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 2023 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2023 compared to fiscal year 2022.
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, 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
On February 1, 2025, President Donald Trump signed executive orders imposing a 25% tariff on most imports from Mexico and Canada and a 10% tariff on most imports from China. The tariffs were effective February 4, 2025, however that same day a 30-day pause was granted to Mexico and Canada. While the potential implications of these imposed tariffs remain uncertain for the auto industry, there may be a significant impact on the price of our products as well as the future mix and demand for vehicles provided by our manufacturers. We will continue to monitor the impact of the Trump administration’s policies on our manufacturers and dealership operations.
Since taking office on January 20, 2025, President Donald Trump has signed a series of executive orders. Through these executive orders, the Trump administration, among other initiatives, directed the U.S. to formally withdraw from the Paris Agreement, eliminate the EV mandate, put forth a federal energy policy to support traditional energy exploration and production, declared a national energy emergency to expedite energy and infrastructure projects, issued a regulatory freeze on all executive departments and agencies to review pending and existing laws and regulations and froze the hiring of federal civilian employees in the executive branch. The executive orders also rescinded certain previous executive orders of the former Biden administration. The impact of the Trump administration’s executive orders on our results of operations cannot be predicted with certainty.
On August 1, 2024, we completed the acquisition of Inchcape Retail automotive operations in the U.K. The Inchcape Acquisition, comprised of 54 dealership locations, certain real estate and three collision centers, substantially increased our portfolio acro ss the U.K. Refer to Note 3. Acquisitions within our Notes to Consolidated Financial Statements for additional discussion of our acquisition of Inchcape Retail.
On June 19, 2024, we were informed of a cybersecurity incident experienced by CDK, which resulted in service outages on CDK’s dealers’ systems. CDK provides clients in the automotive industry, including Group 1 dealerships in the U.S., with a SaaS platform used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations. The CDK Incident temporarily disrupted our business applications and processes in our U.S. operations that rely on CDK’s dealers’ systems. Despite the CDK Incident, all Group 1 U.S. dealerships continued to conduct business using alternative processes until CDK’s dealers’ systems were available. On June 26, 2024, CDK restored service to us for the core DMS, at which time, subject to certain modified procedures, we resumed processing transactions through the CDK DMS. The overall impact of the CDK Incident did not have a material impact on our overall financial condition or on our ongoing results of operations.
The global economy experienced elevated levels of inflation beginning in 2022. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the Federal Reserve, along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms . As a result, during the Current Year, the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment. On January 29, 2025, the Federal Reserve held rates unchanged. On February 6, 2025, the Bank of England lowered interest rates by 25 basis points.
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Although the Federal Reserve and Bank of England decreased interest rates and inflationary pressures moderated during 2024, existing elevated prices as a result of previous rates of inflation above historical levels continue to reduce the disposable income of our customers. In addition, volatility in new vehicle availability and higher interest rates over historical average rates have increased the monthly cost o f financing vehicles as compared to prior periods. These factors have contributed to a continued decline in used vehicle prices during the Current Year as compared to the year ended December 31, 2023 (“Prior Year”).
Recent Accounting Pronouncements
Refer to Note 1. Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements.
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. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative assessment for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required.
In 2024, we elected to perform a quantitative test on the U.K. reporting unit and a qualitative test on the U.S. reporting unit. Based on the tests performed for the U.S. and U.K. reporting units in the fourth quarter of 2024, no im pairments of goodwill were recorded during the Current Year. No goodwill impairments were recorded on any reporting units during the Prior Year. T he quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units. While no impairment was recognized in 2024 based on our quantitative assessment of the U.K. reporting unit, future sustained negative operating results, as well as the deterioration of the macroeconomic environment in the U.K., could result in impairment of the goodwill attributable to the U.K. reporting unit in future periods. Refer to Note 13. 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 $28.2 million were recorded for intangible franchise rights. In the Prior Year, impairment charges of $25.1 million were 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 13. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions.
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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 accurately manage and monitor the underlying 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. Our primary foreign currency exposure is to the GBP. 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 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.
Retail new vehicle units sold include new vehicle agency units sold under agency arrangements with certain manufacturers in the U.K. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles due to their net presentation within revenues as only the sales commission is reported in revenues for dealerships operating under an agency arrangement. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
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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,
2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 9,972.4 $ 8,774.6 $ 1,197.8 13.7 % $ 59.6 13.0 %
Used vehicle retail sales 6,179.9 5,693.5 486.3 8.5 % 49.9 7.7 %
Used vehicle wholesale sales 462.4 441.4 21.0 4.7 % 4.1 3.8 %
Total used 6,642.3 6,135.0 507.3 8.3 % 54.0 7.4 %
Parts and service sales 2,491.0 2,222.3 268.7 12.1 % 13.6 11.5 %
F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 %
Total revenues $ 19,934.3 $ 17,873.7 $ 2,060.6 11.5 % $ 130.1 10.8 %
Gross profit:
New vehicle retail sales $ 717.9 $ 767.0 $ (49.1) (6.4) % $ 4.7 (7.0) %
Used vehicle retail sales 330.0 300.9 29.1 9.7 % 2.5 8.8 %
Used vehicle wholesale sales (3.3) (3.8) 0.5 12.7 % (0.1) 15.4 %
Total used 326.7 297.2 29.6 9.9 % 2.4 9.1 %
Parts and service sales 1,367.7 1,214.2 153.5 12.6 % 7.7 12.0 %
F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 %
Total gross profit $ 3,241.0 $ 3,020.3 $ 220.7 7.3 % $ 17.9 6.7 %
Gross margin:
New vehicle retail sales 7.2 % 8.7 % (1.5) %
Used vehicle retail sales 5.3 % 5.3 % 0.1 %
Used vehicle wholesale sales (0.7) % (0.9) % 0.1 %
Total used 4.9 % 4.8 % 0.1 %
Parts and service sales 54.9 % 54.6 % 0.3 %
Total gross margin 16.3 % 16.9 % (0.6) %
Units sold:
Retail new vehicles sold 203,677 175,566 28,111 16.0 %
Retail used vehicles sold 209,687 187,656 22,031 11.7 %
Wholesale used vehicles sold 52,600 43,763 8,837 20.2 %
Total used 262,287 231,419 30,868 13.3 %
Average sales price per unit sold:
New vehicle retail $ 49,817 $ 50,325 $ (508) (1.0) % $ 296 (1.6) %
Used vehicle retail $ 29,472 $ 30,340 $ (868) (2.9) % $ 238 (3.6) %
Gross profit per unit sold:
New vehicle retail sales $ 3,525 $ 4,369 $ (844) (19.3) % $ 23 (19.9) %
Used vehicle retail sales $ 1,574 $ 1,604 $ (30) (1.9) % $ 12 (2.6) %
Used vehicle wholesale sales $ (63) $ (86) $ 24 27.4 % $ (2) 29.7 %
Total used $ 1,246 $ 1,284 $ (38) (3.0) % $ 9 (3.7) %
F&I PRU $ 2,005 $ 2,043 $ (38) (1.9) % $ 7 (2.2) %
Other:
SG&A expenses $ 2,179.2 $ 1,926.8 $ 252.4 13.1 % $ 14.6 12.3 %
SG&A as % gross profit 67.2 % 63.8 % 3.4 %
Floorplan expense:
Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 % $ 0.6 68.4 %
Less: floorplan assistance (1)
88.4 71.2 17.2 24.2 % 0.1 24.1 %
Net floorplan expense $ 20.1 $ (7.1) $ 27.2 $ 0.5
(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,
2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 8,785.0 $ 8,507.7 $ 277.4 3.3 % $ 40.8 2.8 %
Used vehicle retail sales 5,454.4 5,499.0 (44.6) (0.8) % 32.7 (1.4) %
Used vehicle wholesale sales 398.9 422.5 (23.6) (5.6) % 2.7 (6.2) %
Total used 5,853.3 5,921.5 (68.2) (1.2) % 35.4 (1.7) %
Parts and service sales 2,242.2 2,143.0 99.2 4.6 % 8.6 4.2 %
F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 %
Total revenues $ 17,633.7 $ 17,288.8 $ 344.9 2.0 % $ 86.6 1.5 %
Gross profit:
New vehicle retail sales $ 617.4 $ 745.3 $ (127.9) (17.2) % $ 2.9 (17.6) %
Used vehicle retail sales 290.0 291.4 (1.4) (0.5) % 1.6 (1.0) %
Used vehicle wholesale sales (3.3) (3.6) 0.3 7.8 % (0.1) 10.8 %
Total used 286.7 287.8 (1.1) (0.4) % 1.5 (0.9) %
Parts and service sales 1,222.0 1,169.8 52.2 4.5 % 4.9 4.0 %
F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 %
Total gross profit $ 2,879.3 $ 2,919.5 $ (40.2) (1.4) % $ 11.2 (1.8) %
Gross margin:
New vehicle retail sales 7.0 % 8.8 % (1.7) %
Used vehicle retail sales 5.3 % 5.3 % — %
Used vehicle wholesale sales (0.8) % (0.9) % — %
Total used 4.9 % 4.9 % — %
Parts and service sales 54.5 % 54.6 % (0.1) %
Total gross margin 16.3 % 16.9 % (0.6) %
Units sold:
Retail new vehicles sold 175,397 170,119 5,278 3.1 %
Retail used vehicles sold 185,494 180,946 4,548 2.5 %
Wholesale used vehicles sold 45,410 42,141 3,269 7.8 %
Total used 230,904 223,087 7,817 3.5 %
Average sales price per unit sold:
New vehicle retail $ 50,586 $ 50,368 $ 218 0.4 % $ 234 — %
Used vehicle retail $ 29,405 $ 30,390 $ (986) (3.2) % $ 176 (3.8) %
Gross profit per unit sold:
New vehicle retail sales $ 3,520 $ 4,381 $ (861) (19.7) % $ 17 (20.0) %
Used vehicle retail sales $ 1,563 $ 1,611 $ (47) (2.9) % $ 8 (3.5) %
Used vehicle wholesale sales $ (74) $ (86) $ 12 14.4 % $ (2) 17.3 %
Total used $ 1,242 $ 1,290 $ (49) (3.8) % $ 6 (4.3) %
F&I PRU $ 2,087 $ 2,041 $ 46 2.2 % $ 5 2.0 %
Other:
SG&A expenses $ 1,960.4 $ 1,873.6 $ 86.8 4.6 % $ 8.9 4.2 %
SG&A as % gross profit 68.1 % 64.2 % 3.9 %
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Reported Operating Data — U.S.
(In millions, except unit data)
For the Years Ended December 31,
2024 2023 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 8,110.1 $ 7,433.6 $ 676.6 9.1 %
Used vehicle retail sales 4,550.7 4,458.7 92.0 2.1 %
Used vehicle wholesale sales 323.8 314.4 9.4 3.0 %
Total used 4,874.5 4,773.1 101.4 2.1 %
Parts and service sales 2,052.7 1,933.3 119.4 6.2 %
F&I, net 735.6 674.3 61.3 9.1 %
Total revenues $ 15,772.9 $ 14,814.2 $ 958.7 6.5 %
Gross profit:
New vehicle retail sales $ 571.8 $ 646.1 $ (74.3) (11.5) %
Used vehicle retail sales 249.2 240.8 8.5 3.5 %
Used vehicle wholesale sales 4.5 2.6 2.0 76.7 %
Total used 253.7 243.3 10.4 4.3 %
Parts and service sales 1,119.7 1,046.4 73.3 7.0 %
F&I, net 735.6 674.3 61.3 9.1 %
Total gross profit $ 2,680.9 $ 2,610.1 $ 70.7 2.7 %
Gross margin:
New vehicle retail sales 7.1 % 8.7 % (1.6) %
Used vehicle retail sales 5.5 % 5.4 % 0.1 %
Used vehicle wholesale sales 1.4 % 0.8 % 0.6 %
Total used 5.2 % 5.1 % 0.1 %
Parts and service sales 54.5 % 54.1 % 0.4 %
Total gross margin 17.0 % 17.6 % (0.6) %
Units sold:
Retail new vehicles sold 157,662 142,809 14,853 10.4 %
Retail used vehicles sold 152,970 145,617 7,353 5.0 %
Wholesale used vehicles sold 37,223 31,456 5,767 18.3 %
Total used 190,193 177,073 13,120 7.4 %
Average sales price per unit sold:
New vehicle retail $ 51,440 $ 52,052 $ (613) (1.2) %
Used vehicle retail $ 29,749 $ 30,619 $ (871) (2.8) %
Gross profit per unit sold:
New vehicle retail sales $ 3,627 $ 4,524 $ (897) (19.8) %
Used vehicle retail sales $ 1,629 $ 1,653 $ (24) (1.5) %
Used vehicle wholesale sales $ 121 $ 81 $ 40 49.3 %
Total used $ 1,334 $ 1,374 $ (40) (2.9) %
F&I PRU $ 2,368 $ 2,338 $ 30 1.3 %
Other:
SG&A expenses $ 1,704.0 $ 1,622.9 $ 81.1 5.0 %
SG&A as % gross profit 63.6 % 62.2 % 1.4 %
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Same Store Operating Data — U.S.
(In millions, except unit data)
For the Years Ended December 31,
2024 2023 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 7,378.3 $ 7,166.7 $ 211.7 3.0 %
Used vehicle retail sales 4,263.5 4,264.2 (0.7) — %
Used vehicle wholesale sales 298.0 295.4 2.6 0.9 %
Total used 4,561.5 4,559.6 1.9 — %
Parts and service sales 1,934.6 1,865.1 69.5 3.7 %
F&I, net 685.8 649.0 36.8 5.7 %
Total revenues $ 14,560.2 $ 14,240.3 $ 319.8 2.2 %
Gross profit:
New vehicle retail sales $ 516.6 $ 624.5 $ (107.9) (17.3) %
Used vehicle retail sales 233.3 231.3 2.0 0.9 %
Used vehicle wholesale sales 4.1 2.7 1.4 50.6 %
Total used 237.4 234.0 3.4 1.5 %
Parts and service sales 1,047.0 1,007.0 40.0 4.0 %
F&I, net 685.8 649.0 36.8 5.7 %
Total gross profit $ 2,486.7 $ 2,514.4 $ (27.7) (1.1) %
Gross margin:
New vehicle retail sales 7.0 % 8.7 % (1.7) %
Used vehicle retail sales 5.5 % 5.4 % — %
Used vehicle wholesale sales 1.4 % 0.9 % 0.5 %
Total used 5.2 % 5.1 % 0.1 %
Parts and service sales 54.1 % 54.0 % 0.1 %
Total gross margin 17.1 % 17.7 % (0.6) %
Units sold:
Retail new vehicles sold 142,312 137,362 4,950 3.6 %
Retail used vehicles sold 143,226 138,907 4,319 3.1 %
Wholesale used vehicles sold 34,010 29,834 4,176 14.0 %
Total used 177,236 168,741 8,495 5.0 %
Average sales price per unit sold:
New vehicle retail $ 51,846 $ 52,173 $ (327) (0.6) %
Used vehicle retail $ 29,768 $ 30,698 $ (931) (3.0) %
Gross profit per unit sold:
New vehicle retail sales $ 3,630 $ 4,546 $ (916) (20.2) %
Used vehicle retail sales $ 1,629 $ 1,665 $ (36) (2.2) %
Used vehicle wholesale sales $ 120 $ 91 $ 29 32.1 %
Total used $ 1,339 $ 1,386 $ (47) (3.4) %
F&I PRU $ 2,402 $ 2,349 $ 52 2.2 %
Other:
SG&A expenses $ 1,636.5 $ 1,571.2 $ 65.3 4.2 %
SG&A as % gross profit 65.8 % 62.5 % 3.3 %
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U.S. Region — Year Ended December 31, 2024 compared to 2023
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 $958.7 million, or 6.5%, as compared to the same period in the Prior Year, driven by the acquisition of stores and higher same store revenues.
Total same store revenues in the U.S. during the Current Year increased $319.8 million, or 2.2%, as compared to the Prior Year. This increase was driven by higher revenues across all business lines except used vehicle retail sales.
New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset by lower pricing. Manufacturer vehicle deliveries were higher in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year created downward pressure on pricing and margins. We ended the Current Year with a U.S. new vehicle inventory supply of 43 days, 7 days higher than the Prior Year.
Used vehicle retail same store revenues slightly underperformed the Prior Year, driven by lower pricing, partially offset by more units sold . Used vehicle supply improved as a result of higher new vehicle supply. However, lingering impacts from above-historical average inflation over the past two years reducing the disposable income of our customers and higher interest rates compared to historical averages increasing the monthly cost of financing vehicles, continued to create downward pressure on pricing.
Parts and service same store revenues outperformed the Prior Year, driven by increases in customer pay and warranty revenues, partially offset by decreases in wholesale and collision revenues. This outperformance reflects increased business activity for warranty and customer pay services, supported by increased same store technician headcount through our technician recruiting and retention efforts, providing greater capacity to meet increased demand.
F&I same store revenues outperformed the Prior Year, primarily driven by higher same store new and used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Year, leading to the improved new vehicle F&I penetration.
Gross Profit
Total gross profit in the U.S. during the Current Year increased $70.7 million, or 2.7%, as compared to the Prior Year, driven by the acquisition of stores, partially offset by lower same store gross profit.
Total same store gross profit in the U.S. during the Current Yea r decreased $27.7 million, or 1.1%, as compared to the Prior Year, driven by downward pressure on new vehicle margins, partially offset by increases from parts and service, F&I and used vehicle gross profit.
New vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in units sold. The decrease in new vehicle retail same store gross profit per unit sold is due to higher deliveries from our OEMs, leading to increasing inventory levels of new vehicles as described above.
Used vehicle retail same store gross profit outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold, partially offset by lower same store gross profit per unit sold, as described above for used vehicle retail same store revenues. Used vehicle wholesale same store gross profit outperformed the Prior Year, driven by an increase in same store gross profit per unit sold, coupled with an increase in same store units sold.
Parts and service same store gross profit outperformed the Prior Year, as described above for parts and service same store revenues.
F&I same store gross profit outperformed the Prior Year, as described above for F&I same store revenues.
Total same store gross margin in the U.S. decreased 58 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by improvement in parts and service and used vehicle gross margins.
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SG&A Expenses
SG&A as a percentage of gross profit increased 139 basis points and increased 332 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Total SG&A expenses in the U.S. during the Current Ye ar increased $81.1 million, or 5.0%, as compared to the Prior Year, primarily driven by higher same store SG&A expenses. Total same store SG&A expenses in the U.S. during the Current Year increased $65.3 million or 4.2% as compared to the Prior Year, primarily driven by increased employee related costs, outside services, advertising expenses, loaner car and related expenses, and fees associated with the Inchcape Acquisition. SG&A expenses also included $5.9 million in pre-tax one-time compensation payments to retain our field employees during the CDK Incident.
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Reported Operating Data — U.K.
(In millions, except unit data)
For the Years Ended December 31,
2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,862.3 $ 1,341.0 $ 521.3 38.9 % $ 59.6 34.4 %
Used vehicle retail sales 1,629.2 1,234.8 394.4 31.9 % 49.9 27.9 %
Used vehicle wholesale sales 138.6 127.1 11.5 9.1 % 4.1 5.8 %
Total used 1,767.8 1,361.9 405.9 29.8 % 54.0 25.8 %
Parts and service sales 438.3 289.0 149.3 51.7 % 13.6 47.0 %
F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 %
Total revenues $ 4,161.5 $ 3,059.5 $ 1,102.0 36.0 % $ 130.1 31.8 %
Gross profit:
New vehicle retail sales $ 146.0 $ 120.8 $ 25.2 20.9 % $ 4.7 16.9 %
Used vehicle retail sales 80.8 60.2 20.6 34.3 % 2.5 30.0 %
Used vehicle wholesale sales (7.8) (6.3) (1.5) (23.4) % (0.1) (21.7) %
Total used 73.0 53.9 19.1 35.5 % 2.4 31.0 %
Parts and service sales 248.0 167.8 80.2 47.8 % 7.7 43.2 %
F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 %
Total gross profit $ 560.1 $ 410.1 $ 150.0 36.6 % $ 17.9 32.2 %
Gross margin:
New vehicle retail sales 7.8 % 9.0 % (1.2) %
Used vehicle retail sales 5.0 % 4.9 % 0.1 %
Used vehicle wholesale sales (5.6) % (5.0) % (0.7) %
Total used 4.1 % 4.0 % 0.2 %
Parts and service sales 56.6 % 58.1 % (1.5) %
Total gross margin 13.5 % 13.4 % 0.1 %
Units sold:
Retail new vehicles sold 46,015 32,757 13,258 40.5 %
Retail used vehicles sold 56,717 42,039 14,678 34.9 %
Wholesale used vehicles sold 15,377 12,307 3,070 24.9 %
Total used 72,094 54,346 17,748 32.7 %
Average sales price per unit sold:
New vehicle retail $ 43,765 $ 42,488 $ 1,277 3.0 % $ 1,401 (0.3) %
Used vehicle retail $ 28,725 $ 29,373 $ (648) (2.2) % $ 880 (5.2) %
Gross profit per unit sold:
New vehicle retail sales $ 3,174 $ 3,689 $ (515) (14.0) % $ 103 (16.8) %
Used vehicle retail sales $ 1,425 $ 1,432 $ (7) (0.5) % $ 45 (3.6) %
Used vehicle wholesale sales $ (508) $ (514) $ 6 1.3 % $ (7) 2.6 %
Total used $ 1,013 $ 991 $ 22 2.2 % $ 34 (1.2) %
F&I PRU $ 906 $ 904 $ 2 0.2 % $ 29 (3.0) %
Other:
SG&A expenses $ 475.2 $ 303.9 $ 171.3 56.4 % $ 14.6 51.5 %
SG&A as % gross profit 84.8 % 74.1 % 10.7 %
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Same Store Operating Data — U.K.
(In millions, except unit data)
For the Years Ended December 31,
2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,406.7 $ 1,341.0 $ 65.7 4.9 % $ 40.8 1.9 %
Used vehicle retail sales 1,190.9 1,234.8 (43.9) (3.6) % 32.7 (6.2) %
Used vehicle wholesale sales 100.9 127.1 (26.2) (20.6) % 2.7 (22.7) %
Total used 1,291.8 1,361.9 (70.1) (5.1) % 35.4 (7.7) %
Parts and service sales 307.7 278.0 29.7 10.7 % 8.6 7.6 %
F&I, net 67.4 67.6 (0.2) (0.3) % 1.9 (3.1) %
Total revenues $ 3,073.6 $ 3,048.5 $ 25.1 0.8 % $ 86.6 (2.0) %
Gross profit:
New vehicle retail sales $ 100.8 $ 120.8 $ (20.0) (16.6) % $ 2.9 (19.0) %
Used vehicle retail sales 56.7 60.2 (3.5) (5.8) % 1.6 (8.4) %
Used vehicle wholesale sales (7.4) (6.3) (1.1) (17.1) % (0.1) (15.4) %
Total used 49.3 53.9 (4.6) (8.4) % 1.5 (11.2) %
Parts and service sales 175.0 162.8 12.2 7.5 % 4.9 4.5 %
F&I, net 67.4 67.6 (0.2) (0.3) % 1.9 (3.1) %
Total gross profit $ 392.6 $ 405.1 $ (12.5) (3.1) % $ 11.2 (5.8) %
Gross margin:
New vehicle retail sales 7.2 % 9.0 % (1.8) %
Used vehicle retail sales 4.8 % 4.9 % (0.1) %
Used vehicle wholesale sales (7.3) % (5.0) % (2.4) %
Total used 3.8 % 4.0 % (0.1) %
Parts and service sales 56.9 % 58.6 % (1.7) %
Total gross margin 12.8 % 13.3 % (0.5) %
Units sold:
Retail new vehicles sold 33,085 32,757 328 1.0 %
Retail used vehicles sold 42,268 42,039 229 0.5 %
Wholesale used vehicles sold 11,400 12,307 (907) (7.4) %
Total used 53,668 54,346 (678) (1.2) %
Average sales price per unit sold:
New vehicle retail $ 44,849 $ 42,488 $ 2,361 5.6 % $ 1,301 2.5 %
Used vehicle retail $ 28,175 $ 29,373 $ (1,199) (4.1) % $ 774 (6.7) %
Gross profit per unit sold:
New vehicle retail sales $ 3,047 $ 3,689 $ (641) (17.4) % $ 88 (19.8) %
Used vehicle retail sales $ 1,342 $ 1,432 $ (90) (6.3) % $ 37 (8.9) %
Used vehicle wholesale sales $ (650) $ (514) $ (136) (26.5) % $ (10) (24.6) %
Total used $ 919 $ 991 $ (72) (7.3) % $ 27 (10.0) %
F&I PRU $ 895 $ 904 $ (9) (1.0) % $ 26 (3.8) %
Other:
SG&A expenses $ 323.9 $ 302.3 $ 21.6 7.1 % $ 8.9 4.2 %
SG&A as % gross profit 82.5 % 74.6 % 7.9 %
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U.K. Region — Year Ended December 31, 2024 compared to 2023
Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rat e has fluctuated from £1 to $1.273 at December 31, 2023, to £1 to $1.254 at December 31, 2024, or a slight decrease in the value of the GBP of 1.5%.
Revenues
Total revenues in the U.K. during the Curren t Year increased $1.1 billion, or 36.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and changes in foreign currency exchange rates.
Total same store revenues in the U.K. during the Current Year increased $25.1 million, or 0.8%, as compared to the Prior Year, primarily driven by the positive impact of changes in foreign currency exchange rates, outperformances in new vehicle retail sales and parts and service, offset by lower used vehicle sales and F&I. On a constan t currency basis, same store revenues decreased 2.0%, primarily driven by underperformances in used vehicle sales and F&I, offset by higher new vehicle retail sales and parts and service.
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold, coupled with higher pri cing. We ended the Current Year with a U.K. new vehicle inventory supply of 45 days, three days lower than the Prior Year.
Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year, driven by lower used vehicle retail pricing, partially offset by more units sold.
Used vehicle wholesale same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by a decrease in wholesale used vehicle units sold.
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by i ncreases in customer pay, warranty and wholesale revenues reflecting increased business activity. W e have invested in improvements to our U.K. customer contact center, streamlining operations to make scheduling appointments easier for customers, resulting in an increase in parts and service activity driving an increase in revenues as compared to the Prior Year.
F&I, net same store revenues, on a constant currency basis, underperformed the Prior Year, driven by decreases in income per contract for retail finance fees and service contracts.
Gross Profit
Total gross profit in the U.K. during t he Current Year increased $150.0 million, or 36.6%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.
T otal same store gross profit in the U.K. during the Current Year decreased $12.5 million, or 3.1%, as compared to the Prior Year. On a constant currency basis, total same store gross profit decreased 5.8%, driven by downward pressures on margins across all lines of business.
New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in units sold, as a result of the increase in vehicle inventory production generating downward pressure on new vehicle margins.
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by an increase in used vehicle retail units sold.
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in parts and service same store revenues, as discussed above.
F&I same store gross profit, on a constant currency basis, underperformed the Prior Year, as described above in F&I same store revenues.
Total same store gross margin in the U.K. decreased 52 basis points, driven by margin declines across all lines of business attributable to the factors as described above under gross profit.
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SG&A Expenses
SG&A as a percentage of gross profit increased by 1,074 and 787 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 Curre nt Year increased $171.3 million, or 56.4%, as compared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $21.6 million, or 7.1%, as compared to the Prior Year. On a constant currency basis, total same store SG& A expenses increased 4.2%. The increases on a total same store basis were primarily driven by fees associated with the Inchcape Acqui sition, coupled with increased employee related costs, demonstration and loaner car expenses and advertising costs, offset by lower facilities costs compared to the Prior Year.
Consolidated Selected Comparisons — Year Ended December 31, 2024 compared to 2023
The following table (in millions) and discussion of our results of operations are on a consolidated basis, unless otherwise noted.
For the Years Ended December 31,
2024 2023 Increase/ (Decrease) % Change
Depreciation and amortization expense $ 113.1 $ 92.0 $ 21.1 22.9 %
Asset impairments $ 33.0 $ 32.9 $ 0.1 0.3 %
Restructuring charges
$ 16.7 $ — $ 16.7 100.0 %
Other operating (income) expense
$ (10.0) $ — $ (10.0) (100.0) %
Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 %
Other interest expense, net $ 141.3 $ 99.8 $ 41.5 41.6 %
Provision for income taxes $ 161.5 $ 198.2 $ (36.7) (18.5) %
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. and U.K. regions, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
Impairment of Assets
During the Current Year and the Prior Year, we recorded no goodwill impairments. During the Current Year and Prior Year we recorded impairments of franchise rights of $28.2 million and $25.1 million for franchise agreements in the U.S. region, respectively.
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, there was no asset impairment charges associated with property and equipment and ROU assets. During the Prior Year, we recorded total property and equipment and ROU asset impairment charges of $6.8 million in the U.S. region.
During the Current Year, we recognized $4.8 million in intangible asset impairment associated with assets held for sale.
Refer to Note 13. Intangible Franchise Rights and Goodwill, Note 11. Property and Equipment, Net and Note 12. Leases within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments.
Restructuring Charges
During the Current Year, we incurred $ 16.7 million of restructuring charges. Restructuring charges primarily consist of planned workforce realignment, strategic closing of certain facilities and systems integrations, among other efforts to increase operational efficiency and profitability in connection with the integration of the Inchcape Retail acquisition with our U.K. business.
Refer to Note 5. Restructuring within our Notes to Consolidated Financial Statements for further discussion of our restructuring plan.
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Other Operating Income
During the Current Year, we recognized $ 10.0 million of business interruption insurance recoveries as a result of the June 2024 cybersecurity incident experienced by CDK, which resulted in service outages on CDK’s dealers’ systems. The CDK Incident temporarily disrupted the Company’s business applications and processes in its U.S. operations that rely on CDK’s dealers’ systems. The CDK Incident did not have a material impact on our overall financial condition or on our ongoing results of operations.
Refer to Note 1. Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements for further discussion of the CDK Incident.
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 other benchmark rates. 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 increased $44.4 million, or 69.3%, as compared to the Prior Year, driven primarily by an increase in inventories added to our floorplan due to improvements in manufacturer production as well as acquisitions, partially offset by realized gains on our interest rate swap portfolio due to increases in corresponding interest rates.
Refer to Note 8 . Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps.
Other Interest Expense, Net
Other interest expense, net consists of interest charges primarily on our $750.0 million 4.00% Senior Notes due August 2028 (“4.00% Senior Notes”), $500.0 million 6.375% Senior Notes due January 2030 (“6.375% Senior Notes”), real estate related debt and other debt, partially offset by interest income.
For the Current Year, other interest expense, net, increased $41.5 million, or 41.6%, as compared to the Prior Year. The increase in other interest expense, net during the Current Year was primarily attributable to the issuance of the 6.375% Senior Notes during the Current Year, additional real estate related and other debt in our U.S. and U.K. regions, primarily due to acquisition activity. Additionally, the difference in the Current Year was partly due to a decrease in the gain recognized on the de-designation of a mortgage interest rate swap as compared to the Prior Year of approximately $3.8 million . Refer to Note 15. Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt. Refer to Note 8 . Financial Instruments and Fair Value Measurements within our Notes to the Consolidated Financial Statements for additional discussion of the de-designation of the mortgage interest rate swap.
Provision for Income Taxes
Provision for income taxes from continuing operations during the Current Year decreased $36.7 million, or 18.5%, as compared to the Prior Year. During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $161.5 million and $198.2 million, respectively. The year-over-year tax expense decrease was primarily due to lower pre-tax book income.
The 2024 effective tax rate of 24.5% was lower than the 2023 effective tax rate of 24.8%. The tax rate decrease was primarily due to the mix of earnings and an increase in tax credits.
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 refer to Note 16. 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 (refer to Note 14. Floorplan Notes Payable within 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.
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Available Liquidity Resources
We had the following sources of liquidity available (in millions):
December 31, 2024
Cash and cash equivalents $ 34.4
Floorplan offset accounts 288.2
Available capacity under Acquisition Line 893.2
Total liquidity $ 1,215.8
Cash Flows
We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility. 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 14. Floorplan Notes Payable within our Notes to Consolidated Financial Statements for additional discussion of our Revolving Credit Facility.
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 activities 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,
2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities: $ 586.3 $ 190.2
Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 133.3 504.6
Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity (36.6) 25.2
Adjusted net cash provided by operating activities $ 683.0 $ 720.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities: $ (1,282.6) $ (366.1)
Change in cash paid for acquisitions, associated with Floorplan notes payable 50.3 66.3
Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (31.9) (48.8)
Adjusted net cash used in investing activities $ (1,264.2) $ (348.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activities: $ 681.1 $ 185.2
Change in Floorplan notes payable, excluding floorplan offset (115.2) (547.3)
Adjusted net cash provided by (used in) financing activities $ 565.9 $ (362.1)
Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2024 compared to 2023
For the Current Year, net cash provided by operating activities increased by $396.1 million as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $36.9 million. The decrease on an adjusted basis was primarily driven by a $103.5 million decrease in net income, a $440.1 million decrease in floorplan notes payable – manufacturer affiliates, partially offset by a $313.2 million decrease in inventory levels, a $126.8 million decrease in contracts-in-transit and vehicle receivables and a $51.5 million increase in accounts payable and accrued expenses.
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Sources and Uses of Liquidity from Investing Activities — Year Ended December 31, 2024 compared to 2023
For the Current Year, net cash used in investing activities increased by $916.5 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in investing activities increased by $915.7 million, primarily due to a $926.8 million increase in acquisition activity, and a $59.7 million increase in purchases of property and equipment, including real estate, partially offset by a $52.8 million increase in proceeds from disposition of franchises and property and equipment.
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, $245.1 million was used to purchase property and equipment.
Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2024 compared to 2023
For the Current Year, net cash provided by financing activities increased by $495.9 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $928.1 million. The increase in net cash provided by financing activities on an adjusted basis was primarily driven by a $586.4 million increase in net borrowings of other debt, including real estate-related debt, the issuance of $500.0 million of 6.375% Senior Notes, and increases in net borrowings on our U.S. Floorplan line of $108.5 million (representing the net cash activity in our floorplan offset account). These increases were partially offset by a $249.6 million increase in net repayments on the Acquisition Line.
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, 2024 (in millions):
As of December 31, 2024
Total
Commitment Outstanding Available
U.S. Floorplan Line (1)
$ 1,500.0 $ 1,042.4 $ 457.6
Acquisition Line (2)
1,000.0 106.8 893.2
Total Revolving Credit Facility 2,500.0 1,149.3 1,350.7
FMCC facility (3)
300.0 200.0 100.0
GM Financial Facility (4)
348.1 189.5 158.6
Total U.S. credit facilities (5)
$ 3,148.1 $ 1,538.8 $ 1,609.3
(1) The available balance at December 31, 2024, includes $286.3 million of immediately available funds. The remaining available balance can be used for vehicle inventory financing.
(2) The outstanding balance of $106.8 million is related to outstanding letters of credit of $11.8 million and $95.0 million in USD borrowings. The available borrowings may be limited from time to time, based on certain debt covenant calculations, and as a result, the outstanding balance plus available borrowings may not equal the total commitment.
(3) The available balance as of December 31, 2024, includes $2.0 million of immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing.
(4) The remaining available balance as of December 31, 2024, can be used for General Motors new and rental vehicle inventory financing.
(5) The outstanding balance excludes $590.1 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.
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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 loaner vehicle inventories. In addition, we have outstanding debt instruments, including our 4.00% and 6.375% Senior Notes, as well as real estate related and other debt instruments. Refer to Note 15. Debt within our Notes to Consolidated Financial Statements for further information.
Covenants
Our Revolving Credit Facility, indentures governing our 4.00% and 6.375% 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, 2024, 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, 2024
Required Actual
Total adjusted leverage ratio < 5.75 2.79
Fixed charge coverage ratio > 1.20 3.56
Based on our position as of December 31, 2024, 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.
Refer to Note 14. Floorplan Notes Payable and Note 15. Debt within our Notes to Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of December 31, 2024.
Share 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 12 , 2024 , our Board of Directors increased the share repurchase authorization to $500.0 million. For the Current Year, 518,465 shares were repurchased, at an average price of $311.67 per share, for a total of $161.6 million, excluding excise taxes of $1.4 million. As of December 31, 2024, we had $476.1 million available under our current share repurchase authorization.
During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.88 per share, which resulted in $24.7 million paid to common shareholders and $0.5 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.