Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with Part I, including the matters set forth in Item 1A. Risk Factors, and our Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-K. Refer to Item 1. Business — General for an overview of our operations. Additionally, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2021 compared to fiscal year 2020.
Overview
Our operating results reflect the combined performance of each of our interrelated business activities. Historically, various facets of our business have been directly or indirectly impacted by a variety of supply/demand factors, including vehicle inventories, consumer confidence, consumer transportation preferences, discretionary spending levels, availability and affordability of consumer credit, new vehicle introductions and innovations, manufacturer incentives, the COVID-19 pandemic, weather patterns, fuel prices, inflation and interest rates. For example, during periods of sustained economic downturn or significant supply/demand imbalances, new vehicle sales may be negatively impacted as consumers tend to shift their purchases to used vehicles. Some consumers may delay their purchasing decisions altogether, electing instead to continue to maintain and repair their existing vehicles. In such cases, however, we believe the new vehicle sales impact on our overall business is mitigated by our ability to offer other products and services, such as used vehicles and parts, as well as maintenance, repair and collision services. In addition, our ability to expediently adjust our cost structure in response to changes in new vehicle sales volumes also tempers any negative impact of such sales volume changes.
Recent Events
Our manufacturers’ production continued at reduced levels in the Current Year, despite recent production improvements in the latter half of 2022 for some of those manufacturers. Inventory was constrained in 2022 as a result of sustained global semiconductor and other parts shortages. The shortage of new vehicles, compared to historical levels, led to sharply higher same store new vehicle sales prices and gross margins. Used vehicle gross margins declined in the Current Year, driven by volatility from new vehicle shortages and increased interest rates. Our new vehicle days’ supply of inventory was approximately 24 days at December 31, 2022, as compared to 12 days and 53 days, at December 31, 2021 and 2020, respectively. Current Year increases of new vehicle days’ supply of inventory were seen for most manufacturers.
The Russia and Ukraine Conflict and other geopolitical conflicts, as well as related international responses, have exacerbated inflationary pressures, including causing increases in the prices for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. In particular, the Russia and Ukraine Conflict further impacted the ability of certain OEMs to produce new vehicles and new vehicle parts, which resulted in continued disruptions to the supply of new and used vehicles in 2022.
During the Current Year, the global economy experienced rising inflation and an increase in gasoline and energy prices. In response to inflationary pressures and macroeconomic conditions, the U.S. Federal Reserve, along with other central banks, including in the U.K., increased interest rates throughout 2022. Additionally, U.S. GDP shrank for two consecutive quarters in the first half of 2022 and increased for the third and fourth quarters of 2022, indicating that there is uncertainty as to whether the U.S. economy will experience a recession in the near-term. As a result of rising inflation and higher interest rates, used vehicle pricing has declined in the latter part of 2022. Any further impact of these macroeconomic developments on our operations cannot be predicted with certainty.
In addition to the macroeconomic issues described above, the U.K. faces additional political and economic uncertainty as a result of recent leadership changes in the country’s government. This uncertainty has led to increased foreign currency exchange rate volatility for the country’s currency. During the Current Year, the GBP to USD foreign currency exchange rate has declined 10.4%, from £1 to $1.35 at December 31, 2021, to £1 to $1.21 at December 31, 2022.
Recent Accounting Pronouncements
Refer to Note 1. Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements.
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Critical Accounting Policies and Accounting Estimates
The preparation of our financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Below are the accounting policies and estimates that have been determined to be critical to our business operations and the understanding of our results of operations.
Goodwill and Intangible Franchise Rights
We are organized into two geographic regions, the U.S. region and the U.K. region; each region represents a reporting unit for the purpose of assessing goodwill for impairment. In addition to goodwill, we have identifiable intangibles in the form of rights under our franchise agreements with manufacturers, which are recorded at an individual dealership level.
We evaluate goodwill and intangible franchise rights for impairment annually as of October 31, or more frequently if events or circumstances indicate possible impairment has occurred.
Based on the qualitative test performed for the U.S. and U.K. reporting units in the fourth quarter of 2022, no quantitative test was deemed necessary. No goodwill impairments were recorded on any reporting units during the Current Year and for the year ended December 31, 2021 (the “Prior Year”). The quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units. Refer to Note 12. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of goodwill, including management’s use of estimates and assumptions.
During the Current Year, impairment charges of $1.3 million were recorded for intangible franchise rights. In the Prior Year, no impairment was recorded for intangible franchise rights. As our intangible franchise rights are tested for impairment at the dealership level, any impairments are specific to the performance and outlook of the respective dealership.
Refer to Note 12. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions.
Results of Operations
The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to manage and monitor the performance of the business and is also useful to investors.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than USD using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. Additionally, we caution investors not to place undue reliance on non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. Our management also uses constant currency and adjusted net cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures and the related reconciliations because we believe investors use these metrics in evaluating longer-term period-over-period performance. These metrics also allow investors to better understand and evaluate the information used by management to assess operating performance.
Certain amounts in the financial statements may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented.
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The following tables summarize our operating results on a reported basis and on a same store basis for the Current Year, as compared to the Prior Year.
Reported Operating Data — Consolidated
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 7,452.5 $ 6,504.8 $ 947.8 14.6 % $ (146.4) 16.8 %
Used vehicle retail sales 5,673.3 4,438.8 1,234.5 27.8 % (126.8) 30.7 %
Used vehicle wholesale sales 364.6 365.7 (1.2) (0.3) % (13.3) 3.3 %
Total used 6,037.9 4,804.6 1,233.3 25.7 % (140.2) 28.6 %
Parts and service sales 2,009.5 1,591.2 418.4 26.3 % (28.9) 28.1 %
F&I, net 722.2 581.4 140.8 24.2 % (7.4) 25.5 %
Total revenues $ 16,222.1 $ 13,481.9 $ 2,740.2 20.3 % $ (322.8) 22.7 %
Gross profit:
New vehicle retail sales $ 825.6 $ 610.8 $ 214.8 35.2 % $ (13.3) 37.3 %
Used vehicle retail sales 313.8 354.2 (40.5) (11.4) % (6.9) (9.5) %
Used vehicle wholesale sales — 24.9 (24.9) (100.0) % 0.3 (101.2) %
Total used 313.8 379.1 (65.3) (17.2) % (6.6) (15.5) %
Parts and service sales 1,103.7 869.4 234.3 27.0 % (16.6) 28.9 %
F&I, net 722.2 581.4 140.8 24.2 % (7.4) 25.5 %
Total gross profit $ 2,965.2 $ 2,440.7 $ 524.5 21.5 % $ (44.2) 23.3 %
Gross margin:
New vehicle retail sales 11.1 % 9.4 % 1.7 %
Used vehicle retail sales 5.5 % 8.0 % (2.4) %
Used vehicle wholesale sales — % 6.8 % (6.8) %
Total used 5.2 % 7.9 % (2.7) %
Parts and service sales 54.9 % 54.6 % 0.3 %
Total gross margin 18.3 % 18.1 % 0.2 %
Units sold:
Retail new vehicles sold 154,714 146,072 8,642 5.9 %
Retail used vehicles sold 184,700 161,857 22,843 14.1 %
Wholesale used vehicles sold 37,072 39,486 (2,414) (6.1) %
Total used 221,772 201,343 20,429 10.1 %
Average sales price per unit sold:
New vehicle retail $ 48,170 $ 44,531 $ 3,639 8.2 % $ (946) 10.3 %
Used vehicle retail $ 30,716 $ 27,424 $ 3,292 12.0 % $ (687) 14.5 %
Gross profit per unit sold:
New vehicle retail sales $ 5,336 $ 4,181 $ 1,155 27.6 % $ (86) 29.7 %
Used vehicle retail sales $ 1,699 $ 2,189 $ (490) (22.4) % $ (38) (20.7) %
Used vehicle wholesale sales $ — $ 630 $ (630) (100.0) % $ 8 (101.3) %
Total used $ 1,415 $ 1,883 $ (468) (24.9) % $ (30) (23.3) %
F&I PRU $ 2,128 $ 1,888 $ 240 12.7 % $ (22) 13.8 %
Other:
SG&A expenses $ 1,783.3 $ 1,477.2 $ 306.2 20.7 % $ (30.7) 22.8 %
SG&A as % gross profit 60.1 % 60.5 % (0.4) %
Floorplan expense:
Floorplan interest expense $ 27.3 $ 27.6 $ (0.4) (1.3) % $ (0.7) 1.2 %
Less: floorplan assistance (1)
56.0 54.2 1.8 3.3 % — 3.3 %
Net floorplan expense $ (28.7) $ (26.5) $ (2.1) $ (0.7)
(1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Consolidated Statements of Operations.
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Same Store Operating Data — Consolidated
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 6,183.2 $ 6,368.8 $ (185.6) (2.9) % $ (140.7) (0.7) %
Used vehicle retail sales 4,866.1 4,368.0 498.1 11.4 % (120.8) 14.2 %
Used vehicle wholesale sales 309.4 361.2 (51.8) (14.3) % (12.8) (10.8) %
Total used 5,175.5 4,729.1 446.4 9.4 % (133.6) 12.3 %
Parts and service sales 1,732.7 1,554.3 178.4 11.5 % (26.5) 13.2 %
F&I, net 613.5 569.1 44.4 7.8 % (7.1) 9.1 %
Total revenues $ 13,705.0 $ 13,221.4 $ 483.6 3.7 % $ (308.0) 6.0 %
Gross profit:
New vehicle retail sales $ 669.6 $ 596.0 $ 73.6 12.3 % $ (12.7) 14.5 %
Used vehicle retail sales 265.9 349.3 (83.4) (23.9) % (6.5) (22.0) %
Used vehicle wholesale sales (0.6) 24.6 (25.2) (102.4) % 0.3 (103.6) %
Total used 265.3 373.9 (108.6) (29.1) % (6.3) (27.4) %
Parts and service sales 934.7 848.4 86.3 10.2 % (15.5) 12.0 %
F&I, net 613.5 569.1 44.4 7.8 % (7.1) 9.1 %
Total gross profit $ 2,483.0 $ 2,387.4 $ 95.7 4.0 % $ (41.8) 5.8 %
Gross margin:
New vehicle retail sales 10.8 % 9.4 % 1.5 %
Used vehicle retail sales 5.5 % 8.0 % (2.5) %
Used vehicle wholesale sales (0.2) % 6.8 % (7.0) %
Total used 5.1 % 7.9 % (2.8) %
Parts and service sales 53.9 % 54.6 % (0.6) %
Total gross margin 18.1 % 18.1 % 0.1 %
Units sold:
Retail new vehicles sold 128,684 143,009 (14,325) (10.0) %
Retail used vehicles sold 158,848 159,172 (324) (0.2) %
Wholesale used vehicles sold 30,655 38,818 (8,163) (21.0) %
Total used 189,503 197,990 (8,487) (4.3) %
Average sales price per unit sold:
New vehicle retail $ 48,050 $ 44,534 $ 3,516 7.9 % $ (1,094) 10.3 %
Used vehicle retail $ 30,634 $ 27,442 $ 3,192 11.6 % $ (761) 14.4 %
Gross profit per unit sold:
New vehicle retail sales $ 5,203 $ 4,167 $ 1,036 24.9 % $ (99) 27.2 %
Used vehicle retail sales $ 1,674 $ 2,195 $ (521) (23.7) % $ (41) (21.9) %
Used vehicle wholesale sales $ (20) $ 634 $ (653) (103.1) % $ 9 (104.5) %
Total used $ 1,400 $ 1,889 $ (489) (25.9) % $ (33) (24.1) %
F&I PRU $ 2,134 $ 1,883 $ 250 13.3 % $ (25) 14.6 %
Other:
SG&A expenses $ 1,531.4 $ 1,442.8 $ 88.6 6.1 % $ (29.2) 8.2 %
SG&A as % gross profit 61.7 % 60.4 % 1.2 %
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Reported Operating Data — U.S.
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 6,238.5 $ 5,371.4 $ 867.1 16.1 %
Used vehicle retail sales 4,531.5 3,356.3 1,175.2 35.0 %
Used vehicle wholesale sales 238.8 232.2 6.6 2.8 %
Total used 4,770.2 3,588.5 1,181.8 32.9 %
Parts and service sales 1,761.4 1,361.4 399.9 29.4 %
F&I, net 656.9 525.0 132.0 25.1 %
Total revenues $ 13,427.1 $ 10,846.3 $ 2,580.8 23.8 %
Gross profit:
New vehicle retail sales $ 713.5 $ 533.4 $ 180.2 33.8 %
Used vehicle retail sales 250.3 281.8 (31.5) (11.2) %
Used vehicle wholesale sales 2.6 17.3 (14.7) (85.0) %
Total used 252.9 299.0 (46.1) (15.4) %
Parts and service sales 959.0 732.1 226.8 31.0 %
F&I, net 656.9 525.0 132.0 25.1 %
Total gross profit $ 2,582.3 $ 2,089.5 $ 492.8 23.6 %
Gross margin:
New vehicle retail sales 11.4 % 9.9 % 1.5 %
Used vehicle retail sales 5.5 % 8.4 % (2.9) %
Used vehicle wholesale sales 1.1 % 7.4 % (6.4) %
Total used 5.3 % 8.3 % (3.0) %
Parts and service sales 54.4 % 53.8 % 0.7 %
Total gross margin 19.2 % 19.3 % — %
Units sold:
Retail new vehicles sold 124,934 118,211 6,723 5.7 %
Retail used vehicles sold 145,632 125,409 20,223 16.1 %
Wholesale used vehicles sold 25,076 24,790 286 1.2 %
Total used 170,708 150,199 20,509 13.7 %
Average sales price per unit sold:
New vehicle retail $ 49,934 $ 45,439 $ 4,495 9.9 %
Used vehicle retail $ 31,116 $ 26,763 $ 4,353 16.3 %
Gross profit per unit sold:
New vehicle retail sales $ 5,711 $ 4,512 $ 1,199 26.6 %
Used vehicle retail sales $ 1,719 $ 2,247 $ (528) (23.5) %
Used vehicle wholesale sales $ 104 $ 697 $ (594) (85.1) %
Total used $ 1,481 $ 1,991 $ (509) (25.6) %
F&I PRU $ 2,428 $ 2,155 $ 273 12.7 %
Other:
SG&A expenses $ 1,516.9 $ 1,234.9 $ 281.9 22.8 %
SG&A as % gross profit 58.7 % 59.1 % (0.4) %
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Same Store Operating Data — U.S.
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 5,032.4 $ 5,236.0 $ (203.6) (3.9) %
Used vehicle retail sales 3,805.4 3,287.7 517.7 15.7 %
Used vehicle wholesale sales 190.6 227.9 (37.3) (16.4) %
Total used 3,996.0 3,515.5 480.4 13.7 %
Parts and service sales 1,506.7 1,335.8 170.9 12.8 %
F&I, net 551.5 512.8 38.6 7.5 %
Total revenues $ 11,086.5 $ 10,600.2 $ 486.4 4.6 %
Gross profit:
New vehicle retail sales $ 564.4 $ 518.6 $ 45.8 8.8 %
Used vehicle retail sales 207.4 277.0 (69.6) (25.1) %
Used vehicle wholesale sales 1.8 17.0 (15.2) (89.5) %
Total used 209.2 293.9 (84.7) (28.8) %
Parts and service sales 801.8 716.4 85.4 11.9 %
F&I, net 551.5 512.8 38.6 7.5 %
Total gross profit $ 2,126.8 $ 2,041.7 $ 85.0 4.2 %
Gross margin:
New vehicle retail sales 11.2 % 9.9 % 1.3 %
Used vehicle retail sales 5.5 % 8.4 % (3.0) %
Used vehicle wholesale sales 0.9 % 7.4 % (6.5) %
Total used 5.2 % 8.4 % (3.1) %
Parts and service sales 53.2 % 53.6 % (0.4) %
Total gross margin 19.2 % 19.3 % (0.1) %
Units sold:
Retail new vehicles sold 100,643 115,170 (14,527) (12.6) %
Retail used vehicles sold 122,947 122,845 102 0.1 %
Wholesale used vehicles sold 19,485 24,177 (4,692) (19.4) %
Total used 142,432 147,022 (4,590) (3.1) %
Average sales price per unit sold:
New vehicle retail $ 50,003 $ 45,463 $ 4,539 10.0 %
Used vehicle retail $ 30,951 $ 26,763 $ 4,189 15.7 %
Gross profit per unit sold:
New vehicle retail sales $ 5,608 $ 4,503 $ 1,105 24.5 %
Used vehicle retail sales $ 1,687 $ 2,254 $ (568) (25.2) %
Used vehicle wholesale sales $ 91 $ 702 $ (610) (87.0) %
Total used $ 1,469 $ 1,999 $ (530) (26.5) %
F&I PRU $ 2,466 $ 2,155 $ 312 14.5 %
Other:
SG&A expenses $ 1,281.7 $ 1,206.3 $ 75.4 6.3 %
SG&A as % gross profit 60.3 % 59.1 % 1.2 %
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U.S. Region — Year Ended December 31, 2022 compared to 2021
The following discussion of our U.S. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.
Revenues
Total revenues in the U.S. during the Current Year increased $2.6 billion, or 23.8%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store revenues.
Total same store revenues in the U.S. during the Current Year increased $486.4 million, or 4.6%, as compared to the Prior Year. This increase was primarily driven by higher used vehicle retail sales prices, higher parts and service sales and higher F&I PRU, partially offset by fewer new vehicle unit sales and used vehicle wholesale unit sales.
New and used vehicle retail revenues benefited from the sale of approximately 30,500 units from our online digital platform, AcceleRide®, during the Current Year, a 55.5% increase as compared to the Prior Year.
New vehicle retail same store revenues underperformed the Prior Year, driven by a shortage in new vehicle inventory, leading to fewer unit sales. The shortage of new vehicle inventory, despite recent manufacturers’ production improvements, drove strong pricing, which partially mitigated the revenue impact of lower new vehicle unit sales. We ended the Current Year with a U.S. new vehicle inventory supply of 21 days, 12 days higher than the Prior Year.
Used vehicle retail same store revenues outperformed the Prior Year, primarily driven by strong used vehicle retail pricing due to increased demand. Used vehicle wholesale same store revenues declined due to fewer unit sales from efforts to sell more used vehicles through retail sales rather than the wholesale market as a result of the increased demand and pricing of used vehicle retail sales described above.
Parts and service same store revenues outperformed the Prior Year, primarily driven by increases across all business lines, reflecting increased business activity and increased same store technician headcount through our technician recruiting and retention efforts providing greater capacity to meet increased demand.
F&I, net same store revenues outperformed the Prior Year, primarily driven by higher income per contract on finance, VSCs and other product offerings and improved penetration rates, partially offset by fewer same store new vehicle unit sales.
Gross Profit
Total gross profit in the U.S. during the Current Year increased $492.8 million, or 23.6%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store results.
Total same store gross profit in the U.S. during the Current Year increased $85.0 million, or 4.2%, as compared to the Prior Year, primarily driven by higher same store gross profit from new vehicle retail sales, parts and service sales and F&I, net, partially offset by downward pressures on used vehicle margins.
New vehicle retail same store gross profit outperformed the Prior Year, driven by an increase in new vehicle retail same store gross profit per unit sold, partially offset by a decrease in same store retail new vehicle unit sales. The increase in new vehicle retail same store gross profit per unit sold reflects the strong pricing resulting from the shortage of new vehicle inventory discussed above.
Used vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold. The decrease was driven by inflationary impacts on used vehicle customers, moving into the latter half of 2022, outpacing the decline in used vehicle acquisition costs over that similar period.
Our used vehicle wholesale same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle wholesale same store gross profit per unit sold, coupled with a decrease in same store wholesale used vehicle unit sales. The decrease was driven by efforts to sell more used vehicles through retail sales rather than the wholesale market.
Parts and service same store gross profit outperformed the Prior Year, as described above for parts and service revenues.
F&I, net same store gross profit outperformed the Prior Year, as described above for F&I, net same store revenues.
Total same store gross margin decreased 8 basis points, primarily driven by a decrease in same store used vehicle gross margin, for the reasons described above for used vehicle retail and wholesale same store gross profit. In addition, same store parts and service gross margin declined slightly, largely due to increased labor costs. This decrease was partially offset by higher same store new vehicle retail sales prices outpacing same store new vehicle costs of sales.
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SG&A Expenses
SG&A as a percentage of gross profit declined 36 basis points and increased 118 basis points on an as reported and same store basis, respectively, compared to the Prior Year. The increase in SG&A as a percentage of gross profit on a same store basis was partially driven by the decline in used vehicle same store gross profit described above as well as the following factors impacting total SG&A.
Total SG&A expenses in the U.S. during the Current Year increased $281.9 million, or 22.8%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store SG&A expenses. Total same store SG&A expenses in the U.S. during the Current Year increased $75.4 million, or 6.3%, as compared to the Prior Year, primarily driven by increased labor costs and an increase in other variable expenses associated with the rise in certain business activities.
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Reported Operating Data — U.K.
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,214.0 $ 1,133.3 $ 80.7 7.1 % $ (146.4) 20.0 %
Used vehicle retail sales 1,141.8 1,082.5 59.3 5.5 % (126.8) 17.2 %
Used vehicle wholesale sales 125.8 133.6 (7.8) (5.8) % (13.3) 4.2 %
Total used 1,267.6 1,216.1 51.5 4.2 % (140.2) 15.8 %
Parts and service sales 248.2 229.8 18.4 8.0 % (28.9) 20.6 %
F&I, net 65.2 56.4 8.8 15.6 % (7.4) 28.7 %
Total revenues $ 2,795.1 $ 2,635.6 $ 159.4 6.0 % $ (322.8) 18.3 %
Gross profit:
New vehicle retail sales $ 112.0 $ 77.4 $ 34.6 44.7 % $ (13.3) 61.9 %
Used vehicle retail sales 63.5 72.5 (9.0) (12.4) % (6.9) (2.9) %
Used vehicle wholesale sales (2.6) 7.6 (10.2) (134.4) % 0.3 (138.3) %
Total used 60.9 80.1 (19.2) (24.0) % (6.6) (15.7) %
Parts and service sales 144.7 137.3 7.5 5.5 % (16.6) 17.6 %
F&I, net 65.2 56.4 8.8 15.6 % (7.4) 28.7 %
Total gross profit $ 382.9 $ 351.2 $ 31.7 9.0 % $ (44.2) 21.6 %
Gross margin:
New vehicle retail sales 9.2 % 6.8 % 2.4 %
Used vehicle retail sales 5.6 % 6.7 % (1.1) %
Used vehicle wholesale sales (2.1) % 5.7 % (7.8) %
Total used 4.8 % 6.6 % (1.8) %
Parts and service sales 58.3 % 59.7 % (1.4) %
Total gross margin 13.7 % 13.3 % 0.4 %
Units sold:
Retail new vehicles sold 29,780 27,861 1,919 6.9 %
Retail used vehicles sold 39,068 36,448 2,620 7.2 %
Wholesale used vehicles sold 11,996 14,696 (2,700) (18.4) %
Total used 51,064 51,144 (80) (0.2) %
Average sales price per unit sold:
New vehicle retail $ 40,766 $ 40,678 $ 88 0.2 % $ (4,915) 12.3 %
Used vehicle retail $ 29,227 $ 29,701 $ (474) (1.6) % $ (3,247) 9.3 %
Gross profit per unit sold:
New vehicle retail sales $ 3,762 $ 2,779 $ 983 35.4 % $ (448) 51.5 %
Used vehicle retail sales $ 1,624 $ 1,988 $ (364) (18.3) % $ (177) (9.4) %
Used vehicle wholesale sales $ (217) $ 516 $ (734) (142.1) % $ 25 (146.9) %
Total used $ 1,192 $ 1,565 $ (374) (23.9) % $ (130) (15.6) %
F&I PRU $ 948 $ 878 $ 70 8.0 % $ (107) 20.2 %
Other:
SG&A expenses $ 266.5 $ 242.2 $ 24.2 10.0 % $ (30.7) 22.7 %
SG&A as % gross profit 69.6 % 69.0 % 0.6 %
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Same Store Operating Data — U.K.
(In millions, except unit data)
For the Years Ended December 31,
2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,150.8 $ 1,132.8 $ 18.0 1.6 % $ (140.7) 14.0 %
Used vehicle retail sales 1,060.8 1,080.3 (19.6) (1.8) % (120.8) 9.4 %
Used vehicle wholesale sales 118.8 133.3 (14.5) (10.9) % (12.8) (1.3) %
Total used 1,179.5 1,213.6 (34.1) (2.8) % (133.6) 8.2 %
Parts and service sales 226.1 218.5 7.5 3.5 % (26.5) 15.6 %
F&I, net 62.1 56.3 5.7 10.2 % (7.1) 22.9 %
Total revenues $ 2,618.5 $ 2,621.2 $ (2.8) (0.1) % $ (308.0) 11.6 %
Gross profit:
New vehicle retail sales $ 105.2 $ 77.4 $ 27.8 36.0 % $ (12.7) 52.4 %
Used vehicle retail sales 58.5 72.4 (13.9) (19.2) % (6.5) (10.1) %
Used vehicle wholesale sales (2.4) 7.6 (10.0) (131.2) % 0.3 (134.8) %
Total used 56.1 80.0 (23.9) (29.9) % (6.3) (22.0) %
Parts and service sales 132.9 132.0 1.0 0.7 % (15.5) 12.5 %
F&I, net 62.1 56.3 5.7 10.2 % (7.1) 22.9 %
Total gross profit $ 356.3 $ 345.6 $ 10.6 3.1 % $ (41.8) 15.2 %
Gross margin:
New vehicle retail sales 9.1 % 6.8 % 2.3 %
Used vehicle retail sales 5.5 % 6.7 % (1.2) %
Used vehicle wholesale sales (2.0) % 5.7 % (7.7) %
Total used 4.8 % 6.6 % (1.8) %
Parts and service sales 58.8 % 60.4 % (1.6) %
Total gross margin 13.6 % 13.2 % 0.4 %
Units sold:
Retail new vehicles sold 28,041 27,839 202 0.7 %
Retail used vehicles sold 35,901 36,327 (426) (1.2) %
Wholesale used vehicles sold 11,170 14,641 (3,471) (23.7) %
Total used 47,071 50,968 (3,897) (7.6) %
Average sales price per unit sold:
New vehicle retail $ 41,040 $ 40,691 $ 350 0.9 % $ (5,019) 13.2 %
Used vehicle retail $ 29,547 $ 29,739 $ (192) (0.6) % $ (3,365) 10.7 %
Gross profit per unit sold:
New vehicle retail sales $ 3,752 $ 2,779 $ 973 35.0 % $ (453) 51.3 %
Used vehicle retail sales $ 1,629 $ 1,992 $ (363) (18.2) % $ (182) (9.1) %
Used vehicle wholesale sales $ (213) $ 522 $ (735) (140.9) % $ 24 (145.6) %
Total used $ 1,192 $ 1,569 $ (378) (24.1) % $ (133) (15.6) %
F&I PRU $ 971 $ 878 $ 93 10.6 % $ (112) 23.3 %
Other:
SG&A expenses $ 249.7 $ 236.5 $ 13.1 5.6 % $ (29.2) 17.9 %
SG&A as % gross profit 70.1 % 68.4 % 1.6 %
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U.K. Region — Year Ended December 31, 2022 compared to 2021
The following discussion of our U.K. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings. At the end of 2020, the U.K. experienced a surge in COVID-19 cases, which led to a government-mandated closure of all non-essential businesses beginning January 4, 2021 through April 12, 2021. In mid-April 2021, the COVID-19 restrictions affecting our U.K. dealership showrooms were lifted, and our dealerships were able to reopen.
Revenues
Total revenues in the U.K. during the Current Year increased $159.4 million, or 6.0%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by the negative impact of foreign currency exchange rates.
Total same store revenues in the U.K. during the Current Year decreased $2.8 million, or 0.1%, as compared to the Prior Year, driven by the negative impact of foreign currency exchange rates. On a constant currency basis, total same store revenues increased 11.6%, driven by outperformances across all revenue streams except used vehicle wholesale sales.
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, primarily driven by increased sales prices. The shortage of new vehicle inventory, despite recent manufacturers’ production improvements, drove strong pricing. Supply chain issues, including an ongoing semiconductor and vehicle parts shortage, an d other logistics challenges continued for OEMs, leading to sustained lower vehicle production and deliveries of fewer vehicles to dealerships. The increase in the new vehicle retail same store average sales price per unit sold was driven by both new vehicle shortages, as described above, and strong vehicle demand, which was pent-up over past years due to Brexit and the COVID-19 pandemic. We ended the Current Year with a U.K. new vehicle inventory supply of 36 days, 3 days higher than the Prior Year.
Used vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, despite a modest decline in retail used vehicle unit sales, as increased demand drove higher prices on a constant currency basis.
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by increased business activity across all of our parts and service business lines with the reduction of COVID-19 restrictions compared to the Prior Year.
F&I, net same store revenues, on a constant currency basis, outperformed the Prior Year, driven by improved penetration rates and higher income per contract for finance and VSCs.
Gross Profit
Total gross profit in the U.K. during the Current Year increased $31.7 million, or 9.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store results.
Total same store gross profit in the U.K. during the Current Year increased $10.6 million, or 3.1%, as compared to the Prior Year. On a constant currency basis, total same store gross profit increased 15.2% driven by improvements in new vehicle retail sales, parts and service sales and F&I, net, partially offset by downward pressures on used vehicle margins.
New vehicle retail same store gross profit, on a constant currency basis, outperformed the Prior Year, due to an increase in new vehicle retail same store gross profit per unit sold, resulting from increased prices as discussed above, coupled with a slight increase in new vehicle retail unit sales.
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, due to a decrease in used vehicle retail same store gross profit per unit sold and a slight decrease in same store retail used vehicle unit sales. These decreases were driven by inflationary impacts on customers coupled with the ongoing new vehicle supply shortage impacting the supply of used vehicles.
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by the increases in parts and service same store revenues.
F&I, net same store gross profit, on a constant currency basis, outperformed the Prior Year as described above in F&I, net same store revenues.
Total same store gross margin in the U. K. increased 42 basis points, driven by improvements in new vehicle retail gross margin due to higher prices from increased customer demand and vehicle supply constraints, described above. The increase was partially offset by a decrease in same store used vehicle retail gross margin, resulting from inflationary impacts on our used vehicle customers and the ongoing new vehicle supply shortage, and a decrease in parts and service same store margins due to increased labor costs.
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SG&A Expenses
SG&A as a percentage of gross profit increased 62 and 165 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Total SG&A expenses in the U.K. during the Current Year increased $24.2 million, or 10.0%, as compared to the Prior Year, primarily driven by increases in same store SG&A and the acquisition of stores. Total same store SG&A expenses in the U.K. during the Current Year increased $13.1 million, or 5.6%, as compared to the Prior Year. On a constant currency basis, total same store SG&A expenses increased 17.9%. These increases were primarily driven by higher business activity and acquisition costs compared to the Prior Year, as well as government COVID-19 assistance and the related temporary suspension of city tax in the Prior Year which did not recur in the Current Year.
Consolidated Selected Comparisons — Year Ended December 31, 2022 compared to 2021
The following table (in millions) and discussion of our results of operations is on a consolidated basis, unless otherwise noted.
For the Years Ended December 31,
2022 2021 Increase/ (Decrease) % Change
Depreciation and amortization expense $ 88.4 $ 77.4 $ 10.9 14.1 %
Asset impairments $ 2.1 $ 1.7 $ 0.4 24.5 %
Floorplan interest expense $ 27.3 $ 27.6 $ (0.4) (1.3) %
Other interest expense, net $ 77.5 $ 55.8 $ 21.7 38.9 %
Provision for income taxes $ 231.1 $ 175.5 $ 55.6 31.7 %
Depreciation and Amortization Expense
Depreciation and amortization expense for the Current Year was higher compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. region, as we continue to strategically add dealership related real estate to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and the overall customer experience.
Impairment of Assets
No goodwill impairments were recorded during the Current Year and the Prior Year. During the Current Year, we recorded impairment of franchise rights of $1.3 million for franchise agreements in the U.S. segment. No impairments of intangible franchise rights were recorded during the Prior Year.
We review long-lived assets including property and equipment and ROU assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). During the Current Year and Prior Year , we recorded property and equipment impairment charges of $0.8 million and $1.7 million in the U.S. region, respectively.
See Note 12. Intangible Franchise Rights and Goodwill, Note 10. Property and Equipment, Net and Note 11. Leases within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments.
Floorplan Interest Expense
Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or a benchmark rate. Outstanding borrowings largely fluctuate based on our levels of new and used vehicle inventory. 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 rate.
For the Current Year, floorplan interest expense decreased $0.4 million, or 1.3%, as compared to the Prior Year, driven primarily by lower realized losses on our interest rate swap portfolio in the Current Year, due to increases in corresponding interest rates and an unrealized loss on interest rate swaps of $3.4 million in the Prior Year which did not recur in the Current Year. These decreases were partially offset by an increase in floorplan interest expense on new and used vehicles due to the increase in interest rates between periods.
Refer to Note 7 . Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps.
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Other Interest Expense, Net
Other interest expense, net consists of interest charges primarily on our 4.00% Senior Notes, real estate related debt and other debt, partially offset by interest income.
For the Current Year, other interest expense, net, increased $21.7 million, or 38.9%, as compared to the Prior Year. The increase in other interest expense, net during the Current Year, was primarily attributable to the additional 4.00% Senior Notes issued in October 2021 and an increase in borrowings used to acquire property in our U.S. region, primarily related to the Prime Acquisition. Refer to Note 14. Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt.
Provision for Income Taxes
Provision for income taxes from continuing operations during the Current Year increased $55.6 million, or 31.7%, as compared to the Prior Year. During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $231.1 million and $175.5 million, respectively. The year-over-year tax expense increase was primarily due to higher pre-tax book income.
The 2022 effective tax rate of 23.5% was higher than the 2021 effective tax rate of 21.9%. The tax rate increase was primarily due to the increase in nondeductible excess compensation and an increase in state income tax expense due to the mix of domestic earnings, partially offset by state tax benefits from a valuation allowance release on selected state NOLs in the Current Year as compared to the Prior Year. Additionally, tax benefits from the U.K. tax rate change in the Prior Year did not recur in the Current Year.
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.
For further discussion, please see Note 15. Income Taxes within our Notes to Consolidated Financial Statements.
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 U.S. Floorplan Line and FMCC Facility levels (see Note 13. Floorplan Notes Payable in our Notes to Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings. We anticipate we will generate sufficient cash flows from operations, coupled with cash on hand and available borrowing capacity under our credit facilities, to fund our working capital requirements, service our debt, and meet any other recurring operating expenditures.
Available Liquidity Resources
We had the following sources of liquidity available (in millions):
December 31, 2022
Cash and cash equivalents $ 47.9
Floorplan offset accounts 153.6
Available capacity under Acquisition Line 437.2
Total liquidity $ 638.6
Cash Flows
We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility (as defined in Note 13. Floorplan Notes Payable in the Notes to Consolidated Financial Statements). In accordance with U.S. GAAP, we report floorplan financed with lenders affiliated with our vehicle manufacturers (excluding the cash flows from or to manufacturer-affiliated lenders participating in our syndicated lending group) within Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows. We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows. Refer to Note 13. Floorplan Notes Payable within our Notes to Consolidated Financial Statements for additional discussion of our Revolving Credit Facility.
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However, we believe that all floorplan financing of inventory purchases in the normal course of business should correspond with the related inventory activity and be classified as an operating activity. As a result, we use the non-GAAP measure “Adjusted net cash provided by/used in operating activities” and “Adjusted net cash provided by/used in financing activities” to further evaluate our cash flows. We believe that this classification eliminates excess volatility in our operating cash flows prepared in accordance with U.S. GAAP. In addition, floorplan financing associated with dealership acquisitions and dispositions are classified as investing activity on an adjusted basis to eliminate excess volatility in our operating cash flows prepared in accordance with U.S. GAAP.
The following table reconciles cash flows on a U.S. GAAP basis to the corresponding adjusted amounts (in millions):
Years Ended December 31,
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities: $ 585.9 $ 1,259.6
Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 319.7 (491.5)
Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity 10.1 (12.7)
Adjusted net cash provided by operating activities $ 915.7 $ 755.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities: $ (484.6) $ (1,251.7)
Change in cash paid for acquisitions, associated with Floorplan notes payable 25.3 137.9
Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (3.9) (7.0)
Adjusted net cash used in investing activities $ (463.2) $ (1,120.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used in financing activities: $ (67.3) $ (74.0)
Change in Floorplan notes payable, excluding floorplan offset (351.2) 373.2
Adjusted net cash (used in) provided by financing activities $ (418.6) $ 299.2
Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2022 compared to 2021
For the Current Year, net cash provided by operating activities decreased by $673.7 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by operating activities increased by $160.3 million. The increase on an adjusted basis was primarily driven by a $932.2 million increase in adjusted net floorplan borrowings, partially offset by a $811.8 million increase in inventory levels.
Sources and Uses of Liquidity from Investing Activities — Year Ended December 31, 2022 compared to 2021
For the Current Year, net cash used in investing activities decreased by $767.1 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in investing activities decreased by $657.5 million. The decrease on an adjusted basis was primarily due to a $458.2 million decrease in acquisition activities, coupled with a $119.7 million increase in proceeds from disposition of franchises and property and equipment and $59.4 million net proceeds from the sale of Brazil Discontinued Operations.
Capital Expenditures
Our capital expenditures include costs to extend the useful lives of current dealership facilities, as well as to start or expand operations. In general, expenditures relating to the construction or expansion of dealership facilities are driven by dealership acquisition activity, new franchises being granted to us by a manufacturer, significant growth in sales at an existing facility, relocation opportunities or manufacturer imaging programs. We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments.
For the Current Year, $155.5 million was used to purchase property and equipment, primarily consisting of $115.5 million in capital expenditures from continuing operations and $39.6 million in purchases of real estate associated with existing dealership operations.
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Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2022 compared to 2021
For the Current Year, net cash used in financing activities decreased by $6.6 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in financing activities increased by $717.7 million. The increase on an adjusted basis was primarily driven by Current Year increases in share repurchases of $310.7 million and decreases in net borrowings of debt of $623.7 million, partially offset by increases in net borrowings on our Floorplan lines of $213.8 million (representing the net cash activity in our floorplan offset account).
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 commitment of our credit facilities as of December 31, 2022 (in millions):
As of December 31, 2022
Total
Commitment Outstanding Available
U.S. Floorplan Line (1)
$ 1,200.0 $ 693.3 $ 506.7
Acquisition Line (2)
752.7 315.5 437.2
Total revolving credit facility 1,952.7 1,008.7 944.0
FMCC facility (3)
300.0 41.8 258.2
Total U.S. credit facilities (4)
$ 2,252.7 $ 1,050.5 $ 1,202.2
(1) The available balance at December 31, 2022, includes $140.2 million of immediately available funds. The remaining available balance can be used for inventory financing.
(2) The outstanding balance of $315.5 million is related to outstanding letters of credit of $12.2 million and $303.3 million in borrowings. The borrowings outstanding under the Acquisition Line included $285.0 million USD borrowings and £15.0 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 in accordance with the Revolving Credit Facility. The available borrowings may be limited from time to time, based on certain debt covenants.
(3) The available balance as of December 31, 2022, includes $13.4 million of immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing.
(4) The outstanding balance excludes $270.1 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and rental vehicle financing not associated with any of our U.S. credit facilities.
We have other credit facilities in the U.S. and the U.K. 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 debt instruments. Refer to Note 14. Debt in our Notes to Consolidated Financial Statements for further information.
Covenants
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 December 31, 2022, 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 December 31, 2022
Required Actual
Total adjusted leverage ratio < 5.75 1.89
Fixed charge coverage ratio > 1.20 5.61
Based on our position as of December 31, 2022, and our outlook as discussed within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations to this Form 10-K, we believe we have sufficient liquidity and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants.
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Refer to Note 13. Floorplan Notes Payable and Note 14. Debt in our Notes to Consolidated Financial Statements for further discussion of our credit facilities, debt instruments and other financing arrangements existing as of December 31, 2022.
Stock Repurchases and Dividends
From time to time, our Board of Directors authorizes the repurchase of shares of our common stock up to a certain monetary limit. On November 16, 2022, our Board of Directors increased the share repurchase authorization by $161.0 million to $200.0 million. During the Current Year, 3,021,023 shares were repurchased at an average price of $172.54 per share, for a total of $521.2 million. As of December 31, 2022, we had $163.4 million available under our current stock repurchase authorization.
During December 2022, we adopted a Rule 10b5-1 trading plan that was effective from January 3, 2023 to January 23 2023. Under the plan, we repurchased an additional 76,294 shares subsequent to December 31, 2022 at an average price of $179.42 per share, for a total cost of $13.7 million.
During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.50 per share, which resulted in $23.0 million paid to common shareholders and $0.7 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, changes in laws and regulations, current economic environment and other factors considered relevant.
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