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SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION As of December 31, 2024, the Company had two reportable segments: (1) Dealerships and (2) TCA. Our dealership operations are organized by management into geographic region-based groups within the Dealerships segment. The operations of our F&I product provider is reflected within our TCA segment. Our Chief Operating Decision Maker (CODM) is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic region level for our dealerships and at the TCA segment level for our F&I product provider's operations. The geographic dealership group operating segments have been aggregated into one operating segment disclosed as the Dealerships reportable segment since their operations (i) have similar economic characteristics (our regions all have similar long-term average gross margins), (ii) offer similar products and services (all of our regions offer new and used vehicles, parts and service, and finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our regions distribute products and services through dealership facilities that region to customers in similar ways), and (v) operate under similar regulatory environments. TCA's vehicle protection products are sold through affiliated dealerships and the revenue from the related commissions is included in finance and insurance, net revenue in the Dealerships segment before consolidation. The corresponding claims expense incurred and the amortization of deferred acquisition costs is recorded as a cost of sales in the TCA segment. The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's vehicle protection products. The gross profit earned by our parts and service departments for work performed for TCA customers is reflected as a reduction of parts and service cost of sales in the accompanying consolidated statements of income. The costs incurred by TCA for work performed by our parts and service departments are included in finance and insurance cost of sales in the accompanying consolidated statements of income. The CODM evaluates the performance of each reportable segment primarily through segment operating income. Segment operating income is derived from GAAP operating income, adjusted to exclude the effects of asset impairments and to include floor plan interest expense. Asset impairments are excluded as they are non-recurring in nature and typically do not arise from the ordinary course of operations. By removing these charges, segment operating income better represents the underlying operational performance of the segments. Floor plan interest expense is included in segment operating income because floor plan financing is a required component of the business model dictated by manufacturers. As such, it is an inherent and unavoidable cost of operations. Including floor plan interest expense ensures that the measurement of segment profitability reflects the operational realities and obligations associated with inventory financing, providing a clearer representation of the Dealerships segment’s performance. This approach ensures a consistent and meaningful evaluation of each segment's operational performance by normalizing results for items that may not directly reflect ongoing segment profitability. By utilizing segment operating income in this manner, the CODM can make informed decisions regarding resource allocation, evaluate the relative performance of individual segments, and monitor the effectiveness of strategic initiatives. All floor plan interest expense and asset impairments are exclusively within the dealerships segment for the periods presented. Therefore, there are no reconciling items between segment operating income and income from operations for the TCA segment. Goodwill acquired in the Koons acquisition, which closed in December 2023, of $272.4 million was allocated to the Dealerships segment. The majority of TCA’s revenue arises from sales through our affiliated dealerships. Intercompany profits and losses are eliminated in consolidation. The significant expense categories and amounts are consistent with the segment-level information that is regularly provided to the CODM. Certain intersegment expenses are included within the amounts shown. Rent and related expenses include rent expense, utilities, property and casualty insurance, real estate tax and personal property tax. Other segment items for the TCA segment relate to selling, general and administrative expenses. Reportable segment financial information for the years ended December 31, 2024, 2023 and 2022 is as follows:
| As of and for the year ended December 31, 2024
| Dealerships |  | TCA |  | Total
| (In millions)
Revenue from external customers | $ | 16,885.0 |  |  | $ | 303.6 |  |  | $ | 17,188.6 |
Intersegment revenue | 222.5 |  |  | — |  |  | 222.5 |
| $ | 17,107.5 |  |  | $ | 303.6 |  |  | $ | 17,411.1 |
Reconciliation of revenue |  |  |  |  |
Elimination of intersegment revenue |  |  |  |  | (222.5) |
Total consolidated revenue |  |  |  |  | $ | 17,188.6 |
Less: |  |  |  |  |
Cost of sales |  |  |  |  |
New vehicle | 8,209.3 |  |  | — |  |  |
Used vehicle | 4,972.7 |  |  | — |  |  |
Parts and service | 1,043.0 |  |  | — |  |  |
Finance and insurance | — |  |  | 223.4 |  |  |
Selling, general and administrative expenses |  |  |  |  |
Personnel costs | 1,256.2 |  |  | — |  |  |
Rent and related expenses | 142.3 |  |  | — |  |  |
Advertising | 61.8 |  |  | — |  |  |
Other selling, general and administrative expense | 441.0 |  |  | — |  |  |
Other segment items | — |  |  | 7.0 |  |  |
Depreciation and amortization | 74.6 |  |  | 0.4 |  |  |
Floor plan interest expense | 89.9 |  |  | — |  |  |
Segment operating income | $ | 816.7 |  |  | $ | 72.8 |  |  | $ | 889.5 |
Reconciliation of segment operating income |  |  |  |  |
Intersegment eliminations |  |  |  |  |
Total intersegment revenue eliminations |  |  |  |  | (222.5) |
Total intersegment cost of sales eliminations |  |  |  |  | 208.5 |
Deferral of SG&A expense (related to capitalized contracts offset by amortization) |  |  |  |  | 19.7 |
Total intersegment eliminations |  |  |  |  | 5.8 |
Asset impairments |  |  |  |  | (149.5) |
Other interest expense, net |  |  |  |  | (179.1) |
Gain on dealership divestitures, net |  |  |  |  | 8.6 |
Income before income taxes |  |  |  |  | $ | 575.3 |
| As of and for the year ended December 31, 2024
| Dealerships |  | TCA |  | Total Reportable Segments |  | Eliminations |  | Total
| (In millions)
Capital expenditures | $ | 308.2 |  |  | $ | — |  |  | $ | 308.2 |  |  | $ | — |  |  | $ | 308.2 |
Other interest expense | $ | 179.1 |  |  | $ | — |  |  | $ | 179.1 |  |  | $ | — |  |  | $ | 179.1 |
Amortization of deferred acquisition costs | $ | — |  |  | $ | 170.2 |  |  | $ | 170.2 |  |  | $ | (170.2) |  |  | $ | — |
Total assets | $ | 9,227.6 |  |  | $ | 1,049.4 |  |  | $ | 10,277.0 |  |  | $ | 60.1 |  |  | $ | 10,337.0 |
| As of and for the year ended December 31, 2023
| Dealerships |  | TCA |  | Total
| (In millions)
Revenue from external customers | $ | 14,517.5 |  |  | $ | 285.2 |  |  | $ | 14,802.7 |
Intersegment revenue | 181.5 |  |  | — |  |  | 181.5 |
| $ | 14,699.0 |  |  | $ | 285.2 |  |  | $ | 14,984.2 |
Reconciliation of revenue |  |  |  |  |
Elimination of intersegment revenue |  |  |  |  | (181.5) |
Total consolidated revenue |  |  |  |  | $ | 14,802.7 |
Less: |  |  |  |  |
Cost of sales |  |  |  |  |
New vehicle | 6,927.8 |  |  | — |  |  |
Used vehicle | 4,150.2 |  |  | — |  |  |
Parts and service | 949.9 |  |  | — |  |  |
Finance and insurance | — |  |  | 208.1 |  |  |
Selling, general and administrative expenses |  |  |  |  |
Personnel costs | 1,106.5 |  |  | — |  |  |
Rent and related expenses | 118.7 |  |  | — |  |  |
Advertising | 47.3 |  |  | — |  |  |
Other selling, general and administrative expense | 366.0 |  |  | — |  |  |
Other segment items | — |  |  | 7.4 |  |  |
Depreciation and amortization | 67.1 |  |  | 0.7 |  |  |
Floor plan interest expense | 9.6 |  |  | — |  |  |
Segment operating income | $ | 955.9 |  |  | $ | 69.0 |  |  | $ | 1,025.0 |
Reconciliation of segment operating income |  |  |  |  |
Intersegment eliminations |  |  |  |  |
Total intersegment revenue eliminations |  |  |  |  | (181.5) |
Total intersegment cost of sales eliminations |  |  |  |  | 189.1 |
Deferral of SG&A expense (related to capitalized contracts offset by amortization) |  |  |  |  | 28.5 |
Total intersegment eliminations |  |  |  |  | 36.1 |
Asset impairments |  |  |  |  | (117.2) |
Other interest expense, net |  |  |  |  | (156.1) |
Gain on dealership divestitures, net |  |  |  |  | 13.5 |
Income before income taxes |  |  |  |  | $ | 801.3 |
| As of and for the year ended December 31, 2023
| Dealerships |  | TCA |  | Total Reportable Segments |  | Eliminations |  | Total
| (In millions)
Capital expenditures | $ | 142.3 |  |  | $ | — |  |  | $ | 142.3 |  |  | $ | — |  |  | $ | 142.3 |
Other interest expense | $ | 156.1 |  |  | $ | — |  |  | $ | 156.1 |  |  | $ | — |  |  | $ | 156.1 |
Amortization of deferred acquisition costs | $ | — |  |  | $ | 161.9 |  |  | $ | 161.9 |  |  | $ | (155.9) |  |  | $ | 6.0 |
Total assets | $ | 9,199.4 |  |  | $ | 913.9 |  |  | $ | 10,113.3 |  |  | $ | 46.1 |  |  | $ | 10,159.4 |
| As of and for the year ended December 31, 2022
| Dealerships |  | TCA |  | Total
| (In millions)
Revenue from external customers | $ | 15,188.1 |  |  | $ | 245.8 |  |  | $ | 15,433.8 |
Intersegment revenue | 153.0 |  |  | — |  |  | 153.0 |
| $ | 15,341.1 |  |  | $ | 245.8 |  |  | $ | 15,586.9 |
Reconciliation of revenue |  |  |  |  |
Elimination of intersegment revenue |  |  |  |  | (153.0) |
Total consolidated revenue |  |  |  |  | $ | 15,433.8 |
Less: |  |  |  |  |
Cost of sales |  |  |  |  |
New vehicle | 6,521.6 |  |  | — |  |  |
Used vehicle | 4,843.8 |  |  | — |  |  |
Parts and service | 939.7 |  |  | — |  |  |
Finance and insurance | — |  |  | 191.9 |  |  |
Personnel costs | 1,273.6 |  |  | — |  |  |
Rent and related expenses | 121.4 |  |  | — |  |  |
Advertising | 50.0 |  |  | — |  |  |
Other selling, general and administrative expense | 341.3 |  |  | — |  |  |
Other segment items | — |  |  | 7.0 |  |  |
Depreciation and amortization | 68.2 |  |  | 0.8 |  |  |
Floor plan interest expense | 8.4 |  |  | — |  |  |
Segment operating income | $ | 1,173.1 |  |  | $ | 46.0 |  |  | $ | 1,219.0 |
Reconciliation of segment operating income |  |  |  |  |
Intersegment eliminations |  |  |  |  |
Total intersegment revenue eliminations |  |  |  |  | (153.0) |
Total intersegment cost of sales eliminations |  |  |  |  | 163.8 |
Deferral of SG&A expense (related to capitalized contracts offset by amortization) |  |  |  |  | 30.0 |
Total intersegment eliminations |  |  |  |  | 40.8 |
Other operating income |  |  |  |  | 4.4 |
Other interest expense, net |  |  |  |  | (152.2) |
Gain on dealership divestitures, net |  |  |  |  | 207.1 |
Income before income taxes |  |  |  |  | $ | 1,319.1 |
| As of and for the year ended December 31, 2022
| Dealerships |  | TCA |  | Total Reportable Segments |  | Eliminations |  | Total
| (In millions)
Capital expenditures | $ | 107.9 |  |  | $ | — |  |  | $ | 107.9 |  |  | $ | — |  |  | $ | 107.9 |
Other interest expense | $ | 152.2 |  |  | $ | — |  |  | $ | 152.2 |  |  | $ | — |  |  | $ | 152.2 |
Amortization of deferred acquisition costs | $ | — |  |  | $ | 165.7 |  |  | $ | 165.7 |  |  | $ | (147.5) |  |  | $ | 18.2 |
Total assets | $ | 7,170.8 |  |  | $ | 869.2 |  |  | $ | 8,040.0 |  |  | $ | (18.6) |  |  | $ | 8,021.4 |

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- Definition The entire disclosure for reporting segments including data and tables. 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