Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 18, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-14733 | ||
Entity Registrant Name | LITHIA MOTORS INC | ||
Entity Incorporation, State or Country Code | OR | ||
Entity Tax Identification Number | 93-0572810 | ||
Entity Address, Address Line One | 150 N. Bartlett Street, | ||
Entity Address, City or Town | Medford, | ||
Entity Address, State or Province | OR | ||
Entity Address, Postal Zip Code | 97501 | ||
City Area Code | 541 | ||
Local Phone Number | 776-6401 | ||
Title of 12(b) Security | Common stock without par value | ||
Trading Symbol | LAD | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,385,788 | ||
Entity Common Stock, Shares Outstanding | 29,487,889 | ||
Documents Incorporated by Reference | The Registrant has incorporated into Part III of Form 10-K, by reference, portions of its Proxy Statement for its 2022 Annual Meeting of Shareholders. | ||
Entity Central Index Key | 0001023128 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Portland, Oregon |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash, restricted cash, and cash equivalents | $ 174.8 | $ 162.5 |
Accounts receivable, net of allowance for doubtful accounts of $17.3 and $5.9 | 910 | 614 |
Inventories, net | 2,385.5 | 2,492.9 |
Other current assets | 63 | 70.5 |
Total current assets | 3,533.3 | 3,339.9 |
Property and equipment, net of accumulated depreciation of $422.6 and $338.0 | 3,052.6 | 2,197.5 |
Operating lease right-of-use assets | 395.9 | 264 |
Goodwill | 977.3 | 593 |
Franchise value | 799.1 | 350.2 |
Other non-current assets | 2,388.7 | 1,157.5 |
Total assets | 11,146.9 | 7,902.1 |
Current liabilities: | ||
Floor plan notes payable | 354.2 | 234.2 |
Floor plan notes payable: non-trade | 835.9 | 1,563 |
Current maturities of long-term debt | 223.7 | 66 |
Trade payables | 235.4 | 158.2 |
Accrued liabilities | 753.6 | 458.3 |
Total current liabilities | 2,402.8 | 2,479.7 |
Long-term debt | 3,185.7 | 2,064.7 |
Deferred revenue | 191.2 | 155.7 |
Deferred income taxes | 191 | 146.3 |
Non-current operating lease liabilities | 361.7 | 246.7 |
Other long-term liabilities | 151.3 | 147.5 |
Total liabilities | 6,483.7 | 5,240.6 |
Redeemable non-controlling interest | 34 | 0 |
Equity: | ||
Preferred stock - no par value; authorized 15.0 shares; none outstanding | 0 | 0 |
Additional paid-in capital | 58.3 | 41.4 |
Accumulated other comprehensive loss | (3) | (6.3) |
Retained earnings | 2,859.5 | 1,838.2 |
Total stockholders’ equity - Lithia Motors, Inc. | 4,626.4 | 2,661.5 |
Non-controlling interest | 2.8 | 0 |
Total equity | 4,629.2 | 2,661.5 |
Total liabilities, redeemable non-controlling interest and equity | 11,146.9 | 7,902.1 |
Class B | ||
Equity: | ||
Common stock: Class A and Class B | 0 | 0 |
Common stock | ||
Equity: | ||
Common stock: Class A and Class B | $ 1,711.6 | $ 788.2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable, allowance for doubtful accounts | $ 17.3 | $ 5.9 |
Property and equipment, accumulated depreciation | $ 422.6 | $ 338 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Common stock A and B, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock A and B, shares issued (in shares) | 29,500,000 | 26,300,000 |
Common stock A and B, shares outstanding (in shares) | 29,500,000 | 26,300,000 |
Class B | ||
Common stock A and B, shares authorized (in shares) | 0 | |
Common stock A and B, shares issued (in shares) | 0 | 200,000 |
Common stock A and B, shares outstanding (in shares) | 0 | 200,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Total revenues | $ 22,831.7 | $ 13,124.3 | $ 12,672.7 |
Cost of sales: | |||
Total cost of sales | 18,572.7 | 10,898.7 | 10,718.9 |
Gross profit | 4,259 | 2,225.6 | 1,953.8 |
Asset impairments | 1.9 | 7.9 | 2.6 |
Selling, general and administrative | 2,461.9 | 1,428.3 | 1,373.8 |
Depreciation and amortization | 127.3 | 92.3 | 82.4 |
Operating income | 1,667.9 | 697.1 | 495 |
Floor plan interest expense | (22.3) | (34.4) | (72.8) |
Other interest expense | (108.2) | (73.1) | (60.6) |
Other (expense) income, net | (52.6) | 58.9 | 13.8 |
Income before income taxes | 1,484.8 | 648.5 | 375.4 |
Income tax provision | (422.1) | (178.2) | (103.9) |
Net income | 1,062.7 | 470.3 | 271.5 |
Net income attributable to non-controlling interests | (1.7) | 0 | 0 |
Net income attributable to redeemable non-controlling interest | (0.9) | 0 | 0 |
Net income attributable to Lithia Motors, Inc. | $ 1,060.1 | $ 470.3 | $ 271.5 |
Basic net income per share (in dollars per share) | $ 36.81 | $ 19.74 | $ 11.70 |
Shares used in basic per share calculations (in shares) | 28,800 | 23,800 | 23,200 |
Diluted net income per share (in dollars per share) | $ 36.54 | $ 19.53 | $ 11.60 |
Shares used in diluted per share calculations (in shares) | 29,000 | 24,100 | 23,400 |
Cash dividend paid per Class A and Class B share (in dollars per share) | $ 1.36 | $ 1.22 | $ 1.19 |
New vehicle retail | |||
Revenues: | |||
Total revenues | $ 11,197.7 | $ 6,773.9 | $ 6,799.1 |
Cost of sales: | |||
Total cost of sales | 9,979.2 | 6,313 | 6,413.5 |
Used vehicle retail | |||
Revenues: | |||
Total revenues | 7,255.3 | 3,998.4 | 3,527.2 |
Cost of sales: | |||
Total cost of sales | 6,428.6 | 3,552.4 | 3,159.6 |
Used vehicle wholesale | |||
Revenues: | |||
Total revenues | 957.1 | 308.7 | 301.2 |
Cost of sales: | |||
Total cost of sales | 913.7 | 296.7 | 297.5 |
Finance and insurance | |||
Revenues: | |||
Total revenues | 1,051.3 | 579.8 | 518.6 |
Service, body and parts | |||
Revenues: | |||
Total revenues | 2,110.9 | 1,348.7 | 1,325.1 |
Cost of sales: | |||
Total cost of sales | 1,000.4 | 631.9 | 657.5 |
Fleet and other | |||
Revenues: | |||
Total revenues | 259.4 | 114.8 | 201.5 |
Cost of sales: | |||
Total cost of sales | $ 250.8 | $ 104.7 | $ 190.8 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,062.7 | $ 470.3 | $ 271.5 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment | (1.1) | 0 | 0 |
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(1.6), $2.0 and $0.3 | 4.4 | (5.6) | (0.7) |
Total other comprehensive income (loss), net of tax | 3.3 | (5.6) | (0.7) |
Comprehensive income | 1,066 | 464.7 | 270.8 |
Comprehensive income attributable to non-controlling interest | (1.7) | 0 | 0 |
Comprehensive income attributable to redeemable non-controlling interest | (0.9) | 0 | 0 |
Comprehensive income attributable to Lithia Motors, Inc. | $ 1,063.4 | $ 464.7 | $ 270.8 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Gain (loss) on cash flow hedges, tax (expense) benefit | $ (1.6) | $ 2 | $ 0.3 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST - USD ($) $ in Millions | Total | Common stockClass B | Common stockCommon stock | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Retained earningsAdjustments | Noncontrolling Interest | ||
Beginning balance at Dec. 31, 2018 | $ 1,197.2 | $ 0.1 | [1] | $ 0 | [1] | $ 35 | $ 0 | $ 1,162.1 | $ 0.9 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 12.7 | 3.5 | ||||||||
Issuance of stock in connection with employee stock plans | 11 | |||||||||
Repurchase of class A common stock | (3.2) | |||||||||
Option premium received (paid) | 7.5 | (5.1) | ||||||||
Foreign currency translation adjustment | 0 | |||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(1.6), $2.0 and $0.3 | $ (0.7) | |||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | |||||||||
Net income | $ 271.5 | 271.5 | ||||||||
Dividends paid | (27.6) | |||||||||
Ending balance at Dec. 31, 2019 | 1,467.7 | 0.1 | [1] | 20.5 | [1] | 46 | (0.7) | 1,401.8 | $ (4.8) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 11.6 | 11.6 | ||||||||
Issuance of stock in connection with employee stock plans | 13.3 | |||||||||
Class B common stock converted to class A common stock | (0.1) | 0.1 | ||||||||
Repurchase of class A common stock | (34.4) | (16.2) | ||||||||
Equity issuances, net of issuance costs | 777.1 | |||||||||
Foreign currency translation adjustment | 0 | |||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(1.6), $2.0 and $0.3 | (5.6) | (5.6) | ||||||||
Net income | 470.3 | 470.3 | ||||||||
Dividends paid | (29.1) | |||||||||
Ending balance at Dec. 31, 2020 | 2,661.5 | $ 0 | [1] | 788.2 | [1] | 41.4 | (6.3) | 1,838.2 | $ 0 | |
Redeemable non-controlling interest, ending balances at Dec. 31, 2020 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 17.8 | 16.9 | ||||||||
Issuance of stock in connection with employee stock plans | 25.9 | |||||||||
Repurchase of class A common stock | (230.7) | |||||||||
Equity issuances, net of issuance costs | 1,110.4 | |||||||||
Foreign currency translation adjustment | (1.1) | (1.1) | ||||||||
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(1.6), $2.0 and $0.3 | 4.4 | 4.4 | ||||||||
Net income | 1,062.7 | 1,060.1 | 1.7 | |||||||
Dividends paid | (38.8) | |||||||||
Issuance related to business combinations | 33.1 | 1.1 | ||||||||
Ending balance at Dec. 31, 2021 | 4,629.2 | $ 1,711.6 | [1] | $ 58.3 | $ (3) | $ 2,859.5 | 2.8 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Acquired redeemable non-controlling interest | 33.1 | $ 1.1 | ||||||||
Net income attributable to redeemable non-controlling interest | 0.9 | |||||||||
Redeemable non-controlling interest, ending balances at Dec. 31, 2021 | $ 34 | |||||||||
[1] | Prior to June 7, 2021, common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred in connection with the elimination of our classified common stock structure following the conversion of all Class B common stock to Class A common stock. |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Gain (loss) on cash flow hedges, tax (expense) benefit | $ (1.6) | $ 2 | $ 0.3 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash flows from operating activities: | ||||
Net income | $ 1,062,700,000 | $ 470,300,000 | $ 271,500,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Asset impairments | 1,900,000 | 7,900,000 | 2,600,000 | |
Depreciation and amortization | 127,300,000 | 92,400,000 | 82,400,000 | |
Stock-based compensation | 34,700,000 | 23,200,000 | 16,200,000 | |
Loss on redemption of senior notes | 10,300,000 | 0 | 0 | |
Gain on disposal of other assets | (2,500,000) | (1,700,000) | (100,000) | |
Gain from disposal activities | 0 | (16,600,000) | (9,700,000) | |
Unrealized investment loss (gain) | 66,400,000 | (43,400,000) | 0 | |
Deferred income taxes | 43,100,000 | 17,200,000 | 40,100,000 | |
Amortization of operating lease right-of-use assets | 39,000,000 | 28,900,000 | 31,600,000 | |
(Increase) decrease (net of acquisitions and dispositions): | ||||
Trade receivables, net | (147,100,000) | (113,400,000) | 24,400,000 | |
Inventories | 674,600,000 | 228,800,000 | (19,700,000) | |
Other assets | (579,800,000) | (101,300,000) | 5,400,000 | |
Increase (decrease) (net of acquisitions and dispositions): | ||||
Floor plan notes payable | 116,100,000 | (204,100,000) | 100,700,000 | |
Trade payables | 78,400,000 | 28,200,000 | (1,800,000) | |
Accrued liabilities | 233,000,000 | 113,100,000 | (7,800,000) | |
Other long-term liabilities and deferred revenue | 39,100,000 | 15,100,000 | (11,300,000) | |
Net cash provided by operating activities | 1,797,200,000 | 544,600,000 | 524,500,000 | |
Cash flows from investing activities: | ||||
Notes receivable issued | 0 | (12,500,000) | (12,500,000) | |
Principal payments received on notes receivable | 0 | 25,000,000 | 0 | |
Capital expenditures | (260,400,000) | (167,800,000) | (124,900,000) | |
Proceeds from sales of assets | 3,300,000 | 6,500,000 | 1,500,000 | |
Cash paid for other investments | (10,300,000) | (11,200,000) | (7,200,000) | |
Cash paid for acquisitions, net of cash acquired | (2,699,300,000) | (1,503,300,000) | (366,600,000) | |
Proceeds from sales of stores | 76,300,000 | 57,500,000 | 46,700,000 | |
Net cash used in investing activities | (2,890,400,000) | (1,605,800,000) | (463,000,000) | |
Cash flows from financing activities: | ||||
Repayments on floor plan notes payable: non-trade, net | (685,300,000) | (20,600,000) | (54,600,000) | |
Borrowings on lines of credit | 2,830,600,000 | 1,825,400,000 | 3,167,000,000 | |
Repayments on lines of credit | (2,505,200,000) | (1,935,400,000) | (3,481,600,000) | |
Principal payments on long-term debt and finance lease liabilities, scheduled | (59,300,000) | (29,400,000) | (26,000,000) | |
Principal payments on long-term debt and finance lease liabilities, other | (486,500,000) | (6,300,000) | (11,000,000) | |
Proceeds from issuance of long-term debt | 1,161,800,000 | 606,500,000 | 420,300,000 | |
Payment of debt issuance costs | (14,700,000) | (10,800,000) | (5,800,000) | |
Proceeds from issuance of common stock | 1,136,200,000 | 790,400,000 | 11,000,000 | |
Repurchase of common stock | (230,700,000) | (50,600,000) | (3,200,000) | |
Dividends paid | (38,800,000) | (29,100,000) | (27,600,000) | |
Payments of contingent consideration related to acquisitions | (1,400,000) | (300,000) | 0 | |
Other financing activities | 0 | 0 | 2,400,000 | |
Net cash provided by (used in) financing activities | 1,106,700,000 | 1,139,800,000 | (9,100,000) | |
Effect of exchange rate changes on cash, restricted cash, and cash equivalents | 2,500,000 | 0 | 0 | |
Increase in cash, restricted cash, and cash equivalents | 16,000,000 | 78,600,000 | 52,400,000 | |
Cash, restricted cash, and cash equivalents at beginning of year | 162,500,000 | 84,000,000 | 31,600,000 | |
Cash, restricted cash, and cash equivalents at end of year | 178,500,000 | 162,500,000 | 84,000,000 | |
Reconciliation of cash, restricted cash, and cash equivalents to the consolidated balance sheets | ||||
Cash and cash equivalents | 153,000,000 | 160,200,000 | 84,000,000 | |
Restricted cash from collections on auto loans receivable | 21,800,000 | 2,300,000 | 0 | |
Cash, restricted cash, and cash equivalents | 174,800,000 | 162,500,000 | 84,000,000 | |
Restricted cash on deposit in reserve accounts, included in other non-current assets | 3,700,000 | 0 | 0 | |
Total cash, restricted cash, and cash equivalents reported in the Consolidated Statements of Cash Flows | 178,500,000 | 162,500,000 | 84,000,000 | |
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest | 130,100,000 | 107,700,000 | 135,800,000 | |
Cash paid during the period for income taxes, net | 369,100,000 | 135,000,000 | 38,400,000 | |
Floor plan debt paid in connection with store disposals | 8,700,000 | 38,400,000 | 18,600,000 | |
Supplemental schedule of non-cash activities: | ||||
Debt issued in connection with acquisitions | 355,600,000 | 0 | 26,400,000 | |
Contingent consideration in connection with acquisitions | 900,000 | 14,300,000 | 0 | |
Debt assumed in connection with acquisitions | 4,000,000 | 0 | 0 | |
Right-of-use assets obtained in exchange for lease liabilities1 | [1] | $ 171,800,000 | $ 55,400,000 | $ 260,300,000 |
[1] | Amounts for the twelve months ended December 31, 2019 include the transition adjustment for the adoption of Topic 842. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Business We are one of the largest automotive retailers in the United States and are among the fastest growing companies in the Fortune 500 (#231-2021) with 278 stores representing 40 brands in two countries, across 25 U.S. states and three Canadian provinces. We offer vehicles online and through our nationwide retail network. Our “Growth Powered by People” strategy drives us to innovate and continuously improve the customer experience. Basis of Presentation The accompanying Consolidated Financial Statements reflect the results of operations, the financial position and the cash flows for Lithia Motors, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Cash, Restricted Cash, and Cash Equivalents Cash and cash equivalents are defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable that are restricted for repayment on borrowings on our securitization facility before being unrestricted. Accounts Receivable Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within five • Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. • Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products. Interest income on auto loan receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. All other receivables are recorded at invoice and do not bear interest until they are 60 days past due. The balance of auto loan receivables is made up primarily of loans secured by the related vehicle. More than 95% of the portfolio is aged less than 60 days past due with less than 5% on non-accrual status. As of December 31, 2021, the allowance for credit losses related to auto loan and lease receivables was $25.0 million and was included in allowance for doubtful accounts and other non-current assets. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon reaching 120 days past due status. The annual activity for charges and subsequent recoveries is immaterial. The remainder of our receivables are due primarily from manufacturer partners and various third-party lenders. The historical losses related to these balances are immaterial. The long-term portion of accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets. See Note 2. Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the lower of cost (first-in, first-out) or market method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Certain acquired inventories are valued using the last-in first-out (LIFO) method. The LIFO reserve associated with this inventory as of December 31, 2021 and 2020 was immaterial. Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction to cost of sales as the related vehicles are sold. Parts purchase discounts that we receive from the manufacturer are reflected as a reduction in the carrying value of the parts purchased from the manufacturer and are recognized as a reduction to cost of goods sold as the related inventory is sold. See Note 3. Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives on the straight-line basis. Leasehold improvements made at the inception of the lease or during the term of the lease are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years The cost for maintenance, repairs and minor renewals is expensed as incurred, while significant remodels and betterments are capitalized. In addition, interest on borrowings for major capital projects, significant remodels, and betterments is capitalized. Capitalized interest becomes a part of the cost of the depreciable asset and is depreciated according to the estimated useful lives as previously stated. For the years ended December 31, 2021, 2020 and 2019, we recorded capitalized interest of $2.0 million, $1.6 million and $2.3 million, respectively. When an asset is retired, or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is credited or charged to income from operations. Leased property meeting certain criteria are recorded as finance leases. We have finance leases for certain locations, expiring at various dates through August 1, 2037. Our finance lease right-of-use assets are included in property and equipment on our Consolidated Balance Sheets. Amortization of finance lease right-of-use assets is computed on a straight-line basis over the term of the lease, unless the lease transfers title or it contains a bargain purchase option, in which case, it is amortized over the asset’s useful life and is included in depreciation expense. Finance lease liabilities are recorded as the lesser of the estimated fair market value of the leased property or the net present value of the aggregated future minimum payments and are included in current maturities of long-term debt and long-term debt on our Consolidated Balance Sheets. Interest associated with these obligations is included in other interest expense in the Consolidated Statements of Operations. See Note 7 and Note 11. Long-lived assets held and used by us are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We consider several factors when evaluating whether there are indications of potential impairment related to our long-lived assets, including store profitability, overall macroeconomic factors and the impact of our strategic management decisions. If recoverability testing is performed, we evaluate assets to be held and used by comparing the carrying amount of an asset to future net undiscounted cash flows associated with the asset, including its disposition. If such assets are considered to be impaired, the amount by which the carrying amount of the assets exceeds the fair value of the assets is recognized as a charge to income from operations. See Note 4. Goodwill Goodwill represents the excess purchase price over the fair value of net assets acquired which is not allocable to separately identifiable intangible assets. Other identifiable intangible assets, such as franchise rights, are separately recognized if the intangible asset is obtained through contractual or other legal right or if the intangible asset can be sold, transferred, licensed or exchanged. Goodwill is not amortized but tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying amount of the reporting unit more likely than not exceeds fair value. We have the option to qualitatively or quantitatively assess goodwill for impairment, and we evaluated our goodwill using a qualitative assessment process. Goodwill is tested for impairment at the reporting unit level. Our reporting units are individual stores as this is the level at which discrete financial information is available and for which operating results are regularly reviewed by our chief operating decision maker to allocate resources and assess performance. We test our goodwill for impairment on October 1 of each year. In 2021, we evaluated our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment. See Note 5 and Note 13. Franchise Value We enter into agreements (Franchise Agreements) with our manufacturers. Franchise value represents a right received under Franchise Agreements with manufacturers and is identified on an individual store basis. We evaluated the useful lives of our Franchise Agreements based on the following factors: • certain of our Franchise Agreements continue indefinitely by their terms; • certain of our Franchise Agreements have limited terms, but are routinely renewed without substantial cost to us; • other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers terminating Franchise Agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time; • state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise; • we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and • as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the Franchise Agreements acquired with the dealerships we purchase based on the understanding and industry practice that the Franchise Agreements will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our Franchise Agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We evaluated our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise value for impairment is each individual store. We test our franchise value for impairment on October 1 of each year. In 2021, we evaluated our franchise value using a qualitative assessment process. If the qualitative factors discussed above determine that it is more likely than not that the fair value of the individual store’s franchise value exceeds the carrying amount, the franchise value is not impaired and the second step is not necessary. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying value, then a quantitative valuation of our franchise value is performed and an impairment would be recorded. See Note 5 and Note 13. Financing and Securitization Transactions We maintain a revolving funding program composed of a warehouse facility that we use to fund auto loans receivable originated by Driveway Finance Corporation. We use term securitizations to provide long-term funding for most of the auto loans receivable initially funded through the warehouse facility. In these transactions, a pool of auto loans receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize transfers of auto loans receivable into the warehouse facility and asset-backed term funding transactions, including term securitizations (together, “non-recourse funding vehicles”), as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the non-recourse funding vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the non-recourse funding vehicles. See Note 2 and Note 6 for additional information on auto loans receivable and non-recourse notes payable. Restricted Cash on Deposit in Reserve Accounts The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its creditors. In the event that the cash generated by the related receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities and was $3.7 million as of December 31, 2021, with no amounts as of December 31, 2020 and 2019. Advertising We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Additionally, manufacturer cooperative advertising credits for qualifying, specifically-identified advertising expenditures are recognized as a reduction of advertising expense. Advertising expense and manufacturer cooperative advertising credits were as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Advertising expense, gross $ 197.8 $ 121.3 $ 139.8 Manufacturer cooperative advertising credits (35.6) (23.9) (27.9) Advertising expense, net $ 162.2 $ 97.4 $ 111.9 Contract Origination Costs Contract origination commissions paid to our employees directly related to the sale of our self-insured lifetime lube, oil and filter service contracts and auto loan receivable originations are deferred and charged to expense in proportion to the associated revenue to be recognized. Legal Costs We are a party to numerous legal proceedings arising in the normal course of business. We accrue for certain legal costs, including attorney fees and potential settlement claims related to various legal proceedings that are estimable and probable. See Note 7. Stock-Based Compensation Compensation costs associated with equity instruments exchanged for employee and director services are measured at the grant date, based on the fair value of the award. If there is a performance-based element to the award, the expense is recognized based on the estimated attainment level, estimated time to achieve the attainment level and/or the vesting period. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of non-vested stock awards is based on the closing price of our common stock on the date of grant. We account for forfeitures of stock-based awards as they occur. See Note 10. Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties are recorded as income tax provision in the period incurred or accrued when related to an uncertain tax position. See Note 14. We account for all taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction (i.e., sales, use, value-added) on a net (excluded from revenues) basis. Concentration of Risk and Uncertainties We purchase substantially all of our new vehicles and inventory from various manufacturers at the prevailing prices charged by auto manufacturers to all franchised dealers. Our overall sales could be impacted by the auto manufacturers’ inability or unwillingness to supply dealerships with an adequate supply of popular models. We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. In the event that manufacturers are unable to supply the needed level of vehicles, our financial performance may be adversely impacted. We depend on our manufacturers to deliver high-quality, defect-free vehicles. In the event that manufacturers experience future quality issues, our financial performance may be adversely impacted. We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. Our sales volume could be materially adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles. We also receive incentives and rebates from our manufacturers, including cash allowances, financing programs, discounts, holdbacks and other incentives. These incentives are recorded as accounts receivable in our Consolidated Balance Sheets until payment is received. Our financial condition could be materially adversely impacted by the manufacturers’ or distributors’ inability to continue to offer these incentives and rebates at substantially similar terms, or to pay our outstanding receivables. We enter into Franchise Agreements with the manufacturers. The Franchise Agreements generally limit the location of the dealership and provide the auto manufacturer approval rights over changes in dealership management and ownership. The auto manufacturers are also entitled to terminate the Franchise Agreement if the dealership is in material breach of the terms. Our ability to expand operations depends, in part, on obtaining consents of the manufacturers for the acquisition of additional dealerships. See also “Goodwill” and “Franchise Value” above. We have a credit facility with a syndicate of 20 financial institutions, including eight manufacturer-affiliated finance companies. Several of these financial institutions also provide vehicle financing for certain new vehicles, vehicles that are designated for use as service loaners and mortgage financing. This credit facility is the primary source of floor plan financing for our new vehicle inventory and also provides used vehicle financing and a revolving line of credit. The term of the facility extends through January 2025. At maturity, our financial condition could be materially adversely impacted if lenders are unable to provide credit that has typically been extended to us or with terms unacceptable to us. Our financial condition could be materially adversely impacted if these providers incur losses in the future or undergo funding limitations. See Note 6. We anticipate continued organic growth and growth through acquisitions. This growth will require additional credit which may be unavailable or with terms unacceptable to us. If these events were to occur, we may not be able to borrow sufficient funds to facilitate our growth. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and related notes to financial statements. Changes in such estimates may affect amounts reported in future periods. Estimates are used in the calculation of certain reserves maintained for charge-backs on estimated cancellations of service contracts; life, accident and disability insurance policies; finance fees from customer financing contracts and uncollectible accounts receivable. Estimates are also used in our allowance for loan losses, which represents the net credit losses expected over the remaining contractual life of our managed receivables. Because net loss performance can vary substantially over time, estimating net losses requires assumptions about matters that are uncertain. The allowance for loan losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Determining the appropriateness of the allowance for loan losses requires management to exercise judgement about matters that are inherently uncertain, including the timing and distribution of net losses that could materially affect the allowance or loan losses and, therefore, net earnings. We also use estimates in the calculation of various expenses, accruals and reserves, including anticipated losses related to workers’ compensation insurance; anticipated losses related to self-insurance components of our property and casualty and medical insurance; self-insured lifetime lube, oil and filter service contracts; discretionary employee bonuses, the Transition Agreement with Sidney B. DeBoer, our Chairman of the Board; warranties provided on certain products and services; legal reserves and stock-based compensation. We also make certain estimates regarding the assessment of the recoverability of long-lived assets, indefinite-lived intangible assets and deferred tax assets. We offer a limited warranty on the sale of most retail used vehicles. This warranty is based on mileage and time. We also offer a mileage and time based warranty on parts used in our service repair work and on tire purchases. The cost that may be incurred for these warranties is estimated at the time the related revenue is recorded. A reserve for these warranty liabilities is estimated based on current sales levels, warranty experience rates and estimated costs per claim. The annual activity for reserve increases and claims is immaterial. As of December 31, 2021 and 2020, the accrued warranty balance was $0.6 million and $0.5 million, respectively. Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These market data points include our acquisition and divestiture experience and third-party broker estimates. We use a relief-from-royalty method to determine the fair value of a trade name. Future cost savings associated with owning, rather than licensing, a trade name is estimated based on a royalty rate and management’s forecasted sales projections. The discount rate applied to the future cost savings factors an equity market risk premium, small stock risk premium, an average peer group beta, a risk-free interest rate and a premium for forecast risk. Revenue Recognition The following describes our major product lines, which represent the disaggregation of our revenues to transactions that are similar in nature, amount, timing, uncertainties and economic factors. New Retail Vehicle and Used Retail Vehicle Sales Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectibility is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state law. Service, Body and Parts Sales Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $239.0 million and $194.1 million as of December 31, 2021, and December 31, 2020, respectively; and we recognized $35.0 million and $31.1 million of revenue in the years ended December 31, 2021, and December 31, 2020, respectively, related to our opening contract liability balances. Our contract liability balance is included in accrued liabilities and deferred revenue. Finance and Insurance Sales Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract under the new standard. Our contract asset balance was $9.6 million and $8.2 million as of December 31, 2021, and December 31, 2020, respectively; and is included in trade receivables and other non-current assets. Segment Reporting While we have determined that each individual store is a reporting unit, we have aggregated our reporting units into three reportable segments based on their economic similarities: Domestic, Import and Luxury. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Chrysler, General Motors and Ford. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, Subaru, Nissan, Hyundai, Volkswagen, Kia, and Mazda. Our Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured by BMW, Mercedes-Benz, Audi, Lexus, Acura, Porsche, Jaguar, Land Rover, Mini, Infiniti, Rolls-Royce, Lamborghini, McLaren, and Pagani. The franchises in each segment also sell used vehicles, parts and automotive services, and automotive finance and insurance products. Corporate and other revenue and income include the results of operations of our stand-alone collision center offset by unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other operating segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consisted of the following: December 31, (Dollars in millions) 2021 2020 Contracts in transit $ 304.9 $ 286.8 Trade receivables 125.5 67.0 Vehicle receivables 106.6 61.8 Manufacturer receivables 120.5 118.1 Auto loan and lease receivables 829.2 175.6 Other receivables 43.2 11.6 1,529.9 720.9 Less: Allowance for doubtful accounts (17.3) (5.9) Less: Long-term portion of accounts receivable, net 1 (602.6) (101.0) Total accounts receivable, net $ 910.0 $ 614.0 1 The long-term portions of accounts receivable and allowance for doubtful accounts were included as a component of other non-current assets in the Consolidated Balance Sheets. See Note 1 for additional information on the allowance for credit losses related to auto loan receivables. Our auto loan receivables include amounts due from customers related to vehicle sales financed through Driveway Finance Corporation and are presented net of an allowance for estimated loan losses. Lease receivables include amounts related to vehicles leased through Pfaff Leasing and are also presented net of an allowance for estimated losses. The balance of auto loan and lease receivables is made up primarily of loans and leases secured by the related vehicles. December 31, (Dollars in millions) 2021 2020 Total Auto loan and lease receivables $ 829.2 $ 175.6 Less: Allowance for loan and lease losses (25.0) (12.9) Auto loan and lease receivables, net $ 804.2 $ 162.7 Below is a breakdown of the current and long term portions of our auto loan and lease receivables: December 31, (Dollars in millions) 2021 2020 Current portion of auto loan and lease receivables, net of allowance of $13.6 and $2.1 $ 224.5 $ 78.6 Long term portion of auto loan and lease receivables, net of allowance of $11.4 and $10.8 579.7 84.1 Auto loan and lease receivables, net $ 804.2 $ 162.7 Our allowance for loan and lease losses represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowances for credit losses related to auto loan and lease receivables consisted of the following changes during the period: Year Ended December 31, (Dollars in millions) 2021 2020 Allowance at beginning of period $ 12.9 $ 12.4 Charge-offs (16.6) (10.1) Recoveries 8.8 1.5 Provision expense 17.4 9.1 Allowance at end of period 22.5 12.9 Lease portfolio loss reserve 2.5 — Total balance at end of period $ 25.0 $ 12.9 Ending auto loan receivables (principal balances) by FICO score: Year Ended December 31, (Dollars in millions) 2021 2020 <599 1 $ 83.2 $ 59.9 600-699 437.6 79.3 700-774 166.8 25.2 775+ 37.4 10.3 Total auto loan receivables 725.0 174.7 Lease portfolio and accrued interest 104.2 0.9 Total auto loan and lease receivables $ 829.2 $ 175.6 1 Includes loans that are originated with no FICO score available. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of inventories consisted of the following: December 31, (Dollars in millions) 2021 2020 New vehicles $ 812.9 $ 1,556.6 Used vehicles 1,418.3 835.9 Parts and accessories 154.3 100.4 Total inventories $ 2,385.5 $ 2,492.9 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: December 31, (Dollars in millions) 2021 2020 Land $ 965.6 $ 699.3 Building and improvements 1,748.5 1,149.7 Service equipment 159.9 123.6 Furniture, office equipment, signs and fixtures 507.3 512.9 3,381.3 2,485.5 Less accumulated depreciation (422.6) (338.0) 2,958.7 2,147.5 Construction in progress 93.9 50.0 $ 3,052.6 $ 2,197.5 Long-Lived Asset Impairment Charges We recorded no impairment charges in 2021 and 2020 associated with property and equipment. In 2019, we recorded an impairment charge of $0.5 million associated with property and equipment. The long-lived assets were tested for recoverability and were determined to have a carrying value exceeding their fair value. |
Goodwill and Franchise Value
Goodwill and Franchise Value | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Franchise Value | Goodwill and Franchise Value The following is a roll-forward of goodwill: (Dollars in millions) Domestic Import Luxury Consolidated Balance as of December 31, 2019 ¹ $ 171.8 $ 197.3 $ 85.5 $ 454.6 Additions through acquisitions 2 33.3 94.3 17.3 144.9 Reductions through divestitures (0.1) (0.7) (2.2) (3.0) Reductions from impairments (0.5) (3.0) — (3.5) Balance as of December 31, 2020 ¹ 204.5 287.9 100.6 593.0 Additions through acquisitions 3 101.0 188.7 105.8 395.5 Reductions through divestitures (1.5) (8.4) (1.3) (11.2) Balance as of December 31, 2021 1 $ 304.0 $ 468.2 $ 205.1 $ 977.3 (1) Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. (2) Our purchase price allocation for the 2019 acquisitions were finalized in 2020. As a result, we added $144.9 million of goodwill. (3) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $395.5 million of goodwill. Our purchase price allocation for the 2021 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 15. The following is a roll-forward of franchise value: (Dollars in millions) Franchise Value Balance as of December 31, 2019 $ 306.7 Additions through acquisitions 1 51.9 Reductions through divestitures (4.0) Reductions from impairments (4.4) Balance as of December 31, 2020 350.2 Additions through acquisitions 2 459.7 Reductions through divestitures (8.9) Reductions from impairments (1.9) Balance as of December 31, 2021 $ 799.1 (1) Our purchase price allocation for the 2019 acquisitions were finalized in 2020. As a result, we added $51.9 million of franchise value. (2) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $459.7 million of franchise value. Our purchase price allocation for the 2021 acquisitions are preliminary and is not yet allocated to our segments. See Note 15. |
Credit Facilities and Long-term
Credit Facilities and Long-term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-term Debt | Credit Facilities and Long-Term Debt Below is a summary of our outstanding balances on credit facilities and long-term debt (in millions): December 31, (Dollars in millions) 2021 2020 Floor plan notes payable: non-trade $ 835.9 $ 1,563.0 Floor plan notes payable 354.2 234.2 Total floor plan debt $ 1,190.1 $ 1,797.2 Used and service loaner vehicle inventory financing commitments $ 500.0 $ — Revolving lines of credit 219.9 39.0 Real estate mortgages 592.9 611.5 Finance lease obligations 53.6 246.4 Non-recourse notes payable 317.6 — 5.250% Senior notes due 2025 — 300.0 4.625% Senior notes due 2027 400.0 400.0 4.375% Senior notes due 2031 550.0 550.0 3.875% Senior notes due 2029 800.0 — Other debt 1.9 2.4 Total long-term debt outstanding 3,435.9 2,149.3 Less: unamortized debt issuance costs (26.5) (18.6) Less: current maturities (net of current debt issuance costs) (223.7) (66.0) Long-term debt $ 3,185.7 $ 2,064.7 Credit Facility On April 29, 2021, we amended our existing syndicated credit facility (credit facility), comprised of 20 financial institutions, including 8 manufacturer-affiliated finance companies, extending the maturity date to April 2026. This credit facility provides for a total financing commitment of $3.75 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $4.25 billion. The initial allocation of the financing commitment is for up to $750 million in used vehicle inventory floorplan financing, up to $750 million in revolving financing for general corporate purposes, including acquisitions and working capital, up to $2.15 billion in new vehicle inventory floorplan financing, and up to $100 million in service loaner vehicle floorplan financing. We have the option to reallocate the commitments under this credit facility, provided that each of the used vehicle floor plan commitment and the aggregate revolving loan commitment may not be more than the 20% of the amount of the aggregate commitment, and the aggregate service loaner vehicle floorplan commitment may not be more than the 3% of the amount of the aggregate commitment. All borrowings from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities. Our obligations under our credit facility are secured by a substantial amount of our assets, including our inventory (including new and used vehicles, parts and accessories), equipment, accounts receivable (and other rights to payment) and our equity interests in certain of our subsidiaries. Under our credit facility, our obligations relating to new vehicle floor plan loans are secured only by collateral owned by borrowers of new vehicle floor plan loans under the credit facility. The interest rate on the credit facility varies based on the type of debt, with the rate of one-month LIBOR plus 1.10% for new vehicle floor plan financing, one-month LIBOR plus 1.40% for used vehicle floor plan financing, 1.20% for service loaner floor plan financing and a variable interest rate on the revolving financing ranging from the one-month LIBOR plus 1.00% to 2.00% depending on our leverage ratio. The annual interest rates associated with our floor plan commitments are as follows: Commitment Annual Interest Rate at December 31, 2021 New vehicle floor plan 1.20% Used vehicle floor plan 1.50% Service loaner floor plan 1.30% Revolving line of credit 1.10% Under the terms of our credit facility, we are subject to financial covenants and restrictive covenants that limit or restrict our incurring additional indebtedness, making investments, selling or acquiring assets and granting security interests in our assets. Under our credit facility, we are required to maintain the ratios detailed in the following table: Debt Covenant Ratio Requirement As of December 31, 2021 Current ratio Not less than 1.10 to 1 1.82 to 1 Fixed charge coverage ratio Not less than 1.20 to 1 5.53 to 1 Leverage ratio Not more than 5.75 to 1 1.48 to 1 Other Lines of Credit Our other lines of credit include commitments of up to $80.0 million, secured by certain assets from select Chrysler locations and all Ford locations. These other lines of credit mature in 2022 and have interest rates up to 5.65%. As of December 31, 2021, no amounts were outstanding on these other lines of credit. On July 14, 2020, we entered into a five-year real estate backed facility with eight financial institutions, including two manufacturer affiliated finance companies, maturing in July 2025. The real-estate backed credit facility currently provides a total financing commitment of up to $238.8 million in working capital financing for general corporate purposes, including acquisitions and working capital, collateralized by real estate and certain other assets owned by us. The interest rate on this credit facility uses one-month LIBOR plus a margin ranging from 2.00%-2.50% based on our leverage ratio, or a base rate of 0.75% plus a margin. The facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties by us. Financial covenants include requirements to maintain minimum current and fixed charge coverage ratios, and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with U.S. Bank National Association as administrative agent. As of December 31, 2021, no amounts were outstanding on the real estate backed facility. On July 31, 2020, we entered into a securitization facility which provides initial commitments for borrowings of up to $300 million and matures in July 2022. As of December 31, 2021, we had $90 million drawn on the securitization facility, which is included as part of “Revolving lines of credit” in the “Summary of Outstanding Balances on Credit Facilities and Long-Term Debt” table above. On April 12, 2021, we entered into a credit agreement with Ally Bank (Ally Capital in Hawaii, Mississippi, Montana and New Jersey), as lender. The credit agreement matures in April 2023 and provides for a revolving line of credit facility (Ally credit facility) of up to $300.0 million and is secured by real estate owned by us. The Ally credit facility will bear interest at a rate per annum equal to the greater of 3.00% or the prime rate designated by Ally Bank, minus 25 basis points. The Ally credit facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties. Financial covenants, including the requirements to maintain minimum current and fixed charge coverage ratios, and a maximum leverage ratio, are the same as the requirements under our existing syndicated credit facility with U.S. Bank National Association. The covenants restrict us from disposing of assets and granting additional security interests. As of December 31, 2021, no amounts were outstanding on the Ally credit facility. On August 30, 2021, we entered into a credit agreement with The Bank of Nova Scotia. The credit agreement makes available three primary lines of credit including a working capital revolving credit facility of up to $50 million CAD, up to $300 million CAD floor plan financing for new and used vehicles; and $350 million CAD to provide wholesale lease financing. The credit facilities accrue interest at rates equal to the Lender’s prime lending rate or the Canadian Dollar Offered Rate plus, in each case, a spread, with the spreads ranging from 0.25% per annum to 1.50% per annum. The credit agreement includes various financial and other covenants typical of such agreements. All indebtedness under this agreement is due on demand. Floor Plan Notes Payable We have floor plan agreements with manufacturer-affiliated finance companies for certain new vehicles and vehicles that are designated for use as service loaners. The interest rates on these floor plan notes payable commitments vary by manufacturer and are variable rates. As of December 31, 2021, $354.2 million was outstanding on these agreements at interest rates ranging up to 4.75%. Borrowings from and repayments to manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows. Non-Recourse Notes Payable Driveway Finance Corporation auto loans receivable are primarily funded through our warehouse facilities and asset-backed term funding transactions. These non-recourse funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable. We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles. In November 2021, we issued $344.4 million in non-recourse notes payable related to the asset-backed term funding transaction. 3.875% Senior Notes due 2029 On May 27, 2021, we issued $800 million in aggregate principal amount of 3.875% notes due 2029 to eligible purchasers in a private placement under Rule 144A and Regulation S of the Securities Act of 1933. Interest accrues on the notes from May 27, 2021 and is payable semiannually on June 1 and December 1. We may redeem the notes in whole or in part, on or after June 1, 2024, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but, excluding, the redemption date. Prior to June 1, 2024, we may redeem up to 40% of the aggregate principal amount of the Senior Notes with funds in an aggregate amount up to the net cash proceeds of certain equity offerings at a redemption price equal to 103.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to June 1, 2024, we may redeem some or all of the notes at a price equal to 100% of the principal amount, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Below is a summary of outstanding senior notes issued: Description Maturity Date Interest Payment Dates Principal Amount 4.625% Senior notes due 2027 December 15, 2027 June 15, December 15 $400 million 4.375% Senior notes due 2031 January 15, 2031 January 15, July 15 $550 million 3.875% Senior notes due 2029 June 1, 2029 June 1, December 1 $800 million On August 1, 2021, we redeemed in full the aggregate $300 million principal amount of our 5.250% senior notes due 2025 at a redemption price equal to 102.625% of the principal amount of the notes plus accrued and unpaid interest thereon. This early redemption resulted in a $10.3 million loss on extinguishment of debt, presented as a component of “Other (expense) income, net” in our Consolidated Statement of Operations for the year ended December 31, 2021. Real Estate Mortgages, Finance Lease Obligations, and Other Debt We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from 1.8% to 5.3% at December 31, 2021. The mortgages are payable in various installments through June 1, 2038. As of December 31, 2021, we had fixed interest rates on 71.2% of our outstanding mortgage debt. We have finance lease obligations with some of our leased real estate. Interest rates related to this debt ranged from 1.9% to 8.5% at December 31, 2021. The leases have terms extending through August 2037. Our other debt includes sellers’ notes. The interest rates associated with our other debt ranged from 5.0% to 10.0% at December 31, 2021. This debt, which totaled $1.9 million at December 31, 2021, is due in various installments through April 2027. Future Principal Payments The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2021 was as follows: Year Ending December 31, (Dollars in millions) 2022 $ 97.6 2023 62.8 2024 86.0 2025 53.5 2026 64.7 Thereafter 2,033.8 Total principal payments $ 2,398.4 This table does not include future payments related to vehicle floor plan, revolving lines of credit, and non-recourse notes payable. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Charge-Backs for Various Contracts We have recorded a liability of $96.3 million as of December 31, 2021 for our estimated contractual obligations related to potential charge-backs for vehicle service contracts, lifetime oil change contracts and other various insurance contracts that are terminated early by the customer. We estimate that the charge-backs will be paid out as follows: Year Ending December 31, (Dollars in millions) 2022 $ 67.0 2023 19.6 2024 7.0 2025 2.2 2026 0.4 Thereafter 0.1 Total $ 96.3 Lifetime Lube, Oil and Filter Contracts We retain the obligation for lifetime lube, oil and filter service contracts sold to our customers and assumed the liability of certain existing lifetime lube, oil and filter contracts. These amounts are recorded as a contract liability. At the time of sale, we defer the full sale price and recognize the revenue based on the rate we expect future costs to be incurred. As of December 31, 2021, we had a contract liability balance of $240.5 million associated with these contracts and estimate the contract liability will be recognized as follows: Year Ending December 31, (Dollars in millions) 2022 $ 48.2 2023 38.8 2024 30.7 2025 25.3 2026 21.4 Thereafter 76.1 Total $ 240.5 The contract liability balance is recorded as components of deferred revenue and accrued liabilities in our Consolidated Balance Sheets. We periodically evaluate the estimated future costs of these assumed contracts and record a charge if future expected claim and cancellation costs exceed the contract liability to be recognized. As of December 31, 2021, we had a reserve balance of $2.4 million recorded as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets. The charges associated with this reserve were recognized in 2011 and earlier. Self-insurance Programs We self-insure a portion of our property and casualty insurance, vehicle open lot coverage, medical insurance and workers’ compensation insurance. Third parties are engaged to assist in estimating the loss exposure related to the self-retained portion of the risk associated with these insurances. Additionally, we analyze our historical loss and claims experience to estimate the loss exposure associated with these programs. As of December 31, 2021 and 2020, we had liabilities associated with these programs of $56.4 million and $39.1 million, respectively, recorded as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets. Litigation We are party to numerous legal proceedings arising in the normal course of our business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course of business will have a material adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with certainty. |
Equity and Redeemable Non-contr
Equity and Redeemable Non-controlling Interest | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity and Redeemable Non-controlling Interest | Equity and Redeemable Non-controlling Interest Common Stock The shares of Common stock are not convertible into any other series or class of our securities. Holders of Common stock are entitled to one vote for each share held of record. The Common stock vote together as a single class on all matters submitted to shareholders. Repurchases of Common Stock Repurchases of our Common Stock occurred under repurchase authorizations granted by our Board of Directors and related to shares withheld as part of the vesting of restricted stock units (RSUs). On November 30, 2021, our Board of Directors approved an additional $750 million repurchase authorization of our common stock. This new authorization is in addition to the amount previously authorized by the Board for repurchase. Share repurchases under our authorization were as follows: Repurchases Occurring in 2021 Cumulative Repurchases as of December 31, 2021 Shares Average Price Shares Average Price Share repurchase authorization 756,883 $ 283.75 4,475,931 $ 117.80 As of December 31, 2021, we had $722.8 million available for repurchases pursuant to our share repurchase authorization. In addition, during 2021, we repurchased 54,318 shares at an average price of $292.98 per share, for a total of $15.9 million, related to tax withholdings associated with the vesting of RSUs. The repurchase of shares related to tax withholdings associated with stock awards does not reduce the number of shares available for repurchase as approved by our Board of Directors. The following is a summary of our repurchases in the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Shares repurchased pursuant to repurchase authorizations 756,883 563,953 — Total purchase price (in millions) $ 214.8 $ 46.1 $ — Average purchase price per share $ 283.75 $ 81.71 $ — Shares repurchased in association with tax withholdings on the vesting of RSUs 54,318 30,620 40,356 Dividends We declared and paid dividends on our Common Stock as follows: Quarter declared Dividend amount per share Total amount of dividends paid (in millions) 2019 First quarter $ 0.29 $ 6.7 Second quarter 0.30 7.0 Third quarter 0.30 7.0 Fourth quarter 0.30 6.9 2020 First quarter $ 0.30 $ 7.0 Second quarter 0.30 6.8 Third quarter 0.31 7.1 Fourth quarter 0.31 8.2 2021 First quarter $ 0.31 $ 8.3 Second quarter 0.35 9.3 Third quarter 0.35 10.6 Fourth quarter 0.35 10.6 Follow-On Public Offering On May 24, 2021, we completed the public offering of 3,571,428 shares of our common stock, no par value per share, which included the exercise in full by the underwriters of their option to purchase up to 465,838 additional shares of our common stock, at the public offering price of $322.00 per share. We received $1.11 billion from the offering, net of the underwriting discount and before deducting the offering expenses of $0.6 million. ATM Equity Offering Agreement On July 24, 2020, we entered into an ATM Equity Offering SM Sales Agreement with BofA Securities, Inc. and Jefferies LLC acting as sales agents and/or principals and Bank of America, N.A. and Jefferies LLC acting as forward purchasers, pursuant to which we may offer and sell, from time to time through the sales agents, shares of our Common stock, no par value, having an aggregate gross sales price of up to $400.0 million. To date, no sales have been made under the program. Redeemable Non-controlling Interest |
401(k) Profit Sharing, Deferred
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Postemployment Benefits [Abstract] | |
401(k) Profit Sharing, Deferred Compensation and Long-Term Incentive Plans | 401(k) Profit Sharing, Deferred Compensation and Long-Term Incentive Plans We have a defined contribution 401(k) plan and trust covering substantially all full-time employees. The annual contribution to the plan is at the discretion of our Board of Directors. Contributions of $18.8 million, $9.0 million, and $9.8 million were recognized for the years ended December 31, 2021, 2020 and 2019, respectively. Employees may contribute to the plan if they meet certain eligibility requirements. We offer a non-qualified deferred compensation and supplemental executive retirement plan (the “SERP”) to provide certain employees the ability to accumulate assets for retirement on a tax deferred basis. We may, depending on position, also make discretionary contributions to the SERP. These discretionary contributions could vest immediately or over a period of up to seven years based on the employee’s age. Additionally, a participant may defer a portion of his or her compensation and receive the deferred amount upon certain events, including termination or retirement. The following is a summary related to our SERP: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Compensation expense $ 1.4 $ 1.2 $ 0.9 Total discretionary contribution $ 0.9 $ 0.9 $ 0.3 Guaranteed annual return 5.00 % 5.00 % 5.00 % As of December 31, 2021 and 2020, the balance due to participants was $51.9 million and $43.3 million, respectively, and was included as a component of other long-term liabilities in the Consolidated Balance Sheets. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2009 Employee Stock Purchase Plan The 2009 Employee Stock Purchase Plan (the “2009 ESPP”) allows for the issuance of 3.0 million shares of our Common stock. The 2009 ESPP is intended to qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Compensation Committee of the Board of Directors. Eligible employees are entitled to defer up to 10% of their base pay for the purchase of stock, up to $25,000 of fair market value of our Common stock annually. The purchase price is equal to 85% of the fair market value at the end of the purchase period. Following is information regarding our 2009 ESPP: Year Ended December 31, 2021 Shares purchased pursuant to 2009 ESPP 103,374 Weighted average per share price of shares purchased $ 286.61 Weighted average per share discount from market value for shares purchased $ 50.58 As of December 31, 2021 Shares available for purchase pursuant to 2009 ESPP 1,309,353 Compensation expense related to our 2009 ESPP is calculated based on the 15% discount from the per share market price on the date of grant. 2013 Stock Incentive Plan Our 2013 Stock Incentive Plan, as amended, (the “2013 Plan”) allows for the grant of a total of 3.8 million shares in the form of stock appreciation rights, qualified stock options, nonqualified stock options, restricted share awards and restricted stock unit awards (RSUs) to our officers, key employees, directors and consultants. The 2013 Plan is administered by the Compensation Committee of the Board of Directors and permits accelerated vesting of outstanding awards upon the occurrence of certain changes in control. As of December 31, 2021, 983,435 shares of Common stock were available for future grants. As of December 31, 2021, there were no stock appreciation rights, qualified stock options, nonqualified stock options or restricted share awards outstanding. Restricted Stock Unit Awards RSU grants vest over a period of time up to four years from the date of grant. RSU activity was as follows: RSUs Weighted average per share price, grant date fair value Balance, December 31, 2020 519,612 $ 100.78 Granted 127,666 312.83 Vested (141,857) 107.50 Forfeited (38,561) 188.99 Balance, December 31, 2021 466,860 159.85 We granted 33,665 time-vesting RSUs to members of our Board of Directors and employees in 2021. Each grant entitles the holder to receive shares of our Common stock upon vesting. A portion of the RSUs vest over four years, beginning on the second anniversary of the grant date, for employees and vests quarterly for our Board of Directors, over their service period. Certain key employees were granted 94,001 performance and time-vesting RSUs in 2021. Of these, 74,187 shares were earned based on attaining various target levels of operational performance. Based on the levels of performance achieved in 2021, a weighted average attainment level of 79.0% for these RSUs was met. These RSUs will vest over four years from the grant date. Stock-Based Compensation As of December 31, 2021, unrecognized stock-based compensation related to outstanding, but unvested RSUs was $21.9 million, which will be recognized over the remaining weighted average vesting period of 2.7 years. Certain information regarding our stock-based compensation was as follows: Year Ended December 31, 2021 2020 2019 Per share intrinsic value of non-vested stock granted $ 312.83 $ 130.89 $ 75.73 Weighted average per share discount for compensation expense recognized under the 2009 ESPP 50.58 22.97 17.83 Fair value of non-vested stock that vested during the period (in millions) 107.5 108.5 92.0 Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense (in millions) 34.7 23.2 16.2 Tax benefit recognized in Consolidated Statements of Operations (in millions) 11.9 3.7 2.7 Cash received from options exercised and shares purchased under all share-based arrangements (in millions) 29.6 14.8 11.3 Tax deduction realized related to stock options exercised (in millions) 41.8 13.6 9.8 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases Lease Accounting We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate to third parties. The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets: (Dollars in millions) December 31, 2021 December 31, 2020 Operating lease liabilities: Current portion included in accrued liabilities $ 49.0 $ 30.8 Noncurrent operating lease liabilities 361.7 246.7 Total operating lease liabilities 410.7 277.5 Finance lease liabilities: Current portion included in current maturities of long-term debt 16.3 6.0 Long-term portion of lease liabilities in long-term debt 37.3 240.4 Total finance lease liabilities 53.6 246.4 Total lease liabilities $ 464.3 $ 523.9 Finance lease right-of-use assets: Total finance lease right-of-use assets 1 $ 58.7 $ 253.9 Weighted-average remaining lease term: Operating leases 8 years 5 years Finance leases 11 years 12 years Weighted-average discount rate: Operating leases 4.12 % 4.69 % Finance leases 2.42 % 4.12 % 1 Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation. The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows: Year Ended December 31, Year Ended December 31, (Dollars in millions) 2021 2020 Operating lease cost 1 $ 53.1 $ 41.6 Variable lease cost 2 3.5 3.1 Amortization of finance lease right-of-use assets 5.9 4.5 Interest on finance lease liabilities 4.2 3.4 Sublease income (6.4) (4.9) Total lease costs $ 60.3 $ 47.7 1 Includes short-term and month-to-month lease costs, which are immaterial. 2 Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate. Rent expense, net of sublease income, for all operating leases was $41.3 million for the year ended December 31, 2019. This amount is included as a component of selling, general and administrative expenses in our Consolidated Statements of Operations. As of December 31, 2021, the maturities of our operating and finance lease liabilities were as follows: (Dollars in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2021 $ 60.5 $ 18.3 2022 54.1 3.6 2023 47.8 9.2 2024 44.7 2.9 2025 40.6 2.9 Thereafter 256.1 29.9 Total minimum lease payments 503.8 66.8 Less: Present value adjustment (93.1) (13.2) Total lease liabilities $ 410.7 $ 53.6 |
Leases | Leases Lease Accounting We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate to third parties. The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets: (Dollars in millions) December 31, 2021 December 31, 2020 Operating lease liabilities: Current portion included in accrued liabilities $ 49.0 $ 30.8 Noncurrent operating lease liabilities 361.7 246.7 Total operating lease liabilities 410.7 277.5 Finance lease liabilities: Current portion included in current maturities of long-term debt 16.3 6.0 Long-term portion of lease liabilities in long-term debt 37.3 240.4 Total finance lease liabilities 53.6 246.4 Total lease liabilities $ 464.3 $ 523.9 Finance lease right-of-use assets: Total finance lease right-of-use assets 1 $ 58.7 $ 253.9 Weighted-average remaining lease term: Operating leases 8 years 5 years Finance leases 11 years 12 years Weighted-average discount rate: Operating leases 4.12 % 4.69 % Finance leases 2.42 % 4.12 % 1 Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation. The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows: Year Ended December 31, Year Ended December 31, (Dollars in millions) 2021 2020 Operating lease cost 1 $ 53.1 $ 41.6 Variable lease cost 2 3.5 3.1 Amortization of finance lease right-of-use assets 5.9 4.5 Interest on finance lease liabilities 4.2 3.4 Sublease income (6.4) (4.9) Total lease costs $ 60.3 $ 47.7 1 Includes short-term and month-to-month lease costs, which are immaterial. 2 Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate. Rent expense, net of sublease income, for all operating leases was $41.3 million for the year ended December 31, 2019. This amount is included as a component of selling, general and administrative expenses in our Consolidated Statements of Operations. As of December 31, 2021, the maturities of our operating and finance lease liabilities were as follows: (Dollars in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2021 $ 60.5 $ 18.3 2022 54.1 3.6 2023 47.8 9.2 2024 44.7 2.9 2025 40.6 2.9 Thereafter 256.1 29.9 Total minimum lease payments 503.8 66.8 Less: Present value adjustment (93.1) (13.2) Total lease liabilities $ 410.7 $ 53.6 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We account for derivative financial instruments by recording the fair value as either an asset or liability in our Consolidated Balance Sheets and recognize the resulting gains or losses as adjustments to accumulated other comprehensive income (loss). We do not hold or issue derivative financial instruments for trading or speculative purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss (AOCI) in stockholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. To hedge the business exposure to rising interest rates on a portion of our variable rate debt, we entered into a five-year, zero-cost interest rate collar, with an aggregate notional amount of $300 million, effective June 1, 2019. This instrument hedges interest rate risk related to a portion of our $1.6 billion of non-trade floor plan notes payable. The table below presents the liabilities related to the zero-cost interest rate collar: (Dollars in millions) Accrued Liabilities Other Long-Term Liabilities Total Balance as of December 31, 2018 $ — $ — $ — Amounts reclassified from AOCI to floorplan interest expense — — — Loss recorded from interest rate collar (0.1) (0.9) (1.0) Balance as of December 31, 2019 (0.1) (0.9) (1.0) Amounts reclassified from AOCI to floorplan interest expense 1.8 — 1.8 Loss recorded from interest rate collar (4.3) (5.1) (9.4) Balance as of December 31, 2020 (2.6) (6.0) (8.6) Amounts reclassified from AOCI to floorplan interest expense 2.8 — 2.8 Loss recorded from interest rate collar (2.1) 5.3 3.2 Balance as of December 31, 2021 $ (1.9) $ (0.7) $ (2.6) As of December 31, 2021, the amount of net losses we expect to reclassify from AOCI into interest expense in earnings within the next twelve months is $1.9 million. However, the actual amount reclassified could vary due to future changes in the fair value of these derivatives. We also entered into four other, immaterial and offsetting, derivative arrangements that do not qualify for hedge accounting. These are related to a securitization facility, effective October 2, 2020 and June 15, 2021. We purchased and sold offsetting interest rate caps, all of which are 5-years long with notional amounts totaling $225 million. As of December 31, 2021, the balance in all four agreements was an offsetting $6.4 million and was located in other current assets and accrued liabilities, respectively. See Note 13 for information on the fair value of the derivative contracts. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories: • Level 1 - quoted prices in active markets for identical securities; • Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and • Level 3 - significant unobservable inputs, including our own assumptions in determining fair value. We determined the carrying value of cash equivalents, accounts receivable, trade payables, accrued liabilities and short-term borrowings approximate their fair values because of the nature of their terms and current market rates of these instruments. We believe the carrying value of our variable rate debt approximates fair value. We have investments primarily consisting of our investment in Shift Technologies, Inc. (Shift), a San Francisco-based digital retail company. Shift has a readily determinable fair value following Shift going public in a reverse-merger deal with Insurance Acquisition, a special purpose acquisition company, in the fourth quarter of 2020. We calculated the fair value of this investment using quoted prices for the identical asset (Level 1) and recorded the fair value as part of other non-current assets. An additional component of our investment in Shift consists of shares in escrow subject to release upon certain market conditions being met. The fair value of this component of our investment in Shift is measured using observable Level 2 market expectations at each measurement date and is recorded as part of other non-current assets. For the year ended December 31, 2021, we recognized a $66.4 million unrealized investment loss related to Shift, which was recorded as a component of other (expense) income, net. We have fixed rate debt primarily consisting of amounts outstanding under our senior notes and real estate mortgages. We calculated the estimated fair value of the senior notes using quoted prices for the identical liability (Level 1) and calculated the estimated fair value of the fixed rate real estate mortgages using a discounted cash flow methodology with estimated current interest rates based on a similar risk profile and duration (Level 2). The fixed cash flows are discounted and summed to compute the fair value of the debt. As of December 31, 2021, our real estate mortgages and other debt, which includes finance lease liabilities, had maturity dates between April 1, 2022 and July 1, 2038. We have derivative instruments consisting of an interest rate collar and an offsetting set of interest rate caps. The fair value of derivative assets and liabilities are measured using observable Level 2 market expectations at each measurement date and is recorded as other current assets, current liabilities and other long-term liabilities in the Consolidated Balance Sheets. See Note 12 for more details regarding our derivative contracts. We estimate the value of other long-lived assets that are recorded at fair value on a non-recurring basis on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income and replacement cost approaches. Because these valuations contain unobservable inputs, we classified the measurement of fair value of long-lived assets as Level 3. There were no changes to our valuation techniques during the year ended December 31, 2021. Below are our investments that are measured at fair value (in millions): Fair Value at December 31, 2021 Level 1 Level 2 Level 3 Measured on a recurring basis: Investments $ 40.4 $ 0.5 $ — Fair Value at December 31, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Investments $ 97.9 $ 9.4 $ — Below are our derivative assets and liabilities that are measured at fair value (in millions): Fair Value at December 31, 2021 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative asset $ — $ 6.4 $ — Derivative liability $ — $ 8.9 $ — Fair Value at December 31, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative asset $ — $ 0.5 $ — Derivative liability $ — $ 9.0 $ — A summary of the aggregate carrying values, excluding unamortized debt issuance cost, and fair values of our long-term fixed interest rate debt is as follows (in millions): December 31, 2021 2020 Carrying value 5.250% Senior notes due 2025 $ — $ 300.0 4.625% Senior notes due 2027 400.0 400.0 4.375% Senior notes due 2031 550.0 550.0 3.875% Senior notes due 2029 800.0 — Non-recourse notes payable 317.6 — Real estate mortgages and other debt 477.6 714.8 $ 2,545.2 $ 1,964.8 Fair value 5.250% Senior notes due 2025 $ — $ 311.6 4.625% Senior notes due 2027 420.0 425.0 4.375% Senior notes due 2031 583.0 589.9 3.875% Senior notes due 2029 815.0 — Non-recourse notes payable 316.8 — Real estate mortgages and other debt 488.7 713.2 $ 2,623.5 $ 2,039.7 During the third quarter of 2021, we recognized asset impairments of $1.9 million related to the franchise value associated with certain dealership locations indicating carrying values less than fair values. These locations were subsequently sold in the fourth quarter of 2021. In the second quarter of 2020, we recognized asset impairments of $4.4 million and $3.5 million related to the franchise value and goodwill, respectively, associated with certain dealership locations indicating carrying values less than fair values. Certain of these locations were subsequently sold in the fourth quarter of 2020, with the remainder sold in 2021. In the first quarter of 2019, we recorded an asset impairment of $0.5 million associated with certain real properties. The long-lived assets were tested for recoverability and were determined to have a carrying value exceeding their fair value. The impaired long-lived asset was subsequently sold in the second quarter of 2019. In the fourth quarter of 2019, we recognized asset impairments of $0.4 million and 1.7 million related to the franchise value and goodwill, respectively, associated with certain dealership locations indicating carrying values less than fair values. These locations were subsequently sold in 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Provision The income tax provision was as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Current: Federal $ 266.2 $ 108.9 $ 40.0 State 111.6 50.3 24.0 Foreign 1.2 — — 379.0 159.2 64.0 Deferred: Federal 38.2 17.6 34.7 State 3.8 1.4 5.2 Foreign 1.1 — — 43.1 19.0 39.9 Total $ 422.1 $ 178.2 $ 103.9 At December 31, 2021 and 2020, we had income taxes payable of $43.0 million and $33.1 million, respectively included as a component of accrued liabilities in our Consolidated Balance Sheets. The reconciliation between amounts computed using the federal income tax rate of 21% and our income tax provision is shown in the following tabulation: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Federal tax provision at statutory rate $ 311.7 $ 136.2 $ 78.8 State taxes, net of federal income tax benefit 85.4 40.4 23.6 Non-deductible items 4.8 2.8 2.6 Permanent differences related to stock compensation (2.6) (0.5) 0.2 Net change in valuation allowance 25.3 0.5 (0.5) General business credits (2.3) (1.3) (0.9) Foreign Rate Differential 0.5 — — Other (0.7) 0.1 0.1 Income tax provision $ 422.1 $ 178.2 $ 103.9 Deferred Taxes Individually significant components of the deferred tax assets and (liabilities) are presented below: December 31, (Dollars in millions) 2021 2020 Deferred tax assets: Deferred revenue and cancellation reserves $ 95.3 $ 64.2 Allowances and accruals, including state tax carryforward amounts 72.8 55.6 Lease liability 107.6 73.4 Credits and other 0.6 3.4 Valuation allowance (26.4) (1.1) Total deferred tax assets 249.9 195.5 Deferred tax liabilities: Inventories (20.1) (44.9) Goodwill (112.3) (76.5) Property and equipment, principally due to differences in depreciation (185.9) (139.0) Right of use asset (103.7) (69.8) Prepaid expenses and other (18.9) (11.6) Total deferred tax liabilities (440.9) (341.8) Total $ (191.0) $ (146.3) We consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. As of December 31, 2021, we had a $26.4 million valuation allowance recorded associated with our deferred tax assets. Of the total valuation allowance, $24.3 million relates to our investment in Shift Technologies Inc. (Shift) and $2.1 million relates to state net operating losses generated in current and previous years. As a result of the significant reduction in value of our investment in Shift during the fourth quarter of 2021 and no readily available capital gains to offset a capital loss when realized, we determined that it is more likely than not that the Shift deferred tax asset will not be realized. The state NOL valuation allowance increased $1.0 million in the current year as a result of losses incurred, the benefits of which are not expected to be realized. As of December 31, 2021, we had state net operating loss (NOL) carryforward amounts totaling approximately $3.7 million, tax effected, with expiration dates through 2041. We believe that it is more likely than not that the benefit from certain state NOL carryforward amounts will not be realized. In recognition of this risk, we have recorded a valuation allowance of $2.1 million on the deferred tax assets relating to these state NOL carryforwards as discussed above. We have taken the position that we intend to indefinitely reinvest the earnings of our Canadian subsidiaries to ensure there is sufficient working capital to expand operations in Canada. Accordingly, we have not recorded a deferred tax liability related to foreign withholding taxes on approximately $4.6 million of undistributed earnings of these Canadian subsidiaries as of December 31, 2021. An immaterial amount of tax would be payable upon the remittance of these undistributed earnings. Unrecognized Tax Benefits We had no unrecognized tax benefits recorded as of December 31, 2019. The following is a reconciliation of our unrecognized tax benefits for December 31, 2021 and 2020: (Dollars in millions) Balance, December 31, 2019 $ — Increase related to tax positions taken - current year 0.2 Balance, December 31, 2020 0.2 Increase related to tax positions taken - current year 0.1 Balance, December 31, 2021 $ 0.3 Open tax years at December 31, 2021 included the following: Federal 2018 - 2021 States (28) 2017 - 2021 Canada 2021 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions In 2021, we completed the following acquisitions: • In February 2021, Fields Chrysler Jeep Dodge Ram and Land Rover Orlando in Florida. • In March 2021, Fink Auto Group in Florida. • In March 2021, Avondale Nissan in Arizona. • In April 2021, The Suburban Collection in Michigan. • In April 2021, Planet Honda in New Jersey. • In May 2021, Superstore Auto Group in Nevada. • In May 2021, Center BMW and Center Acura in California. • In June 2021, Southwest Kia Group in Arizona. • In June 2021, Herrin-Gear Toyota in Mississippi. • In June 2021, Michael’s Subaru and Michael’s Toyota in Washington. • In July 2021, Koby Subaru in Alabama. • In August 2021, Rock Honda in California. • In August 2021, Pfaff Automotive Partners in Canada. • In September 2021, Curry Honda in Georgia. • In September 2021, Orange Coast Chrysler Dodge Jeep Ram Fiat in California. • In November 2021, Coral Springs Audi and Fort Lauderdale Audi in Florida. • In November 2021, Pfaff Harley-Davidson in Canada. • In December 2021, Elder Ford of Tampa in Florida. • In December 2021, Elder Ford of Troy and Elder Ford of Romeo in Michigan. Revenue and operating income contributed by the 2021 acquisitions subsequent to the date of acquisition were as follows: Year Ended December 31, (Dollars in millions) 2021 Revenue $ 4,130.0 Operating income 211.3 In 2020, we completed the following acquisitions: • In February 2020, Sacramento Lexus and Roseville Lexus in California. • In June 2020, Hank’s Body Shop in Billings, Montana. • In June 2020, Chrysler Dodge Jeep Ram of Bend and Nissan of Bend in Oregon. • In July 2020, Subaru of Thousand Oaks in California. • In July 2020, BMW of San Francisco in California. • In August 2020, John Eagle Auto Group,a ten store platform in Texas. • In September 2020, Knoxville Chrysler Dodge Jeep Ram in Tennessee. • In October 2020, Latham Ford in New York. • In November 2020, nine stores from Keyes Auto Group: eight in California and one in Arizona. • In November 2020, Ramsey Subaru and Mazda in Iowa. • In November 2020, Sterling Motorcars in Virginia. All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition. The following tables summarize the consideration paid for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date: Year Ended December 31, (Dollars in millions) 2021 2020 Cash paid, net of cash acquired $ 2,697.5 $ 1,503.1 Contingent consideration — 4.6 Preliminary fair value of redeemable non-controlling interest 33.1 — Debt and finance lease obligations 356.0 218.9 Total consideration paid $ 3,086.6 $ 1,726.6 Year Ended December 31, (Dollars in millions) 2021 2020 Trade receivables, net $ 1.3 $ 0.2 Inventories 626.2 358.9 Property and equipment 767.5 529.9 Other assets 1,726.2 858.4 Floor plan notes payable (4.0) (13.1) Other liabilities (30.6) (8.5) 3,086.6 1,725.8 Goodwill — 0.8 Total net assets acquired and liabilities assumed $ 3,086.6 $ 1,726.6 In 2021, the Company expanded into Canada through a partnership with Toronto-based Pfaff Automotive Partners. As part of the acquisition, the Company was granted the right to purchase (Call Option), and granted Pfaff Automotive a right to sell (Put Option), the remaining interest after a three-year period, with a purchase price based on Pfaff’s pro rata share of assets at the date of exercise of the Call or Put Option, as applicable. As a result of this redemption feature, the Company recorded redeemable non-controlling interest, at its preliminary estimate of acquisition-date fair value, that is classified as mezzanine equity in the accompanying consolidated balance sheets at December 31, 2021. The purchase price allocations for the 2021 acquisitions are preliminary as we have not obtained all of the detailed information to finalize the opening balance sheet related to real estate purchased, leases assumed and the allocation of franchise value to each reporting unit. Management has recorded the purchase price allocations based on the information that is currently available. We expect substantially all of the goodwill related to acquisitions completed in 2021 to be deductible for federal income tax purposes. The purchase price allocations for the 2020 acquisitions were finalized in 2021, including amounts posted to contingent consideration, real estate, franchise value, and goodwill, reducing the amounts posted to “Other assets” shown in the table above. We account for franchise value as an indefinite-lived intangible asset. We recognized $20.2 million and $3.0 million, respectively, in acquisition related expenses as a component of selling, general and administrative expenses in the Consolidated Statements of Operations in 2021 and 2020, respectively. The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the year: Year Ended December 31, (Dollars in millions, except for per share amounts) 2021 2020 Revenue $ 25,519.8 $ 19,528.5 Net income 1,123.7 621.4 Basic net income per share 39.02 26.08 Diluted net income per share 38.73 25.80 These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have been adjusted to reflect the following: depreciation on a straight-line basis over the expected lives for property, plant and equipment; accounting for inventory on a specific identification method; and recognition of interest expense for real estate financing related to stores where we purchased the facility. No non-recurring pro forma adjustments directly attributable to the acquisitions are included in the reported pro forma revenues and earnings. |
Net Income Per Share of Common
Net Income Per Share of Common Stock | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Common Stock | Net Income Per Share of Common Stock We compute net income per share using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding common shares underlying equity awards that are unvested or subject to forfeiture. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the common shares issuable upon the net exercise of stock options and unvested RSUs and is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares. Prior to June 7, 2021, our common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred pursuant to an amendment and restatement of our Articles of Incorporation in connection with the elimination of our classified common stock structure following the conversion of all Class B common stock to Class A common stock. Prior to the reclassification, except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock were identical. Under our Articles of Incorporation, the Class A and Class B common stock shared equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation that would adversely alter the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B Common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights were identical, the undistributed earnings are allocated on a proportionate basis. Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS (in millions, except per share amounts): Year Ended December 31, 2021 2020 2019 (Dollars in millions, except for per share amounts) Class A Class B Class A Class B Class A Class B Net income from continuing operations applicable to common stockholders $ 1,059.5 $ 0.6 $ 460.9 $ 9.4 $ 264.5 $ 7.0 Reallocation of distributed net income due to conversion of class B to class A common shares outstanding — — 0.6 — 0.7 — Conversion of class B common shares into class A common shares 0.6 — 8.9 — 6.3 — Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted $ 1,060.1 $ 0.6 $ 470.3 $ 9.4 $ 271.5 $ 7.0 Weighted average common shares outstanding – basic 28.8 — 23.3 0.5 22.6 0.6 Conversion of class B common shares into class A common shares — — 0.5 — 0.6 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.2 — 0.3 — 0.2 — Weighted average common shares outstanding – diluted 29.0 — 24.1 0.5 23.4 0.6 Basic earnings per share attributable to Lithia Motors, Inc. $ 36.81 $ 36.81 $ 19.74 $ 19.74 $ 11.70 $ 11.70 Diluted earnings per share attributable to Lithia Motors, Inc. $ 36.54 $ 36.54 $ 19.53 $ 19.53 $ 11.60 $ 11.60 The effects of antidilutive securities on Class A and Class B common stock were evaluated for the years ended 2021, 2020, and 2019 and were determined to be immaterial. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments Certain financial information on a segment basis is as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Revenues: Domestic $ 6,975.3 $ 4,503.0 $ 4,382.4 Import 9,690.8 5,448.8 5,267.8 Luxury 6,114.8 3,152.0 2,991.9 22,780.9 13,103.8 12,642.1 Corporate and other 50.8 20.5 30.6 $ 22,831.7 $ 13,124.3 $ 12,672.7 Segment income*: Domestic $ 466.4 $ 230.0 $ 123.4 Import 813.4 249.8 153.9 Luxury 384.6 98.5 57.1 Total segment income for reportable segments $ 1,664.4 $ 578.3 $ 334.4 *Segment income for each of the segments is a Non-GAAP measure defined as Income from operations before income taxes, depreciation and amortization, other interest expense and other income, net. Year Ended December 31, (Dollars in millions) 2021 2020 2019 Total segment income for reportable segments $ 1,664.4 $ 578.3 $ 334.4 Corporate and other 108.5 176.7 170.2 Depreciation and amortization (127.3) (92.3) (82.4) Other interest expense (108.2) (73.1) (60.6) Other (expense) income, net (52.6) 58.9 13.8 Income before income taxes $ 1,484.8 $ 648.5 $ 375.4 Year Ended December 31, (Dollars in millions) 2021 2020 2019 Floor plan interest expense: Domestic $ 24.7 $ 30.9 $ 53.6 Import 30.3 31.6 44.1 Luxury 21.7 22.2 30.2 76.7 84.7 127.9 Corporate and other (54.4) (50.3) (55.1) $ 22.3 $ 34.4 $ 72.8 December 31, (Dollars in millions) 2021 2020 Total assets: Domestic $ 1,574.7 $ 1,262.4 Import 1,858.1 1,654.7 Luxury 1,407.1 1,132.4 Corporate and other 6,307.0 3,852.6 $ 11,146.9 $ 7,902.1 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transition Agreement In September 2015, we entered into a transition agreement with Sidney B. DeBoer, our Chairman of the Board, which provided him certain benefits until his death. The agreement has an effective date of January 1, 2016 and the initial payment of these benefits began in the third quarter of 2016. On January 22, 2019, we amended the transition agreement to end the annual payments to Mr. DeBoer after 17 years, commencing January 1, 2019, or upon Mr. DeBoer’s death, whichever occurs first. We recorded a charge of $18.3 million in 2015 as a component of selling, general and administrative expense in our Consolidated Statement of Operations related to the present value of estimated future payments due pursuant to this agreement. We believe that this estimate is reasonable; however, actual cash flows could differ materially. We will periodically evaluate whether significant changes in our assumptions have occurred and record an adjustment if future expected cash flows are significantly different than the reserve recorded. As a result of the amendment to the agreement on January 22, 2019, no change was made to the reserve. The balance associated with this agreement was $13.0 million and $13.9 million as of December 31, 2021 and 2020, respectively, and was included as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets. |
Changes in Accounting Policies
Changes in Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Changes in Accounting Policies | Changes in Accounting PoliciesIn 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which replaces the existing incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Topic 326 made changes to the accounting for available-for-sale debt securities. We adopted Topic 326 using a modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a decrease to retained earnings, net of tax, of $4.8 million as of January 1, 2020 for the cumulative effect of adopting Topic 326. The transition adjustment is related to updating our allowance for loan loss methodology related to our auto loan receivables. Our methodology incorporates a combination of historical loan loss experience, current conditions and forecasts, as well as the value of any underlying assets securing the receivables. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements,” which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries when estimating the allowance. In May 2019, the FASB issued ASU 2019-05, “Targeted Transition Relief,” which allows entities with an option to elect fair value for certain instruments upon adoption of Topic 326. The impact of adopting Topic 326 on the accompanying Consolidated Balance Sheets as of January 1, 2020 was as follows (in millions): Impact on Consolidated Balance Sheets December 31, 2019 Adjustments January 1, 2020 CECL Adoption: Accounts receivable, net of allowance for doubtful accounts of $7.3 $ 505.0 $ (0.5) $ 504.5 Other non-current assets 388.5 (6.0) 382.5 Total assets 6,083.9 (6.5) 6,077.4 Deferred income taxes 131.1 (1.7) 129.4 Total liabilities 4,616.2 (1.7) 4,614.5 Retained earnings 1,401.8 (4.8) 1,397.0 Total liabilities and stockholders’ equity 6,083.9 (6.5) 6,077.4 |
Net Investment in Operating Lea
Net Investment in Operating Leases | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Net Investment in Operating Leases | Net Investment in Operating Leases In the third quarter of 2021, we acquired a leasing portfolio as a part of our acquisition of the Pfaff Automotive Partners consisting of both sales-type financing and operating leases. Net investment in operating leases consists primarily of lease contracts for vehicles with individuals and business entities. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned. Net investment in operating leases was as follows: (in millions) December 31, 2021 December 31, 2020 Vehicles, at cost 1 $ 66.0 $ — Accumulated depreciation 1 (0.9) — Net investment in operating leases $ 65.1 $ — 1 Vehicles, at cost and accumulated depreciation are recorded in other non-current assets, on the Consolidated Balance Sheets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements reflect the results of operations, the financial position and the cash flows for Lithia Motors, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Cash, Restricted Cash, and Cash Equivalents | Cash, Restricted Cash, and Cash Equivalents Cash and cash equivalents are defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable that are restricted for repayment on borrowings on our securitization facility before being unrestricted. |
Cash, Restricted Cash, and Cash Equivalents | Cash, Restricted Cash, and Cash EquivalentsCash and cash equivalents are defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable that are restricted for repayment on borrowings on our securitization facility before being unrestricted |
Accounts Receivable | Accounts Receivable Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within five • Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. • Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products. Interest income on auto loan receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. All other receivables are recorded at invoice and do not bear interest until they are 60 days past due. The balance of auto loan receivables is made up primarily of loans secured by the related vehicle. More than 95% of the portfolio is aged less than 60 days past due with less than 5% on non-accrual status. As of December 31, 2021, the allowance for credit losses related to auto loan and lease receivables was $25.0 million and was included in allowance for doubtful accounts and other non-current assets. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon reaching 120 days past due status. The annual activity for charges and subsequent recoveries is immaterial. The remainder of our receivables are due primarily from manufacturer partners and various third-party lenders. The historical losses related to these balances are immaterial. |
Inventories | Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the lower of cost (first-in, first-out) or market method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Certain acquired inventories are valued using the last-in first-out (LIFO) method. The LIFO reserve associated with this inventory as of December 31, 2021 and 2020 was immaterial. Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction to cost of sales as the related vehicles are sold. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives on the straight-line basis. Leasehold improvements made at the inception of the lease or during the term of the lease are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years The cost for maintenance, repairs and minor renewals is expensed as incurred, while significant remodels and betterments are capitalized. In addition, interest on borrowings for major capital projects, significant remodels, and betterments is capitalized. Capitalized interest becomes a part of the cost of the depreciable asset and is depreciated according to the estimated useful lives as previously stated. For the years ended December 31, 2021, 2020 and 2019, we recorded capitalized interest of $2.0 million, $1.6 million and $2.3 million, respectively. When an asset is retired, or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is credited or charged to income from operations. Leased property meeting certain criteria are recorded as finance leases. We have finance leases for certain locations, expiring at various dates through August 1, 2037. Our finance lease right-of-use assets are included in property and equipment on our Consolidated Balance Sheets. Amortization of finance lease right-of-use assets is computed on a straight-line basis over the term of the lease, unless the lease transfers title or it contains a bargain purchase option, in which case, it is amortized over the asset’s useful life and is included in depreciation expense. Finance lease liabilities are recorded as the lesser of the estimated fair market value of the leased property or the net present value of the aggregated future minimum payments and are included in current maturities of long-term debt and long-term debt on our Consolidated Balance Sheets. Interest associated with these obligations is included in other interest expense in the Consolidated Statements of Operations. See Note 7 and Note 11. |
Goodwill | Goodwill Goodwill represents the excess purchase price over the fair value of net assets acquired which is not allocable to separately identifiable intangible assets. Other identifiable intangible assets, such as franchise rights, are separately recognized if the intangible asset is obtained through contractual or other legal right or if the intangible asset can be sold, transferred, licensed or exchanged. |
Franchise Value | Franchise Value We enter into agreements (Franchise Agreements) with our manufacturers. Franchise value represents a right received under Franchise Agreements with manufacturers and is identified on an individual store basis. We evaluated the useful lives of our Franchise Agreements based on the following factors: • certain of our Franchise Agreements continue indefinitely by their terms; • certain of our Franchise Agreements have limited terms, but are routinely renewed without substantial cost to us; • other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers terminating Franchise Agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time; • state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise; • we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and • as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the Franchise Agreements acquired with the dealerships we purchase based on the understanding and industry practice that the Franchise Agreements will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our Franchise Agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We evaluated our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise value for impairment is each individual store. |
Financing And Securitization Transactions | Financing and Securitization Transactions We maintain a revolving funding program composed of a warehouse facility that we use to fund auto loans receivable originated by Driveway Finance Corporation. We use term securitizations to provide long-term funding for most of the auto loans receivable initially funded through the warehouse facility. In these transactions, a pool of auto loans receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. We are required to evaluate term securitization trusts for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. We recognize transfers of auto loans receivable into the warehouse facility and asset-backed term funding transactions, including term securitizations (together, “non-recourse funding vehicles”), as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other support to the non-recourse funding vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require us to provide financial support to the non-recourse funding vehicles. |
Advertising | AdvertisingWe expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Additionally, manufacturer cooperative advertising credits for qualifying, specifically-identified advertising expenditures are recognized as a reduction of advertising expense. |
Contract Origination Costs | Contract Origination CostsContract origination commissions paid to our employees directly related to the sale of our self-insured lifetime lube, oil and filter service contracts and auto loan receivable originations are deferred and charged to expense in proportion to the associated revenue to be recognized. |
Legal Costs | Legal Costs We are a party to numerous legal proceedings arising in the normal course of business. We accrue for certain legal costs, including attorney fees and potential settlement claims related to various legal proceedings that are estimable and probable. See Note 7. |
Stock-Based Compensation | Stock-Based Compensation Compensation costs associated with equity instruments exchanged for employee and director services are measured at the grant date, based on the fair value of the award. If there is a performance-based element to the award, the expense is recognized based on the estimated attainment level, estimated time to achieve the attainment level and/or the vesting period. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of non-vested stock awards is based on the closing price of our common stock on the date of grant. We account for forfeitures of stock-based awards as they occur. See Note 10. |
Income and Other Taxes | Income and Other Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, we adjust our financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized. Interest and penalties are recorded as income tax provision in the period incurred or accrued when related to an uncertain tax position. See Note 14. |
Concentration of Risk and Uncertainties | Concentration of Risk and Uncertainties We purchase substantially all of our new vehicles and inventory from various manufacturers at the prevailing prices charged by auto manufacturers to all franchised dealers. Our overall sales could be impacted by the auto manufacturers’ inability or unwillingness to supply dealerships with an adequate supply of popular models. We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. In the event that manufacturers are unable to supply the needed level of vehicles, our financial performance may be adversely impacted. We depend on our manufacturers to deliver high-quality, defect-free vehicles. In the event that manufacturers experience future quality issues, our financial performance may be adversely impacted. We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. Our sales volume could be materially adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles. We also receive incentives and rebates from our manufacturers, including cash allowances, financing programs, discounts, holdbacks and other incentives. These incentives are recorded as accounts receivable in our Consolidated Balance Sheets until payment is received. Our financial condition could be materially adversely impacted by the manufacturers’ or distributors’ inability to continue to offer these incentives and rebates at substantially similar terms, or to pay our outstanding receivables. We enter into Franchise Agreements with the manufacturers. The Franchise Agreements generally limit the location of the dealership and provide the auto manufacturer approval rights over changes in dealership management and ownership. The auto manufacturers are also entitled to terminate the Franchise Agreement if the dealership is in material breach of the terms. Our ability to expand operations depends, in part, on obtaining consents of the manufacturers for the acquisition of additional dealerships. See also “Goodwill” and “Franchise Value” above. We have a credit facility with a syndicate of 20 financial institutions, including eight manufacturer-affiliated finance companies. Several of these financial institutions also provide vehicle financing for certain new vehicles, vehicles that are designated for use as service loaners and mortgage financing. This credit facility is the primary source of floor plan financing for our new vehicle inventory and also provides used vehicle financing and a revolving line of credit. The term of the facility extends through January 2025. At maturity, our financial condition could be materially adversely impacted if lenders are unable to provide credit that has typically been extended to us or with terms unacceptable to us. Our financial condition could be materially adversely impacted if these providers incur losses in the future or undergo funding limitations. See Note 6. We anticipate continued organic growth and growth through acquisitions. This growth will require additional credit which may be unavailable or with terms unacceptable to us. If these events were to occur, we may not be able to borrow sufficient funds to facilitate our growth. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and related notes to financial statements. Changes in such estimates may affect amounts reported in future periods. Estimates are used in the calculation of certain reserves maintained for charge-backs on estimated cancellations of service contracts; life, accident and disability insurance policies; finance fees from customer financing contracts and uncollectible accounts receivable. Estimates are also used in our allowance for loan losses, which represents the net credit losses expected over the remaining contractual life of our managed receivables. Because net loss performance can vary substantially over time, estimating net losses requires assumptions about matters that are uncertain. The allowance for loan losses is determined using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Determining the appropriateness of the allowance for loan losses requires management to exercise judgement about matters that are inherently uncertain, including the timing and distribution of net losses that could materially affect the allowance or loan losses and, therefore, net earnings. We also use estimates in the calculation of various expenses, accruals and reserves, including anticipated losses related to workers’ compensation insurance; anticipated losses related to self-insurance components of our property and casualty and medical insurance; self-insured lifetime lube, oil and filter service contracts; discretionary employee bonuses, the Transition Agreement with Sidney B. DeBoer, our Chairman of the Board; warranties provided on certain products and services; legal reserves and stock-based compensation. We also make certain estimates regarding the assessment of the recoverability of long-lived assets, indefinite-lived intangible assets and deferred tax assets. |
Fair Value of Assets Acquired and Liabilities Assumed | Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These market data points include our acquisition and divestiture experience and third-party broker estimates. We use a relief-from-royalty method to determine the fair value of a trade name. Future cost savings associated with owning, rather than licensing, a trade name is estimated based on a royalty rate and management’s forecasted sales projections. The discount rate applied to the future cost savings factors an equity market risk premium, small stock risk premium, an average peer group beta, a risk-free interest rate and a premium for forecast risk. |
Revenue Recognition | Revenue Recognition The following describes our major product lines, which represent the disaggregation of our revenues to transactions that are similar in nature, amount, timing, uncertainties and economic factors. New Retail Vehicle and Used Retail Vehicle Sales Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectibility is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state law. Service, Body and Parts Sales Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $239.0 million and $194.1 million as of December 31, 2021, and December 31, 2020, respectively; and we recognized $35.0 million and $31.1 million of revenue in the years ended December 31, 2021, and December 31, 2020, respectively, related to our opening contract liability balances. Our contract liability balance is included in accrued liabilities and deferred revenue. Finance and Insurance Sales Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract under the new standard. Our contract asset balance was $9.6 million and $8.2 million as of December 31, 2021, and December 31, 2020, respectively; and is included in trade receivables and other non-current assets. |
Segment Reporting | Segment Reporting While we have determined that each individual store is a reporting unit, we have aggregated our reporting units into three reportable segments based on their economic similarities: Domestic, Import and Luxury. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Chrysler, General Motors and Ford. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, Subaru, Nissan, Hyundai, Volkswagen, Kia, and Mazda. Our Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured by BMW, Mercedes-Benz, Audi, Lexus, Acura, Porsche, Jaguar, Land Rover, Mini, Infiniti, Rolls-Royce, Lamborghini, McLaren, and Pagani. The franchises in each segment also sell used vehicles, parts and automotive services, and automotive finance and insurance products. Corporate and other revenue and income include the results of operations of our stand-alone collision center offset by unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other operating segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden a stand-alone dealership would experience. Examples of these internal allocations include internal rent expense, internal floor plan financing charges, and internal fees charged to offset employees within our corporate headquarters that perform certain dealership functions. |
Reclassifications | Reclassifications Certain immaterial reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency and comparability between periods presented. We reclassified certain components within cash provided by operating activities and changes in restricted cash within the Consolidated Statements of Cash Flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Estimated Useful Lives | The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years Property and equipment consisted of the following: December 31, (Dollars in millions) 2021 2020 Land $ 965.6 $ 699.3 Building and improvements 1,748.5 1,149.7 Service equipment 159.9 123.6 Furniture, office equipment, signs and fixtures 507.3 512.9 3,381.3 2,485.5 Less accumulated depreciation (422.6) (338.0) 2,958.7 2,147.5 Construction in progress 93.9 50.0 $ 3,052.6 $ 2,197.5 |
Schedule of Advertising Expense and Manufacturer Cooperative Advertising Credits | Advertising expense and manufacturer cooperative advertising credits were as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Advertising expense, gross $ 197.8 $ 121.3 $ 139.8 Manufacturer cooperative advertising credits (35.6) (23.9) (27.9) Advertising expense, net $ 162.2 $ 97.4 $ 111.9 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: December 31, (Dollars in millions) 2021 2020 Contracts in transit $ 304.9 $ 286.8 Trade receivables 125.5 67.0 Vehicle receivables 106.6 61.8 Manufacturer receivables 120.5 118.1 Auto loan and lease receivables 829.2 175.6 Other receivables 43.2 11.6 1,529.9 720.9 Less: Allowance for doubtful accounts (17.3) (5.9) Less: Long-term portion of accounts receivable, net 1 (602.6) (101.0) Total accounts receivable, net $ 910.0 $ 614.0 1 The long-term portions of accounts receivable and allowance for doubtful accounts were included as a component of other non-current assets in the Consolidated Balance Sheets. See Note 1 for additional information on the allowance for credit losses related to auto loan receivables. December 31, (Dollars in millions) 2021 2020 Total Auto loan and lease receivables $ 829.2 $ 175.6 Less: Allowance for loan and lease losses (25.0) (12.9) Auto loan and lease receivables, net $ 804.2 $ 162.7 Below is a breakdown of the current and long term portions of our auto loan and lease receivables: December 31, (Dollars in millions) 2021 2020 Current portion of auto loan and lease receivables, net of allowance of $13.6 and $2.1 $ 224.5 $ 78.6 Long term portion of auto loan and lease receivables, net of allowance of $11.4 and $10.8 579.7 84.1 Auto loan and lease receivables, net $ 804.2 $ 162.7 |
Accounts Receivable, Allowance for Credit Loss | The allowances for credit losses related to auto loan and lease receivables consisted of the following changes during the period: Year Ended December 31, (Dollars in millions) 2021 2020 Allowance at beginning of period $ 12.9 $ 12.4 Charge-offs (16.6) (10.1) Recoveries 8.8 1.5 Provision expense 17.4 9.1 Allowance at end of period 22.5 12.9 Lease portfolio loss reserve 2.5 — Total balance at end of period $ 25.0 $ 12.9 |
Financing Receivable Credit Quality Indicators | Ending auto loan receivables (principal balances) by FICO score: Year Ended December 31, (Dollars in millions) 2021 2020 <599 1 $ 83.2 $ 59.9 600-699 437.6 79.3 700-774 166.8 25.2 775+ 37.4 10.3 Total auto loan receivables 725.0 174.7 Lease portfolio and accrued interest 104.2 0.9 Total auto loan and lease receivables $ 829.2 $ 175.6 1 Includes loans that are originated with no FICO score available. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The components of inventories consisted of the following: December 31, (Dollars in millions) 2021 2020 New vehicles $ 812.9 $ 1,556.6 Used vehicles 1,418.3 835.9 Parts and accessories 154.3 100.4 Total inventories $ 2,385.5 $ 2,492.9 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The range of estimated useful lives is as follows: Buildings and improvements 5 to 40 years Service equipment 5 to 15 years Furniture, office equipment, signs and fixtures 3 to 10 years Property and equipment consisted of the following: December 31, (Dollars in millions) 2021 2020 Land $ 965.6 $ 699.3 Building and improvements 1,748.5 1,149.7 Service equipment 159.9 123.6 Furniture, office equipment, signs and fixtures 507.3 512.9 3,381.3 2,485.5 Less accumulated depreciation (422.6) (338.0) 2,958.7 2,147.5 Construction in progress 93.9 50.0 $ 3,052.6 $ 2,197.5 |
Goodwill and Franchise Value (T
Goodwill and Franchise Value (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a roll-forward of goodwill: (Dollars in millions) Domestic Import Luxury Consolidated Balance as of December 31, 2019 ¹ $ 171.8 $ 197.3 $ 85.5 $ 454.6 Additions through acquisitions 2 33.3 94.3 17.3 144.9 Reductions through divestitures (0.1) (0.7) (2.2) (3.0) Reductions from impairments (0.5) (3.0) — (3.5) Balance as of December 31, 2020 ¹ 204.5 287.9 100.6 593.0 Additions through acquisitions 3 101.0 188.7 105.8 395.5 Reductions through divestitures (1.5) (8.4) (1.3) (11.2) Balance as of December 31, 2021 1 $ 304.0 $ 468.2 $ 205.1 $ 977.3 (1) Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. (2) Our purchase price allocation for the 2019 acquisitions were finalized in 2020. As a result, we added $144.9 million of goodwill. (3) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $395.5 million of goodwill. Our purchase price allocation for the 2021 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 15. |
Schedule of Franchise Value | The following is a roll-forward of franchise value: (Dollars in millions) Franchise Value Balance as of December 31, 2019 $ 306.7 Additions through acquisitions 1 51.9 Reductions through divestitures (4.0) Reductions from impairments (4.4) Balance as of December 31, 2020 350.2 Additions through acquisitions 2 459.7 Reductions through divestitures (8.9) Reductions from impairments (1.9) Balance as of December 31, 2021 $ 799.1 (1) Our purchase price allocation for the 2019 acquisitions were finalized in 2020. As a result, we added $51.9 million of franchise value. (2) Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $459.7 million of franchise value. Our purchase price allocation for the 2021 acquisitions are preliminary and is not yet allocated to our segments. See Note 15. |
Credit Facilities and Long-te_2
Credit Facilities and Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Instrument [Line Items] | |
Summary of Outstanding Balances on Credit Facilities and Long-term Debt | Below is a summary of our outstanding balances on credit facilities and long-term debt (in millions): December 31, (Dollars in millions) 2021 2020 Floor plan notes payable: non-trade $ 835.9 $ 1,563.0 Floor plan notes payable 354.2 234.2 Total floor plan debt $ 1,190.1 $ 1,797.2 Used and service loaner vehicle inventory financing commitments $ 500.0 $ — Revolving lines of credit 219.9 39.0 Real estate mortgages 592.9 611.5 Finance lease obligations 53.6 246.4 Non-recourse notes payable 317.6 — 5.250% Senior notes due 2025 — 300.0 4.625% Senior notes due 2027 400.0 400.0 4.375% Senior notes due 2031 550.0 550.0 3.875% Senior notes due 2029 800.0 — Other debt 1.9 2.4 Total long-term debt outstanding 3,435.9 2,149.3 Less: unamortized debt issuance costs (26.5) (18.6) Less: current maturities (net of current debt issuance costs) (223.7) (66.0) Long-term debt $ 3,185.7 $ 2,064.7 |
Schedule of Line of Credit Facilities | The annual interest rates associated with our floor plan commitments are as follows: Commitment Annual Interest Rate at December 31, 2021 New vehicle floor plan 1.20% Used vehicle floor plan 1.50% Service loaner floor plan 1.30% Revolving line of credit 1.10% |
Schedule of Maturities of Long-term Debt | The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2021 was as follows: Year Ending December 31, (Dollars in millions) 2022 $ 97.6 2023 62.8 2024 86.0 2025 53.5 2026 64.7 Thereafter 2,033.8 Total principal payments $ 2,398.4 |
Schedule of Long-term Debt Instruments | Below is a summary of outstanding senior notes issued: Description Maturity Date Interest Payment Dates Principal Amount 4.625% Senior notes due 2027 December 15, 2027 June 15, December 15 $400 million 4.375% Senior notes due 2031 January 15, 2031 January 15, July 15 $550 million 3.875% Senior notes due 2029 June 1, 2029 June 1, December 1 $800 million |
Credit Facility | Line of Credit | |
Debt Instrument [Line Items] | |
Schedule of Debt Covenant Terms | Under our credit facility, we are required to maintain the ratios detailed in the following table: Debt Covenant Ratio Requirement As of December 31, 2021 Current ratio Not less than 1.10 to 1 1.82 to 1 Fixed charge coverage ratio Not less than 1.20 to 1 5.53 to 1 Leverage ratio Not more than 5.75 to 1 1.48 to 1 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimated Charge Backs | We estimate that the charge-backs will be paid out as follows: Year Ending December 31, (Dollars in millions) 2022 $ 67.0 2023 19.6 2024 7.0 2025 2.2 2026 0.4 Thereafter 0.1 Total $ 96.3 |
Schedule of Deferred Revenue | As of December 31, 2021, we had a contract liability balance of $240.5 million associated with these contracts and estimate the contract liability will be recognized as follows: Year Ending December 31, (Dollars in millions) 2022 $ 48.2 2023 38.8 2024 30.7 2025 25.3 2026 21.4 Thereafter 76.1 Total $ 240.5 |
Equity and Redeemable Non-con_2
Equity and Redeemable Non-controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Stock Repurchased and Retired | Share repurchases under our authorization were as follows: Repurchases Occurring in 2021 Cumulative Repurchases as of December 31, 2021 Shares Average Price Shares Average Price Share repurchase authorization 756,883 $ 283.75 4,475,931 $ 117.80 The following is a summary of our repurchases in the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Shares repurchased pursuant to repurchase authorizations 756,883 563,953 — Total purchase price (in millions) $ 214.8 $ 46.1 $ — Average purchase price per share $ 283.75 $ 81.71 $ — Shares repurchased in association with tax withholdings on the vesting of RSUs 54,318 30,620 40,356 |
Schedule of Dividends Declared | We declared and paid dividends on our Common Stock as follows: Quarter declared Dividend amount per share Total amount of dividends paid (in millions) 2019 First quarter $ 0.29 $ 6.7 Second quarter 0.30 7.0 Third quarter 0.30 7.0 Fourth quarter 0.30 6.9 2020 First quarter $ 0.30 $ 7.0 Second quarter 0.30 6.8 Third quarter 0.31 7.1 Fourth quarter 0.31 8.2 2021 First quarter $ 0.31 $ 8.3 Second quarter 0.35 9.3 Third quarter 0.35 10.6 Fourth quarter 0.35 10.6 |
401(k) Profit Sharing, Deferr_2
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Postemployment Benefits [Abstract] | |
Schedule of Long-term Incentive Plan | The following is a summary related to our SERP: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Compensation expense $ 1.4 $ 1.2 $ 0.9 Total discretionary contribution $ 0.9 $ 0.9 $ 0.3 Guaranteed annual return 5.00 % 5.00 % 5.00 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Employee Stock Purchase Plan | Following is information regarding our 2009 ESPP: Year Ended December 31, 2021 Shares purchased pursuant to 2009 ESPP 103,374 Weighted average per share price of shares purchased $ 286.61 Weighted average per share discount from market value for shares purchased $ 50.58 As of December 31, 2021 Shares available for purchase pursuant to 2009 ESPP 1,309,353 |
Schedule of Restricted Stock Units Activity | RSU grants vest over a period of time up to four years from the date of grant. RSU activity was as follows: RSUs Weighted average per share price, grant date fair value Balance, December 31, 2020 519,612 $ 100.78 Granted 127,666 312.83 Vested (141,857) 107.50 Forfeited (38,561) 188.99 Balance, December 31, 2021 466,860 159.85 |
Schedule of Stock-Based Compensation | Certain information regarding our stock-based compensation was as follows: Year Ended December 31, 2021 2020 2019 Per share intrinsic value of non-vested stock granted $ 312.83 $ 130.89 $ 75.73 Weighted average per share discount for compensation expense recognized under the 2009 ESPP 50.58 22.97 17.83 Fair value of non-vested stock that vested during the period (in millions) 107.5 108.5 92.0 Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense (in millions) 34.7 23.2 16.2 Tax benefit recognized in Consolidated Statements of Operations (in millions) 11.9 3.7 2.7 Cash received from options exercised and shares purchased under all share-based arrangements (in millions) 29.6 14.8 11.3 Tax deduction realized related to stock options exercised (in millions) 41.8 13.6 9.8 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease-Related Liabilities Recorded on the Balance Sheet | The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets: (Dollars in millions) December 31, 2021 December 31, 2020 Operating lease liabilities: Current portion included in accrued liabilities $ 49.0 $ 30.8 Noncurrent operating lease liabilities 361.7 246.7 Total operating lease liabilities 410.7 277.5 Finance lease liabilities: Current portion included in current maturities of long-term debt 16.3 6.0 Long-term portion of lease liabilities in long-term debt 37.3 240.4 Total finance lease liabilities 53.6 246.4 Total lease liabilities $ 464.3 $ 523.9 Finance lease right-of-use assets: Total finance lease right-of-use assets 1 $ 58.7 $ 253.9 Weighted-average remaining lease term: Operating leases 8 years 5 years Finance leases 11 years 12 years Weighted-average discount rate: Operating leases 4.12 % 4.69 % Finance leases 2.42 % 4.12 % 1 Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation. |
Schedule of Lease Costs | The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows: Year Ended December 31, Year Ended December 31, (Dollars in millions) 2021 2020 Operating lease cost 1 $ 53.1 $ 41.6 Variable lease cost 2 3.5 3.1 Amortization of finance lease right-of-use assets 5.9 4.5 Interest on finance lease liabilities 4.2 3.4 Sublease income (6.4) (4.9) Total lease costs $ 60.3 $ 47.7 1 Includes short-term and month-to-month lease costs, which are immaterial. 2 Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate. |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2021, the maturities of our operating and finance lease liabilities were as follows: (Dollars in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2021 $ 60.5 $ 18.3 2022 54.1 3.6 2023 47.8 9.2 2024 44.7 2.9 2025 40.6 2.9 Thereafter 256.1 29.9 Total minimum lease payments 503.8 66.8 Less: Present value adjustment (93.1) (13.2) Total lease liabilities $ 410.7 $ 53.6 |
Schedule of Maturities of Finance Lease Liabilities | As of December 31, 2021, the maturities of our operating and finance lease liabilities were as follows: (Dollars in millions) Operating Lease Liabilities Finance Lease Liabilities Year Ending December 31, 2021 $ 60.5 $ 18.3 2022 54.1 3.6 2023 47.8 9.2 2024 44.7 2.9 2025 40.6 2.9 Thereafter 256.1 29.9 Total minimum lease payments 503.8 66.8 Less: Present value adjustment (93.1) (13.2) Total lease liabilities $ 410.7 $ 53.6 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The table below presents the liabilities related to the zero-cost interest rate collar: (Dollars in millions) Accrued Liabilities Other Long-Term Liabilities Total Balance as of December 31, 2018 $ — $ — $ — Amounts reclassified from AOCI to floorplan interest expense — — — Loss recorded from interest rate collar (0.1) (0.9) (1.0) Balance as of December 31, 2019 (0.1) (0.9) (1.0) Amounts reclassified from AOCI to floorplan interest expense 1.8 — 1.8 Loss recorded from interest rate collar (4.3) (5.1) (9.4) Balance as of December 31, 2020 (2.6) (6.0) (8.6) Amounts reclassified from AOCI to floorplan interest expense 2.8 — 2.8 Loss recorded from interest rate collar (2.1) 5.3 3.2 Balance as of December 31, 2021 $ (1.9) $ (0.7) $ (2.6) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Long-Lived Assets Measured at Fair Value | Below are our investments that are measured at fair value (in millions): Fair Value at December 31, 2021 Level 1 Level 2 Level 3 Measured on a recurring basis: Investments $ 40.4 $ 0.5 $ — Fair Value at December 31, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Investments $ 97.9 $ 9.4 $ — Below are our derivative assets and liabilities that are measured at fair value (in millions): Fair Value at December 31, 2021 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative asset $ — $ 6.4 $ — Derivative liability $ — $ 8.9 $ — Fair Value at December 31, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative asset $ — $ 0.5 $ — Derivative liability $ — $ 9.0 $ — |
Schedule of Aggregate Carrying Values and Fair Values of Long-term Fixed Interest Rate Debt | A summary of the aggregate carrying values, excluding unamortized debt issuance cost, and fair values of our long-term fixed interest rate debt is as follows (in millions): December 31, 2021 2020 Carrying value 5.250% Senior notes due 2025 $ — $ 300.0 4.625% Senior notes due 2027 400.0 400.0 4.375% Senior notes due 2031 550.0 550.0 3.875% Senior notes due 2029 800.0 — Non-recourse notes payable 317.6 — Real estate mortgages and other debt 477.6 714.8 $ 2,545.2 $ 1,964.8 Fair value 5.250% Senior notes due 2025 $ — $ 311.6 4.625% Senior notes due 2027 420.0 425.0 4.375% Senior notes due 2031 583.0 589.9 3.875% Senior notes due 2029 815.0 — Non-recourse notes payable 316.8 — Real estate mortgages and other debt 488.7 713.2 $ 2,623.5 $ 2,039.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The income tax provision was as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Current: Federal $ 266.2 $ 108.9 $ 40.0 State 111.6 50.3 24.0 Foreign 1.2 — — 379.0 159.2 64.0 Deferred: Federal 38.2 17.6 34.7 State 3.8 1.4 5.2 Foreign 1.1 — — 43.1 19.0 39.9 Total $ 422.1 $ 178.2 $ 103.9 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between amounts computed using the federal income tax rate of 21% and our income tax provision is shown in the following tabulation: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Federal tax provision at statutory rate $ 311.7 $ 136.2 $ 78.8 State taxes, net of federal income tax benefit 85.4 40.4 23.6 Non-deductible items 4.8 2.8 2.6 Permanent differences related to stock compensation (2.6) (0.5) 0.2 Net change in valuation allowance 25.3 0.5 (0.5) General business credits (2.3) (1.3) (0.9) Foreign Rate Differential 0.5 — — Other (0.7) 0.1 0.1 Income tax provision $ 422.1 $ 178.2 $ 103.9 |
Schedule of Deferred Tax Assets and Liabilities | Individually significant components of the deferred tax assets and (liabilities) are presented below: December 31, (Dollars in millions) 2021 2020 Deferred tax assets: Deferred revenue and cancellation reserves $ 95.3 $ 64.2 Allowances and accruals, including state tax carryforward amounts 72.8 55.6 Lease liability 107.6 73.4 Credits and other 0.6 3.4 Valuation allowance (26.4) (1.1) Total deferred tax assets 249.9 195.5 Deferred tax liabilities: Inventories (20.1) (44.9) Goodwill (112.3) (76.5) Property and equipment, principally due to differences in depreciation (185.9) (139.0) Right of use asset (103.7) (69.8) Prepaid expenses and other (18.9) (11.6) Total deferred tax liabilities (440.9) (341.8) Total $ (191.0) $ (146.3) |
Schedule of Unrecognized Tax Benefits | The following is a reconciliation of our unrecognized tax benefits for December 31, 2021 and 2020: (Dollars in millions) Balance, December 31, 2019 $ — Increase related to tax positions taken - current year 0.2 Balance, December 31, 2020 0.2 Increase related to tax positions taken - current year 0.1 Balance, December 31, 2021 $ 0.3 |
Summary of Open Tax Years | Open tax years at December 31, 2021 included the following: Federal 2018 - 2021 States (28) 2017 - 2021 Canada 2021 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Pro Forma Summary | Revenue and operating income contributed by the 2021 acquisitions subsequent to the date of acquisition were as follows: Year Ended December 31, (Dollars in millions) 2021 Revenue $ 4,130.0 Operating income 211.3 The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the year: Year Ended December 31, (Dollars in millions, except for per share amounts) 2021 2020 Revenue $ 25,519.8 $ 19,528.5 Net income 1,123.7 621.4 Basic net income per share 39.02 26.08 Diluted net income per share 38.73 25.80 |
Summary of Consideration Paid for Acquisitions | The following tables summarize the consideration paid for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date: Year Ended December 31, (Dollars in millions) 2021 2020 Cash paid, net of cash acquired $ 2,697.5 $ 1,503.1 Contingent consideration — 4.6 Preliminary fair value of redeemable non-controlling interest 33.1 — Debt and finance lease obligations 356.0 218.9 Total consideration paid $ 3,086.6 $ 1,726.6 Year Ended December 31, (Dollars in millions) 2021 2020 Trade receivables, net $ 1.3 $ 0.2 Inventories 626.2 358.9 Property and equipment 767.5 529.9 Other assets 1,726.2 858.4 Floor plan notes payable (4.0) (13.1) Other liabilities (30.6) (8.5) 3,086.6 1,725.8 Goodwill — 0.8 Total net assets acquired and liabilities assumed $ 3,086.6 $ 1,726.6 |
Net Income Per Share of Commo_2
Net Income Per Share of Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS (in millions, except per share amounts): Year Ended December 31, 2021 2020 2019 (Dollars in millions, except for per share amounts) Class A Class B Class A Class B Class A Class B Net income from continuing operations applicable to common stockholders $ 1,059.5 $ 0.6 $ 460.9 $ 9.4 $ 264.5 $ 7.0 Reallocation of distributed net income due to conversion of class B to class A common shares outstanding — — 0.6 — 0.7 — Conversion of class B common shares into class A common shares 0.6 — 8.9 — 6.3 — Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted $ 1,060.1 $ 0.6 $ 470.3 $ 9.4 $ 271.5 $ 7.0 Weighted average common shares outstanding – basic 28.8 — 23.3 0.5 22.6 0.6 Conversion of class B common shares into class A common shares — — 0.5 — 0.6 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.2 — 0.3 — 0.2 — Weighted average common shares outstanding – diluted 29.0 — 24.1 0.5 23.4 0.6 Basic earnings per share attributable to Lithia Motors, Inc. $ 36.81 $ 36.81 $ 19.74 $ 19.74 $ 11.70 $ 11.70 Diluted earnings per share attributable to Lithia Motors, Inc. $ 36.54 $ 36.54 $ 19.53 $ 19.53 $ 11.60 $ 11.60 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Certain Information on a Segment Basis | Certain financial information on a segment basis is as follows: Year Ended December 31, (Dollars in millions) 2021 2020 2019 Revenues: Domestic $ 6,975.3 $ 4,503.0 $ 4,382.4 Import 9,690.8 5,448.8 5,267.8 Luxury 6,114.8 3,152.0 2,991.9 22,780.9 13,103.8 12,642.1 Corporate and other 50.8 20.5 30.6 $ 22,831.7 $ 13,124.3 $ 12,672.7 Segment income*: Domestic $ 466.4 $ 230.0 $ 123.4 Import 813.4 249.8 153.9 Luxury 384.6 98.5 57.1 Total segment income for reportable segments $ 1,664.4 $ 578.3 $ 334.4 *Segment income for each of the segments is a Non-GAAP measure defined as Income from operations before income taxes, depreciation and amortization, other interest expense and other income, net. Year Ended December 31, (Dollars in millions) 2021 2020 2019 Total segment income for reportable segments $ 1,664.4 $ 578.3 $ 334.4 Corporate and other 108.5 176.7 170.2 Depreciation and amortization (127.3) (92.3) (82.4) Other interest expense (108.2) (73.1) (60.6) Other (expense) income, net (52.6) 58.9 13.8 Income before income taxes $ 1,484.8 $ 648.5 $ 375.4 Year Ended December 31, (Dollars in millions) 2021 2020 2019 Floor plan interest expense: Domestic $ 24.7 $ 30.9 $ 53.6 Import 30.3 31.6 44.1 Luxury 21.7 22.2 30.2 76.7 84.7 127.9 Corporate and other (54.4) (50.3) (55.1) $ 22.3 $ 34.4 $ 72.8 |
Schedule of Reconciliation of Assets from Segment to Consolidated | December 31, (Dollars in millions) 2021 2020 Total assets: Domestic $ 1,574.7 $ 1,262.4 Import 1,858.1 1,654.7 Luxury 1,407.1 1,132.4 Corporate and other 6,307.0 3,852.6 $ 11,146.9 $ 7,902.1 |
Changes in Accounting Policies
Changes in Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Impact of Adopting Topic 326 | The impact of adopting Topic 326 on the accompanying Consolidated Balance Sheets as of January 1, 2020 was as follows (in millions): Impact on Consolidated Balance Sheets December 31, 2019 Adjustments January 1, 2020 CECL Adoption: Accounts receivable, net of allowance for doubtful accounts of $7.3 $ 505.0 $ (0.5) $ 504.5 Other non-current assets 388.5 (6.0) 382.5 Total assets 6,083.9 (6.5) 6,077.4 Deferred income taxes 131.1 (1.7) 129.4 Total liabilities 4,616.2 (1.7) 4,614.5 Retained earnings 1,401.8 (4.8) 1,397.0 Total liabilities and stockholders’ equity 6,083.9 (6.5) 6,077.4 |
Net Investment in Operating L_2
Net Investment in Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule Of Net Investment In Lease | Net investment in operating leases was as follows: (in millions) December 31, 2021 December 31, 2020 Vehicles, at cost 1 $ 66.0 $ — Accumulated depreciation 1 (0.9) — Net investment in operating leases $ 65.1 $ — 1 Vehicles, at cost and accumulated depreciation are recorded in other non-current assets, on the Consolidated Balance Sheets. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||||||
Dec. 31, 2021USD ($)brandstorecountrysegmentstate | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2021USD ($) | Apr. 29, 2021finance_companyfinancialInstitution | Sep. 30, 2020USD ($) | Jul. 14, 2020finance_company | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Number of stores | store | 278 | ||||||
Number of new vehicle brands | brand | 40 | ||||||
Number of countries | country | 2 | ||||||
Number of states | state | 25 | ||||||
Debt Instrument [Line Items] | |||||||
Threshold period for interest to bear on receivables | 60 days | ||||||
Interest costs capitalized | $ 2,000,000 | $ 1,600,000 | $ 2,300,000 | ||||
Restricted cash on deposit in reserve accounts, included in other non-current assets | 3,700,000 | 0 | $ 0 | ||||
Debt instrument, number of manufacturer-affiliated finance companies | finance_company | 2 | ||||||
Accrued warranty balance | $ 600,000 | $ 500,000 | |||||
Contract liability | 239,000,000 | 194,100,000 | |||||
Contract liability, revenue recognized | 35,000,000 | 31,100,000 | |||||
Contract asset | $ 9,600,000 | $ 8,200,000 | |||||
Number of reportable segments | segment | 3 | ||||||
Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, number of counter-parties | financialInstitution | 20 | ||||||
Debt instrument, number of manufacturer-affiliated finance companies | finance_company | 8 | ||||||
Loans receivables | Automobile loan | |||||||
Debt Instrument [Line Items] | |||||||
Loan receivables aged less than 60 days past due, percent (more than) | 95.00% | ||||||
Loan receivable on non-accrual status, percent (less than) | 5.00% | ||||||
Allowance for credit losses | $ 25,000,000 | ||||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Period that contracts in transit are outstanding | 5 days | ||||||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Period that contracts in transit are outstanding | 10 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Service equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Service equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Furniture, office equipment, signs and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture, office equipment, signs and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Advertising Expense and Manufacturing Cooperative Advertising Credits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising expense, gross | $ 197.8 | $ 121.3 | $ 139.8 |
Manufacturer cooperative advertising credits | (35.6) | (23.9) | (27.9) |
Advertising expense, net | $ 162.2 | $ 97.4 | $ 111.9 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | $ 1,529.9 | $ 720.9 | |
Less: Allowance for doubtful accounts | (17.3) | (5.9) | |
Less: Long-term portion of accounts receivable, net | (602.6) | (101) | |
Total accounts receivable, net | 910 | 614 | $ 505 |
Contracts in transit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | 304.9 | 286.8 | |
Trade receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | 125.5 | 67 | |
Vehicle receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | 106.6 | 61.8 | |
Manufacturer receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | 120.5 | 118.1 | |
Auto loan and lease receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | 829.2 | 175.6 | |
Less: Allowance for doubtful accounts | (25) | (12.9) | $ (12.4) |
Less: Long-term portion of accounts receivable, net | (579.7) | (84.1) | |
Total accounts receivable, net | 224.5 | 78.6 | |
Other receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable gross | $ 43.2 | $ 11.6 |
Accounts Receivable - Auto Loan
Accounts Receivable - Auto Loan and Lease Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Auto loan and lease receivables | $ 1,529.9 | $ 720.9 | |
Less: Allowance for loan and lease losses | (17.3) | (5.9) | |
Auto loan and lease receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total Auto loan and lease receivables | 829.2 | 175.6 | |
Less: Allowance for loan and lease losses | (25) | (12.9) | $ (12.4) |
Auto loan and lease receivables, net | $ 804.2 | $ 162.7 |
Accounts Receivable - Breakdown
Accounts Receivable - Breakdown of Current and Long Term Portions of Auto Loan and Lease Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Current portion of auto loan and lease receivables, net of allowance of $13.6 and $2.1 | $ 910 | $ 614 | $ 505 |
Long term portion of auto loan and lease receivables, net of allowance of $11.4 and $10.8 | 602.6 | 101 | |
Accounts receivable, allowance for credit loss, current | 17.3 | 5.9 | $ 7.3 |
Auto loan and lease receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Current portion of auto loan and lease receivables, net of allowance of $13.6 and $2.1 | 224.5 | 78.6 | |
Long term portion of auto loan and lease receivables, net of allowance of $11.4 and $10.8 | 579.7 | 84.1 | |
Auto loan and lease receivables, net | 804.2 | 162.7 | |
Accounts receivable, allowance for credit loss, current | 13.6 | 2.1 | |
Accounts receivable, allowance for credit loss, noncurrent | $ 11.4 | $ 10.8 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance for Credit Losses Related to Auto Loan and Lease Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance at beginning of period | $ 5.9 | |
Total balance at end of period | 17.3 | $ 5.9 |
Auto loan and lease receivables | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance at beginning of period | 12.9 | 12.4 |
Charge-offs | (16.6) | (10.1) |
Recoveries | 8.8 | 1.5 |
Provision expense | 17.4 | 9.1 |
Allowance at end of period | 22.5 | 12.9 |
Lease portfolio loss reserve | 2.5 | 0 |
Total balance at end of period | $ 25 | $ 12.9 |
Accounts Receivable - FICO Scor
Accounts Receivable - FICO Score (Details) - Auto loan and lease receivables - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total auto loan receivables | $ 725 | $ 174.7 |
Lease portfolio and accrued interest | 104.2 | 0.9 |
Total Auto loan and lease receivables | 829.2 | 175.6 |
Less than 599 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total auto loan receivables | 83.2 | 59.9 |
600-699 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total auto loan receivables | 437.6 | 79.3 |
700-774 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total auto loan receivables | 166.8 | 25.2 |
775+ | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total auto loan receivables | $ 37.4 | $ 10.3 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Total inventories | $ 2,385.5 | $ 2,492.9 |
New vehicle retail | ||
Inventory [Line Items] | ||
Total inventories | 812.9 | 1,556.6 |
Used vehicles | ||
Inventory [Line Items] | ||
Total inventories | 1,418.3 | 835.9 |
Parts and accessories | ||
Inventory [Line Items] | ||
Total inventories | $ 154.3 | $ 100.4 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,381.3 | $ 2,485.5 |
Less accumulated depreciation | (422.6) | (338) |
Property and equipment, net | 2,958.7 | 2,147.5 |
Construction in progress | 93.9 | 50 |
Total property, plant, and equipment | 3,052.6 | 2,197.5 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 965.6 | 699.3 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,748.5 | 1,149.7 |
Service equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 159.9 | 123.6 |
Furniture, office equipment, signs and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 507.3 | $ 512.9 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Asset impairments | $ 0 | $ 0 | ||
Asset impairments | $ 500,000 | $ 1,900,000 | $ 7,900,000 | $ 2,600,000 |
Goodwill and Franchise Value -
Goodwill and Franchise Value - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2008 | |
Goodwill [Roll Forward] | |||||
Balance | $ 593 | $ 454.6 | |||
Additions through acquisitions | 395.5 | 144.9 | |||
Reductions through divestitures | (11.2) | (3) | |||
Reductions from impairments | $ (3.5) | $ (1.7) | (3.5) | ||
Balance | 454.6 | 977.3 | 593 | ||
Accumulated impairment losses | $ 299.3 | ||||
Additions through acquisitions | 395.5 | 144.9 | |||
Domestic | |||||
Goodwill [Roll Forward] | |||||
Balance | 204.5 | 171.8 | |||
Additions through acquisitions | 101 | 33.3 | |||
Reductions through divestitures | (1.5) | (0.1) | |||
Reductions from impairments | (0.5) | ||||
Balance | 171.8 | 304 | 204.5 | ||
Additions through acquisitions | 101 | 33.3 | |||
Import | |||||
Goodwill [Roll Forward] | |||||
Balance | 287.9 | 197.3 | |||
Additions through acquisitions | 188.7 | 94.3 | |||
Reductions through divestitures | (8.4) | (0.7) | |||
Reductions from impairments | (3) | ||||
Balance | 197.3 | 468.2 | 287.9 | ||
Additions through acquisitions | 188.7 | 94.3 | |||
Luxury | |||||
Goodwill [Roll Forward] | |||||
Balance | 100.6 | 85.5 | |||
Additions through acquisitions | 105.8 | 17.3 | |||
Reductions through divestitures | (1.3) | (2.2) | |||
Reductions from impairments | 0 | ||||
Balance | $ 85.5 | 205.1 | 100.6 | ||
Additions through acquisitions | $ 105.8 | $ 17.3 |
Goodwill and Franchise Value _2
Goodwill and Franchise Value - Franchise Value (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | $ 350.2 | $ 306.7 | |||
Additions through acquisitions | 459.7 | 51.9 | |||
Reductions through divestitures | (8.9) | (4) | |||
Reductions from impairments | $ (1.9) | $ (4.4) | $ (0.4) | (1.9) | (4.4) |
Ending balance | $ 306.7 | $ 799.1 | $ 350.2 |
Credit Facilities and Long-te_3
Credit Facilities and Long-term Debt - Schedule of Credit Facilities and Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Aug. 01, 2021 | May 27, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||
Floor plan notes payable: non-trade | $ 835.9 | $ 1,563 | ||
Floor plan notes payable | 354.2 | 234.2 | ||
Total floor plan debt | 1,190.1 | 1,797.2 | ||
Finance lease obligations | 53.6 | 246.4 | ||
Total long-term debt outstanding | 3,435.9 | 2,149.3 | ||
Less: unamortized debt issuance costs | (26.5) | (18.6) | ||
Less: current maturities (net of current debt issuance costs) | (223.7) | (66) | ||
Long-term debt | 3,185.7 | 2,064.7 | ||
Other debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 1.9 | 2.4 | ||
Line of Credit | Used and service loaner vehicle inventory financing commitments | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 500 | 0 | ||
Line of Credit | Revolving lines of credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 219.9 | 39 | ||
Real estate mortgages | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 592.9 | 611.5 | ||
Non-recourse notes payable | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 317.6 | 0 | ||
Senior Notes | 5.250% Senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | $ 300 | ||
Debt stated interest rate | 5.25% | 5.25% | ||
Senior Notes | 4.625% Senior notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 400 | $ 400 | ||
Debt stated interest rate | 4.625% | |||
Senior Notes | 4.375% Senior notes due 2031 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 550 | 550 | ||
Debt stated interest rate | 4.375% | |||
Senior Notes | 3.875% Senior notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 800 | $ 0 | ||
Debt stated interest rate | 3.875% | 3.875% |
Credit Facilities and Long-te_4
Credit Facilities and Long-term Debt - Narrative (Details) $ in Millions | Aug. 30, 2021CAD ($)lineOfCredit | Aug. 01, 2021USD ($) | May 27, 2021USD ($) | Apr. 12, 2021USD ($) | Jul. 14, 2020USD ($)finance_companyfinancialInstitution | Dec. 31, 2021USD ($) | Nov. 30, 2021USD ($) | Apr. 29, 2021USD ($)finance_companyfinancialInstitution | Dec. 31, 2020USD ($) | Oct. 09, 2020USD ($) | Jul. 31, 2020USD ($) | Dec. 09, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, number of manufacturer-affiliated finance companies | finance_company | 2 | |||||||||||
Floor plan notes payable | $ 354,200,000 | $ 234,200,000 | ||||||||||
Non-recourse notes payable | $ 344,400,000 | |||||||||||
Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Finance lease, interest rate | 1.90% | |||||||||||
Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Finance lease, interest rate | 8.50% | |||||||||||
Floor Plan Notes Payable | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 4.75% | |||||||||||
Other debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total long-term debt outstanding | $ 1,900,000 | 2,400,000 | ||||||||||
Other debt | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 5.00% | |||||||||||
Other debt | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 10.00% | |||||||||||
Line of Credit | Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, number of counter-parties | financialInstitution | 20 | |||||||||||
Debt instrument, number of manufacturer-affiliated finance companies | finance_company | 8 | |||||||||||
Financing commitment amount | $ 3,750,000,000 | |||||||||||
Credit facility, maximum borrowing facility | 4,250,000,000 | |||||||||||
Line of Credit | Bank of Nova Scotia Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of debt instruments | lineOfCredit | 3 | |||||||||||
Line of Credit | Bank of Nova Scotia Credit Agreement | Prime Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 0.25% | |||||||||||
Line of Credit | Bank of Nova Scotia Credit Agreement | Prime Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 1.50% | |||||||||||
Real Estate Mortgages | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percent of total mortgage debt with fixed interest rates | 71.20% | |||||||||||
Total long-term debt outstanding | $ 592,900,000 | $ 611,500,000 | ||||||||||
Real Estate Mortgages | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 1.80% | |||||||||||
Real Estate Mortgages | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 5.30% | |||||||||||
Senior Notes | 5.250% Senior notes due 2025 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 5.25% | 5.25% | ||||||||||
Aggregate principal amount | $ 300,000,000 | |||||||||||
Debt redemption price, percentage of principal amount redeemed | 102.625% | |||||||||||
Loss on extinguishment of debt | $ 10,300,000 | |||||||||||
Total long-term debt outstanding | $ 0 | $ 300,000,000 | ||||||||||
Senior Notes | 3.875% Senior notes due 2029 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 3.875% | 3.875% | ||||||||||
Aggregate principal amount | $ 800,000,000 | |||||||||||
Total long-term debt outstanding | $ 800,000,000 | 0 | ||||||||||
Senior Notes | 3.875% Senior notes due 2029 | Debt Redemption Scenario One | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of debt principal amount redeemed | 40.00% | |||||||||||
Debt redemption price, percentage of principal amount redeemed | 103.875% | |||||||||||
Senior Notes | 3.875% Senior notes due 2029 | Debt Redemption Scenario Two | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt redemption price, percentage of principal amount redeemed | 100.00% | |||||||||||
Senior Notes | 4.625% Senior notes due 2027 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 4.625% | |||||||||||
Aggregate principal amount | $ 400,000,000 | |||||||||||
Total long-term debt outstanding | $ 400,000,000 | 400,000,000 | ||||||||||
Senior Notes | 4.375% Senior notes due 2031 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 4.375% | |||||||||||
Aggregate principal amount | $ 550,000,000 | |||||||||||
Total long-term debt outstanding | $ 550,000,000 | 550,000,000 | ||||||||||
Used Vehicle Inventory Floorplan Financing | Line of Credit | Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 750,000,000 | |||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 20.00% | |||||||||||
Used Vehicle Inventory Floorplan Financing | Line of Credit | Credit Facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 1.40% | |||||||||||
Revolving lines of credit | Ally Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 300,000,000 | |||||||||||
Long-term line of credit | $ 0 | |||||||||||
Debt stated interest rate | 3.00% | |||||||||||
Revolving lines of credit | Ally Credit Facility | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 0.25% | |||||||||||
Revolving lines of credit | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total long-term debt outstanding | $ 219,900,000 | $ 39,000,000 | ||||||||||
Revolving lines of credit | Line of Credit | Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 750,000,000 | |||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 20.00% | |||||||||||
Revolving lines of credit | Line of Credit | Credit Facility | LIBOR | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 1.00% | |||||||||||
Revolving lines of credit | Line of Credit | Credit Facility | LIBOR | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 2.00% | |||||||||||
Revolving lines of credit | Line of Credit | Bank of Nova Scotia Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 50 | |||||||||||
Service Loaner Vehicle Floorplan Financing | Line of Credit | Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 100,000,000 | |||||||||||
Option to reallocate commitment, maximum aggregate commitment threshold percentage | 3.00% | |||||||||||
Service Loaner Vehicle Floorplan Financing | Line of Credit | Credit Facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 1.20% | |||||||||||
New Vehicle Inventory Floorplan Financing | Line of Credit | Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 2,150,000,000 | |||||||||||
New Vehicle Inventory Floorplan Financing | Line of Credit | Credit Facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 1.10% | |||||||||||
Other Lines of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 80,000,000 | |||||||||||
Long-term line of credit | $ 0 | |||||||||||
Other Lines of Credit | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt stated interest rate | 5.65% | |||||||||||
Real Estate Backed Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, number of counter-parties | financialInstitution | 8 | |||||||||||
Credit facility, maximum borrowing facility | $ 238,800,000 | |||||||||||
Long-term line of credit | $ 0 | |||||||||||
Debt term | 5 years | |||||||||||
Real Estate Backed Credit Facility | LIBOR | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 2.00% | |||||||||||
Real Estate Backed Credit Facility | LIBOR | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 2.50% | |||||||||||
Real Estate Backed Credit Facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate (in percent) | 0.75% | |||||||||||
Securitization Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 300,000,000 | |||||||||||
Long-term line of credit | $ 90,000,000 | |||||||||||
New and Used Vehicles Inventory Floorplan Financing | Line of Credit | Bank of Nova Scotia Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | 300 | |||||||||||
Wholesale Lease Financing | Line of Credit | Bank of Nova Scotia Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing facility | $ 350 |
Credit Facilities and Long-te_5
Credit Facilities and Long-term Debt - Annual Interest Rates (Details) - Credit Facility - Line of Credit | Dec. 31, 2021 |
New Vehicle Inventory Floorplan Financing | |
Debt Instrument [Line Items] | |
Annual interest rate | 1.20% |
Used Vehicle Inventory Floorplan Financing | |
Debt Instrument [Line Items] | |
Annual interest rate | 1.50% |
Service Loaner Vehicle Floorplan Financing | |
Debt Instrument [Line Items] | |
Annual interest rate | 1.30% |
Revolving lines of credit | |
Debt Instrument [Line Items] | |
Annual interest rate | 1.10% |
Credit Facilities and Long-te_6
Credit Facilities and Long-term Debt - Details of Financial Covenants (Details) | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |
Debt Covenant Current Ratio | 1.10 |
Current Ratio | 1.82 |
Debt Covenant Fixed Charge Coverage Ratio | 1.20 |
Fixed Charge Coverage Ratio | 5.53 |
Debt Covenant Leverage Ratio | 5.75 |
Leverage Ratio | 1.48 |
Credit Facilities and Long-te_7
Credit Facilities and Long-term Debt - Future Principal Payments on Long-term Debt (Details) $ in Millions | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 97.6 |
2023 | 62.8 |
2024 | 86 |
2025 | 53.5 |
2026 | 64.7 |
Thereafter | 2,033.8 |
Total principal payments | $ 2,398.4 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Charge-back liability | $ 96.3 | |
Contract liability balance | 240.5 | |
Deferred revenue reserve | 2.4 | |
Self insurance program liabilities | $ 56.4 | $ 39.1 |
Commitments and Contingencies_2
Commitments and Contingencies - Charge-backs for Various Contracts (Details) $ in Millions | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 67 |
2023 | 19.6 |
2024 | 7 |
2025 | 2.2 |
2026 | 0.4 |
Thereafter | 0.1 |
Total | $ 96.3 |
Commitments and Contingencies_3
Commitments and Contingencies - Lifetime Lube, Oil and Filter Contracts Acquired (Details) $ in Millions | Dec. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 240.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 48.2 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 38.8 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 30.7 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 25.3 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 21.4 |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 76.1 |
Revenue, remaining performance obligation, period |
Equity and Redeemable Non-con_3
Equity and Redeemable Non-controlling Interest - Narrative (Details) | Aug. 30, 2021 | May 24, 2021USD ($)$ / sharesshares | Jul. 24, 2020USD ($) | Dec. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020shares | Dec. 31, 2019shares | Nov. 30, 2021USD ($) |
Class of Stock [Line Items] | |||||||
Common stock number of votes | vote | 1 | ||||||
Additional amount authorized to be repurchased | $ 750,000,000 | ||||||
Remaining authorized repurchase amount | $ 722,800,000 | ||||||
Redeemable non-controlling interest, redemption feature, period | 3 years | ||||||
Follow-On Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Shares sold in offering | shares | 3,571,428 | ||||||
Offering price per share (in dollars per share) | $ / shares | $ 322 | ||||||
Aggregate net proceeds from stock offering | $ 1,110,000,000 | ||||||
Payments of stock issuance costs | $ 600,000 | ||||||
Over-Allotment Option | |||||||
Class of Stock [Line Items] | |||||||
Shares sold in offering | shares | 465,838 | ||||||
ATM Equity Offering Agreement | |||||||
Class of Stock [Line Items] | |||||||
Aggregate net proceeds from stock offering | $ 400,000,000 | ||||||
Restricted Stock Units (RSUs) | |||||||
Class of Stock [Line Items] | |||||||
Shares repurchased in association with tax withholdings on the vesting of RSUs | shares | 54,318 | 30,620 | 40,356 | ||||
Weighted average per share price of shares purchased (in dollars per share) | $ / shares | $ 292.98 | ||||||
Adjustments related to tax withholding for share-based compensation | $ 15,900,000 |
Equity and Redeemable Non-con_4
Equity and Redeemable Non-controlling Interest - Summary of Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 71 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased pursuant to repurchase authorizations | 756,883 | 563,953 | 0 | 4,475,931 |
Total purchase price (in millions) | $ 214.8 | $ 46.1 | $ 0 | |
Average purchase price per share (in dollars per share) | $ 283.75 | $ 81.71 | $ 0 | $ 117.80 |
Restricted Stock Units (RSUs) | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased in association with tax withholdings on the vesting of RSUs | 54,318 | 30,620 | 40,356 |
Equity and Redeemable Non-con_5
Equity and Redeemable Non-controlling Interest - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Equity [Abstract] | ||||||||||||
Dividend amount per share (in dollars per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.29 |
Total amount of dividends paid (in millions) | $ 10.6 | $ 10.6 | $ 9.3 | $ 8.3 | $ 8.2 | $ 7.1 | $ 6.8 | $ 7 | $ 6.9 | $ 7 | $ 7 | $ 6.7 |
401(k) Profit Sharing, Deferr_3
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |||
Contributions | $ 18.8 | $ 9 | $ 9.8 |
Other Long-Term Liabilities | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Balance due to participants | $ 51.9 | $ 43.3 | |
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Discretionary contributions vesting period | 7 years |
401(k) Profit Sharing, Deferr_4
401(k) Profit Sharing, Deferred Compensation and Long-term Incentive Plans - Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |||
Compensation expense | $ 1.4 | $ 1.2 | $ 0.9 |
Total discretionary contribution | $ 0.9 | $ 0.9 | $ 0.3 |
Guaranteed annual return | 5.00% | 5.00% | 5.00% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
The 2009 ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 3,000,000 |
Maximum employee subscription rate (in percent) | 10.00% |
Maximum amount of stock per employee | $ | $ 25,000 |
Purchase price of common stock (in percent) | 85.00% |
Discount from market price, offering date (in percent) | 15.00% |
Shares available for purchase | 1,309,353 |
2013 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 3,800,000 |
Shares available for purchase | 983,435 |
Shares outstanding | 0 |
2013 Stock Incentive Plan | Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Unvested RSUs | $ | $ 21,900,000 |
Weighted average vesting period | 2 years 8 months 12 days |
2013 Stock Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
2013 Stock Incentive Plan | Time Vesting RSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance of restricted stock to employees (in shares) | 33,665 |
2013 Stock Incentive Plan | Performance and Time Vesting RSU's | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance of restricted stock to employees (in shares) | 94,001 |
2013 Stock Incentive Plan | Performance RSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance of restricted stock to employees (in shares) | 74,187 |
Weighted average attainment level for performance and time vesting RSUs (in percent) | 79.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of 2009 ESPP (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average per share discount from market value for shares purchased (in dollars per share) | $ 50.58 | $ 22.97 | $ 17.83 |
The 2009 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased pursuant to 2009 ESPP | 103,374 | ||
Weighted average per share price of shares purchased (in dollars per share) | $ 286.61 | ||
Weighted average per share discount from market value for shares purchased (in dollars per share) | $ 50.58 | ||
Shares available for purchase pursuant to 2009 ESPP | 1,309,353 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan Activity, Restricted Stock (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
RSUs | |
Beginning Balance (in shares) | shares | 519,612 |
Granted (in shares) | shares | 127,666 |
Vested (in shares) | shares | (141,857) |
Forfeited (in shares) | shares | (38,561) |
Ending Balance (in shares) | shares | 466,860 |
Weighted average per share price, grant date fair value | |
Beginning Balance (in dollars per share) | $ / shares | $ 100.78 |
Granted (in dollars per share) | $ / shares | 312.83 |
Vested (in dollars per share) | $ / shares | 107.50 |
Forfeited (in dollars per share) | $ / shares | 188.99 |
Ending Balance (in dollars per share) | $ / shares | $ 159.85 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Per share intrinsic value of non-vested stock granted (in dollars per share) | $ 312.83 | $ 130.89 | $ 75.73 |
Weighted average per share discount from market value for shares purchased (in dollars per share) | $ 50.58 | $ 22.97 | $ 17.83 |
Fair value of non-vested stock that vested during the period (in millions) | $ 107.5 | $ 108.5 | $ 92 |
Tax benefit recognized in Consolidated Statements of Operations (in millions) | 11.9 | 3.7 | 2.7 |
Cash received from options exercised and shares purchased under all share-based arrangements (in millions) | 29.6 | 14.8 | 11.3 |
Tax deduction realized related to stock options exercised (in millions) | 41.8 | 13.6 | 9.8 |
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense (in millions) | $ 34.7 | $ 23.2 | $ 16.2 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2021 | |
Lessor, Lease, Description [Line Items] | ||
Rent expense, net of sublease income operating leases | $ 41.3 | |
Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Lease renewal term | 1 year | |
Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Lease renewal term | 25 years |
Leases - Schedule of Lease-Rela
Leases - Schedule of Lease-Related Liabilities Recorded on the Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Operating lease liabilities: | ||
Current portion included in accrued liabilities | $ 49 | $ 30.8 |
Noncurrent operating lease liabilities | 361.7 | 246.7 |
Total operating lease liabilities | $ 410.7 | $ 277.5 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities |
Finance lease liabilities: | ||
Current portion included in current maturities of long-term debt | $ 16.3 | $ 6 |
Long-term portion of lease liabilities in long-term debt | 37.3 | 240.4 |
Total financing lease liabilities | 53.6 | 246.4 |
Total lease liabilities | 464.3 | 523.9 |
Total finance lease right-of-use assets | $ 58.7 | $ 253.9 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term debt | Current maturities of long-term debt |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt | Long-term debt |
Weighted-average remaining lease term: | ||
Weighted-average remaining lease term, operating leases | 8 years | 5 years |
Weighted-average remaining lease term, finance leases | 11 years | 12 years |
Weighted-average discount rate: | ||
Weighted-average discount rate, operating leases | 4.12% | 4.12% |
Weighted-average discount rate, finance leases | 2.42% | 4.69% |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 53.1 | $ 41.6 |
Variable lease cost | 3.5 | 3.1 |
Amortization of finance lease right-of-use assets | 5.9 | 4.5 |
Interest on finance lease liabilities | 4.2 | 3.4 |
Sublease income | (6.4) | (4.9) |
Total lease costs | $ 60.3 | $ 47.7 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Lease Liabilities | ||
2021 | $ 60.5 | |
2022 | 54.1 | |
2023 | 47.8 | |
2024 | 44.7 | |
2025 | 40.6 | |
Thereafter | 256.1 | |
Total minimum lease payments | 503.8 | |
Present value adjustment | (93.1) | |
Total lease liabilities | 410.7 | $ 277.5 |
Finance Lease Liabilities | ||
2021 | 18.3 | |
2022 | 3.6 | |
2023 | 9.2 | |
2024 | 2.9 | |
2025 | 2.9 | |
Thereafter | 29.9 | |
Total minimum lease payments | 66.8 | |
Present value adjustment | (13.2) | |
Finance lease obligations | $ 53.6 | $ 246.4 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) $ in Millions | Oct. 02, 2020USD ($)derivative | Jun. 01, 2019USD ($) | Dec. 31, 2021USD ($)derivative | Dec. 31, 2020USD ($) |
Derivative [Line Items] | ||||
Non-trade floor plan notes payable | $ 835.9 | $ 1,563 | ||
Amount of net losses expected to reclassify from AOCI into interest expense in earnings within the next twelve months | 1.9 | |||
Interest rate collar | ||||
Derivative [Line Items] | ||||
Derivative term | 5 years | |||
Derivative, notional amount | $ 300 | |||
Non-trade floor plan notes payable | $ 1,600 | |||
Interest rate collar | Not Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Derivative asset | 6.4 | |||
Derivative liability | $ 6.4 | |||
Interest Rate Cap | Not Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Derivative term | 5 years | |||
Derivative, notional amount | $ 225 | |||
Number of derivative instruments held | derivative | 4 | 4 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Zero-Cost Interest Rate Collar (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 2,661.5 | $ 1,467.7 | $ 1,197.2 |
Ending balance | 4,629.2 | 2,661.5 | 1,467.7 |
Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (8.6) | (1) | 0 |
Amounts reclassified from AOCI to floorplan interest expense | 2.8 | 1.8 | 0 |
Loss recorded from interest rate collar | 3.2 | (9.4) | (1) |
Ending balance | (2.6) | (8.6) | (1) |
Accrued Liabilities | Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (2.6) | (0.1) | 0 |
Amounts reclassified from AOCI to floorplan interest expense | 2.8 | 1.8 | 0 |
Loss recorded from interest rate collar | (2.1) | (4.3) | (0.1) |
Ending balance | (1.9) | (2.6) | (0.1) |
Other Long-Term Liabilities | Interest rate collar | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (6) | (0.9) | 0 |
Amounts reclassified from AOCI to floorplan interest expense | 0 | 0 | 0 |
Loss recorded from interest rate collar | 5.3 | (5.1) | (0.9) |
Ending balance | $ (0.7) | $ (6) | $ (0.9) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |||||||
Unrealized investment loss (gain) | $ 66.4 | $ (43.4) | $ 0 | ||||
Franchise value, impairment | $ 1.9 | $ 4.4 | $ 0.4 | 1.9 | 4.4 | ||
Reductions from impairments | $ 3.5 | $ 1.7 | 3.5 | ||||
Asset impairments | $ 0.5 | $ 1.9 | $ 7.9 | $ 2.6 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Non-recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 40.4 | $ 97.9 |
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0.5 | 9.4 |
Derivative asset | 0.5 | 6.4 |
Derivative liability | 9 | 8.9 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Derivative asset | 0 | 0 |
Derivative liability | $ 0 | $ 0 |
Fair Value Measurements - Long-
Fair Value Measurements - Long-term Fixed Interest Rate Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Aug. 01, 2021 | May 27, 2021 | Dec. 31, 2020 |
Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 2,545.2 | $ 1,964.8 | ||
Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 2,623.5 | $ 2,039.7 | ||
5.250% Senior notes due 2025 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt stated interest rate | 5.25% | 5.25% | ||
5.250% Senior notes due 2025 | Senior Notes | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 0 | $ 300 | ||
5.250% Senior notes due 2025 | Senior Notes | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 0 | 311.6 | ||
4.625% Senior notes due 2027 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt stated interest rate | 4.625% | |||
4.625% Senior notes due 2027 | Senior Notes | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 400 | 400 | ||
4.625% Senior notes due 2027 | Senior Notes | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 420 | 425 | ||
4.375% Senior notes due 2031 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt stated interest rate | 4.375% | |||
4.375% Senior notes due 2031 | Senior Notes | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 550 | 550 | ||
4.375% Senior notes due 2031 | Senior Notes | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 583 | 589.9 | ||
3.875% Senior notes due 2029 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt stated interest rate | 3.875% | 3.875% | ||
3.875% Senior notes due 2029 | Senior Notes | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 800 | 0 | ||
3.875% Senior notes due 2029 | Senior Notes | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 815 | 0 | ||
Non-recourse notes payable | Senior Notes | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 317.6 | 0 | ||
Non-recourse notes payable | Senior Notes | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 316.8 | 0 | ||
Real estate mortgages and other debt | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 477.6 | 714.8 | ||
Real estate mortgages and other debt | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | $ 488.7 | $ 713.2 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 266.2 | $ 108.9 | $ 40 |
State | 111.6 | 50.3 | 24 |
Foreign | 1.2 | 0 | 0 |
Current income tax expense (benefit) | 379 | 159.2 | 64 |
Deferred: | |||
Federal | 38.2 | 17.6 | 34.7 |
State | 3.8 | 1.4 | 5.2 |
Foreign | 1.1 | 0 | 0 |
Deferred income tax expense (benefit) | 43.1 | 19 | 39.9 |
Total | $ 422.1 | $ 178.2 | $ 103.9 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Income taxes payable | $ 43,000,000 | $ 33,100,000 | |
Valuation allowance | 26,400,000 | 1,100,000 | |
Deferred tax liability related to foreign withholding taxes | 4,600,000 | ||
Unrecognized tax benefits | 300,000 | $ 200,000 | $ 0 |
Shift Technologies Inc. | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | 24,300,000 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance, state net operating loss carryforwards | 2,100,000 | ||
Increase of NOL valuation allowance | 1,000,000 | ||
State operating loss carryforwards | $ 3,700,000 |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal tax provision at statutory rate | $ 311.7 | $ 136.2 | $ 78.8 |
State taxes, net of federal income tax benefit | 85.4 | 40.4 | 23.6 |
Non-deductible items | 4.8 | 2.8 | 2.6 |
Permanent differences related to stock compensation | (2.6) | (0.5) | 0.2 |
Net change in valuation allowance | 25.3 | 0.5 | (0.5) |
General business credits | (2.3) | (1.3) | (0.9) |
Foreign Rate Differential | 0.5 | 0 | 0 |
Other | (0.7) | 0.1 | 0.1 |
Total | $ 422.1 | $ 178.2 | $ 103.9 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Deferred revenue and cancellation reserves | $ 95.3 | $ 64.2 |
Allowances and accruals, including state tax carryforward amounts | 72.8 | 55.6 |
Lease liability | 107.6 | 73.4 |
Credits and other | 0.6 | 3.4 |
Valuation allowance | (26.4) | (1.1) |
Total deferred tax assets | 249.9 | 195.5 |
Deferred tax liabilities: | ||
Inventories | (20.1) | (44.9) |
Goodwill | (112.3) | (76.5) |
Property and equipment, principally due to differences in depreciation | (185.9) | (139) |
Right of use asset | (103.7) | (69.8) |
Prepaid expenses and other | (18.9) | (11.6) |
Total deferred tax liabilities | (440.9) | (341.8) |
Total | $ (191) | $ (146.3) |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning balance | $ 200,000 | $ 0 |
Increase related to tax positions taken - current year | 100,000 | 200,000 |
Unrecognized tax benefits, ending balance | $ 300,000 | $ 200,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020numberOfStore | Aug. 31, 2020numberOfStore | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Business Acquisition [Line Items] | ||||
Number of stores acquired | 9 | 10 | ||
Acquisition related expenses | $ | $ 20.2 | $ 3 | ||
CALIFORNIA | ||||
Business Acquisition [Line Items] | ||||
Number of stores acquired | 8 | |||
ARIZONA | ||||
Business Acquisition [Line Items] | ||||
Number of stores acquired | 1 |
Acquisitions - Revenue and Oper
Acquisitions - Revenue and Operating Income from Acquisitions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Revenue | $ 4,130 |
Operating income | $ 211.3 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 977.3 | $ 593 | $ 454.6 |
2021 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | 2,697.5 | ||
Contingent consideration | 0 | ||
Preliminary fair value of redeemable non-controlling interest | 33.1 | ||
Debt and finance lease obligations | 356 | ||
Total consideration paid | 3,086.6 | ||
Trade receivables, net | 1.3 | ||
Inventories | 626.2 | ||
Property and equipment | 767.5 | ||
Other assets | 1,726.2 | ||
Floor plan notes payable | (4) | ||
Other liabilities | (30.6) | ||
Assets acquired and liabilities assumed, excluding goodwill | 3,086.6 | ||
Goodwill | 0 | ||
Total net assets acquired and liabilities assumed | $ 3,086.6 | ||
2020 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | 1,503.1 | ||
Contingent consideration | 4.6 | ||
Preliminary fair value of redeemable non-controlling interest | 0 | ||
Debt and finance lease obligations | 218.9 | ||
Total consideration paid | 1,726.6 | ||
Trade receivables, net | 0.2 | ||
Inventories | 358.9 | ||
Property and equipment | 529.9 | ||
Other assets | 858.4 | ||
Floor plan notes payable | (13.1) | ||
Other liabilities | (8.5) | ||
Assets acquired and liabilities assumed, excluding goodwill | 1,725.8 | ||
Goodwill | 0.8 | ||
Total net assets acquired and liabilities assumed | $ 1,726.6 |
Acquisitions - Pro Forma Summar
Acquisitions - Pro Forma Summary of All Acquisitions (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 25,519.8 | $ 19,528.5 |
Net income | $ 1,123.7 | $ 621.4 |
Basic net income per share (in dollars per share) | $ 39.02 | $ 26.08 |
Diluted net income per share (in dollars per share) | $ 38.73 | $ 25.80 |
Net Income Per Share of Commo_3
Net Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted average common shares outstanding – basic | 28,800 | 23,800 | 23,200 |
Weighted average common shares outstanding – diluted | 29,000 | 24,100 | 23,400 |
Net income per common share - basic (in dollars per share) | $ 36.81 | $ 19.74 | $ 11.70 |
Net income per common share - diluted (in dollars per share) | $ 36.54 | $ 19.53 | $ 11.60 |
Class A | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income from continuing operations applicable to common stockholders | $ 1,059.5 | $ 460.9 | $ 264.5 |
Reallocation of distributed net income due to conversion of class B to class A common shares outstanding | 0 | 0.6 | 0.7 |
Conversion of class B common shares into class A common shares | 0.6 | 8.9 | 6.3 |
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted | $ 1,060.1 | $ 470.3 | $ 271.5 |
Weighted average common shares outstanding – basic | 28,800 | 23,300 | 22,600 |
Conversion of class B common shares into class A common shares | 0 | 500 | 600 |
Effect of employee stock purchases and restricted stock units on weighted average common shares | 200 | 300 | 200 |
Weighted average common shares outstanding – diluted | 29,000 | 24,100 | 23,400 |
Net income per common share - basic (in dollars per share) | $ 36.81 | $ 19.74 | $ 11.70 |
Net income per common share - diluted (in dollars per share) | $ 36.54 | $ 19.53 | $ 11.60 |
Class B | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income from continuing operations applicable to common stockholders | $ 0.6 | $ 9.4 | $ 7 |
Reallocation of distributed net income due to conversion of class B to class A common shares outstanding | 0 | 0 | 0 |
Conversion of class B common shares into class A common shares | 0 | 0 | 0 |
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted | $ 0.6 | $ 9.4 | $ 7 |
Weighted average common shares outstanding – basic | 0 | 500 | 600 |
Conversion of class B common shares into class A common shares | 0 | 0 | 0 |
Effect of employee stock purchases and restricted stock units on weighted average common shares | 0 | 0 | 0 |
Weighted average common shares outstanding – diluted | 0 | 500 | 600 |
Net income per common share - basic (in dollars per share) | $ 36.81 | $ 19.74 | $ 11.70 |
Net income per common share - diluted (in dollars per share) | $ 36.54 | $ 19.53 | $ 11.60 |
Segments - Certain Segment Fina
Segments - Certain Segment Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 22,831.7 | $ 13,124.3 | $ 12,672.7 |
Total segment income for reportable segments | 1,484.8 | 648.5 | 375.4 |
Depreciation, Depletion and Amortization | (127.3) | (92.4) | (82.4) |
Other interest expense | (108.2) | (73.1) | (60.6) |
Other (expense) income, net | (52.6) | 58.9 | 13.8 |
Floor plan interest expense: | |||
Floor plan interest expense | 22.3 | 34.4 | 72.8 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 22,780.9 | 13,103.8 | 12,642.1 |
Total segment income for reportable segments | 1,664.4 | 578.3 | 334.4 |
Floor plan interest expense: | |||
Floor plan interest expense | 76.7 | 84.7 | 127.9 |
Operating Segments | Domestic | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 6,975.3 | 4,503 | 4,382.4 |
Total segment income for reportable segments | 466.4 | 230 | 123.4 |
Floor plan interest expense: | |||
Floor plan interest expense | 24.7 | 30.9 | 53.6 |
Operating Segments | Import | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 9,690.8 | 5,448.8 | 5,267.8 |
Total segment income for reportable segments | 813.4 | 249.8 | 153.9 |
Floor plan interest expense: | |||
Floor plan interest expense | 30.3 | 31.6 | 44.1 |
Operating Segments | Luxury | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 6,114.8 | 3,152 | 2,991.9 |
Total segment income for reportable segments | 384.6 | 98.5 | 57.1 |
Floor plan interest expense: | |||
Floor plan interest expense | 21.7 | 22.2 | 30.2 |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 50.8 | 20.5 | 30.6 |
Total segment income for reportable segments | 108.5 | 176.7 | 170.2 |
Floor plan interest expense: | |||
Floor plan interest expense | (54.4) | (50.3) | (55.1) |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Depreciation, Depletion and Amortization | (127.3) | (92.3) | (82.4) |
Other interest expense | (108.2) | (73.1) | (60.6) |
Other (expense) income, net | $ (52.6) | $ 58.9 | $ 13.8 |
Segments - Segment Assets (Deta
Segments - Segment Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | |||
Total assets | $ 11,146.9 | $ 7,902.1 | $ 6,083.9 |
Operating Segments | Domestic | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,574.7 | 1,262.4 | |
Operating Segments | Import | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,858.1 | 1,654.7 | |
Operating Segments | Luxury | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,407.1 | 1,132.4 | |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 6,307 | $ 3,852.6 |
Related Party Transactions (Det
Related Party Transactions (Details) - Chairman of the Board - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Charge to selling, general and administrative expense from transactions with related party | $ 18.3 | ||
Accrued Liabilities and Other Long Term Liabilities | |||
Related Party Transaction [Line Items] | |||
Balance due to related parties | $ 13 | $ 13.9 |
Changes in Accounting Policie_2
Changes in Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease of retained earnings | $ (4,626.4) | $ (2,661.5) | |
Adjustments | Retained earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease of retained earnings | $ 4.8 |
Changes in Accounting Policie_3
Changes in Accounting Policies - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable, allowance for doubtful accounts | $ 17.3 | $ 5.9 | $ 7.3 | |
Total accounts receivable, net | 910 | 614 | 505 | |
Other non-current assets | 2,388.7 | 1,157.5 | 388.5 | |
Total assets | 11,146.9 | 7,902.1 | 6,083.9 | |
Deferred income taxes | 191 | 146.3 | 131.1 | |
Total liabilities | 6,483.7 | 5,240.6 | 4,616.2 | |
Retained earnings | 2,859.5 | 1,838.2 | 1,401.8 | |
Total liabilities and stockholders’ equity | $ 11,146.9 | $ 7,902.1 | $ 6,083.9 | |
Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total accounts receivable, net | $ (0.5) | |||
Other non-current assets | (6) | |||
Total assets | (6.5) | |||
Deferred income taxes | (1.7) | |||
Total liabilities | (1.7) | |||
Retained earnings | (4.8) | |||
Total liabilities and stockholders’ equity | (6.5) | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total accounts receivable, net | 504.5 | |||
Other non-current assets | 382.5 | |||
Total assets | 6,077.4 | |||
Deferred income taxes | 129.4 | |||
Total liabilities | 4,614.5 | |||
Retained earnings | 1,397 | |||
Total liabilities and stockholders’ equity | $ 6,077.4 |
Net Investment in Operating L_3
Net Investment in Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Vehicles, at cost | $ 66 | $ 0 |
Accumulated depreciation | (0.9) | 0 |
Net investment in operating leases | $ 65.1 | $ 0 |
Uncategorized Items - lad-20211
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |