 Less: unamortized debt issuance costs (29.1) (26.5) Less: current maturities (net of current debt issuance costs) (20.5) (223.7) Long-term debt, less current maturities $ 5,088.3 $ 2,868.1 Non-recourse notes payable Various dates through Apr 2030 $ 422.2 $ 317.6 |
Schedule of Line of Credit Facilities | The annual interest rates associated with our floor plan commitments are as follows: Commitment Annual Interest Rate at December 31, 2022 New vehicle floor plan 5.51% Used vehicle floor plan 5.81% Service loaner floor plan 5.51% Revolving line of credit 5.41% Commitment Annual Interest Rate at December 31, 2022 Wholesale flooring facility 5.76% Used vehicle flooring facility 6.01% Daily rental facility 5.96% Wholesale leasing facility 6.06% Working capital revolving facility 6.01% |
Schedule of Debt Covenant Terms | Under our USB credit facility, we are required to maintain the ratios detailed in the following table: Debt Covenant Ratio Requirement As of December 31, 2022 Fixed charge coverage ratio Not less than 1.20 to 1 5.81 to 1 Leverage ratio Not more than 5.75 to 1 1.36 to 1 |
Schedule of Long-term Debt Instruments | In August 2022, we issued $298.1 million in non-recourse notes payable related to the asset-backed term funding transaction. Below is a summary of outstanding non-recourse notes payable issued: ($ in millions) Balance as of December 31, 2022 Initial Principal Amount Issuance Date Interest Rate Final Distribution Date LAD Auto Receivables Trust 2021-1 Class A $ 115.0 $ 282.8 11/19/21 1.30% 08/17/26 LAD Auto Receivables Trust 2021-1 Class B 18.3 18.3 11/19/21 1.94% 11/16/26 LAD Auto Receivables Trust 2021-1 Class C 26.0 26.0 11/19/21 2.35% 04/15/27 LAD Auto Receivables Trust 2021-1 Class D 17.2 17.2 11/19/21 3.99% 11/15/29 LAD Auto Receivables Trust 2022-1 Class A 207.2 259.7 08/09/22 5.21% 06/15/27 LAD Auto Receivables Trust 2022-1 Class B 15.5 15.5 08/09/22 5.87% 09/15/27 LAD Auto Receivables Trust 2022-1 Class C 23.0 22.9 08/09/22 6.85% 04/15/30 Total non-recourse notes payable $ 422.2 $ 642.4 Below is a summary of outstanding senior notes issued: ($ in millions) Principal Amount Earliest Redemption Date % Currently Redeemable Current Redemption Price Maturity Date Interest Payment Dates 4.625% Senior notes due 2027 $400.0 12/15/22 100% 102.313% 12/15/27 Jun 15, Dec 15 4.375% Senior notes due 2031 550.0 10/15/25 40% 104.375% 01/15/31 Jan 15, Jul 15 3.875% Senior notes due 2029 800.0 06/01/24 40% 103.875% 06/01/29 Jun 1, Dec 1 Total senior notes $1,750.0 |
Schedule of Maturities of Long-term Debt | The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2022 was as follows: Year Ending December 31, ($ in millions) 2023 $ 26.7 2024 74.8 2025 74.1 2026 49.3 2027 473.8 Thereafter 1,688.9 Total principal payments $ 2,387.6 |
401(k) Profit Sharing, Deferr_2
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Postemployment Benefits [Abstract] | |
Summary of SERP | The following is a summary related to our SERP: Year Ended December 31, ($ in millions) 2022 2021 2020 Compensation expense $ 1.1 $ 1.4 $ 1.2 Total discretionary contribution $ 1.0 $ 0.9 $ 0.9 Guaranteed annual return 5.00 % 5.00 % 5.00 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The table below presents the liabilities related to the zero-cost interest rate collar: ($ in millions) Accrued Liabilities Other Long-Term Liabilities Other Non-Current Assets Total Balance as of December 31, 2019 $ (0.1) $ (0.9) $ — $ (1.0) Amounts reclassified from AOCI to floorplan interest expense 1.8 — — 1.8 Loss recorded from interest rate collar (4.3) (5.1) — (9.4) Balance as of December 31, 2020 (2.6) (6.0) — (8.6) Amounts reclassified from AOCI to floorplan interest expense 2.8 — — 2.8 Loss recorded from interest rate collar (2.1) 5.3 — 3.2 Balance as of December 31, 2021 (1.9) (0.7) — (2.6) Amounts reclassified from AOCI to floorplan interest expense 0.7 — (2.7) (2.0) Gain recorded from interest rate collar 1.2 0.7 2.7 4.6 Balance as of December 31, 2022 $ — $ — $ — $ — |
Equity and Redeemable Non-con_2
Equity and Redeemable Non-controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stock Repurchased and Retired | Share repurchases under our authorization were as follows: Repurchases Occurring in 2022 Cumulative Repurchases as of December 31, 2022 Shares Average Price Shares Average Price Share repurchase authorization 2,428,850 $ 276.42 6,904,781 $ 173.59 The following is a summary of our repurchases in the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Shares repurchased pursuant to repurchase authorizations 2,428,850 756,883 563,953 Total purchase price ($ in millions) $ 671.4 $ 214.8 $ 46.1 Average purchase price per share $ 276.42 $ 283.75 $ 81.71 Shares repurchased in association with tax withholdings on the vesting of RSUs 56,911 54,318 30,620 |
Schedule of Dividends Declared | We declared and paid dividends on our common stock as follows: Quarter declared Dividend amount per share Total amount of dividends paid ($ in millions) 2020 First quarter $ 0.30 $ 7.0 Second quarter 0.30 6.8 Third quarter 0.31 7.1 Fourth quarter 0.31 8.2 2021 First quarter $ 0.31 $ 8.2 Second quarter 0.35 9.3 Third quarter 0.35 10.6 Fourth quarter 0.35 10.6 2022 First quarter $ 0.35 $ 10.3 Second quarter 0.42 11.9 Third quarter 0.42 11.6 Fourth quarter 0.42 11.4 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Employee Stock Purchase Plan | Following is information regarding our 2009 ESPP: Year Ended December 31, 2022 Shares purchased pursuant to 2009 ESPP 157,507 Weighted average per share price of shares purchased $ 218.59 Weighted average per share discount from market value for shares purchased $ 38.57 As of December 31, 2022 Shares available for purchase pursuant to 2009 ESPP 1,151,846 |
Schedule of Restricted Stock Units Activity | RSU grants vest over a period of time up to four years from the date of grant. RSU activity was as follows: RSUs Weighted average per share grant date fair value Balance, December 31, 2021 466,860 $ 159.85 Granted 138,420 294.32 Vested (147,441) 110.77 Forfeited (41,961) 164.88 Balance, December 31, 2022 415,878 224.00 |
Schedule of Stock-Based Compensation | Certain information regarding our stock-based compensation was as follows: Year Ended December 31, 2022 2021 2020 Per share intrinsic value of non-vested stock granted $ 294.32 $ 312.83 $ 130.89 Weighted average per share discount for compensation expense recognized under the 2009 ESPP 38.57 50.58 22.97 Fair value of non-vested stock that vested during the period ($ in millions) 110.8 107.5 108.5 Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense ($ in millions) 41.1 34.7 23.2 Tax benefit recognized in Consolidated Statements of Operations ($ in millions) 12.4 11.9 3.7 Cash received from options exercised and shares purchased under all share-based arrangements ($ in millions) 34.4 29.6 14.8 Tax deduction realized related to stock options exercised ($ in millions) 43.7 41.8 13.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Below are our assets and liabilities that are measured at fair value on a recurring basis: As of December 31 2022 2021 ($ in millions) Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3 Investments Shift Technologies, Inc. $ 1.8 $ 1.8 $ — $ — $ 40.9 $ 40.4 $ 0.5 $ — Derivatives Derivative assets 22.1 — 22.1 — 6.4 — 6.4 — Derivative liabilities 22.1 — 22.1 — 8.9 — 8.9 — Fixed rate debt (1) 4.625% Senior notes due 2027 400.0 364.0 — — 400.0 420.0 — — 4.375% Senior notes due 2031 550.0 448.3 — — 550.0 583.0 — — 3.875% Senior notes due 2029 800.0 656.0 — — 800.0 815.0 — — Non-recourse notes payable 422.2 — 411.8 — 317.6 — 316.8 — Real estate mortgages and other debt 489.0 — 399.0 — 477.6 — 488.7 — (1) Excluding unamortized debt issuance cost |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The income tax provision was as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Current: Federal $ 269.2 $ 266.2 $ 108.9 State 105.5 111.6 50.3 Foreign (0.9) 1.2 — 373.8 379.0 159.2 Deferred: Federal 73.4 38.2 17.6 State 13.5 3.8 1.4 Foreign 7.7 1.1 — 94.6 43.1 19.0 Total $ 468.4 $ 422.1 $ 178.2 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between amounts computed using the federal income tax rate of 21% and our income tax provision is shown in the following tabulation: Year Ended December 31, ($ in millions) 2022 2021 2020 Federal tax provision at statutory rate $ 363.3 $ 311.7 $ 136.2 State taxes, net of federal income tax benefit 76.9 85.4 40.4 Non-deductible items 5.0 4.8 2.8 Permanent differences related to stock compensation (2.4) (2.6) (0.5) Net change in valuation allowance 25.0 25.3 0.5 General business credits (2.6) (2.3) (1.3) Foreign Rate Differential 1.4 0.5 — Other 1.8 (0.7) 0.1 Income tax provision $ 468.4 $ 422.1 $ 178.2 |
Schedule of Deferred Tax Assets and Liabilities | Individually significant components of the deferred tax assets and (liabilities) are presented below: December 31, ($ in millions) 2022 2021 Deferred tax assets: Deferred revenue and cancellation reserves $ 126.6 $ 95.3 Allowances and accruals, including state tax carryforward amounts 71.3 69.1 Lease liability 103.2 107.6 Credits and other 5.1 1.8 Net operating losses 27.9 3.7 Valuation allowance (51.4) (26.4) Total deferred tax assets 282.7 251.1 Deferred tax liabilities: Inventories (39.2) (20.1) Goodwill (157.7) (112.3) Property and equipment, principally due to differences in depreciation (233.0) (185.9) Right of use asset (99.0) (103.7) Prepaid expenses and other (40.1) (20.1) Total deferred tax liabilities (569.0) (442.1) Total $ (286.3) $ (191.0) |
Schedule of Unrecognized Tax Benefits | The following is a reconciliation of our unrecognized tax benefits for December 31, 2022, 2021, and 2020: ($ in millions) Balance, December 31, 2020 $ 0.2 Increase related to tax positions taken - current year 0.1 Balance, December 31, 2021 0.3 Increase related to tax positions taken - current year 0.3 Balance, December 31, 2022 $ 0.6 |
Summary of Open Tax Years | Open tax years at December 31, 2022 included the following: Federal 2019 - 2022 States (30) 2018 - 2022 Canada 2021 - 2022 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Pro Forma Summary | Revenue and operating income contributed by the 2022 acquisitions subsequent to the date of acquisition were as follows: Year Ended December 31, ($ in millions) 2022 Revenue $ 1,404.0 Operating income 66.9 The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the year: Year Ended December 31, ($ in millions, except for per share amounts) 2022 2021 Revenue $ 29,748.1 $ 26,200.5 Net income 1,338.2 1,236.9 Basic net income per share 47.47 42.95 Diluted net income per share 47.25 42.64 |
Summary of Consideration Paid for Acquisitions | The following tables summarize the consideration paid for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date: Year Ended December 31, ($ in millions) 2022 2021 Cash paid, net of cash acquired $ 1,240.8 $ 2,697.5 Contingent consideration 3.9 — Redeemable non-controlling interest — 33.1 Debt issued — 356.0 Total consideration transferred $ 1,244.7 $ 3,086.6 Year Ended December 31, ($ in millions) 2022 2021 Trade receivables, net $ 0.2 $ 1.3 Inventories 228.3 626.2 Franchise value 63.7 — Goodwill 30.1 — Property and equipment 379.9 767.5 Other assets 639.1 1,726.2 Floor plan notes payable (0.7) (4.0) Debt and finance lease obligations (78.5) — Other liabilities (17.4) (30.6) Total net assets acquired and liabilities assumed $ 1,244.7 $ 3,086.6 |
Net Income Per Share of Commo_2
Net Income Per Share of Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS: Year Ended December 31, 2022 2021 2020 ($ in millions, except for per share amounts) Common stock Class A Class B Class A Class B Net income from continuing operations applicable to common stockholders $ 1,251.0 $ 1,059.5 $ 0.6 $ 460.9 $ 9.4 Reallocation of distributed net income due to conversion of class B to class A common shares outstanding — — — 0.6 — Conversion of class B common shares into class A common shares — 0.6 — 8.8 — Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted $ 1,251.0 $ 1,060.1 $ 0.6 $ 470.3 $ 9.4 Weighted average common shares outstanding – basic 28.2 28.8 — 23.3 0.5 Conversion of class B common shares into class A common shares — — — 0.5 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.1 0.2 — 0.3 — Weighted average common shares outstanding – diluted 28.3 29.0 — 24.1 0.5 Basic earnings per share attributable to Lithia Motors, Inc. $ 44.38 $ 36.81 $ 36.81 $ 19.74 $ 19.74 Diluted earnings per share attributable to Lithia Motors, Inc. $ 44.17 $ 36.54 $ 36.54 $ 19.53 $ 19.53 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Certain Information on a Segment Basis | Certain financial information on a segment basis is as follows: Year Ended December 31, ($ in millions) 2022 2021 2020 Vehicle operations revenue $ 28,187.8 $ 22,831.7 $ 13,126.5 Vehicle operations gross profit 5,154.3 4,263.9 2,225.0 Floor plan interest expense (38.8) (22.3) (34.4) Vehicle operations selling, general and administrative (3,260.0) (2,568.0) (1,559.6) Vehicle operations income 1,855.5 1,673.6 631.0 Financing operations interest margin: Interest, fee, and lease income 134.1 45.9 13.9 Interest expense (52.2) (4.8) (1.5) Total interest margin 81.9 41.1 12.4 Selling, general and administrative (32.0) (18.2) (8.9) Total pre-provision income 49.9 22.9 3.5 Provision for loan and lease losses (44.4) (9.4) 3.0 Depreciation and amortization (9.5) (2.5) — Financing operations (loss) income (4.0) 11.0 6.5 Total segment income for reportable segments 1,851.6 1,684.5 637.4 Corporate and other 213.9 80.4 113.2 Depreciation and amortization (163.2) (124.8) (92.3) Other interest expense (129.1) (103.4) (71.6) Other income (expense), net (43.2) (52.0) 61.8 Income before income taxes $ 1,730.0 $ 1,484.8 $ 648.5 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) country store state province brand | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of stores | store | 296 | ||
Number of new vehicle brands | brand | 48 | ||
Number of countries | country | 2 | ||
Number of states | state | 28 | ||
Number of provinces | province | 3 | ||
Debt Instrument [Line Items] | |||
Threshold period for interest to bear on receivables | 60 days | ||
Finance receivables, threshold period past due | 120 days | ||
Interest costs capitalized | $ 2.6 | $ 2 | $ 1.6 |
Accrued warranty balance | $ 0.3 | 0.6 | |
Customer returns on sales, threshold period past due | 30 days | ||
Contract liability | $ 284.3 | 239 | |
Contract liability, revenue recognized | 44.6 | 35 | |
Contract asset | $ 12.5 | $ 9.6 | |
Loans receivables | Auto loan receivables | |||
Debt Instrument [Line Items] | |||
Loan receivables aged less than 60 days past due, percent (more than) | 98% | ||
Loan receivable on non-accrual status, percent (less than) | 2% | ||
Allowance for credit losses | $ 69.3 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Period that contracts in transit are outstanding | 5 days | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Period that contracts in transit are outstanding | 10 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Service equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Service equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Furniture, office equipment, signs and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture, office equipment, signs and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Advertising Expense and Manufacturing Cooperative Advertising Credits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising expense, gross | $ 299.9 | $ 197.8 | $ 121.3 |
Manufacturer cooperative advertising credits | (46.3) | (35.6) | (23.9) |
Advertising expense, net | $ 253.6 | $ 162.2 | $ 97.4 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | $ 689.2 | |
Less: Allowance for doubtful accounts | $ (3.1) | (3.7) |
Total accounts receivable, net | 813.1 | 685.5 |
Contracts in transit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | 432.5 | 304.9 |
Trade receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | 122.6 | 125.5 |
Vehicle receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | 105.4 | 106.6 |
Manufacturer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | 151.9 | 120.5 |
Other receivables, current | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable gross | $ 3.8 | $ 31.7 |
Inventories and Floor Plan No_3
Inventories and Floor Plan Notes Payable - Components of Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Total inventories | $ 3,409.4 | $ 2,385.5 |
New vehicles | ||
Inventory [Line Items] | ||
Total inventories | 1,679.8 | 812.9 |
Used vehicles | ||
Inventory [Line Items] | ||
Total inventories | 1,529.3 | 1,418.3 |
Parts and accessories | ||
Inventory [Line Items] | ||
Total inventories | $ 200.3 | $ 154.3 |
Inventories and Floor Plan No_4
Inventories and Floor Plan Notes Payable - Schedule of Floor Plan Notes Payable (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Floor plan notes payable: non-trade | $ 1,489.4 | $ 835.9 |
Floor plan notes payable | 627.2 | 354.2 |
Total floor plan debt | $ 2,116.6 | $ 1,190.1 |
Inventories and Floor Plan No_5
Inventories and Floor Plan Notes Payable - Narrative (Details) | Dec. 31, 2022 |
Floor Plan Notes Payable | Maximum | |
Short-Term Debt [Line Items] | |
Debt stated interest rate | 6.01% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 4,013.8 | $ 3,381.3 |
Less accumulated depreciation | (526.8) | (422.6) |
Property and equipment, net | 3,487 | 2,958.7 |
Construction in progress | 87.6 | 93.9 |
Total property, plant, and equipment | 3,574.6 | 3,052.6 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,149.9 | 965.6 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,027.8 | 1,748.5 |
Service equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 185.8 | 159.9 |
Furniture, office equipment, signs and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 650.3 | $ 507.3 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Asset impairments | $ 0 | $ 0 | $ 0 |
Goodwill and Franchise Value -
Goodwill and Franchise Value - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2008 | |
Goodwill [Roll Forward] | |||
Balance at the beginning | $ 977.3 | $ 593 | |
Additions through acquisitions | 500.4 | 395.5 | |
Reductions through divestitures | (17.9) | (11.2) | |
Currency translation | 0.9 | ||
Balance at the end | 1,460.7 | 977.3 | |
Accumulated impairment losses | $ 299.3 | ||
Additions through acquisitions | 500.4 | 395.5 | |
Vehicle Operations | |||
Goodwill [Roll Forward] | |||
Balance at the beginning | 977.3 | 593 | |
Additions through acquisitions | 483.4 | 395.5 | |
Reductions through divestitures | (17.9) | (11.2) | |
Currency translation | 0.7 | ||
Balance at the end | 1,443.5 | 977.3 | |
Additions through acquisitions | 483.4 | 395.5 | |
Financing Operations | |||
Goodwill [Roll Forward] | |||
Balance at the beginning | 0 | 0 | |
Additions through acquisitions | 17 | 0 | |
Reductions through divestitures | 0 | 0 | |
Currency translation | 0.2 | ||
Balance at the end | 17.2 | 0 | |
Additions through acquisitions | $ 17 | $ 0 |
Goodwill and Franchise Value _2
Goodwill and Franchise Value - Franchise Value (Details) - Franchise Rights - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | $ 799.1 | $ 350.2 |
Additions through acquisitions | 1,088.4 | 459.7 |
Reductions through divestitures | (33.6) | (8.9) |
Reductions from impairments | (1.9) | |
Currency translation | 2.3 | |
Ending balance | $ 1,856.2 | $ 799.1 |
Finance Receivables - Auto Loan
Finance Receivables - Auto Loan and Lease Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Total finance receivables | $ 2,256.9 | $ 828.3 | |
Less: Allowance for finance receivable losses | (69.3) | (25) | $ (12.9) |
Finance receivables, net | 2,187.6 | 803.3 | |
Asset-backed term funding | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Total finance receivables | 482.1 | 331.2 | |
Warehouse facilities | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Total finance receivables | 1,383.9 | 279.6 | |
Other managed receivables | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Total finance receivables | $ 390.9 | $ 217.5 |
Finance Receivables - Allowance
Finance Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance at beginning of period | $ 25 | $ 12.9 |
Charge-offs | (62) | (16.6) |
Recoveries | 19.1 | 8.8 |
Provision expense | 87.2 | 19.9 |
Allowance at end of period | $ 69.3 | $ 25 |
Finance Receivables - FICO Scor
Finance Receivables - FICO Score (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Total | $ 2,256.9 | $ 828.3 |
Auto loan receivables | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Current Year | 1,661 | 619.3 |
Fiscal Year before Current Fiscal Year | 393.1 | 83.8 |
Two Years before Current Fiscal Year | 46.5 | |
Total | 2,100.6 | 703.1 |
Auto loan receivables | Less than 599 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Current Year | 63 | 53.3 |
Fiscal Year before Current Fiscal Year | 30.3 | 9.5 |
Two Years before Current Fiscal Year | 4.8 | |
Total | 98.1 | 62.8 |
Auto loan receivables | 600-699 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Current Year | 652.6 | 386.5 |
Fiscal Year before Current Fiscal Year | 243.4 | 50 |
Two Years before Current Fiscal Year | 27.2 | |
Total | 923.2 | 436.5 |
Auto loan receivables | 700-774 | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Current Year | 575.9 | 149.2 |
Fiscal Year before Current Fiscal Year | 97.9 | 17.3 |
Two Years before Current Fiscal Year | 10 | |
Total | 683.8 | 166.5 |
Auto loan receivables | 775+ | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Current Year | 369.5 | 30.3 |
Fiscal Year before Current Fiscal Year | 21.5 | 7 |
Two Years before Current Fiscal Year | 4.5 | |
Total | 395.5 | 37.3 |
Other finance receivables | ||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract] | ||
Total | $ 156.3 | $ 125.2 |
Net Investment in Operating L_3
Net Investment in Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Vehicles, at cost | $ 92.2 | $ 66 |
Accumulated depreciation | (7.6) | (0.9) |
Net investment in operating leases | $ 84.6 | $ 65.1 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Commitments [Line Items] | |||
Rent expense, net of sublease income operating leases | $ 41.2 | ||
Charge-back liability | $ 147.6 | ||
Contract liability balance | 284.9 | ||
Self insurance program liabilities | $ 67.4 | $ 56.4 | |
Minimum | |||
Other Commitments [Line Items] | |||
Lease renewal term | 1 year | ||
Maximum | |||
Other Commitments [Line Items] | |||
Lease renewal term | 25 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Lease-Related Liabilities Recorded on the Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Operating lease liabilities: | ||
Current portion included in accrued liabilities | $ 51.7 | $ 49 |
Noncurrent operating lease liabilities | 346.6 | 361.7 |
Total operating lease liabilities | $ 398.3 | $ 410.7 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Finance lease liabilities: | ||
Current portion included in current maturities of long-term debt | $ 2 | $ 16.3 |
Long-term portion of lease liabilities in long-term debt | 54.4 | 37.3 |
Finance lease obligations | $ 56.4 | $ 53.6 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term debt | Current maturities of long-term debt |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt, less current maturities | Long-term debt, less current maturities |
Total lease liabilities | $ 454.7 | $ 464.3 |
Total finance lease right-of-use assets | $ 75.9 | $ 58.7 |
Weighted-average remaining lease term: | ||
Weighted-average remaining lease term, operating leases | 7 years | 8 years |
Weighted-average remaining lease term, finance leases | 10 years | 11 years |
Weighted-average discount rate: | ||
Weighted-average discount rate, operating leases | 4.31% | 4.12% |
Weighted-average discount rate, finance leases | 4.85% | 2.42% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 77.9 | $ 53.1 |
Variable lease cost | 5.6 | 3.5 |
Amortization of finance lease right-of-use assets | 4.2 | 5.9 |
Interest on finance lease liabilities | 3.7 | 4.2 |
Sublease income | (7.5) | (6.4) |
Total lease costs | $ 83.9 | $ 60.3 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease Liabilities | ||
2023 | $ 70.5 | |
2024 | 63.7 | |
2025 | 59.7 | |
2026 | 50.2 | |
2027 | 44.6 | |
Thereafter | 235.6 | |
Total minimum lease payments | 524.3 | |
Less: present value adjustment | (126) | |
Total operating lease liabilities | 398.3 | $ 410.7 |
Finance Lease Liabilities | ||
2023 | 4.6 | |
2024 | 10.2 | |
2025 | 22.2 | |
2026 | 2.9 | |
2027 | 3 | |
Thereafter | 26.9 | |
Total minimum lease payments | 69.8 | |
Less: present value adjustment | (13.4) | |
Finance lease obligations | $ 56.4 | $ 53.6 |
Commitments and Contingencies_5
Commitments and Contingencies - Charge-backs for Various Contracts (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 79.9 |
2024 | 41.1 |
2025 | 18.6 |
2026 | 6.4 |
2027 | 1.4 |
Thereafter | 0.2 |
Total | $ 147.6 |
Commitments and Contingencies_6
Commitments and Contingencies - Lifetime Lube, Oil and Filter Contracts Acquired (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 284.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 58.5 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 47 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 37.5 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 29.8 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 24 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 88.1 |
Revenue, remaining performance obligation, period |
Credit Facilities and Long-te_3
Credit Facilities and Long-term Debt - Schedule of Credit Facilities and Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 56.4 | $ 53.6 |
Less: current maturities (net of current debt issuance costs) | (20.5) | (223.7) |
Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 2,734.8 | 719.9 |
Line of credit | Used and service loaner vehicle inventory financing commitments | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 877.2 | 500 |
Line of credit | Revolving lines of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 927.6 | 129.9 |
Line of credit | Warehouse facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 930 | 90 |
Real estate mortgages | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 580.1 | 592.9 |
Senior notes | 4.625% Senior notes due 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 400 | 400 |
Debt stated interest rate | 4.625% | |
Senior notes | 4.375% Senior notes due 2031 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 550 | 550 |
Debt stated interest rate | 4.375% | |
Senior notes | 3.875% Senior notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 800 | 800 |
Debt stated interest rate | 3.875% | |
Other debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 16.6 | 1.9 |
Long-term debt excluding notes payable | ||
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | 5,137.9 | 3,118.3 |
Less: unamortized debt issuance costs | (29.1) | (26.5) |
Less: current maturities (net of current debt issuance costs) | (20.5) | (223.7) |
Long-term debt, less current maturities | 5,088.3 | 2,868.1 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, less current maturities | 422.2 | 317.6 |
Notes payable | Nonrecourse | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 422.2 | $ 317.6 |
Credit Facilities and Long-te_4
Credit Facilities and Long-term Debt - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2022 USD ($) | Nov. 30, 2022 USD ($) financialInstitution financeCompany | Aug. 01, 2021 USD ($) | Aug. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Nov. 21, 2022 USD ($) financialInstitution financeCompany | Nov. 17, 2022 USD ($) | Nov. 01, 2022 USD ($) | Jun. 03, 2022 CAD ($) financialInstitution financeCompany | |
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of non-recourse notes payable | $ 298,100,000 | $ 344,400,000 | $ 0 | ||||||||
Nonrecourse | Collateralized Auto Loans | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of non-recourse notes payable | $ 298,100,000 | ||||||||||
Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Finance lease, interest rate | 2.50% | ||||||||||
Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Finance lease, interest rate | 8.50% | ||||||||||
Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, number of counter-parties | financialInstitution | 6 | ||||||||||
Debt instrument, number of manufacturer-affiliated finance companies | financeCompany | 2 | ||||||||||
Other debt | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 2.30% | ||||||||||
Other debt | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 10% | ||||||||||
Revolving lines of credit | Ally Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 300,000,000 | ||||||||||
Debt stated interest rate | 3% | ||||||||||
Revolving lines of credit | Ally Credit Facility | Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 0.40% | ||||||||||
Securitization Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 1,000,000,000 | ||||||||||
Debt stated interest rate | 1.70% | ||||||||||
Mizuho Warehouse Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 500,000,000 | ||||||||||
Mizuho Warehouse Facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 1.30% | ||||||||||
Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total long-term debt outstanding | $ 2,734,800,000 | 719,900,000 | |||||||||
Line of Credit | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, number of counter-parties | financialInstitution | 20 | ||||||||||
Debt instrument, number of manufacturer-affiliated finance companies | financeCompany | 8 | ||||||||||
Financing commitment amount | $ 3,750,000,000 | ||||||||||
Credit facility, maximum borrowing facility | 4,500,000,000 | ||||||||||
Line of Credit | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 1,100,000,000 | ||||||||||
Line of Credit | Real Estate Backed Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, number of counter-parties | financialInstitution | 8 | ||||||||||
Debt instrument, number of manufacturer-affiliated finance companies | financeCompany | 2 | ||||||||||
Financing commitment amount | $ 216,200,000 | ||||||||||
Line of Credit | Real Estate Backed Credit Facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 0.10% | ||||||||||
Line of Credit | Real Estate Backed Credit Facility | SOFR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 2% | ||||||||||
Line of Credit | Real Estate Backed Credit Facility | SOFR | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 2.50% | ||||||||||
Line of Credit | Used vehicle floor plan | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 800,000,000 | ||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 40% | ||||||||||
Line of Credit | Used vehicle floor plan | Credit Facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 1.40% | ||||||||||
Line of Credit | Revolving lines of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total long-term debt outstanding | $ 927,600,000 | 129,900,000 | |||||||||
Line of Credit | Revolving lines of credit | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 1,500,000,000 | ||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 40% | ||||||||||
Line of Credit | Revolving lines of credit | Credit Facility | SOFR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 1% | ||||||||||
Line of Credit | Revolving lines of credit | Credit Facility | SOFR | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 2% | ||||||||||
Line of Credit | New vehicle floor plan | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 1,400,000,000 | ||||||||||
Line of Credit | New vehicle floor plan | Credit Facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 0.10% | ||||||||||
Line of Credit | New vehicle floor plan | Credit Facility | Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 1.10% | ||||||||||
Line of Credit | New vehicle floor plan | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | 500,000,000 | ||||||||||
Line of Credit | Service loaner floor plan | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 50,000,000 | ||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 3% | ||||||||||
Line of Credit | Service loaner floor plan | Credit Facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (in percent) | 1.20% | ||||||||||
Line of Credit | Working capital revolving facility | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | 100,000,000 | ||||||||||
Line of Credit | Used vehicle flooring facility | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | 100,000,000 | ||||||||||
Line of Credit | Wholesale leasing facility | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | 400,000,000 | ||||||||||
Line of Credit | Daily rental facility | Bank of Nova Scotia Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing facility | $ 25,000,000 | ||||||||||
Line of Credit | Securitization Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total long-term debt outstanding | $ 785,000,000 | ||||||||||
Line of Credit | Mizuho Warehouse Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total long-term debt outstanding | 145,000,000 | ||||||||||
Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | 1,750,000,000 | ||||||||||
Senior Notes | Senior Notes Due 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 5.25% | ||||||||||
Aggregate principal amount | $ 300,000,000 | ||||||||||
Redemption price, percentage of principal amount redeemed | 102.625% | ||||||||||
Loss on extinguishment of debt | 10,300,000 | ||||||||||
Real estate mortgages | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total long-term debt outstanding | $ 580,100,000 | $ 592,900,000 | |||||||||
Percent of total mortgage debt with fixed interest rates | 71.70% | ||||||||||
Real estate mortgages | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 3% | ||||||||||
Real estate mortgages | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt stated interest rate | 8% |
Credit Facilities and Long-te_5
Credit Facilities and Long-term Debt - Annual Interest Rates (Details) - Line of Credit | Dec. 31, 2022 |
New vehicle floor plan | Credit Facility | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.51% |
Used vehicle floor plan | Credit Facility | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.81% |
Service loaner floor plan | Credit Facility | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.51% |
Revolving lines of credit | Credit Facility | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.41% |
Wholesale flooring facility | Bank of Nova Scotia Credit Agreement | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.76% |
Used vehicle flooring facility | Bank of Nova Scotia Credit Agreement | |
Debt Instrument [Line Items] | |
Annual interest rate | 6.01% |
Daily rental facility | Bank of Nova Scotia Credit Agreement | |
Debt Instrument [Line Items] | |
Annual interest rate | 5.96% |
Wholesale leasing facility | Bank of Nova Scotia Credit Agreement | |
Debt Instrument [Line Items] | |
Annual interest rate | 6.06% |
Working capital revolving facility | Bank of Nova Scotia Credit Agreement | |
Debt Instrument [Line Items] | |
Annual interest rate | 6.01% |
Credit Facilities and Long-te_6
Credit Facilities and Long-term Debt - Details of Financial Covenants (Details) | Dec. 31, 2022 |
Debt Disclosure [Abstract] | |
Requirement, Fixed charge coverage ratio | 1.20 |
Fixed charge coverage ratio | 5.81 |
Requirement, Leverage ratio | 5.75 |
Leverage ratio | 1.36 |
Credit Facilities and Long-te_7
Credit Facilities and Long-term Debt - Schedule of Non-Recourse Notes Payable (Details) - Notes Payable - Nonrecourse - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 422.2 | $ 317.6 |
Aggregate principal amount | 642.4 | |
LAD Auto Receivables Trust 2021-1 Class A | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 115 | |
Aggregate principal amount | $ 282.8 | |
Debt stated interest rate | 1.30% | |
LAD Auto Receivables Trust 2021-1 Class B | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 18.3 | |
Aggregate principal amount | $ 18.3 | |
Debt stated interest rate | 1.94% | |
LAD Auto Receivables Trust 2021-1 Class C | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 26 | |
Aggregate principal amount | $ 26 | |
Debt stated interest rate | 2.35% | |
LAD Auto Receivables Trust 2021-1 Class D | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 17.2 | |
Aggregate principal amount | $ 17.2 | |
Debt stated interest rate | 3.99% | |
LAD Auto Receivables Trust 2022-1 Class A | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 207.2 | |
Aggregate principal amount | $ 259.7 | |
Debt stated interest rate | 5.21% | |
LAD Auto Receivables Trust 2022-1 Class B | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 15.5 | |
Aggregate principal amount | $ 15.5 | |
Debt stated interest rate | 5.87% | |
LAD Auto Receivables Trust 2022-1 Class C | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 23 | |
Aggregate principal amount | $ 22.9 | |
Debt stated interest rate | 6.85% |
Credit Facilities and Long-te_8
Credit Facilities and Long-term Debt- Summary of Outstanding Senior Notes (Details) - Senior Notes | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,750,000,000 |
4.625% Senior notes due 2027 | |
Debt Instrument [Line Items] | |
Debt stated interest rate | 4.625% |
Aggregate principal amount | $ 400,000,000 |
% Currently Redeemable | 100% |
Current Redemption Price (as a percent) | 102.313% |
4.375% Senior notes due 2031 | |
Debt Instrument [Line Items] | |
Debt stated interest rate | 4.375% |
Aggregate principal amount | $ 550,000,000 |
% Currently Redeemable | 40% |
Current Redemption Price (as a percent) | 104.375% |
3.875% Senior notes due 2029 | |
Debt Instrument [Line Items] | |
Debt stated interest rate | 3.875% |
Aggregate principal amount | $ 800,000,000 |
% Currently Redeemable | 40% |
Current Redemption Price (as a percent) | 103.875% |
Credit Facilities and Long-te_9
Credit Facilities and Long-term Debt - Future Principal Payments on Long-term Debt (Details) - Long-Term Debt Excluding Lines of Credit and Notes Payable $ in Millions | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 26.7 |
2024 | 74.8 |
2025 | 74.1 |
2026 | 49.3 |
2027 | 473.8 |
Thereafter | 1,688.9 |
Total principal payments | $ 2,387.6 |
401(k) Profit Sharing, Deferr_3
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |||
Contributions | $ 29.9 | $ 18.8 | $ 9 |
Other Long-Term Liabilities | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Balance due to participants | $ 63 | $ 51.9 | |
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Discretionary contributions vesting period | 7 years |
401(k) Profit Sharing, Deferr_4
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans - SERP (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |||
Compensation expense | $ 1.1 | $ 1.4 | $ 1.2 |
Total discretionary contribution | $ 1 | $ 0.9 | $ 0.9 |
Guaranteed annual return | 5% | 5% | 5% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) $ in Millions | 8 Months Ended | |||
Jun. 01, 2019 USD ($) | Jun. 15, 2021 USD ($) derivative | Dec. 31, 2022 USD ($) derivative | Dec. 31, 2021 USD ($) | |
Derivative [Line Items] | ||||
Floor plan notes payable: non-trade | $ 1,489.4 | $ 835.9 | ||
Interest rate collar | ||||
Derivative [Line Items] | ||||
Derivative term | 5 years | |||
Derivative, notional amount | $ 300 | |||
Floor plan notes payable: non-trade | $ 1,600 | |||
Interest rate collar | Not Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Derivative ssset | 22.1 | |||
Derivative liability | $ 22.1 | |||
Interest Rate Cap | Not Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Derivative term | 5 years | |||
Derivative, notional amount | $ 298 | |||
Number of derivative instruments held | derivative | 4 | 4 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Zero-Cost Interest Rate Collar (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 4,629.2 | $ 2,661.5 | $ 1,467.7 |
Ending balance | 5,210.4 | 4,629.2 | 2,661.5 |
Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (2.6) | (8.6) | (1) |
Amounts reclassified from AOCI to floorplan interest expense | (2) | 2.8 | 1.8 |
Loss recorded from interest rate collar | 4.6 | 3.2 | (9.4) |
Ending balance | 0 | (2.6) | (8.6) |
Accrued Liabilities | Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (1.9) | (2.6) | (0.1) |
Amounts reclassified from AOCI to floorplan interest expense | 0.7 | 2.8 | 1.8 |
Loss recorded from interest rate collar | 1.2 | (2.1) | (4.3) |
Ending balance | 0 | (1.9) | (2.6) |
Other Long-Term Liabilities | Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (0.7) | (6) | (0.9) |
Amounts reclassified from AOCI to floorplan interest expense | 0 | 0 | 0 |
Loss recorded from interest rate collar | 0.7 | 5.3 | (5.1) |
Ending balance | 0 | (0.7) | (6) |
Other Non-Current Assets | Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Amounts reclassified from AOCI to floorplan interest expense | (2.7) | 0 | 0 |
Loss recorded from interest rate collar | 2.7 | 0 | 0 |
Ending balance | $ 0 | $ 0 | $ 0 |
Equity and Redeemable Non-con_3
Equity and Redeemable Non-controlling Interest - Narrative (Details) | 12 Months Ended | |||||
Aug. 30, 2021 | Jul. 24, 2020 USD ($) | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares | Nov. 01, 2022 USD ($) | |
Class of Stock [Line Items] | ||||||
Common stock number of votes | vote | 1 | |||||
Additional amount authorized to be repurchased | $ 450,000,000 | |||||
Remaining authorized repurchase amount | $ 501,400,000 | |||||
Redeemable non-controlling interest, redemption feature, period | 3 years | |||||
ATM Equity Offering Agreement | ||||||
Class of Stock [Line Items] | ||||||
Aggregate net proceeds from stock offering | $ 400,000,000 | |||||
Restricted Stock Units (RSUs) | ||||||
Class of Stock [Line Items] | ||||||
Shares repurchased in association with tax withholdings on the vesting of RSUs | shares | 56,911 | 54,318 | 30,620 | |||
Weighted average per share price of shares purchased (in dollars per share) | $ / shares | $ 296.86 | |||||
Adjustments related to tax withholding for share-based compensation | $ 16,900,000 |
Equity and Redeemable Non-con_4
Equity and Redeemable Non-controlling Interest - Summary of Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 83 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased pursuant to repurchase authorizations | 2,428,850 | 756,883 | 563,953 | |
Total purchase price ($ in millions) | $ 671.4 | $ 214.8 | $ 46.1 | |
Average purchase price per share (in dollars per share) | $ 276.42 | $ 283.75 | $ 81.71 | |
Restricted Stock Units (RSUs) | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased pursuant to repurchase authorizations | 2,428,850 | 6,904,781 | ||
Average purchase price per share (in dollars per share) | $ 276.42 | $ 173.59 | ||
Shares repurchased in association with tax withholdings on the vesting of RSUs | 56,911 | 54,318 | 30,620 |
Equity and Redeemable Non-con_5
Equity and Redeemable Non-controlling Interest - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Equity [Abstract] | ||||||||||||
Dividend amount per share (in dollars per share) | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.30 | $ 0.30 |
Total amount of dividends paid ($ in millions) | $ 11.4 | $ 11.6 | $ 11.9 | $ 10.3 | $ 10.6 | $ 10.6 | $ 9.3 | $ 8.2 | $ 8.2 | $ 7.1 | $ 6.8 | $ 7 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
The 2009 ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 3,000,000 |
Maximum employee subscription rate (in percent) | 10% |
Maximum amount of stock per employee | $ | $ 25,000 |
Purchase price of common stock (in percent) | 85% |
Discount from market price, offering date (in percent) | 15% |
Shares available for purchase (in shares) | 1,151,846 |
2013 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 3,800,000 |
Shares available for purchase (in shares) | 943,888 |
Shares outstanding (in shares) | 0 |
2013 Stock Incentive Plan | Time Vesting RSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 18,080 |
2013 Stock Incentive Plan | Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Unvested RSUs | $ | $ 16,500,000 |
Weighted average vesting period | 2 years 4 months 24 days |
2013 Stock Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
2013 Stock Incentive Plan | Performance and Time Vesting RSU's | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 120,340 |
2013 Stock Incentive Plan | Performance RSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 48,979 |
Weighted average attainment level for performance and time vesting RSUs (in percent) | 50.90% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of 2009 ESPP (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average per share discount from market value for shares purchased (in dollars per share) | $ 38.57 | $ 50.58 | $ 22.97 |
The 2009 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased pursuant to 2009 ESPP (in shares) | 157,507 | ||
Weighted average per share price of shares purchased (in dollars per share) | $ 218.59 | ||
Weighted average per share discount from market value for shares purchased (in dollars per share) | $ 38.57 | ||
Shares available for purchase pursuant to 2009 ESPP (in shares) | 1,151,846 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan Activity, Restricted Stock (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
RSUs | |
Beginning Balance (in shares) | shares | 466,860 |
Granted (in shares) | shares | 138,420 |
Vested (in shares) | shares | (147,441) |
Forfeited (in shares) | shares | (41,961) |
Ending Balance (in shares) | shares | 415,878 |
Weighted average per share grant date fair value | |
Beginning Balance (in dollars per share) | $ / shares | $ 159.85 |
Granted (in dollars per share) | $ / shares | 294.32 |
Vested (in dollars per share) | $ / shares | 110.77 |
Forfeited (in dollars per share) | $ / shares | 164.88 |
Ending Balance (in dollars per share) | $ / shares | $ 224 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Per share intrinsic value of non-vested stock granted (in dollars per share) | $ 294.32 | $ 312.83 | $ 130.89 |
Weighted average per share discount for compensation expense recognized under the 2009 ESPP (in dollars per share) | $ 38.57 | $ 50.58 | $ 22.97 |
Fair value of non-vested stock that vested during the period ($ in millions) | $ 110.8 | $ 107.5 | $ 108.5 |
Tax benefit recognized in Consolidated Statements of Operations ($ in millions) | 12.4 | 11.9 | 3.7 |
Cash received from options exercised and shares purchased under all share-based arrangements ($ in millions) | 34.4 | 29.6 | 14.8 |
Tax deduction realized related to stock options exercised ($ in millions) | 43.7 | 41.8 | 13.6 |
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense ($ in millions) | $ 41.1 | $ 34.7 | $ 23.2 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||||
Unrealized investment loss (gain) | $ 39.2 | $ 66.4 | $ (43.4) | ||
Franchise value, impairment | $ 1.9 | $ 4.4 | |||
Reductions from impairments | $ 3.5 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current, Other long-term liabilities | Liabilities, Current, Other long-term liabilities |
Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt stated interest rate | 4.625% | |
Senior Notes | 4.375% Senior notes due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt stated interest rate | 4.375% | |
Senior Notes | 3.875% Senior notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt stated interest rate | 3.875% | |
Fair Value, Recurring | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Shift Technologies, Inc. | $ 1.8 | $ 40.9 |
Derivative Asset | 22.1 | 6.4 |
Derivative liability | 22.1 | 8.9 |
Fair Value, Recurring | Carrying Value | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 400 | 400 |
Fair Value, Recurring | Carrying Value | Senior Notes | 4.375% Senior notes due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 550 | 550 |
Fair Value, Recurring | Carrying Value | Senior Notes | 3.875% Senior notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 800 | 800 |
Fair Value, Recurring | Carrying Value | Notes Payable | Nonrecourse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 422.2 | 317.6 |
Fair Value, Recurring | Carrying Value | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 489 | 477.6 |
Fair Value, Recurring | Fair value measurement | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Shift Technologies, Inc. | 1.8 | 40.4 |
Derivative Asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 1 | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 364 | 420 |
Fair Value, Recurring | Fair value measurement | Level 1 | Senior Notes | 4.375% Senior notes due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 448.3 | 583 |
Fair Value, Recurring | Fair value measurement | Level 1 | Senior Notes | 3.875% Senior notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 656 | 815 |
Fair Value, Recurring | Fair value measurement | Level 1 | Notes Payable | Nonrecourse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 1 | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Shift Technologies, Inc. | 0 | 0.5 |
Derivative Asset | 22.1 | 6.4 |
Derivative liability | 22.1 | 8.9 |
Fair Value, Recurring | Fair value measurement | Level 2 | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 2 | Senior Notes | 4.375% Senior notes due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 2 | Senior Notes | 3.875% Senior notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 2 | Notes Payable | Nonrecourse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 411.8 | 316.8 |
Fair Value, Recurring | Fair value measurement | Level 2 | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 399 | 488.7 |
Fair Value, Recurring | Fair value measurement | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Shift Technologies, Inc. | 0 | 0 |
Derivative Asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 3 | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 3 | Senior Notes | 4.375% Senior notes due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 3 | Senior Notes | 3.875% Senior notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 3 | Notes Payable | Nonrecourse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value, Recurring | Fair value measurement | Level 3 | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 269.2 | $ 266.2 | $ 108.9 |
State | 105.5 | 111.6 | 50.3 |
Foreign | (0.9) | 1.2 | 0 |
Current income tax expense (benefit) | 373.8 | 379 | 159.2 |
Deferred: | |||
Federal | 73.4 | 38.2 | 17.6 |
State | 13.5 | 3.8 | 1.4 |
Foreign | 7.7 | 1.1 | 0 |
Deferred income tax expense (benefit) | 94.6 | 43.1 | 19 |
Total | $ 468.4 | $ 422.1 | $ 178.2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Income taxes receivable | $ 33.6 | |
Income taxes payable | $ 43 | |
Valuation allowance | 51.4 | $ 26.4 |
Canada | ||
Operating Loss Carryforwards [Line Items] | ||
Undistributed earnings | 72.9 | |
Tax that would be payable upon remittance of undistributed earnings | 3.6 | |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 17.4 | |
Foreign Tax Authority | Canada | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 10.5 | |
Investment in Shift Technologies Inc. | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 34 | |
Change in valuation allowance | 9.7 | |
State Net Operating Losses | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 17.4 | |
Change in valuation allowance | $ 15.3 |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal tax provision at statutory rate | $ 363.3 | $ 311.7 | $ 136.2 |
State taxes, net of federal income tax benefit | 76.9 | 85.4 | 40.4 |
Non-deductible items | 5 | 4.8 | 2.8 |
Permanent differences related to stock compensation | (2.4) | (2.6) | (0.5) |
Net change in valuation allowance | 25 | 25.3 | 0.5 |
General business credits | (2.6) | (2.3) | (1.3) |
Foreign Rate Differential | 1.4 | 0.5 | 0 |
Other | 1.8 | (0.7) | 0.1 |
Total | $ 468.4 | $ 422.1 | $ 178.2 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Deferred revenue and cancellation reserves | $ 126.6 | $ 95.3 |
Allowances and accruals, including state tax carryforward amounts | 71.3 | 69.1 |
Lease liability | 103.2 | 107.6 |
Credits and other | 5.1 | 1.8 |
Net operating losses | 27.9 | 3.7 |
Valuation allowance | (51.4) | (26.4) |
Total deferred tax assets | 282.7 | 251.1 |
Deferred tax liabilities: | ||
Inventories | (39.2) | (20.1) |
Goodwill | (157.7) | (112.3) |
Property and equipment, principally due to differences in depreciation | (233) | (185.9) |
Right of use asset | (99) | (103.7) |
Prepaid expenses and other | (40.1) | (20.1) |
Total deferred tax liabilities | (569) | (442.1) |
Total | $ (286.3) | $ (191) |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning balance | $ 0.3 | $ 0.2 |
Increase related to tax positions taken - current year | 0.3 | 0.1 |
Unrecognized tax benefits, ending balance | $ 0.6 | $ 0.3 |
Acquisitions - Revenue and Oper
Acquisitions - Revenue and Operating Income from Acquisitions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Revenue | $ 1,404 |
Operating income | $ 66.9 |
Acquisitions - Summary of Consi
Acquisitions - Summary of Consideration Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | $ 1,243.6 | $ 2,699.3 | $ 1,503.3 |
Goodwill | 1,460.7 | 977.3 | $ 593 |
2022 Acquisition | |||
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | 1,240.8 | ||
Contingent consideration | 3.9 | ||
Redeemable non-controlling interest | 0 | ||
Debt issued | 0 | ||
Total consideration transferred | 1,244.7 | ||
Trade receivables, net | 0.2 | ||
Inventories | 228.3 | ||
Franchise value | 63.7 | ||
Goodwill | 30.1 | ||
Property and equipment | 379.9 | ||
Other assets | 639.1 | ||
Floor plan notes payable | (0.7) | ||
Debt and finance lease obligations | (78.5) | ||
Other liabilities | (17.4) | ||
Total net assets acquired and liabilities assumed | $ 1,244.7 | ||
2021 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | 2,697.5 | ||
Contingent consideration | 0 | ||
Redeemable non-controlling interest | 33.1 | ||
Debt issued | 356 | ||
Total consideration transferred | 3,086.6 | ||
Trade receivables, net | 1.3 | ||
Inventories | 626.2 | ||
Franchise value | 0 | ||
Goodwill | 0 | ||
Property and equipment | 767.5 | ||
Other assets | 1,726.2 | ||
Floor plan notes payable | (4) | ||
Debt and finance lease obligations | 0 | ||
Other liabilities | (30.6) | ||
Total net assets acquired and liabilities assumed | $ 3,086.6 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Acquisition related expenses | $ 15 | $ 20.2 |
Acquisitions - Pro Forma Summar
Acquisitions - Pro Forma Summary of All Acquisitions (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 29,748.1 | $ 26,200.5 |
Net income | $ 1,338.2 | $ 1,236.9 |
Basic net income per share (in dollars per share) | $ 47.47 | $ 42.95 |
Diluted net income per share (in dollars per share) | $ 47.25 | $ 42.64 |
Net Income Per Share of Commo_3
Net Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted average common shares outstanding – basic (in shares) | 28.2 | 28.8 | 23.8 |
Weighted average common shares outstanding – diluted (in shares) | 28.3 | 29 | 24.1 |
Basic earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.38 | $ 36.81 | $ 19.74 |
Diluted earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.17 | $ 36.54 | $ 19.53 |
Class A | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income from continuing operations applicable to common stockholders | $ 1,059.5 | $ 460.9 | |
Reallocation of distributed net income due to conversion of class B to class A common shares outstanding | 0 | 0.6 | |
Conversion of class B common shares into class A common shares | 0.6 | 8.8 | |
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted | $ 1,060.1 | $ 470.3 | |
Weighted average common shares outstanding – basic (in shares) | 28.8 | 23.3 | |
Conversion of class B common shares into class A common shares (in shares) | 0 | 0.5 | |
Effect of employee stock purchases and restricted stock units on weighted average common shares (in shares) | 0.2 | 0.3 | |
Weighted average common shares outstanding – diluted (in shares) | 29 | 24.1 | |
Basic earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 36.81 | $ 19.74 | |
Diluted earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 36.54 | $ 19.53 | |
Class B | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income from continuing operations applicable to common stockholders | $ 0.6 | $ 9.4 | |
Reallocation of distributed net income due to conversion of class B to class A common shares outstanding | 0 | 0 | |
Conversion of class B common shares into class A common shares | 0 | 0 | |
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted | $ 0.6 | $ 9.4 | |
Weighted average common shares outstanding – basic (in shares) | 0 | 0.5 | |
Conversion of class B common shares into class A common shares (in shares) | 0 | 0 | |
Effect of employee stock purchases and restricted stock units on weighted average common shares (in shares) | 0 | 0 | |
Weighted average common shares outstanding – diluted (in shares) | 0 | 0.5 | |
Basic earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 36.81 | $ 19.74 | |
Diluted earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 36.54 | $ 19.53 | |
Common stock | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income from continuing operations applicable to common stockholders | $ 1,251 | ||
Reallocation of distributed net income due to conversion of class B to class A common shares outstanding | 0 | ||
Conversion of class B common shares into class A common shares | 0 | ||
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted | $ 1,251 | ||
Weighted average common shares outstanding – basic (in shares) | 28.2 | ||
Conversion of class B common shares into class A common shares (in shares) | 0 | ||
Effect of employee stock purchases and restricted stock units on weighted average common shares (in shares) | 0.1 | ||
Weighted average common shares outstanding – diluted (in shares) | 28.3 | ||
Basic earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.38 | ||
Diluted earnings per share attributable to Lithia Motors, Inc. (in dollars per share) | $ 44.17 |
Segments - Certain Segment Fina
Segments - Certain Segment Financial Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 28,187.8 | $ 22,831.7 | $ 13,126.5 |
Gross profit | 5,152.4 | 4,259 | 2,224.3 |
Floor plan interest expense | (38.8) | (22.3) | (34.4) |
Selling, general and administrative | (3,044.1) | (2,480.8) | (1,437.9) |
Operating income | 1,941.1 | 1,662.5 | 692.7 |
Depreciation and amortization | (163.2) | (124.8) | (92.3) |
Income before income taxes | 1,730 | 1,484.8 | 648.5 |
Depreciation and amortization | (172.7) | (127.3) | (92.4) |
Other interest expense | (129.1) | (103.4) | (71.6) |
Other (expense) income, net | (43.2) | (52) | 61.8 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Floor plan interest expense | (38.8) | (22.3) | (34.4) |
Income before income taxes | 1,851.6 | 1,684.5 | 637.4 |
Operating Segments | Vehicle Operations | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 28,187.8 | 22,831.7 | 13,126.5 |
Gross profit | 5,154.3 | 4,263.9 | 2,225 |
Selling, general and administrative | (3,260) | (2,568) | (1,559.6) |
Operating income | 1,855.5 | 1,673.6 | 631 |
Operating Segments | Financing Operations | |||
Segment Reporting Information [Line Items] | |||
Selling, general and administrative | (32) | (18.2) | (8.9) |
Interest, fee, and lease income | 134.1 | 45.9 | 13.9 |
Interest expense | (52.2) | (4.8) | (1.5) |
Total interest margin | 81.9 | 41.1 | 12.4 |
Total pre-provision income | 49.9 | 22.9 | 3.5 |
Provision for loan and lease losses | (44.4) | (9.4) | 3 |
Depreciation and amortization | (9.5) | (2.5) | 0 |
Financing operations (loss) income | (4) | 11 | 6.5 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Income before income taxes | 213.9 | 80.4 | 113.2 |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | (163.2) | (124.8) | (92.3) |
Other interest expense | (129.1) | (103.4) | (71.6) |
Other (expense) income, net | $ (43.2) | $ (52) | $ 61.8 |
Subsequent Events (Details)
Subsequent Events (Details) - Line of Credit - Credit Facility - USD ($) | Feb. 09, 2023 | Nov. 21, 2022 |
Subsequent Event [Line Items] | ||
Financing commitment amount | $ 3,750,000,000 | |
Credit facility, maximum borrowing facility | $ 4,500,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Financing commitment amount | $ 4,500,000,000 | |
Credit facility, maximum borrowing facility | $ 5,500,000,000 |
Uncategorized Items - lad-20221
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |