What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-06 compared with 2020-11-04 · 314 added, 719 removed, 421 unchanged (71% of the section changed)

12 unchanged sentences

Our operations are aligned into three regions, which comprise our reportable segments:

(1) U.S., (2) U.K.

and (3) Brazil.

the U.S., U.K.

and Brazil segments are led by the President, U.S.

and Brazilian Operations, and the U.K.

segment is led by an Operations Director, each reporting directly to our Chief Executive Officer.

segment is led by an Operations Director, each reporting directly to our Chief Executive Officer, who is the CODM.

The President, U.S.

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Operations Director are responsible for the overall performance of their respective regions, as well as for overseeing field level management.

segment includes the activities of our corporate office.

As of September 30, 2020 , our retail network consisted of 119 dealerships in the U.S., 50 dealerships in the U.K.

As of March 31, 2021, our retail network consisted of 118 dealerships in the U.S., 49 dealerships in the U.K.

and 16 dealerships in Brazil.

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Long-Term Strategy

Our business strategy primarily focuses on the performance of our existing dealerships to achieve growth, capture market share and maximize the investment return to our stockholders.

We are also focused on enhancing our dealership portfolio through strategic acquisitions and dispositions.

Our business strategy focuses on improving the performance of our existing dealerships and enhancing our dealership portfolio through strategic acquisitions and dispositions to achieve growth, capture market share and maximize the investment return to our stockholders.

We constantly evaluate opportunities to improve the overall profitability of our dealerships.

Our long-term strategic areas of emphasis include:

We believe that as of March 31, 2021, we have sufficient financial resources to support additional acquisitions.

Further, we intend to continue to critically evaluate our return on invested capital in our current dealership portfolio for disposition opportunities.

For 2021, our priorities are growing our company through acquisitions, improving and growing sales penetration in our digital retailing platform, AcceleRide®, continuing to grow our parts and service gross profit through numerous initiatives, increasing our market share in the highly fragmented used vehicle business, continuing to leverage our SG&A as a percentage of gross profit and focusing on the retention and training of our talented dealership employees.

Strategic Acquisitions and Dispositions

We will continue to focus on opportunities to enhance our current dealership portfolio through strategic acquisitions and improving or disposing of underperforming dealerships.

We believe that substantial opportunities for growth through acquisitions remain in our industry in the U.S., U.K.

Acquisitions capitalize on economies of scale and cost savings opportunities in our existing markets in areas such as used vehicle sourcing, advertising, purchasing, data processing and personnel utilization, thereby increasing operating efficiency.

We seek to acquire large, profitable, well-established dealerships that represent growing brands in growth markets.

We evaluate all brands and geographies to expand our brand, product and service offerings in our existing markets or expand into growing geographic areas we currently do not serve.

During the first quarter of 2021, we acquired two Toyota dealerships in the U.S.

Further, we intend to continue to critically evaluate our return on invested capital in our current dealership portfolio for disposition opportunities.

Refer to Note 3.

Acquisitions and Dispositions within our Notes to Condensed Consolidated Financial Statements for further discussion.

Digital Initiatives to Enhance the Customer Experience

Our digital initiatives focus on ensuring that we can do business with our customers where and when they want to do business.

Our online new and used vehicle retail platform, AcceleRide®, which was deployed to all of our U.S.

Our online retail platform, AcceleRide®, which was deployed to all of our U.S.

dealerships in 2019, allows a customer to complete a vehicle transaction entirely online or start the sales process online and complete the transaction at one of our dealerships.

In addition, our parts and service digital efforts focus on our online customer scheduling appointment system.

The customer also has the ability to apply for financing and review and select F&I products as part of the online process.

During the first quarter of 2021, U.S.

total online retail unit sales increased 124.0% compared to the same period in 2020.

We also completed the roll out of AcceleRide® to our U.K.

dealerships in the first quarter of 2021.

Our parts and service digital efforts focus on our online customer scheduling appointment system.

We have seen continued growth in the percentage of appointments scheduled online over the past few years as we have continued to enhance this tool.

These digital platforms were instrumental in allowing us to connect with and service our customers during the restricted social distancing environment as a result of the COVID-19 pandemic.

During the third quarter of 2020, AcceleRide® sales were up 73.1% from a year ago.

We have also focused on improved interaction with our parts and service customers by offering preferred communication options via dealership apps, phone, text or email and online payment options.

We are capitalizing on technology advances in robotic process automation and artificial intelligence to improve our marketing, call center and back office efficiency.

These digital platforms were instrumental in allowing us to connect with and service our customers during the social distancing requirements imposed as a result of the COVID-19 pandemic.

Parts and Service Growth

We remain focused on sustained growth in our higher margin parts and service operations which continue to hinge on the retention and hiring of skilled service technicians and advisors.

In 2019, our U.S.

service operations implemented a four-day work week for service technicians and advisors which allowed us to expand our hours of operations during the week.

This change has resulted in increased service technician and advisor retention, thereby expanding our service capacity without investing additional capital in facilities.

Our online service appointment platform and centralized call centers have improved the customer experience.

We seek to increase the retention of our customers through more convenient service hours, training of our service advisors, selling service contracts with vehicles sales and customer relationship management software that allows us to provide targeted marketing to our customers.

The increasing complexity of vehicles, especially in the area of electronics and technological advancements, is making it increasingly difficult for independent repair shops to maintain the expertise and technology to work on these vehicles and provides us the opportunity to increase our market share well into the future.

Used Vehicle Retail Growth

Gross profit from the sale of used vehicles depends primarily on a dealership’s ability to obtain a high-quality supply of used vehicles at reasonable prices.

Used vehicle gross profit depends primarily on a dealership’s ability to obtain a high-quality supply of used vehicles at reasonable prices.

Our new vehicle operations generally provide our used vehicle operations with a large supply of high-quality trade-ins and off-lease vehicles, which are our best source of used vehicle inventory.

Our dealerships also purchase used vehicle inventory directly from customers and supplement their used vehicle inventory with purchases at auctions, including manufacturer-sponsored auctions available only to franchised dealers.

In October 2020, we introduced “Sell A Ride” to our AcceleRide® platform to increase our ability to purchase used vehicle inventory directly from customers with a cash offer within 30 minutes during business hours, home pickup and payment available within one hour.

Our dealerships supplement their used vehicle inventory with purchases at auctions, including manufacturer-sponsored auctions available only to franchised dealers.

Our data driven pricing strategies ensure that our used vehicles are priced at market to generate more traffic to our websites.

We review our market pricing on a regular basis and work to limit discounting from our advertised prices.

We will continue efforts to expand our “Val-U-Line®” sales program, a strategic used vehicle initiative that targets a growing customer niche and enables us to retail lower cost, higher mileage units that would otherwise have been sent to auction.

The Val-U-Line® initiative is expected to increase used retail volume by leveraging our scale, internal on-line buying center, internal auction capability and transportation infrastructure.

Parts and Service Growth

We remain focused on sustained growth in our higher margin parts and service operations which continue to hinge on the retention and hiring of skilled service technicians and advisors.

Our four-day work week implemented in 2019 has allowed us to extend our hours of operations and increase service technician and advisor retention, thereby expanding our service capacity without investing additional capital in facilities.

The increasing complexity of vehicles, especially in the area of electronics and technological advancements, is making it difficult for independent repair shops to retain the expertise and technology to work on these vehicles and provides us the opportunity to increase our market share.

We review our market pricing on a constant basis and work to limit discounting from our advertised prices.

Cost Management

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We believe that our management structure supports rapid decision making and facilitates an efficient and effective roll-out of new processes.

Additionally, see “COVID-19 Pandemic” section below for specific cost-cutting measures in response to the COVID-19 pandemic.

As part of the digital efforts discussed above, we have improved our productivity for our sales and service departments.

Employee Training and Retention

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We believe this approach allows us to provide the best possible service to our customers, as well as attract and retain talented employees.

Strategic Acquisitions and Dispositions

We will continue to focus on opportunities to enhance our current dealership portfolio through strategic acquisitions and improving or disposing of underperforming dealerships.

We believe that substantial opportunities for growth through acquisitions remain in our industry in the U.S., the U.K.

Further, we intend to continue to critically evaluate our return on invested capital in our current dealership portfolio for disposition opportunities.

COVID-19 Pandemic

Since emerging in December 2019 , the COVID-19 pandemic has spread globally, including to all of our markets in the U.S., U.K.

and Brazil, significantly impacting our operating results starting in March 2020.

There have been extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 across the world, including mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations.

Beginning in mid-March 2020, these measures significantly reduced operating capacity of all of our dealerships in the U.S., the U.K.

The primary COVID-19 impacts on our global business and our response to date include:

Virtually all of our U.S.

dealerships are located in markets that operated in some form of restricted social distancing environments in accordance with applicable state and local orders during most of March 2020 and April 2020.

As the market shutdowns began, March 2020 U.S.

sales dropped sharply from February 2020, with new and used retail unit sales dropping approximately 50% and service repair orders also declining by approximately 50% for the last two weeks of March 2020 compared to the last two weeks of March 2019 and the first two weeks of April 2020 compared to the first two weeks of April 2019.

In early May 2020, as restricted social distancing environment policies began to be partially lifted, our used vehicle business returned to near normal levels and our new vehicle sales pace started improving.

Our new vehicle sales pace has improved during the third quarter, however the recovery of new vehicle unit sales was limited as a result of low inventory levels due to reduced OEM production rates.

Thus far, we have been able to offset the volume declines with higher gross margins in new and used vehicles and higher F&I per retail unit.

As a result, our margin improvement outweighed our volume declines.

Beginning in mid-April 2020, we saw continued improvement in our parts and service business as well and we are near prior year levels at the end of the third quarter.

Our online selling platform AcceleRide® and our online service scheduling platforms continue to show increased utilization rates as we remain in a restricted social distancing environment and such higher utilization rates are expected to continue after the pandemic.

vehicle sales levels were well above prior year levels in most of our brands through February 2020.

March, which is a plate change month, is one of the largest selling months of the year with many vehicles delivered from orders placed in January 2020 and February 2020.

Due to the closure of our facilities and various business restrictions put in place as a result of a shut-down order from the government, we were not able to deliver approximately 35% of our vehicles at the end of March 2020 that we had contracted to sell prior to the shut-down restrictions.

We closed all of our U.K.

dealerships from late March 2020 through May 18, 2020 for service, with the exception of emergency vehicle repairs.

Our vehicle showrooms were closed for more than two months and did not reopen until June 1, 2020.

Operations in the U.K.

significantly improved in June 2020 and continued to improve throughout the third quarter.

As vehicle sales and service operations reopened, our revenues and margins in all departments increased versus prior year levels.

As a result, the U.K.

operations made a significant contribution to our quarterly financial results for the third quarter of 2020.

While new vehicle volumes have rebounded, our new vehicle inventory is still well below normal levels due to reduced OEM production rates.

On October 31, 2020, the U.K.

government announced a national lockdown of non-essential businesses, which includes our dealership vehicle showrooms, beginning November 5, 2020 through December 2, 2020, at which time the government will determine whether the lockdown restrictions will be extended.

Our dealership service operations will remain open, however this mandate will adversely impact our U.K.

vehicle sales in the fourth quarter.

See Part II, “Item 1A.

Risk Factors” of this Form 10-Q for further discussion of the potential risks if the lockdown is extended.

Effective March 20, 2020, all of our dealerships were required to close.

Despite restrictions being lifted and businesses reopening in Brazil during the second quarter, the recovery has been limited as the impacts of COVID-19 are still impacting operations significantly.

Cost-Cutting Actions

In all regions we have taken aggressive actions to reduce costs and preserve liquidity, with approximately 8,000 employees furloughed or terminated in early April 2020.

As sales have improved in the U.S.

and U.K., we have been able to return some of the furloughed employees to a point where our U.S.

headcounts are approximately 75% of our pre-COVID levels.

Along with this, we modified our employee productivity targets in our U.S.

In addition, other measures were implemented significantly reducing costs in all three regions including reductions of as much as 50% in management compensation, 100% of Board of Directors’ cash compensation, over 75% reduction in advertising expense and cuts across all other cost categories.

Additionally, as announced in April 2020, we suspended our dividend and canceled our share repurchase program, as well as implemented capital expenditure deferrals.

By the end of the third quarter as market conditions improved, we restored many of these cost reductions and on October 6, 2020 announced a $200 million share repurchase program.

As discussed in “Liquidity and Capital Resources,” we have sufficient liquidity currently and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with debt covenants.

The demand outlook remains uncertain and the long-term impact of the COVID-19 pandemic is difficult to predict, especially with the recently announced lockdown in the U.K.

and rising cases in some of our markets.

However, we expect our used vehicle and service operations in the fourth quarter to return to near prior year levels.

Reduced new vehicle inventory levels in the U.S.

will likely persist in the fourth quarter and will limit the recovery in new vehicle unit sales in the fourth quarter.

However, we expect to continue the trend set in the third quarter of offsetting much or all of the decline in volume with improvements in gross margin.

We will remain vigilant and are prepared to adjust our cost structure to adapt to the market conditions.

While some of the cost reductions taken in the first and second quarters were reinstated in the third quarter as market conditions improved, we expect to be more cost efficient going forward compared to pre-pandemic levels.

Any potential impact of the COVID-19 pandemic will depend on future developments and new information that may emerge regarding the severity and duration of the pandemic and the actions taken by authorities to contain it or address its impact, all of which are beyond our control.

Diversity, Equity and Inclusion (“DEI”)

We have a DEI council that is chaired by our President, U.S.

and Brazilian Operations.

The council’s mission is to foster a diverse and inclusive culture where employees of all backgrounds are respected, valued and developed.

We will enhance employee engagement in the areas of diversity, equity and inclusion by offering innovative training, recruitment and career path development where a sense of belonging is apparent throughout the organization.

The council has four primary areas of focus:

Workforce, Workplace, Community Involvement and Women’s Initiative.

The council consists of a diverse group of employees providing representation across the organization.

Each area has an employee chairperson as well as an executive sponsor.

In 2020, we implemented an ongoing diversity and inclusion training program led by a well-known diversity expert which was developed specifically for us.

COVID-19 Pandemic and New Vehicle Inventory Levels

The COVID-19 pandemic continues to impact our operations in all of our markets.

our dealership showrooms were closed for the entire first quarter of 2021 and in Brazil, our dealerships were closed for portions of the first quarter of 2021 due to government mandated closures related to the pandemic.

and Brazil in Results of Operations discussions for further information.

Additionally, our manufacturers’ production is currently at reduced levels as a result of global semiconductor chip shortages, which is impacting our new vehicle sales and inventory levels in all our markets.

Refer to Item 1A.

Risk Factors of this Form 10-Q for additional discussion.

Critical Accounting Policies and Accounting Estimates

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The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each period presented in comparison, commencing with the first full month in which the dealership was owned by us and, in the case of dispositions, ending with the last full month it was owned by us.

For example, for a dealership acquired on August 15, 2020, the results from this dealership will appear in our same store comparison beginning in 2021 for the period September 2021 through December 2021, when comparing to September 2020 through December 2020 results.

For example, the results for a dealership acquired on August 15, 2020 will appear in our same store comparison beginning in 2021 for the period September 2021 through December 2021, when comparing to September 2020 through December 2020 results.

If we disposed of a store on August 15, 2020, the results from this store would be excluded from same store results beginning in August 2020 as July 2020 was the last full month the dealership was owned by us.

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(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Floorplan expense:

Floorplan interest expense

floorplan assistance (1)

Net floorplan expense

(1) Floorplan assistance is included within New vehicle retail sales Gross profit above and New vehicle retail sales Cost of sales in our Condensed Consolidated Statements of Operations.

Same Store Operating Data - Consolidated

(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Reported Operating Data - Consolidated

(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 1,543.4 $ 1,342.2 $ 201.2 15.0 % $ 13.3 14.0 %

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Used vehicle wholesale sales 80.2 86.5 (6.3) (7.2) % 1.4 (8.8) %

Total used 979.0 865.6 113.5 13.1 % 11.8 11.7 %

Parts and service sales 360.6 370.6 (10.0) (2.7) % 2.0 (3.2) %

F&I, net 127.0 112.5 14.5 12.9 % 0.5 12.5 %

Total revenues $ 3,010.0 $ 2,690.8 $ 319.2 11.9 % $ 27.8 10.8 %

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Used vehicle wholesale sales 3.9 1.0 2.9 293.5 % (0.1) 300.7 %

Total used 63.5 43.1 20.4 47.3 % 0.2 46.7 %

Parts and service sales 201.1 198.0 3.0 1.5 % 1.5 0.8 %

F&I, net 127.0 112.5 14.5 12.9 % 0.5 12.5 %

Total gross profit $ 490.7 $ 416.5 $ 74.2 17.8 % $ 2.7 17.2 %

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Used vehicle wholesale sales 4.9 % 1.2 % 3.8 %

Total used 6.5 % 5.0 % 1.5 %

Parts and service sales 55.8 % 53.4 % 2.3 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 16.3 % 15.5 % 0.8 %

2 unchanged sentences

Wholesale used vehicles sold 9,812 12,086 (2,274) (18.8) %

Total used 47,871 48,876 (1,005) (2.1) %

Average sales price per unit sold:

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Used vehicle wholesale sales $ 401 $ 83 $ 319 384.8 % $ (7) 393.5 %

Total used $ 1,327 $ 883 $ 445 50.4 % $ 5 49.8 %

F&I PRU $ 1,695 $ 1,559 $ 137 8.8 % $ 6 8.3 %

SG&A expenses $ 318.4 $ 328.0 $ (9.5) (2.9) % $ 1.9 (3.5) %

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floorplan assistance (1)

13.2 10.6 2.6 24.9 % — 24.9 %

Net floorplan expense $ (5.6) $ 2.3 $ (7.9) (345.5) % $ 0.1 (349.3) %

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(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Reported Operating Data - U.S.

(In millions, except unit data)

Three Months Ended September 30,

Increase/(Decrease)

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Same Store Operating Data - U.S.

(In millions, except unit data)

Three Months Ended September 30,

Increase/(Decrease)

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 1,542.9 $ 1,332.0 $ 210.8 15.8 % $ 13.3 14.8 %

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Used vehicle wholesale sales 80.2 85.5 (5.4) (6.3) % 1.4 (7.9) %

Total used 978.4 856.1 122.3 14.3 % 11.8 12.9 %

Parts and service sales 358.1 364.2 (6.1) (1.7) % 1.9 (2.2) %

F&I, net 127.0 111.5 15.5 13.9 % 0.5 13.5 %

Total revenues $ 3,006.3 $ 2,663.7 $ 342.6 12.9 % $ 27.6 11.8 %

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Used vehicle wholesale sales 4.0 1.0 3.0 295.2 % (0.1) 301.0 %

Total used 63.6 42.9 20.7 48.2 % 0.3 47.7 %

Parts and service sales 200.0 194.7 5.3 2.7 % 1.4 2.0 %

F&I, net 127.0 111.5 15.5 13.9 % 0.5 13.5 %

Total gross profit $ 489.6 $ 411.3 $ 78.4 19.1 % $ 2.7 18.4 %

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Used vehicle wholesale sales 5.0 % 1.2 % 3.8 %

Total used 6.5 % 5.0 % 1.5 %

Parts and service sales 55.8 % 53.5 % 2.4 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 16.3 % 15.4 % 0.8 %

2 unchanged sentences

Wholesale used vehicles sold 9,799 11,921 (2,122) (17.8) %

Total used 47,826 48,252 (426) (0.9) %

Average sales price per unit sold:

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Used vehicle wholesale sales $ 408 $ 85 $ 323 380.8 % $ (6) 387.9 %

Total used $ 1,330 $ 889 $ 441 49.6 % $ 5 49.0 %

F&I PRU $ 1,696 $ 1,561 $ 135 8.6 % $ 6 8.2 %

SG&A expenses $ 317.3 $ 322.3 $ (4.9) (1.5) % $ 1.8 (2.1) %

SG&A as % gross profit 64.8 % 78.4 % (13.6) %

The following discussion of our U.S.

operating results is on a same store basis.

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

During the third quarter of 2020, our U.S.

dealership operations have been steadily recovering from the impact on business caused by the COVID-19 pandemic.

Total revenues in the U.S.

during the three months ended September 30, 2020 decreased $178.2 million , or 7.4% , as compared to the same period in 2019 .

Total same store revenues in the U.S.

during the three months ended September 30, 2020 decreased $197.7 million , or 8.2% , as compared to the same period in 2019 , driven by declines in all of our revenue streams.

The declines of 9.9% in new vehicle retail same store sales, 8.9% in used vehicle retail same store sales and 2.3% in used vehicle wholesale same store sales were driven by decreases of 15.7% , 12.9% and 18.1% in new vehicle, used vehicle retail and used vehicle wholesale unit sales, respectively.

The declines in new vehicle retail, used vehicle retail and used vehicle wholesale unit sales were driven by inventory supply constraints, in part due to reduced OEM production rates, as our dealerships experienced increasing demand for new and used vehicles during the quarter.

Our online new and used vehicle sales platform, AcceleRide® was instrumental in allowing us to connect with and serve our customers throughout the restricted social distancing environment due to the COVID-19 pandemic.

During the third quarter of 2020, AcceleRide® sales were up 73.1% from a year ago.

Parts and service same store revenues, dampened by the impact of the COVID-19 pandemic, decreased 3.3% during the third quarter as compared to the same period last year, driven by a 23.4% decline in collision revenues and a 1.6% decline in both customer pay and warranty revenues which were partially offset by a 4.4% increase in wholesale parts revenues.

F&I same store revenues were relatively flat as a 14.3% decline in same store total retail unit sales was offset by improvements in income per contract, higher penetration rates, and a decline in our overall chargeback experience.

Total gross profit in the U.S.

during the three months ended September 30, 2020 increased $28.8 million , or 7.4% , as compared to the same period in 2019 .

Total same store gross profit in the U.S.

during the three months ended September 30, 2020 increased $24.6 million , or 6.4% , as compared to the same period in 2019 .

The increase in same store gross profit was driven by increases in new vehicle retail, used vehicle retail, and used vehicle wholesale, partially offset by a decline in parts and service gross profit compared to the same period last year.

New vehicle same store gross profit increased 34.3% driven by a 59.3% i ncrease in new vehicle same store gross profit per unit sold, which more than offset the 15.7% decline in new units sold.

The increase in new vehicle retail same store gross profit per unit sold reflects inventory supply constraints as many manufacturers put a hold on production due to the COVID-19 pandemic earlier in the year and have not returned to normal levels.

Used vehicle retail same store gross profit increased 19.1% reflecting an increase of 36.7% in used vehicle retail same store gross profit per unit sold partially offset by a 12.9% decrease in used vehicle retail same store unit sales over the same period in 2019.

The increase in used vehicle retail same store gross profit per unit sold reflects supply constraints combined with a strong demand leading to higher margins on used vehicle retail sales.

Used vehicle wholesale gross profit increased as industry supply constraints drove up auction prices.

Parts and service same store gross profit declined 4.0% driven by the decrease in revenue discussed above.

F&I same store gross profit was relatively flat as discussed above.

Total same store gross margin increased 250 basis points driven by higher vehicle prices as a result of supply shortages of new and used vehicle inventory.

SG&A Expenses

Our SG&A expenses consist primarily of personnel costs, including salaries, commissions and incentive-based compensation, as well as rent and facility costs, advertising and other expenses, which include legal, professional fees and general corporate expenses.

Total SG&A expenses in the U.S.

during the three months ended September 30, 2020 decreased $40.0 million , or 14.0% , as compared to the same period in 2019 .

Total same store SG&A expenses in the U.S.

during the three months ended September 30, 2020 decreased $41.0 million , or 14.5% , as compared to the same period in 2019 driven by the implementation and continual execution of cost reduction strategies as a reaction to the COVID-19 pandemic.

As market conditions have improved, we have strived to retain our lower operating cost structure as a result of the pandemic and we continued to benefit from these cost cutting measures in the third quarter.

Total same store SG&A expenses in the U.S.

in the third quarter of 2019 included $11.9 million in insurance deductible expense associated with Tropical Storm Imelda in Texas and $0.5 million in costs related to dealership and real estate transactions.

Total same store SG&A as a percent of gross profit decreased from 73.5% in the third quarter of 2019 to 59.1% for the same period of 2020 driven by the expense reductions taken to offset the negative impact of the COVID-19 pandemic.

Reported Operating Data — U.S.

(In millions, except unit data)

Nine Months Ended September 30,

Increase/(Decrease)

Three Months Ended March 31,

2021 2020 Increase/(Decrease) % Change

New vehicle retail sales $ 1,246.0 $ 988.4 $ 257.7 26.1 %

1 unchanged sentence

Used vehicle wholesale sales 50.4 46.8 3.6 7.6 %

Total used 746.9 617.1 129.8 21.0 %

Parts and service sales 296.3 304.6 (8.3) (2.7) %

F&I, net 115.1 97.4 17.7 18.1 %

Total revenues $ 2,404.3 $ 2,007.6 $ 396.8 19.8 %

3 unchanged sentences

Used vehicle wholesale sales 3.9 0.8 3.1 374.6 %

Total used 54.3 32.8 21.5 65.6 %

Parts and service sales 165.1 163.5 1.6 1.0 %

F&I, net 115.1 97.4 17.7 18.1 %

Total gross profit $ 415.3 $ 340.9 $ 74.3 21.8 %

3 unchanged sentences

Used vehicle wholesale sales 7.8 % 1.8 % 6.0 %

Total used 7.3 % 5.3 % 2.0 %

Parts and service sales 55.7 % 53.7 % 2.0 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 17.3 % 17.0 % 0.3 %

2 unchanged sentences

Wholesale used vehicles sold 6,440 7,027 (587) (8.4) %

Total used 36,871 34,695 2,176 6.3 %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ 610 $ 118 $ 492 417.9 %

Total used $ 1,471 $ 944 $ 527 55.8 %

F&I PRU $ 1,931 $ 1,868 $ 64 3.4 %

SG&A expenses $ 261.7 $ 257.5 $ 4.2 1.6 %

2 unchanged sentences

(In millions, except unit data)

Nine Months Ended September 30,

Increase/(Decrease)

Three Months Ended March 31,

2021 2020 Increase/(Decrease) % Change

New vehicle retail sales $ 1,245.7 $ 979.3 $ 266.4 27.2 %

1 unchanged sentence

Used vehicle wholesale sales 50.4 45.9 4.5 9.8 %

Total used 746.8 608.7 138.1 22.7 %

Parts and service sales 295.5 301.9 (6.4) (2.1) %

F&I, net 115.1 96.6 18.5 19.2 %

Total revenues $ 2,403.1 $ 1,986.5 $ 416.6 21.0 %

3 unchanged sentences

Used vehicle wholesale sales 3.9 0.8 3.1 367.2 %

Total used 54.3 32.6 21.7 66.5 %

Parts and service sales 164.7 161.8 2.9 1.8 %

F&I, net 115.1 96.6 18.5 19.2 %

Total gross profit $ 415.0 $ 337.6 $ 77.4 22.9 %

3 unchanged sentences

Used vehicle wholesale sales 7.8 % 1.8 % 6.0 %

Total used 7.3 % 5.4 % 1.9 %

Parts and service sales 55.7 % 53.6 % 2.1 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 17.3 % 17.0 % 0.3 %

2 unchanged sentences

Wholesale used vehicles sold 6,440 6,897 (457) (6.6) %

Total used 36,865 34,177 2,688 7.9 %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ 612 $ 122 $ 489 400.3 %

Total used $ 1,473 $ 954 $ 519 54.4 %

F&I PRU $ 1,931 $ 1,873 $ 58 3.1 %

SG&A expenses $ 262.0 $ 253.9 $ 8.1 3.2 %

3 unchanged sentences

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

dealership operations have been impacted by the reduced demand caused by the COVID-19 pandemic and the restrictions put in place by local governments to contain the virus.

Total revenues in the U.S.

during the nine months ended September 30, 2020 decreased $681.0 million , or 10.1% , as compared to the same period in 2019 .

during the three months ended March 31, 2021 increased $396.8 million, or 19.8%, as compared to the same period in 2020.

Total same store revenues in the U.S.

during the nine months ended September 30, 2020 decreased $742.9 million , or 11.1% , as compared to the same period in 2019 .

The decrease in U.S.

same store revenues was driven by declines in all of our revenue streams.

The declines of 13.4% in new vehicle retail same store sales, 9.7% in used vehicle retail same store sales and 7.5% in used vehicle wholesale same store sales were driven by declines of 17.6% , 11.2% and 14.1% in new vehicle, used vehicle retail and used vehicle wholesale unit sales, respectively, reflecting reduced demand at our dealerships caused by the COVID-19 pandemic and inventory supply shortages.

Partially offsetting these declines, our online new and used vehicle sales platform, AcceleRide® was instrumental in allowing us to connect with and serve our customers throughout the restricted social distancing environment.

Parts and service same store revenues decreased 7.0% driven by an 18.1% decrease in collision revenues, 10.6% decrease in warranty revenues, 4.5% decrease in customer-pay revenues and a 1.8% decrease in wholesale parts revenues.

F&I same store revenues decreased 6.3% driven by a 14.4% decrease in same store retail unit sales as discussed above, which was partially offset by higher penetration rates and income per contract on many of our finance and insurance product offerings and a decline in our overall chargeback experience.

during the three months ended March 31, 2021 increased $416.6 million, or 21.0%, as compared to the same period in 2020, driven by increases in all of our revenue streams, with the exception of parts and service sales.

The increase of 27.2% in new vehicle retail same store sales was driven by a 20.1% increase in same store new vehicle retail unit sales coupled with a 5.9% increase in same store new vehicle average sales price per retail unit reflecting increased demand at our dealerships and lower vehicle inventory supply as a result of the OEMs producing and delivering fewer vehicles to dealerships due to a global semiconductor chip shortage.

At March 31, 2021, our U.S.

new vehicle inventory stood at a 34 day’s supply, which was 87 days lower than the same period last year and 14 days lower than December 31, 2020 days’ supply of 48.

While we anticipate inventories remaining tight in the near term, we will continue to adjust our operations as necessary.

Used vehicle retail same store sales increased 23.7% driven by an 11.5% increase in used vehicle retail same store unit sales coupled with a 10.9% increase in used vehicle same store average price per retail unit reflecting increased demand and lower inventory levels.

Sell A Ride, a tool from our online digital platform, AcceleRide® which enables a customer to sell their vehicle from the comfort of their home, was instrumental in alleviating some of our used vehicle supply constraints.

Adding to the increase in our new and used vehicle retail same store sales were sales from AcceleRide®.

Several technological enhancements made during the first quarter of 2021 to our online platform helped bolster these results.

Used vehicle wholesale same store sales increased 9.8% driven by a 17.5% increase in used vehicle average same store price per wholesale unit which was partially offset by a 6.6% decrease in used vehicle same store wholesale units.

The increase in our same store average used vehicle wholesale price was the result of a 19.8% increase in average used vehicle market prices in 2021 as compared to the first quarter of 2020, as reflected in the Manheim Index.

Parts and service same store revenues decreased by 2.1% for the quarter ended March 31, 2021 as compared to the same period in 2020, driven by a 11.7% decline in warranty revenues and a 14.5% decline in collision revenues which were partially offset by a 5.2% increase in customer pay revenues while our wholesale revenues remained flat.

Our Texas and Oklahoma stores were adversely impacted by a record-setting winter storm in the middle of February, which essentially shut down most of our parts and service business for approximately a week and dampened our parts and service same store revenues.

F&I same store revenues increased 19.2% driven primarily by a 15.6% increase in same store total retail unit sales and higher income per contract on finance and many of our other insurance product offerings, which were partially offset by lower penetration rates and an increase in our overall chargeback experience.

Total gross profit in the U.S.

during the nine months ended September 30, 2020 decreased $29.4 million , or 2.6% , as compared to the same period in 2019 .

during the three months ended March 31, 2021 increased $74.3 million, or 21.8%, as compared to the same period in 2020.

Total same store gross profit in the U.S.

during the nine months ended September 30, 2020 decreased $42.1 million , or 3.8% , as compared to the same period in 2019 .The decrease in total gross profit was driven by decreases in all of our operations except for new vehicle retail and used vehicle wholesale.

New vehicle retail same store gross profit increased 9.0% driven by a 32.4% increase in new vehicle retail same store gross profit per unit sold which was partially offset by a 17.6% decrease in new vehicle retail unit sales.

The increase in new vehicle retail same store gross profit per unit sold reflects supply constraints as many manufacturers had put a hold on production due to the COVID-19 pandemic earlier in the year and have not returned to normal production levels.

The 1.3% decrease in used vehicle retail same store gross profit was related to an 11.2% decline in used vehicle retail unit sales which was mostly offset by an 11.2% increase in used vehicle retail same store average gross profit per unit sold.

The decline in used vehicle retail same store gross profit was related to inventory supply constraints and the reduced demand during the first half of the year caused by the COVID-19 pandemic.

Parts and service same store gross profit and F&I same store gross profit decreased 7.8% and 6.3% , respectively, driven by decreases described above.

Total same store gross margin increased 130 basis points primarily as a result of higher new vehicle and used vehicle retail and wholesale margins related to the supply constraints of inventory in the industry.

during the three months ended March 31, 2021 increased $77.4 million, or 22.9%, as compared to the same period in 2020, driven by increases in all of our operations.

New vehicle same store gross profit increased 73.4%, reflecting a 44.4% increase in new vehicle same store gross profit per unit sold, coupled with a 20.1% increase in same store new vehicle retail units sold.

The increase in new vehicle retail same store gross profit per unit sold reflects strong consumer demand along with inventory supply constraints.

Used vehicle retail same store gross profit increased 58.6%, reflecting an increase of 42.2% in used vehicle retail same store gross profit per unit sold coupled with an 11.5% increase in used vehicle retail same store unit sales over the same period in 2020.

The increase in used vehicle retail same store gross profit per unit sold reflects higher market prices stemming from tight inventory levels.

Used vehicle wholesale gross profit increased as industry supply shortages drove up auction prices as reflected in the Manheim Index.

Parts and service same store gross profit increased 1.8% primarily due to an increase in customer pay gross profit.

New F&I same store gross profit increased 19.2% driven by the increases in revenue discussed above.

Total same store gross margin increased 30 basis points driven by higher new and used vehicle margins because of vehicle supply constraints and higher parts and service margin due to improvements in customer pay.

SG&A Expenses

Our SG&A expenses consist primarily of personnel costs, including salaries, commissions and incentive-based compensation, as well as rent and facility costs, advertising and other expenses (which includes legal, professional fees and general corporate expenses).

Total SG&A expenses in the U.S.

during the nine months ended September 30, 2020 decreased $103.5 million , or 12.8% , as compared to the same period in 2019 .

Total same store SG&A expenses in the U.S.

during the nine months ended September 30, 2020 , decreased $112.4 million , or 14.0% , as compared to the same period in 2019 .

dealership operations were directly impacted by reduced demand caused by the COVID-19 pandemic.

In an effort to reduce costs, beginning in March, we furloughed and terminated employees and significantly reduced advertising and other SG&A expenses.

As market conditions have improved, we have strived to retain our lower operating cost structure as a result of the pandemic.

during the three months ended March 31, 2021 increased $4.2 million, or 1.6%, as compared to the same period in 2020.

Total same store SG&A expenses in the U.S.

for the first nine months of 2019 included $17.8 million in net costs associated with hailstorms and flooding from Tropical Storm Imelda in Texas;

$1.8 million in non-core legal expenses;

and $0.5 million in net gains on real estate and dealership transactions.

during the three months ended March 31, 2021 increased $8.1 million, or 3.2%, as compared to the same period in 2020 primarily driven by an increase in personnel costs due to growth in variable commission payments as a result of improvements in new and used vehicle retail sales volume and gross profit.

Total 2021 same store SG&A expenses in the U.S.

during the first nine months of 2020 included $10.6 million in expense for an out-of-period adjustment related to stock-based compensation.

Total same store SG&A as a percent of gross profit decreased from 73.0% for the nine months ended 2019 to 65.3% for the same period of 2020 driven by cost cutting measures taken due to the impact of the COVID-19 pandemic.

Reported Operating Data - U.K.

(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Same Store Operating Data - U.K.

(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

The following discussion of our U.K.

operating results is on a same store basis.

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

During the third quarter of 2020, our U.K.

dealership operations have been steadily recovering from the impact on business caused by the COVID-19 pandemic.

Total revenues in the U.K.

during the three months ended September 30, 2020 increased $156.2 million , or 26.7% , as compared to the same period in 2019 .

Total same store revenues in the U.K.

during the three months ended September 30, 2020 increased $130.5 million , or 22.6% , as compared to the same period in 2019 .

On a constant currency basis, total same store revenues increased 17.3% driven by improvements in all of our dealership operations.

In response to the COVID-19 pandemic, during March the government mandated the closure of all U.K.

dealerships in an effort to stop the spread of the virus with the exception of emergency vehicle repairs.

showrooms were allowed to reopen June 1, 2020.

Since reopening, dealership operations have continued to improve throughout the third quarter.

On a constant currency basis, new vehicle retail same store revenues grew 19.2% driven by a 10.6% increase in new vehicle retail same store unit sales, coupled with a 7.8% increase in average new vehicle retail same store sales price.

While industry sales declined slightly, our new vehicle retail same store unit sales were up reflecting 2019 inventory shortages experienced in our Audi and VW brands as a result of the stricter emissions standards imposed by the Worldwide Harmonised Light Vehicle Test Procedure.

Used vehicle retail same store revenues on a constant currency basis increased 20.9% as used vehicle retail same store unit sales improved 14.1%, coupled with a 5.9% increase in average used retail same store sales price reflecting higher demand.

Parts and service same store revenues increased 3.8% on a constant currency basis, driven by a 12.3% increase in customer-pay business, partially offset by declines in our other parts and service businesses.

F&I same store revenues on a constant currency basis increased 8.3% as an increase in retail unit sales volumes was partially offset by lower penetration rates.

Total gross profit in the U.K.

during the three months ended September 30, 2020 increased $22.5 million , or 34.6% , as compared to the same period in 2019 .

Total same store gross profit in the U.K.

during the three months ended September 30, 2020 increased $19.9 million , or 31.6% , as compared to the same period in 2019 .

On a constant currency basis, total same store gross profit increased 25.7% , driven by increases in all of our operations.

New vehicle retail same store gross profit increased 26.1% on a constant currency basis, driven by a 10.6% growth in new vehicle retail same store unit sales, coupled with a 14.0% increase in new vehicle retail same store gross profit per unit.

The increase in new vehicle gross profit per unit primarily reflects increased demand coupled with our current supply constraints.

On a constant currency basis, used vehicle retail same store gross profit improved 78.9% , reflecting a 14.1% increase in used vehicle retail same store unit sales, coupled with a 56.8% increase in used vehicle retail same store gross profit per unit sold.

The increase in used vehicle retail same store gross profit per unit sold reflects supply constraints similar to new vehicles.

Used vehicle wholesale same store gross profit increased 694.3% on a constant currency basis, driven by an increase in auction prices and improved processes.

Parts and service same store gross profit on a constant currency basis increased 9.5% driven by the 12.3% increase in our higher margin customer-pay business discussed above.

F&I same store revenues on a constant currency basis increased 8.3% as previously discussed.

SG&A Expenses

Total SG&A expenses in the U.K.

during the three months ended September 30, 2020 decreased $3.9 million , or 6.8% , as compared to the same period in 2019 .

Total same store SG&A expenses in the U.K.

during the three months ended September 30, 2020 , decreased $4.3 million , or 7.9% , as compared to the same period in 2019 .

On a constant currency basis, total same store SG&A expenses decreased 12.1% , driven by the implementation and continual execution of cost reduction strategies as a reaction to the COVID-19 pandemic.

Total same store SG&A expenses in 2019 included $0.2 million in losses on dealership and real estate transactions.

As a percentage of gross profit, total same store SG&A expenses decreased from 86.5% for the third quarter of 2019 to 60.6% for the same period of 2020.

included $2.2 million in disaster pay and insurance deductible expense associated with the February winter storm in Texas and a $1.0 million gain related to a non-core legal settlement.

Total same store SG&A as a percent of gross profit decreased from 75.2% in the first quarter of 2020 to 63.1% for the same period of 2021, driven by higher vehicle margins and gains in our salesperson and technician productivity rates.

Reported Operating Data — U.K.

(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 263.2 $ 296.3 $ (33.1) (11.2) % $ 21.4 (18.4) %

1 unchanged sentence

Used vehicle wholesale sales 27.8 35.8 (8.0) (22.4) % 1.9 (27.6) %

Total used 219.4 224.6 (5.2) (2.3) % 14.9 (8.9) %

Parts and service sales 56.5 56.4 — 0.1 % 3.9 (6.9) %

F&I, net 10.6 13.3 (2.8) (20.7) % 0.8 (26.8) %

Total revenues $ 549.6 $ 590.7 $ (41.0) (6.9) % $ 41.2 (13.9) %

3 unchanged sentences

Used vehicle wholesale sales (0.2) — (0.1) (412.9) % — (305.7) %

Total used 8.0 9.1 (1.1) (12.2) % 0.5 (18.1) %

Parts and service sales 32.6 30.3 2.3 7.6 % 2.3 0.1 %

F&I, net 10.6 13.3 (2.8) (20.7) % 0.8 (26.8) %

Total gross profit $ 66.0 $ 64.8 $ 1.2 1.8 % $ 4.9 (5.8) %

3 unchanged sentences

Used vehicle wholesale sales (0.6) % (0.1) % (0.5) %

Total used 3.7 % 4.1 % (0.4) %

Parts and service sales 57.8 % 53.7 % 4.1 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 12.0 % 11.0 % 1.0 %

2 unchanged sentences

Wholesale used vehicles sold 3,138 4,584 (1,446) (31.5) %

Total used 10,250 12,608 (2,358) (18.7) %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ (51) $ (7) $ (44) (649.3) % $ (11) (492.7) %

Total used $ 782 $ 724 $ 58 8.0 % $ 53 0.7 %

F&I PRU $ 773 $ 787 $ (14) (1.8) % $ 59 (9.3) %

SG&A expenses $ 49.6 $ 59.8 $ (10.2) (17.0) % $ 3.5 (23.0) %

2 unchanged sentences

(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 263.0 $ 295.2 $ (32.2) (10.9) % $ 21.4 (18.2) %

1 unchanged sentence

Used vehicle wholesale sales 27.8 35.8 (8.0) (22.4) % 1.9 (27.6) %

Total used 218.9 223.6 (4.7) (2.1) % 14.8 (8.7) %

Parts and service sales 54.7 52.7 2.0 3.9 % 3.8 (3.3) %

F&I, net 10.5 13.2 (2.7) (20.1) % 0.8 (26.3) %

Total revenues $ 547.2 $ 584.7 $ (37.5) (6.4) % $ 41.1 (13.4) %

3 unchanged sentences

Used vehicle wholesale sales (0.1) — (0.1) (208.2) % — (147.1) %

Total used 8.0 9.1 (1.0) (11.2) % 0.5 (17.3) %

Parts and service sales 32.0 28.7 3.2 11.2 % 2.3 3.4 %

F&I, net 10.5 13.2 (2.7) (20.1) % 0.8 (26.3) %

Total gross profit $ 65.3 $ 63.0 $ 2.3 3.7 % $ 4.9 (4.1) %

3 unchanged sentences

Used vehicle wholesale sales (0.4) % (0.1) % (0.3) %

Total used 3.7 % 4.0 % (0.4) %

Parts and service sales 58.4 % 54.5 % 3.9 %

F&I, net 100.0 % 100.0 % — %

Total gross margin 11.9 % 10.8 % 1.2 %

2 unchanged sentences

Wholesale used vehicles sold 3,125 4,549 (1,424) (31.3) %

Total used 10,211 12,502 (2,291) (18.3) %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ (34) $ (8) $ (27) (348.7) % $ (7) (259.6) %

Total used $ 787 $ 724 $ 63 8.7 % $ 54 1.3 %

F&I PRU $ 774 $ 786 $ (12) (1.5) % $ 59 (9.1) %

SG&A expenses $ 48.2 $ 57.8 $ (9.6) (16.6) % $ 3.4 (22.6) %

3 unchanged sentences

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

dealership operations have been impacted by the restrictions put in place by the national government in efforts to contain the spread of COVID-19.

experienced a surge in COVID-19 cases at the end of 2020, which led to a government-mandated closure of all non-essential businesses beginning January 4, 2021 through April 12, 2021.

The national lockdown impacted our new and used vehicle sales as our showrooms were closed the entire first quarter of 2021, but had a lesser impact on our service operations as they remained open.

Total revenues in the U.K.

during the nine months ended September 30, 2020 decreased $246.2 million , or 13.4% , as compared to the same period in 2019 .

during the three months ended March 31, 2021 decreased $41.0 million, or 6.9%, as compared to the same period in 2020.

Total same store revenues in the U.K.

during the nine months ended September 30, 2020 decreased $297.1 million , or 16.6% , as compared to the same period in 2019 .

On a constant currency basis, total same store revenues decreased 16.8% , driven by decreases in all of our operations due to the COVID-19 pandemic.

Beginning March 21, 2020, the government mandated the closure of all U.K.

dealerships in efforts to stop the spread of the virus.

The government shutdown remained in effect through May 18, 2020 for service, with the exception of emergency vehicle repairs, and June 1, 2020 for showrooms.

Since June, business has recovered but not enough to offset the declines caused by the shutdown.

New vehicle retail same store revenues on a constant currency basis decreased 15.8% , as a 21.9% decrease in new vehicle retail same store unit sales was partially offset by a 7.8% increase in new vehicle retail same store average sales price per unit sold.

On a constant currency basis, used vehicle retail same store revenues decreased 13.7% , as a 16.1% decrease in used vehicle retail same store unit sales was partially offset by a 3.0% increase in used vehicle retail same store average sales price per unit sold.

Parts and service same store revenues decreased 21.1% on a constant currency basis driven by declines of 13.1% in customer-pay, 32.4% in warranty, 35.5% in collision, and 27.0% in wholesale parts revenues.

The decreases in all parts and service businesses are a result of the limitations on the business due to COVID-19.

F&I same store revenues on a constant currency basis decreased 22.8% driven by the decline in retail unit sales and lower penetration rates.

during the three months ended March 31, 2021 decreased $37.5 million, or 6.4%, as compared to the same period in 2020.

On a constant currency basis, total same store revenues decreased 13.4% driven by declines in all of our revenue streams.

During the first quarter of 2021, our U.K.

operations relied heavily on online selling by rolling out AcceleRide®, our online new and used vehicle sales platform.

New vehicle retail same store revenues on a constant currency basis decreased 18.2% driven by a 26.1% decline in new vehicle retail same store unit sales, partially offset by a 10.7% increase in average new vehicle retail same store sales price.

On a constant currency basis, used vehicle retail same store revenues decreased 5.1% as used vehicle retail same store unit sales declined 10.9%, partially offset by a 6.5% increase in average used retail same store sales price.

The declines in new and used vehicle retail same store unit sales reflect limitations on selling vehicles without a showroom or the ability to conduct test drives as our showrooms were closed for the entire first quarter as discussed above.

The increases in average new and used vehicle retail same store sales prices reflect lower vehicle inventory supply as OEMs are producing and delivering fewer vehicles due to a global semiconductor chip shortage.

At March 31, 2021 our U.K.

new vehicle inventory stood at a 28 days’ supply, which was 8 days lower than the same period last year and 74 days lower than December 31, 2020 days’ supply of 102.

While we anticipate inventories remaining tight in the near term, we will continue to adjust our operations as necessary.

Parts and service same store revenues decreased 3.3% on a constant currency basis, as a 1.3% increase in customer-pay business was more than offset by declines in our other parts and service businesses.

F&I same store revenues on a constant currency basis decreased 26.3%, as a decline in retail unit sales volumes coupled with lower penetration rates were partially offset by a decrease in our overall chargeback experience.

Total gross profit in the U.K.

during the nine months ended September 30, 2020 decreased $19.3 million , or 9.6% , as compared to the same period in 2019 .

during the three months ended March 31, 2021 increased $1.2 million, or 1.8%, as compared to the same period in 2020.

Total same store gross profit in the U.K.

during the nine months ended September 30, 2020 decreased $24.7 million , or 12.8% , as compared to the same period in 2019 .

On a constant currency basis, total same store gross profit decreased 13.1% , driven by decreases in all of our operations, except for used vehicle, as result of the COVID-19 pandemic.

New vehicle retail same store gross profit on a constant currency basis decreased 16.0% , driven by a 21.9% decline in new vehicle retail same store unit sales, partially offset by a 7.6% increase in new vehicle retail same store average gross profit per unit sold.

The increase in new vehicle retail same store gross profit per unit sold reflects supply constraints related to the COVID-19 pandemic as many manufacturers had put a hold on production earlier in the year and have not returned to normal production levels.

Used vehicle retail same store gross profit on a constant currency basis increased 16.9% on a 39.4% increase in used vehicle retail same store average gross profit per unit sold, partially offset by a 16.1% decrease in used vehicle retail same store unit sales.

The increase in used vehicle retail same store average gross profit per unit sold reflects supply constraints similar to new vehicles.

Used vehicle wholesale same store gross profit improved 192.5% on a constant currency basis driven by an increase in auction prices due to supply constraints and improved processes.

Parts and service same store gross profit on a constant currency basis decreased 20.6% as a result of a 21.1% decline in revenues discussed above.

F&I same store gross profit on a constant currency basis decreased 22.8% as discussed above.

during the three months ended March 31, 2021 increased $2.3 million, or 3.7%, as compared to the same period in 2020.

On a constant currency basis, total same store gross profit decreased 4.1%, driven by declines in our used vehicle retail and F&I operations.

New vehicle retail same store gross profit increased 12.3% on a constant currency basis, driven by a 51.9% increase in new vehicle retail same store gross profit per unit, partially offset by a 26.1% decrease in new vehicle retail same store unit sales.

The increase in new vehicle gross profit per unit primarily reflects supply constraints.

On a constant currency basis, used vehicle retail same store gross profit decreased 16.6%, reflecting a 10.9% decline in used vehicle retail same store unit sales, coupled with a 6.4% decrease in used vehicle retail same store gross profit per unit sold.

The decline in used vehicle retail same store gross profit per unit sold reflects our efforts to refresh inventory as we pushed to sell older units in stock.

Parts and service same store gross profit on a constant currency basis increased 3.4%, as most of the service repair work performed in the quarter was higher margin, as customers have deferred lower margin regular maintenance during the lockdown period.

F&I same store gross profit on a constant currency basis decreased 26.3% as previously discussed.

SG&A Expenses

Our SG&A expenses consist primarily of personnel costs, including salaries, commissions and incentive-based compensation, as well as rent and facility costs, advertising and other expenses (which includes legal, professional fees and general corporate expenses).

Total SG&A expenses in the U.K.

during the nine months ended September 30, 2020 decreased $34.0 million , or 19.3% , as compared to the same period in 2019 .

during the three months ended March 31, 2021 decreased $10.2 million, or 17.0%, as compared to the same period in 2020.

Total same store SG&A expenses in the U.K.

during the nine months ended September 30, 2020 , decreased $38.7 million , or 23.3% , as compared to the same period in 2019 .

On a constant currency basis, total same store SG&A expenses decreased 23.6% .

This decline was driven by the implementation and execution of cost reduction strategies as a reaction to the COVID-19 pandemic, which enabled us to partially offset the negative impact of lower gross profit.

Total same store SG&A expenses in 2020 included $1.2 million in severance costs for redundancy due to the COVID-19 pandemic.

Total same store SG&A expenses in 2019 included $0.2 million in losses on dealership and real estate transactions.

As a percentage of gross profit, total same store SG&A expenses decreased from 86.0% for the nine months ended 2019 to 75.6% for the same period of 2020.

during the three months ended March 31, 2021, decreased $9.6 million, or 16.6%, as compared to the same period in 2020.

On a constant currency basis, total same store SG&A expenses decreased 22.6%, driven by the continual execution of cost reduction strategies as a response to the COVID-19 pandemic coupled with a temporary suspension of city tax.

We have strived to retain our lower operating cost structure and have continued to benefit from these cost cutting measures in the first quarter of 2021.

As a percentage of gross profit, total same store SG&A expenses decreased from 91.8% for the first quarter of 2020 to 73.8% for the same period of 2021.

Reported Operating Data — Brazil

(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 34.1 $ 57.5 $ (23.3) (40.6) % $ (8.1) (26.5) %

1 unchanged sentence

Used vehicle wholesale sales 2.0 3.8 (1.8) (47.6) % (0.5) (34.6) %

Total used 12.7 23.8 (11.1) (46.7) % (3.1) (33.7) %

Parts and service sales 7.9 9.6 (1.7) (17.6) % (1.9) 2.3 %

F&I, net 1.4 1.7 (0.3) (19.9) % (0.3) (0.7) %

Total revenues $ 56.1 $ 92.5 $ (36.5) (39.4) % $ (13.4) (24.9) %

3 unchanged sentences

Used vehicle wholesale sales 0.2 0.2 — (17.0) % — 1.5 %

Total used 1.3 1.3 — 1.8 % (0.3) 25.5 %

Parts and service sales 3.3 4.2 (0.9) (20.3) % (0.8) (1.0) %

F&I, net 1.4 1.7 (0.3) (19.9) % (0.3) (0.7) %

Total gross profit $ 9.4 $ 10.7 $ (1.3) (12.1) % $ (2.3) 8.9 %

3 unchanged sentences

Used vehicle wholesale sales 8.4 % 5.3 % 3.1 %

Total used 10.1 % 5.3 % 4.8 %

Parts and service sales 42.5 % 43.9 % (1.4) %

F&I, net 100.0 % 100.0 % — %

Total gross margin 16.7 % 11.5 % 5.2 %

2 unchanged sentences

Wholesale used vehicles sold 234 475 (241) (50.7) %

Total used 750 1,573 (823) (52.3) %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ 725 $ 430 $ 295 68.6 % $ (161) 106.1 %

Total used $ 1,704 $ 798 $ 906 113.6 % $ (396) 163.2 %

F&I PRU $ 816 $ 560 $ 256 45.7 % $ (196) 80.6 %

SG&A expenses $ 7.1 $ 10.6 $ (3.5) (33.1) % $ (1.6) (18.0) %

2 unchanged sentences

(In millions, except unit data)

Three Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change

New vehicle retail sales $ 34.1 $ 57.5 $ (23.3) (40.6) % $ (8.1) (26.5) %

1 unchanged sentence

Used vehicle wholesale sales 2.0 3.8 (1.8) (47.6) % (0.5) (34.6) %

Total used 12.7 23.8 (11.1) (46.7) % (3.1) (33.7) %

Parts and service sales 7.9 9.6 (1.7) (17.6) % (1.9) 2.3 %

F&I, net 1.4 1.7 (0.3) (19.9) % (0.3) (0.7) %

Total revenues $ 56.1 $ 92.5 $ (36.5) (39.4) % $ (13.4) (24.9) %

3 unchanged sentences

Used vehicle wholesale sales 0.2 0.2 — (17.0) % — 1.5 %

Total used 1.3 1.3 — 1.8 % (0.3) 25.5 %

Parts and service sales 3.3 4.2 (0.9) (20.4) % (0.8) (1.1) %

F&I, net 1.4 1.7 (0.3) (19.9) % (0.3) (0.7) %

Total gross profit $ 9.4 $ 10.7 $ (1.3) (12.2) % $ (2.3) 8.9 %

3 unchanged sentences

Used vehicle wholesale sales 8.4 % 5.3 % 3.1 %

Total used 10.1 % 5.3 % 4.8 %

Parts and service sales 42.5 % 44.0 % (1.5) %

F&I, net 100.0 % 100.0 % — %

Total gross margin 16.7 % 11.5 % 5.2 %

2 unchanged sentences

Wholesale used vehicles sold 234 475 (241) (50.7) %

Total used 750 1,573 (823) (52.3) %

Average sales price per unit sold:

5 unchanged sentences

Used vehicle wholesale sales $ 725 $ 430 $ 295 68.6 % $ (161) 106.1 %

Total used $ 1,704 $ 798 $ 906 113.5 % $ (396) 163.1 %

F&I PRU $ 816 $ 560 $ 256 45.7 % $ (196) 80.6 %

SG&A expenses $ 7.1 $ 10.5 $ (3.4) (32.2) % $ (1.6) (16.8) %

2 unchanged sentences

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

Our Brazil dealership operations have been significantly impacted by the reduced demand caused by the COVID-19 pandemic and the restrictions put in place by local governments to contain the virus.

Total revenues in Brazil during the three months ended September 30, 2020 decreased $56.6 million , or 51.1% , as compared to the same period in 2019 .

Total same store revenues in Brazil during the three months ended September 30, 2020 decreased $56.3 million , or 50.9% , as compared to the same period in 2019 .

On a constant currency basis, total same store revenues decreased 33.6% driven by declines in all business lines caused by the continued negative impacts of the COVID-19 pandemic.

During the first quarter of 2021, Brazil saw a rise in COVID-19 cases partially due to a new variant that is rapidly spreading through the country and overwhelming the healthcare system.

To contain the spread of the virus, the government canceled Carnival in 2021 and implemented various lockdowns for non-essential businesses.

As such, many of our showrooms were closed periodically throughout the quarter impacting our ability to sell new and used vehicles.

Total and same store revenues in Brazil during the three months ended March 31, 2021 decreased $36.5 million, or 39.4%, as compared to the same period in 2020.

On a constant currency basis, total same store revenues decreased 24.9% driven by declines in all business lines except parts and services, resulting from the continued negative impact of the COVID-19 pandemic.

New vehicle retail same store revenues on a constant currency basis decreased 26.5%, as a 40.6% decrease in new vehicle retail same store unit sales was partially offset by a 23.7% increase in new vehicle retail same store average sales price per unit sold.

Used vehicle retail same store revenues on a constant currency basis decreased 34.7% , reflecting a 54.6% decrease in used vehicle same store unit sales partially offset by a 43.8% increase in used vehicle retail same store average sales price per unit sold.

Used vehicle wholesale same store revenues decreased 24.8% on a constant currency basis reflecting a 34.4% decline in wholesale used vehicle same store unit sales.

Reduced demand and a limited availability of inventory drove the reduction in new and used vehicle same store unit sales.

The increases in new and used vehicle retail same store average sales price per unit reflect the supply constraints and a change in brand mix, which has shifted towards our higher priced luxury brands.

Parts and service same store revenues on a constant currency basis decreased 8.4% primarily driven by declines in collision and customer-pay revenues.

F&I same store revenues on a constant currency basis decreased 20.3% primarily due to the decline in retail unit sales partially offset by an increase in the penetration rate and income per contract for our retail finance fees.

Total gross profit in Brazil during the three months ended September 30, 2020 decreased $5.0 million , or 36.6% , as compared to the same period in 2019 .

Total same store gross profit in Brazil during the three months ended September 30, 2020 decreased $5.0 million , or 36.7% , as compared to the same period in 2019 .

On a constant currency basis, total same store gross profit decreased 14.1% driven by declines in all business lines.

New vehicle retail same store gross profit on a constant currency basis decreased 20.7% driven by the 46.9% decline in new vehicle retail same store units sold partially offset by a 49.5% increase in new vehicle retail same store average gross profit per unit sold.

Used vehicle retail same store gross profit on a constant currency basis decreased 21.5% reflecting the 54.6% decline in used vehicle retail same store unit sales partially offset by a 72.9% increase in used vehicle retail same store average gross profit per unit sold.

Used vehicle wholesale same store gross profit on a constant currency basis decreased 14.7% driven by the 34.4% decline in wholesale used vehicles same store unit sales partially offset by a 30.0% increase in used vehicle wholesale same store average gross profit per unit sold.

The improvement in new and used same store gross profit PRU was a direct result of supply constraints and a mix shift towards our luxury brands.

Parts and service same store gross profit on a constant currency basis decreased 3.6% as a result of the 8.4% decrease in revenues described above.

F&I same store gross profit on a constant currency basis decreased 20.3% as discussed above.

Used vehicle retail same store revenues on a constant currency basis decreased 33.6%, reflecting a 53.0% decrease in used vehicle retail same store unit sales partially offset by a 41.4% increase in used vehicle retail same store average sales price per unit sold.

Used vehicle wholesale same store revenues decreased 34.6% on a constant currency b asis, reflecting a 50.7% decline in wholesale used vehicle same store unit sales.

Reduced demand, limited availability of inventory and closure of our dealerships during the COVID-19 lockdown drove the reduction in new and used vehicle same store unit sales.

The increases in new and used vehicle retail same store average sales price per unit is the result of higher transaction prices due to lower inventory supply in the market as OEMs are producing and delivering fewer vehicles due to a global semiconductor chip shortage.

Parts and service same store revenues on a constant currency basis increased 2.3%, driven by increases in customer-pay and warranty revenues, which were partially offset by declines in collision revenues.

F&I same store revenues on a constant currency basis remained relatively flat as an increase in finance income per contract was offset by the decline in retail unit sales.

Total and same store gross profit in Brazil during the three months ended March 31, 2021 decreased $1.3 million as compared to the same period in 2020.

On a constant currency basis, total same store gross profit increased 8.9% driven by increases in new vehicle, used vehicle retail and used vehicle wholesale, partially offset by declines in parts and services.

New vehicle retail same store gross profit on a constant currency basis increased 19.6% driven by a 101.3% increase in new vehicle retail same store average gross profit per unit sold, partially offset by a 40.6% decline in new vehicle retail same store unit sales.

Used vehicle retail same store gross profit on a constant currency basis increased 30.1%, reflecting the 176.9% increase in used vehicle retail same store average gross profit per unit sold partially offset by the 53.0% decline in used vehicle retail same store unit sales.

The improvement in new and used same store retail gross profit per retail unit was a direct result of supply constraints.

Parts and service same store gross profit on a constant currency basis decreased 1.1% driven by declines in our warranty and customer-pay margins.

F &I same store gross profit on a constant currency basis remained flat compared to the same period a year ago.

SG&A Expenses

Total SG&A expenses in Brazil during the three months ended September 30, 2020 decreased $4.2 million , or 37.8% , as compared to the same period in 2019 .

Total same store SG&A expenses in Brazil during the three months ended September 30, 2020 decreased $4.4 million , or 38.9% , as compared to the same period in 2019 .

On a constant currency basis, total same store SG&A expenses decreased 17.0% while total same store gross profit decreased 14.1%, resulting in a 290 basis points decrease in total same store SG&A as a percentage of gross profit.

Our SG&A expenses consist primarily of personnel costs, including salaries, commissions and incentive-based compensation, as well as rent and facility costs, advertising and other expenses (which includes legal, professional fees and general corporate expenses).

Total SG&A expenses in Brazil during the three months ended March 31, 2021 decreased $3.5 million, or 33.1%, as compared to the same period in 2020.

Total same store SG&A expenses in Brazil during the three months ended March 31, 2021 decreased $3.4 million, or 32.2%, as compared to the same period in 2020.

On a constant currency basis, total same store SG&A expenses decreased 16.8% while total same store gross profit increased 8.9%, resulting in a 2,250 basis points decrease in total same store SG&A as a percentage of gross profit.

The decrease in same store SG&A is explained by expense control measures taken by management due to COVID-19, primarily driven by a decrease in personnel expense.

Reported Operating Data - Brazil

(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

Same Store Operating Data - Brazil

(In millions, except unit data)

Nine Months Ended September 30,

Increase/ (Decrease)

Currency Impact on Current Period Results

Constant Currency % Change

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total revenues

Gross profit:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross profit

Gross margin:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

Parts and service sales

Total gross margin

Retail new vehicles sold

Retail used vehicles sold

Wholesale used vehicles sold

Average sales price per unit sold:

New vehicle retail

Used vehicle retail

Gross profit per unit sold:

New vehicle retail sales

Used vehicle retail sales

Used vehicle wholesale sales

SG&A expenses

SG&A as % gross profit

The following discussion of our Brazil operating results is on a same store basis.

The difference between reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.

Our Brazil dealership operations have been significantly impacted by the reduced demand caused by the COVID-19 pandemic and the restrictions put in place by local governments to contain the virus.

Total revenues in Brazil during the nine months ended September 30, 2020 decreased $143.5 million , or 43.9% , as compared to the same period in 2019 .

Total same store revenues in Brazil during the nine months ended September 30, 2020 decreased $135.0 million , or 42.4% , as compared to the same period in 2019 .

On a constant currency basis, total same store revenues decreased 27.7% with declines in all revenue lines except for used vehicle wholesale.

Beginning March 20, 2020, all our dealerships were required to close in efforts to stop the spread of the virus and while our service centers reopened and operated throughout the second quarter, our showrooms did not reopen until May 2020 with reduced hours.

New vehicle retail same store revenues on a constant currency basis decreased 33.6% , as a 43.7% decrease in new vehicle retail same store unit sales was partially offset by an 18.0% increase in new vehicle retail same store average sales price per unit sold.

Used vehicle retail same store revenues on a constant currency basis decreased 21.1% , as a 37.6% decrease in used vehicle retail same store unit sales more than offset a 26.5% increase in used vehicle retail same store average sales price per unit sold.

Used vehicle wholesale same store revenues increased 4.4% on a constant currency basis.

The improvement in used vehicle wholesale same store revenues and the increases in new and used vehicle retail same store average sales price per unit sold reflect supply constraints and a shift in brand mix to higher priced luxury brands.

The decline in total units sold reflects the shutdowns and subsequent lower demand and inventory shortages caused by the COVID-19 pandemic.

Parts and service same store revenues on a constant currency basis decreased 15.2% driven by declines in customer-pay, warranty and collision revenues partially offset by an increase in wholesale revenues.

F&I same store revenues on a constant currency basis decreased 23.2% primarily as a result of a decline in our retail unit sales partially offset by an improvement in income per contract on our retail finance fees.

Total gross profit in Brazil during the nine months ended September 30, 2020 decreased $15.4 million , or 38.9% , as compared to the same period in 2019 .

Total same store gross profit in Brazil during the nine months ended September 30, 2020 decreased $15.0 million , or 38.3% , as compared to the same period in 2019 .

On a constant currency basis total same store gross profit decreased 21.4% driven by declines in all business lines.

New vehicle retail same store gross profit on a constant currency basis decreased 24.6% , driven by a 43.7% decrease in new vehicle retail same store units sold partially offset by a 33.9% increase in new vehicle retail same store average gross profit per unit sold.

Used vehicle retail same store gross profit on a constant currency basis decreased 31.8%, reflecting a 37.6% decrease in used vehicle retail same store unit sales partially offset by a 9.3% increase in used vehicle retail same store average gross profit per unit sold.

The improvement in new and used vehicle retail same store gross profit per unit reflects the shift towards our higher priced luxury brands and supply constraints experienced during the COVID-19 pandemic as many manufacturers had put a hold on production earlier in the year and have not returned to normal production levels.

Parts and service same store gross profit decreased 14.7% on a constant currency basis, driven by the 15.2% decrease in parts and service revenues described above.

F&I same store gross profit on a constant currency basis decreased 23.2% as discussed above.

SG&A Expenses

Total SG&A expenses in Brazil during the nine months ended September 30, 2020 decreased $11.9 million , or 34.0% , as compared to the same period in 2019 .

Total same store SG&A expenses in Brazil during the nine months ended September 30, 2020 , decreased $11.4 million , or 33.1% , as compared to the same period in 2019 .

On a constant currency basis, total same store SG&A expenses decreased 14.7% while total same store gross profit decreased 21.4% , resulting in a 730 basis points increase in total same store SG&A as a percentage of gross profit.

The decrease in SG&A expenses was a result of cost control initiatives implemented by the management team centered around reducing personnel expense.

Total same store SG&A expenses in 2020 included $0.9 million of severance costs associated with the termination of employees as a result of the COVID-19 pandemic.

The following discussion of our results of operations is on a consolidated basis, unless otherwise noted.

The following table (in millions) and discussion of our results of operations is on a consolidated basis, unless otherwise noted.

Three Months Ended March 31,

2021 2020 Increase/ (Decrease) % Change

Depreciation and amortization expense $ 19.5 $ 18.6 $ 0.9 4.7 %

Our total depreciation and amortization expense increased from $18.2 million to $19.1 million and from $53.0 million to $56.5 million for the three and nine months ended September 30, 2020 , respectively, when compared to the same period in 2019 .

The slight increase is attributed to an increase in property and equipment in our U.S.

Impairment of Assets

We evaluate intangible assets, consisting entirely of indefinite-lived franchise rights and goodwill, for impairment annually, or more frequently if events or circumstances indicate possible impairment.

During the three months ended June 30, 2020 we recorded goodwill impairment charges of $10.7 million within the Brazil reporting unit and franchise rights impairment charges of $11.1 million within the U.K.

segment and $0.1 million within the Brazil segment.

During the three months ended September 30, 2019 we recorded franchise rights impairment charges of $5.6 million in the U.K.

segment and $3.0 million in the U.S.

See Part I, “Item 1.

Financial Statements,” Note 8 “Intangibles” for additional discussion of our interim impairment assessment.

We also review long-lived assets that are held-for-use, including our property and equipment and ROU assets, for impairment at the lowest level of identifiable cash flows whenever there are indicators that the carrying value of these assets may not be recoverable.

During the three months ended June 30, 2020, we recognized ROU asset impairment charges of $1.7 million relating to seven dealerships within the U.K.

segment and $0.2 million relating to one dealership within the Brazil segment.

During the three months ended September 30, 2019 we recognized a ROU asset impairment charge of $1.4 million in the U.K.

segment and asset impairment charges of $0.2 million in the U.S.

During the three months ended June 30, 2019 we recognized asset impairment charges of $0.5 million within the Brazil segment.

See Part I, “Item 1.

Financial Statements,” Note 1 “Interim Financial Information” for additional discussion of our interim impairment assessment.

The impairment charges were recognized within Asset impairments in our Condensed Consolidated Statements of Operations.

Floorplan interest expense $ 7.6 $ 12.9 $ (5.3) (41.2) %

Other interest expense, net $ 13.8 $ 18.1 $ (4.3) (23.9) %

(Benefit) provision for income taxes $ 29.4 $ 9.1 $ 20.3 223.0 %

Depreciation and Amortization Expense

Total depreciation and amortization expense during the three months ended March 31, 2021 increased $0.9 million, or 4.7%, as compared to the same period in 2020.

The slight increase is attributed to an increase in property and equipment in our U.K.

Floorplan Interest Expense

Total floorplan interest expense during the three months ended March 31, 2021 decreased $5.3 million, or 41.2%, as compared to the same period in 2020.

Our floorplan interest expense fluctuates with changes in our borrowings outstanding and interest rates, which are based on LIBOR, Prime rate or a benchmark rate.

To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure for a fixed interest rate over the term of the variable interest rate borrowing.

For the three months ended September 30, 2020 , total floorplan interest expense decreased 47.1% as compared to the same period in 2019 .

For the nine months ended September 30, 2020 , total floorplan interest expense decreased 33.8% as compared to the same period in 2019 .

The decrease in both comparative periods is primarily due to lower inventory levels and lower weighted average interest rates mainly due to a decline in LIBOR, partially offset by higher expense on our interest rate swaps.

To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rat e.

The decrease is primarily due to lower floorplan borrowings as a result of lower inventory levels and lower weighted average interest rates mainly due to a decline in LIBOR, partially offset by higher expense on our interest rate swaps.

Other Interest Expense, Net

Other interest expense, net consists of interest charges primarily on our real estate related debt, working capital lines of credit and other long-term debt, partially offset by interest income.

For the three months ended September 30, 2020 , other interest expense, net decreased from $18.9 million to $14.6 million as compared to the same period in 2019 .

For the nine months ended September 30, 2020 , other interest expense, net decreased from $55.8 million to $49.0 million as compared to the same period in 2019 .

The decrease in both comparable periods was primarily attributable to lower interest rates achieved through debt refinancings in the current year, including the redemption of $300.0 million in aggregate principal of our 5.25% Senior Notes on April 2, 2020, which was funded at lower interest rates through increased borrowings on our real estate related debt and Acquisition Line, and the redemption of $550.0 million aggregate principal of our 5.00% Senior Notes on September 2, 2020, which was funded through the issuance of $550.0 million aggregate principal amount of our 4.00% Senior Notes on August 17, 2020.

See “Sources and Uses of Liquidity from Financing Activities” within “Liquidity and Capital Resources” below for further discussion of our debt refinancings in the current year.

Loss on Extinguishment of Debt

On April 2, 2020, we fully redeemed $300.0 million in aggregate principal amount of our outstanding 5.25% Senior Notes due June 2023, at a premium of 102.625% .

The total redemption price, consisting of the principal amount of the notes redeemed plus associated premium, amounted to $307.9 million .

We recognized a loss on extinguishment of $10.4 million which included write offs of an unamortized discount in the amount of $1.9 million and unamortized debt issuance costs in the amount of $0.6 million .

On September 2, 2020, we fully redeemed $550.0 million in aggregate principal amount of our outstanding 5.00% Senior Notes due June 2022, at par value.

We recognized a loss on extinguishment of $3.3 million which included write offs of an unamortized discount in the amount of $2.6 million and unamortized debt issuance costs in the amount of $0.7 million .

Total other interest expense, net during the three months ended March 31, 2021 decreased $4.3 million, or 23.9%, as compared to the same period in 2020.

Other interest expense, net consists of interest charges primarily on our Senior Notes, real estate related debt and other debt, partially offset by interest income.

The decrease was primarily attributable to lower interest rates achieved through refinancing our debt in the previous year, including the redemption of $300.0 million in aggregate principal of our 5.25% Senior Notes on April 2, 2020, which was funded at lower interest rates through increased borrowings on our real estate related debt and Acquisition Line, and the redemption of $550.0 million aggregate principal of our 5.00% Senior Notes on September 2, 2020, which was funded through the issuance of $550.0 million aggregate principal amount of our 4.00% Senior Notes on August 17, 2020.

Provision for Income Taxes

Our provision for income taxes increased $23.6 million to $34.6 million for the three months ended September 30, 2020 as compared to the same period in 2019.

For the nine months ended September 30, 2020 , our provision for income taxes increased $17.4 million to $55.8 million , as compared to the same period in 2019.

The increases were primarily due to increases in pretax book income.

For the three months ended September 30, 2020 , our effective tax rate decreased to 21.5% from 22.3% as compared to the same period in 2019.

This decrease was primarily due to changes to valuation allowances provided for net operating losses in certain U.S.

states and in Brazil.

For the nine months ended September 30, 2020 , our effective tax rate decreased to 23.1% from 23.4% as compared to the same period in 2019.

This decrease was primarily due to increased tax deductions in excess of book expense with respect to RSAs that vested in 2020, partially offset by higher disallowed excess compensation expense in 2020 and reductions to valuation allowances provided for net operating losses in certain U.S.

states and in Brazil that were higher in 2019.

Provision for income taxes of $29.4 million during the three months ended March 31, 2021 increased by $20.3 million, or 223.0% , as compared to the same period in 2020.

The increase was primarily due to higher pretax book income.

For the three months ended March 31, 2021, our effective tax rate decreased to 22.4% from 23.4% as compared to the same period in 2020.

This decrease was primarily due to decreases in valuation allowances provided for net operating losses in Brazil as compared to the same period in 2020.

We expect our effective tax rate for the remainder of 2021 will be between 23.0% and 24.0%.

We believe that it is more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences.

The anticipated effects of the COVID-19 pandemic should not materially impact our estimated effective tax rate for the full-year of 2020.

Liquidity and Capital Resources

Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our Floorplan Line and FMCC Facility levels (see Part I, “Item 1.

Financial Statements,” Note 10 “Floorplan Notes Payable” in the Notes to Condensed Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, which provide vehicle floorplan financing, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings.

Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S.

Floorplan Line and FMCC Facility levels (refer to Note 10.

Floorplan Notes Payable in our Notes to Condensed Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, which provide vehicle floorplan financing, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings.

Based on current facts and circumstances, we believe we will have adequate cash flow, coupled with available borrowing capacity, to fund our current operations, capital expenditures and acquisitions for the next 12 months.

If economic and business conditions deteriorate or if our capital expenditures or acquisition plans for 2021 change, we may need to access the private or public capital markets to obtain additional funding.

See “Sources and Uses of Liquidity from Investing Activities” below for further discussion of expectations regarding future capital expenditures.

As of September 30, 2020 , our total cash on hand was $66.2 million .

The balance of cash on hand excludes $126.7 million of immediately available funds used to pay down our Floorplan Line and FMCC Facility as of September 30, 2020 .

We use the pay down of our Floorplan Line and FMCC Facility as a channel for the short-term investment of excess cash.

Refer to Sources and Uses of Liquidity from Investing Activities below for further discussion of expectations regarding future capital expenditures.

As of March 31, 2021, our total cash on hand was $82.9 million.

The balance of cash on hand excludes $244.8 million of immediately available funds used to pay down our U.S.

Floorplan Line and FMCC Facility as of March 31, 2021.

We use the pay down of our U.S.

Floorplan Line and FMCC Facility as a channel for the short-term investment of excess cash.

We utilize various credit facilities to finance the purchase of our new and used vehicle inventory.

With respect to all new vehicle floorplan borrowings in the normal course of business, the manufacturers of the vehicles draft our credit facilities directly with no cash flows to or from us.

With respect to borrowings for used vehicle financing, we finance up to 85% of the value of our used vehicle inventory in the U.S.

and the funds flow directly between us and the lender.

With respect to borrowings for used vehicle financing, we finance up t o 85% o f the value of our used vehicle inventory in the U.S., and the funds flow directly between us and the lender.

We categorize the cash flows associated with borrowings and repayments on these various credit facilities as Cash Flows from Operating Activities or Cash Flows from Financing Activities in our Condensed Consolidated Statements of Cash Flows.

All borrowings from, and repayments to, lenders affiliated with our vehicle manufacturers (excluding the cash flows from or to manufacturer-affiliated lenders participating in our syndicated lending group) are presented within Cash Flows from Operating Activities in the Condensed Consolidated Statements of Cash Flows in conformity with U.S.

All borrowings from, and repayments to, the Revolving Credit Facility (see Part I, “Item 1.

Financial Statements,” Note 10 “Floorplan Notes Payable” in the Notes to Condensed Consolidated Financial Statements for additional information) (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K.

All borrowings from, and repayments to, the Revolving Credit Facility (refer to Note 10.

Floorplan Notes Payable in the Notes to Condensed Consolidated Financial Statements for additional information) (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K.

and Brazil unaffiliated with our manufacturer partners (collectively, “Non-OEM Floorplan Credit Facilities”), are presented within Cash Flows from Financing Activities in conformity with U.S.

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GAAP basis to the corresponding adjusted amounts (in millions):

Nine Months Ended September 30,

Three Months Ended March 31,

2021 2020 % Change

CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash provided by (used in) operating activities:

Change in Floorplan notes payable — credit facilities and other, excluding floorplan offset and net acquisition and disposition

Change in Floorplan notes payable — manufacturer affiliates associated with net acquisition and disposition and floorplan offset activity

$ 239.3 $ 44.1 443.2 %

Change in Floorplan notes payable — credit facilities and other, excluding floorplan offset and net acquisitions and dispositions (79.6) 11.8

Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity (3.1) (3.9)

Adjusted net cash provided by (used in) operating activities $ 156.6 $ 51.9 201.5 %

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Net cash provided by (used in) investing activities:

$ (76.7) $ (31.1) (146.6) %

Change in cash paid for acquisitions, associated with Floorplan notes payable 5.3 —

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Net cash provided by (used in) financing activities:

$ (165.6) $ (18.5) (796.6) %

Change in Floorplan notes payable, excluding floorplan offset 82.9 (7.9)

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Sources and Uses of Liquidity from Operating Activities

For the nine months ended September 30, 2020 , we generated $712.7 million of net cash flows from operating activities.

On an adjusted basis for the same period, we generated $358.3 million in net cash flows from operating activities, primarily consisting of $186.4 million in net income, coupled with non-cash adjustments related to depreciation and amortization of $56.5 million , stock-based compensation of $27.0 million , asset impairments of $23.8 million , operating lease assets of $18.1 million and a loss on extinguishment of $13.7 million related to the 5.00% Senior Notes and 5.25% Senior Notes.

Adjusted net cash flows from operating activities also included a $31.1 million adjusted net change in operating assets and liabilities, including cash inflows of $499.6 million from decreases in inventory levels, $41.1 million from net decreases in prepaid expenses and other assets, $33.0 million from net decreases in contracts-in-transit and vehicle receivables and $25.2 million from net decreases in accounts and notes receivables.

These cash inflows were partially offset by cash outflows of $492.3 million from adjusted net floorplan repayments and $58.8 million from decreases in accounts payable and accrued expenses.

For the nine months ended September 30, 2019 , we generated $310.8 million of net cash flows from operating activities.

On an adjusted basis for the same period, we generated $242.0 million in net cash flows from operating activities, primarily consisting of $125.9 million in net income, coupled with non-cash adjustments related to depreciation and amortization of $53.0 million, operating lease assets of $21.2 million, stock-based compensation of $14.5 million, asset impairments of $10.8 million and deferred income taxes of $3.6 million, partially offset by a $5.9 million gain on the disposition of assets.

Adjusted net cash flows from operating activities also includes a $15.0 million adjusted net change in operating assets and liabilities, including cash inflows of $99.0 million from increases in accounts payable and accrued expenses and $41.7 million from decreases in inventory levels.

These cash inflows were partially offset by cash outflows of $70.0 million from adjusted net floorplan repayments, $31.7 million from net increases in accounts and notes receivables and $21.3 million from decreases in operating lease liabilities.

For the three months ended March 31, 2021, we generated $239.3 million of net cash flows from operating activities.

On an adjusted basis for the same period, we generated $156.6 million in net cash flows from operating activities, primarily consisting of $101.9 million in net income, coupled with non-cash adjustments related to depreciation and amortization of $19.5 million and stock-based compensation of $6.4 million.

Adjusted net cash flows from operating activities also included an $18.0 million adjusted net change in operating assets and liabilities, including cash inflows of $149.3 million from decreases in inventory levels and $18.3 million from increases in accounts payable and accrued expenses.

These cash inflows were partially offset by cash outflows of $83.2 million from adjusted net floorplan repayments and $43.5 million from net increases in contracts-in-transit and vehicle receivables.

For the three months ended March 31, 2020, we generated $44.1 million of net cash flows from operating activities.

On an adjusted basis for the same period, we generated $51.9 million in net cash flows from operating activities, primarily consisting of $29.8 million in net income, coupled with non-cash adjustments related to depreciation and amortization of $18.6 million, operating lease assets of $6.4 million and stock-based compensation of $5.1 million.

Adjusted net cash flows from operating activities also includes an $8.9 million adjusted net change in operating assets and liabilities, including cash outflows of $125.7 million from an increase in inventory levels, $98.1 million from decreases in accounts payable and accrued expenses and $7.3 million from the decrease in operating lease liabilities.

These cash outflows were partially offset by cash inflows of $135.2 million from net decreases in contracts-in-transit and vehicle receivables, $43.8 million from an adjusted net increase of floorplan borrowings and $41.6 million from decreases in accounts and notes receivable.

Working Capital

At September 30, 2020 , we had a $104.6 million surplus of working capital.

At March 31, 2021, we had a $198.6 million surplus of working capital.

This represents an increase of $37.2 million from December 31, 2020, when we had a $161.5 million surplus of working capital.

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Sources and Uses of Liquidity from Investing Activities

During the nine months ended September 30, 2020 , we used $78.8 million in net cash flows from investing activities on both an unadjusted and adjusted basis, which represented $78.8 million used for purchases of property and equipment and to construct new and improve existing facilities, $1.3 million used for acquisition activity, partially offset by cash inflows of $1.3 million related to the disposition of property and equipment.

Of the $78.8 million in property and equipment purchases, $55.4 million was used for non-real estate related capital expenditures, $22.4 million was used for the purchase of real estate associated with existing dealership operations and $1.0 million represented the net decrease in the accrual for capital expenditures from year-end.

During the nine months ended September 30, 2019 , we used $193.5 million in net cash flows from investing activities.

On an adjusted basis for the same period, we used $198.7 million in net cash flows from investing activities, representing $139.6 million used for purchases of property and equipment and to construct new and improve existing facilities and $82.7 million used for dealership acquisition activity, partially offset by cash inflows of $23.6 million related to the disposition of franchises and property and equipment.

Of the $139.6 million in property and equipment purchases, $70.8 million was used for non-real estate related capital expenditures, $65.1 million was used for the purchase of real estate associated with existing dealership operations and $3.6 million represented the net decrease in the accrual for capital expenditures from year-end.

During the three months ended March 31, 2021, we used $76.7 million in net cash flow for investing activities.

On an adjusted basis for the same period, we used $76.8 million in net cash flows from investing activities, primarily consisting of $44.6 million used for acquisition activity and $37.3 million used for purchases of property and equipment and to construct new and improve existing facilities, partially offset by cash inflows of $5.0 million related to the disposition of franchises and property and equipment.

Of the $37.3 million in property and equipment purchases, $22.2 million was used for non-real estate related capital expenditures, $17.5 million was used for the purchase of real estate associated with existing dealership operations and $2.4 million represented the net increase in the accrual for capital expenditures from fiscal year-end.

During the three months ended March 31, 2020, we used $31.1 million in net cash flows from investing activities on both an unadjusted and adjusted basis, which represents $31.6 million used for purchases of property and equipment partially offset by cash inflows of $0.5 million related to the disposition of property and equipment.

Of the $31.6 million in property and equipment purchases, $21.2 million was used for non-real estate related capital expenditures, $11.2 million was used for the purchase of real estate associated with existing dealership operations and $0.7 million represents the net increase in the accrual for capital expenditures from fiscal year-end.

Capital Expenditures

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Sources and Uses of Liquidity from Financing Activities

For the nine months ended September 30, 2020 , we used $590.4 million in net cash flows from financing activities.

On an adjusted basis for the same period, we used $236.0 million in net cash flows from financing activities, primarily related to cash outflows of $857.9 million related to the extinguishment of our 5.00% and 5.25% Senior Notes, $48.9 million related to the repurchase of our common stock and $5.5 million in dividend payments.

These cash outflows were partially offset by $550.0 million from the issuance of our 4.00% Senior Notes.

The $162.1 million net borrowings on other debt primarily reflected increased mortgage borrowings in the U.S.

to partially fund the redemption of the 5.25% Senior Notes.

For the nine months ended September 30, 2019 , we used $90.1 million in net cash flows from financing activities.

On an adjusted basis for the same period, we used $16.1 million in net cash flows from financing activities, primarily related to cash outflows of $35.8 million in net repayments on other debt and $14.9 million in dividend payments, partially offset by $19.1 million in net borrowings on our Acquisition Line and $15.8 million in net borrowings on our Floorplan Lines (representing the net cash activity in our floorplan offset accounts).

For the three months ended March 31, 2021, we used $165.6 million in net cash flows from financing activities.

On an adjusted basis for the same period, we used $82.8 million in net cash flows from financing activities, primarily related to cash outflows of $68.4 million in net repayments on our U.S.

Floorplan Line (representing the net cash activity in our floorplan offset account) and $5.6 million in dividend payments.

For the three months ended March 31, 2020, we used $18.5 million in n et cash flows from financing activities.

On an adjusted basis for the same period, we used $26.4 million in net cash flows from financing activities, primarily related to cash outflows of $48.9 million related to the repurchase of our common stock and $5.5 million in dividend payments, partially offset by $20.2 million in net borrowings on our U.S.

Floorplan Line (representing the net cash activity in our floorplan offset account) and $10.5 million in net borrowings on other debt.

Credit Facilities, Debt Instruments and Other Financing Arrangements

Our various credit facilities, debt instruments and other financing arrangements are used to finance the purchase of inventory and real estate, provide acquisition funding and provide working capital for general corporate purposes.

The following table summarizes the position of our U.S.

credit facilities as of September 30, 2020 (in millions):

The following table summarizes the commitment of our credit facilities as of March 31, 2021 (in millions):

Commitment Outstanding Available

Floorplan Line (1)

$ 1,396.0 $ 576.6 $ 819.4

Acquisition Line (2)

349.0 65.8 283.2

Total revolving credit facility 1,745.0 642.4 1,102.6

FMCC Facility (3)

300.0 69.6 230.4

credit facilities (4)

(1) The available balance at September 30, 2020 includes $108.2 million of immediately available funds.

$ 2,045.0 $ 712.0 $ 1,333.0

(1) The available balance at March 31, 2021 includes $231.9 million of immediately available funds.

The remaining available balance can be used for inventory financing.

(2) The outstanding balance of $75.9 million is related to outstanding letters of credit of $17.8 million and $ 58.1 million in borrowings as of September 30, 2020 .

The borrowings outstanding under the Acquisition Line included no U.S dollar borrowings and £ 45 million of British pound sterling borrowings translated at the spot rate on the day borrowed, solely for the purpose of calculating the outstanding and available borrowings under the Acquisition Line.

(2) The outstanding balance of $65.8 million is related to outstanding letters of credit of $17.8 million and $48.0 million in borrowings as of March 31, 2021.

The borrowings outstanding under the Acquisition Line included no U.S dollar borrowings and £ 35 million of GBP borrowings translated at the spot rate on the day borrowed, solely for the purpose of calculating the outstanding and available borrowings under the Acquisition Line.

The available borrowings may be limited from time to time, based on certain debt covenants.

(3) The available balance at September 30, 2020 includes $ 18.5 million of immediately available funds.

(3) The available balance at March 31, 2021 includes $12.9 million of immediately available funds.

The remaining available balance can be used for Ford new vehicle inventory financing.

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and Brazil with third-party financial institutions, most of which are affiliated with the automobile manufacturers that provide financing for portions of our new, used and rental vehicle inventories.

In addition, we have outstanding debt instruments, including our 4.00% Senior Notes, as well as real estate related and other long-term debt instruments.

4.00% Senior Notes Issuance

On August 17, 2020, we issued Senior Notes maturing on August 15, 2028 in aggregate principal amount of $550.0 million.

Interest on the notes is payable semi-annually on February 15 th and August 15 th at a coupon rate of 4.00%.

The notes were issued at par and carry an effective interest rate of 4.21% after consideration of associated debt issuance costs.

At our option, we may redeem some or all of the Senior Notes at varying redemption prices (expressed as percentages of principal amount of the notes) and redemption periods throughout the term.

Refer to Part I, “Item 1.

Financial Statements,” Note 9 “Debt” within our Notes to Condensed Consolidated Financial Statements for further information regarding our 4.00% Senior Notes.

5.00% Senior Notes Redemption and Debt Refinancing

On September 2, 2020, we fully redeemed $550.0 million in aggregate principal amount of our outstanding 5.00% Senior Notes due June 2022, at par value.

Additionally, we paid accrued interest of $6.9 million .

The redemption was funded with $550.0 million of our newly issued 4.00% Senior Notes due 2028.

See 4.00% Senior Notes Issuance .

These refinancings are expected to lower our annual interest expense by approximately $5.5 million.

5.25% Senior Notes Redemption and Debt Refinancing

On April 2, 2020, we fully redeemed $300.0 million in aggregate principal amount of our outstanding 5.25% Senior Notes due 2023, at a premium of 102.625%.

The total redemption price, consisting of the principal amount of the notes redeemed plus associated premium, amounted to $307.9 million.

Additionally, we paid $4.6 million of accrued interest up to the date of redemption.

The redemption was funded through a combination of Acquisition Line borrowings, mortgage borrowings, and excess cash.

Additional mortgage debt was funded during the second quarter of 2020 to provide supplemental liquidity.

These refinancings are expected to lower our annual interest expense by approximately $10.8 million.

In addition, we have outstanding debt instruments, including our 4.00% Senior Notes, as well as real estate related and other debt instruments.

Refer to Note 9.

Debt in our Notes to Condensed Consolidated Financial Statements for further information.

Our Revolving Credit Facility, indentures governing our senior notes and certain mortgage term loans contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and to merge or consolidate with other entities.

Certain of our mortgage agreements contain cross-default provisions that in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default.

As of September 30, 2020 , we were in compliance with the requirements of the financial covenants under our debt agreements.

As of March 31, 2021, we were in compliance with the requirements of the financial covenants under our debt agreements.

We are required to maintain the ratios detailed in the following table:

As of September 30, 2020

As of March 31, 2021

Required Actual

Total adjusted leverage ratio < 5.50 1.98

Fixed charge coverage ratio > 1.20 4.81

As of September 30, 2020 , we had $66.2 million of cash on hand and an additional $126.7 million invested in our floorplan offset accounts, bringing total cash liquidity to $192.9 million.

In addition, we had $273.1 million of additional borrowing capacity on our Acquisition Line, bringing total immediate liquidity to $466.0 million as of September 30, 2020 .

Based on our position as of September 30, 2020 and our outlook as discussed within “Management's Discussion and Analysis of Financial Condition and Results of Operations,” we have sufficient liquidity currently and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants.

See Part I, “Item 1.

Financial Statements,” Note 9 “Debt” and Note 10 “Floorplan Notes Payable” in our Notes to Condensed Consolidated Financial Statements for further discussion of our debt instruments, credit facilities, and other financing arrangements existing as of September 30, 2020 .

Stock Repurchases and Dividends

As of March 31, 2021, we had $82.9 million of cash on hand and an additional $244.8 million invested in our floorplan offset accounts, bringing total cash liquidity to $327.7 million.

In addition, we had $283.2 million of additional borrowing capacity on our Acquisition Line, bringing total immediate liquidity to $610.9 million as of March 31, 2021.

Based on our position as of March 31, 2021 and our outlook as discussed within Management's Discussion and Analysis of Financial Condition and Results of Operations, we have sufficient liquidity currently and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants.

Refer to Note 9.

Debt and Note 10.

Floorplan Notes Payable in our Notes to Condensed Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of March 31, 2021.

Share Repurchases and Dividends

Our Board of Directors from time to time, authorizes the repurchase of shares of our common stock up to a certain monetary limit.

On April 7, 2020, we canceled our most recently authorized share repurchase program in light of the COVID-19 pandemic.

During the first quarter 2020 and through the cancellation date, 597,764 shares were repurchased at an average price of $81.83 per share, for a total of $48.9 million.

During the first quarter of 2020, our Board of Directors approved a quarterly cash dividend of $0.30 per share on all shares of our common stock, which resulted in $5.3 million paid to common shareholders and $0.2 million to unvested RSA holders.

On April 7, 2020, we temporarily suspended quarterly dividends in light of the COVID-19 pandemic.

On October 5, 2020, our Board of Directors approved a new $200.0 million share repurchase program.

During the first quarter of 2021, we had no repurchase of shares of our common stock.

As of March 31, 2021, we had $168.7 million available under our current share repurchase authorization.

For the first quarter of 2021, our Board of Directors approved a quarterly cash dividend of $0.31 per share on all shares of our common stock, which resulted in $5.4 million paid to common shareholders and $0.2 million to unvested RSA holders.

Future share repurchases and the payment of any future dividends are subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, covenant compliance, current economic environment and other factors considered relevant.

Recent Regulatory Developments

In Brazil, Law No.

13,709/2018, the General Data Protection Act (Lei Geral de Proteção de Dados, or “GDPA”) will come into force in May 2021 and will change personal data protection in Brazil.

The GDPA establishes a new legal framework covering personal data processing, including client, supplier and employee data.

The GDPA establishes, among others, personal data owners’ rights, the legal basis for personal data protection, requirements for obtaining consent from personal data owners, obligations and requirements related to security incidents, data leaks and data transfers, as well as the creation of a National Data Protection Authority.

We have begun initial preparations to comply with the GDPA ahead of its May 2021 effective date;

however, we may have difficulty adapting our systems and processes to the new legislation due to the legislation’s complexity.

In the event of non-compliance with the GDPA, we may be subject to penalties, beginning in August 2021, including making certain disclosures to authorities, the required deletion of personal data and fines, per infraction, of up to 2% (subject to an upper limit of R$50,000,000) of our revenues in Brazil during our last fiscal year, excluding taxes.

See the risk factor titled “We are subject to substantial governmental laws and regulations, which if we are found to be in violation of, or subject to liabilities under, may adversely affect our business and results of operations” in Part I, “Item 1A.

Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019.

On March 31, 2020, the U.S.

Environmental Protection Agency and National Highway Traffic Safety Administration under the Trump Administration issued a final rule re-setting corporate average fuel economy (“CAFE”) and greenhouse gas (“GHG”) emissions standards for model years 2021-2026 passenger cars and light trucks.

The March 31, 2020 final rule will increase stringency of CAFE and GHG emissions standards by 1.5% each year through model year 2026, as compared with the standards issued in 2012, which would have required annual increases of about 5%.

Legal challenges to the March 31, 2020 final rule are expected.

See the risk factor titled “Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities” in Part I, “Item 1A.

Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis