LITHIA MOTORS INC
For the period ended Dec 31, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
LAD$308.77-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0001023128-25-000026
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-25.
0001023128-26-000015
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 160 previous paragraphs and 165 current paragraphs.
106 unchanged; 38 reworded; 20 added; 15 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 26 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Used vehicle revenues increased 5.9%, resulting from an increase in retail unit sales of 3.3% and an increase in average selling price per retail unit of 2.8%. On a same store basis, used vehicle revenues increased 5.8%, due to an increase in retail unit sales of 3.6% and an increase in average selling price per retail unit of 2.4%.
Current report
The same store revenue increase was primarily driven by an increase in our CPO vehicle category of 10.2% and an increase in our value auto category of 25.3%. The increase in our CPO vehicle category includes an increase in unit sales of 6.7% and an increase in average selling price per vehicle of 3.2%. The increase in our value auto category includes an increase in unit sales of 29.2%, partially offset by a decrease in average selling price per vehicle of 3.0%.
Current report
Used vehicle gross profits increased 1.3%, due to an increase in retail unit sales of 3.3%, partially offset by a decrease in average gross profit per retail unit of 0.7%. On a same store basis, used vehicle gross profit decreased 1.1%, due to a decrease in average gross profit per retail unit of 3.1%, partially offset by an increase in retail unit sales of 3.6%.
Current report
The same store gross profit decrease was primarily driven by a decrease in core, wholesale, and certified vehicle categories, partially offset by an increase in our value auto category of 28.3% The increase in our value auto category includes an increase in unit sales of 29.2%, partially offset by a decrease in average gross profit per vehicle of 0.7%.
Current report
Used vehicle revenues increased 15.9%, resulting from an increase in retail unit sales of 26.4%, offset by a decrease in average selling price per retail unit of 6.9%. On a same store basis, used vehicle revenues decreased 9.0%, due to a decrease in retail unit sales of 4.1% and a decrease in average selling price per retail unit of 4.1%.
Current report
Used vehicle gross profits increased 2.7%, due to an increase in retail unit sales of 26.4%, offset by a decrease in average gross profit per retail unit of 20.1%. On a same store basis, used vehicle gross profit decreased 10.0%, led by a decrease in average gross profit per retail unit of 6.2%.
Current report
Aftersales gross profit increased 10.4%, primarily driven by increases in customer pay and warranty service work volume as well as increased gross margins. Same store aftersales gross profit increased 9.4%, driven by an increase in customer pay margins of 120 basis points and an increase in warranty margins of 110 basis points.
Current report
Financing operations recorded higher income in 2025 compared to 2024, primarily due to increased interest income resulting from the growth of the portfolio and a decreased cost of funds, resulting in an increased interest margin from 4.0% in 2024 to 4.6% in 2025.
Current report
The weighted average contract rate on loans originated in 2025 decreased to 8.6%, compared with 9.8% in 2024 as we decreased rates to maintain competitiveness following Federal Reserve rate cuts. Cost of funds decreased due to Federal Reserve rate cuts along with improved execution on ABS transactions and amendments to warehouse facilities. The decrease in provision expense as a percentage of receivables compared to the prior year reflected the increased credit quality of the portfolio as well as a decrease in the percentage of ending managed receivables constituted by the allowance for loan losses. Other financing operations expenses as a percentage of average managed receivables decreased from 2024 despite significant portfolio growth, reflecting improved operational performance and economies of scale.
Current report
The decrease in net credit losses reflects the increasing impact of originations under our tightened credit policy, which are becoming a larger portion of the managed portfolio.
Current report
Floor plan interest expense decreased $50.6 million, primarily due to lower interest rates and decreases in average vehicle inventory levels throughout the year. Floor plan interest expense decreased 16.8% due to lower interest rates and 1.3% due to decreases in inventory at our stores.
Current report
Asset Impairments
Current report
Asset impairments recorded as a component of operations consist of the following:
Current report
Goodwill and franchise value are tested for impairment annually as of October 1 or more frequently when events or changes in circumstances indicate that impairment may have occurred. We elected to perform qualitative franchise value and goodwill impairment tests as of October 1 each year. These non-cash impairment charges are included in the “Corporate and Other” category of our segment information.
Current report
In 2025, we recorded asset impairments of $5.8 million related to franchise value (See Note 6 – Goodwill and Franchise Value). No impairment charges were recorded in 2024 or 2023.
Current report
See Note 1 – Summary of Significant Accounting Policies, Note 4 – Property and Equipment, Note 6 – Goodwill and Franchise Value, and Note 15 – Fair Value Measurements of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Financial Data of this Annual Report.
Current report
Other Income, Net
Current report
Canada and the U.K. have enacted legislation implementing the OECD’s Pillar Two global minimum tax framework, effective beginning January 1, 2024. Based on the Company’s analysis of Pillar Two provisions, these tax law changes did not have a material effect on our overall effective tax rate.
Current report
Cash provided by operating activities decreased $68.4 million in 2025 compared to 2024, primarily as a result of changes in floor plan notes payable, finance receivables, and other assets, partially offset by changes in inventories, trade receivables, and other long-term liabilities and deferred revenue.
Current report
(5)Non-GAAP financial measure.
Removed paragraphs (15)
Previous report
Used vehicle revenues increased 17.7%, due to increased volume from acquisitions, offset by decreased volume at our seasoned stores. On a same store basis, used vehicle revenues decreased 8.0%, due to a 4.1% decrease in average selling price per retail unit and a 4.0% decrease in unit volume. The same store revenue decrease was driven by a decrease in our CPO vehicle category of 10.0% and a decrease in our core vehicles of 8.3%, partially offset by an increase in our value autos of 1.4%. The decrease in our CPO vehicle category includes an 8.0% decrease in volume and a 2.2% decrease in average selling price per vehicle. The decrease in our core vehicle category includes a 5.8% decrease in volume and a 2.7% decrease in average selling price per vehicle.
Previous report
Used vehicle gross profits increased 1.0%, due to an increase in unit volume of 26.4%, offset by a 20.1% decrease in average gross profit per unit. On a same store basis, used vehicle gross profit decreased 9.8%, led by a decrease in our CPO vehicles of 24.5% and decrease in our core vehicles of 5.4%, partially offset by an increase in our value auto category of 4.4%. The decrease in our CPO vehicle category was driven by a decrease in gross profit per unit of 18.0% to $2,138, and a decrease in unit volume of 8.0%. Gross profit per unit in our core vehicle category, which accounted for 55.3% of our used vehicle unit sales, increased 0.4% to $1,975. The increase in same store gross profit in our value auto category was driven by an increase in unit volume of 8.6%, offset by a 3.9% decrease in gross profit per unit to $2,331.
Previous report
Used vehicle revenues increased 1.5%, due to increased volume from acquisitions, offset by decreased volume at our seasoned stores. Excluding the impact of acquisitions, on a same store basis, used vehicle revenues decreased 10.7%, due to a 5.5% decrease in average selling price per retail unit and 5.5% decrease in unit volume.
Previous report
Used vehicle gross profits decreased 12.6%, due to a 16.4% decrease in average gross profit per unit, partially offset by a 4.5% increase in units sold. On a same store basis, used vehicle gross profit decreased 23.0%, led by a decrease in average gross profit per unit of 18.6%.
Previous report
2.8%. Same store aftersales gross profit increased 4.7%. Our gross margins continue to increase as our mix has shifted towards customer pay and warranty, which has higher margins than other service work.
Previous report
Financing operations income increased from 2023 to 2024 primarily due to increased contract rates on new originations and decreased funding costs as a percentage of average managed receivables, which increased net interest margin from 2.8% in 2023 to 4.2% in 2024, along with decreased provision expense as a percentage of average managed receivables. Given the increased seasoning of the portfolio and as origination levels were flat, there was less of a negative impact to results due to the upfront recognition of loss provisions on new receivables.
Previous report
The increase in net credit losses was driven by the growth in the portfolio, as net credit losses as a percentage of total averaged managed receivables, along with delinquencies, were relatively consistent with the prior year.
Previous report
The decline in the average recovery rate was driven by used vehicle price depreciation outpacing the amortization of the principal balance on loan principal balances, due to the relatively limited seasoning of the portfolio.
Previous report
Other Income (Expense), Net
Previous report
Our effective income tax rate in 2023 was positively affected by a reduction in the current and deferred state tax rate, due to changing state mix, and a reduction in valuation allowance. The decrease in tax rate was offset by non-deductible acquisition costs recorded during the period.
Previous report
Global Implementation of Pillar Two
Previous report
We are subject to corporation tax on profits in the United States, the United Kingdom, and Canada. The Organization for Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting has developed the Pillar Two global minimum tax regime. The Pillar Two rules provide a coordinated system to ensure that multinational enterprises with revenues above €750 million pay a minimum effective tax rate of 15% on the income arising in each of the jurisdictions in which they operate.
Previous report
On June 20, 2023, the U.K.’s Finance (No. 2) Bill 2023 was enacted, which represents the United Kingdom’s introduction of a Pillar Two regime, effective for annual reporting periods beginning on or after December 31, 2023. On August 4, 2023, Canada released draft legislation to implement the primary taxing rule in Pillar Two for fiscal periods beginning on or after December 31, 2023.
Previous report
We analyzed the tax impact of the Pillar Two regime based on available guidance and determined these rules do not have a material impact on our overall effective tax rate.
Previous report
Cash provided by operating activities increased $897.5 million in 2024 compared to 2023, primarily as a result of maturation of our financing receivables portfolio and a decrease in inventory levels at our seasoned stores, partially offset by net changes in floor plan notes payable and reduced net income.
Reworded paragraphs (38)
Previous wording
We are a global automotive retailer ranked #140 on the Fortune 500 in 2024. As of February 24, 2025, we offered 52 brands of new vehicles and all brands of used vehicles in 460 stores in the United States, the United Kingdom, and Canada and online at nearly 400 websites. We offer a wide range of products and services including new and used vehicles, F&I products, and vehicle repair and maintenance aftersales.
Current wording
We are a global automotive retailer ranked #124 on the Fortune 500 in 2025. As of February 25, 2026, we offered 54 brands of new vehicles and all brands of used vehicles in 458 stores in the United States, the United Kingdom, and Canada and online at over 400 websites. We offer a wide range of products and services including new and used vehicles, F&I products, and vehicle repair and maintenance aftersales.
Previous wording
We experienced growth of revenue in all major business lines in 2024 compared to 2023, primarily driven by increases in volume related to acquisitions, complemented by organic growth in new vehicles, and aftersales. Acquisition volume contributed to growth of our total company gross profit, offset by a decrease in new vehicle gross profit. On a same store basis, new and used vehicle retail gross profits experienced declines primarily driven by decreases in gross profit per unit as margins normalize to pre-pandemic levels. Net income decline was primarily driven by this margin normalization, increased interest expense, and increased SG&A as a percentage of gross profit.
Current wording
We experienced revenue growth across all major business lines in 2025 compared to 2024, driven by same store growth and complemented by acquisitions. Improvements in same store aftersales and third-party finance and insurance gross profit contributed to total company gross profit growth, partially offset by decreases in new and used vehicle gross profit. On a same store basis, new and used vehicle retail gross profit declined due to lower gross profit per unit as margins continued to normalize toward pre-pandemic levels. The decline in net income was driven by this margin normalization, higher SG&A as a percentage of gross profit, and a higher effective income tax rate, partially offset by lower interest expense.
Previous wording
(1)Includes the sales and gross profit related to new, used retail, used wholesale and F&I and unit sales for new and used retail
Current wording
(1)Includes the sales and gross profit related to new, used, and F&I and unit sales for new and used retail
Previous wording
(1)Includes the sales and gross profit related to new, used retail, used wholesale and F&I and unit sales for new and used retail
Current wording
(1)Includes the sales and gross profit related to new, used, and F&I and unit sales for new and used retail
Previous wording
New vehicle revenue grew 17.5%, resulting from a 15.7% increase in unit sales due to acquisitions, complemented by a 1.6% increase in average selling prices. Same store new vehicle revenue was primarily impacted by a 3.4% increase in unit sales, complemented by an increase in average selling prices of 2.0%.
Current wording
New vehicle revenue increased 2.1%, resulting from an increase in average selling prices of 2.5%, offset by a decrease in unit sales of 0.9%. Same store new vehicle revenue was primarily impacted by an increase in average selling prices of 2.0%, offset by a decrease in unit sales of 1.2%.
Previous wording
New vehicle gross profit declined 11.8%, primarily due to a 25.1% decrease in average gross profit per unit, partially offset by a 17.8% increase in unit sales driven by acquisitions. On a same store basis, gross profit per new vehicle decreased 26.4%, continuing to normalize to pre-pandemic levels.
Current wording
New vehicle gross profit decreased 9.0%, due to a decrease in average gross profit per unit of 8.2% and a decrease in unit sales of 0.9%. On a same store basis, gross profit per new vehicle decreased 8.5%, continuing to normalize to pre-pandemic levels.
Previous wording
New vehicle revenue grew 15.8%, resulting from a 17.8% increase in unit sales due to our accelerated growth through strategic acquisitions, offset by a 1.6% decrease in average selling prices. Same store new vehicle revenue was primarily impacted by a 2.3% increase in unit sales, offset by a decrease in average selling prices of 0.5%.
Current wording
New vehicle revenue increased 17.4%, resulting from an increase in unit sales of 22.4%, offset by a decrease in average selling prices of 2.8%. Same store new vehicle revenue was primarily impacted by a 1.4% increase in unit sales, offset by a decrease in average selling prices of 0.1%.
Previous wording
New vehicle gross profit declined 11.7%, primarily due to a 23.7% decrease in average gross profit per unit, partially offset by a 15.7% increase in unit sales driven by acquisitions. On a same store basis, gross profit per new vehicle decreased 24.1%.
Current wording
New vehicle gross profit decreased 10.0%, primarily due to a decrease in average gross profit per unit of 26.5%, partially offset by an increase in unit sales of 22.4%. On a same store basis, gross profit per new vehicle decreased 25.9%.
Previous wording
F&I revenue increased 6.0%, primarily due to increased volume related to acquisitions. On a same store basis, F&I revenue decreased 4.6%, to $2,011 per unit. This decrease was driven by a decline in service contract penetration rates and lower finance reserve paid per unit from third-party lenders as a result of the higher interest rate environment.
Current wording
F&I revenue increased 3.9%, primarily due to increased unit sales related to acquisitions. On a same store basis, F&I revenue increased 3.1%, to $1,863 per unit. This increase was driven by higher finance reserve paid per unit from third-party lenders.
Previous wording
F&I revenue increased 4.0%, primarily due to increased volume related to acquisitions. On a same store basis, F&I revenue decreased 3.6%, to $2,152 per unit.
Current wording
F&I revenue increased 6.0%, primarily due to increased unit sales related to acquisitions. On a same store basis, F&I revenue decreased 4.6%, to $2,017 per unit.
Previous wording
Our aftersales revenue growth was driven by increases in warranty and customer pay service work, primarily due to our strategic acquisition growth. On a same store basis, aftersales revenue increased 2.9%, primarily driven by an increase in warranty revenue of 14.0% and customer pay of 1.8%. Performance in body shop saw a decrease of
Current wording
Aftersales revenue increased 7.0%, primarily driven by increases in customer pay and warranty service work. On a same store basis, aftersales revenue increased 6.3%, primarily driven by an increase in warranty revenue of 13.9% and customer pay of 7.1%.
Previous wording
Aftersales revenue grew in all areas, primarily due to acquisition growth. On a same store basis, aftersales revenue and gross profit increased 5.8% and 7.9%, respectively.
Current wording
Aftersales revenue increased 19.1%, experiencing growth in all areas, primarily due to acquisition growth. On a same store basis, aftersales revenue and gross profit increased 2.7% and 4.5%, respectively.
Previous wording
See Note 19 – Segments for additional information on Financing Operations income and Note 5 – Finance Receivables of Notes to Consolidated Financial Statements for information on finance receivables, including credit quality.
Current wording
See Note 19 – Segments of Notes to Consolidated Financial Statements for additional information on Financing Operations income and Note 5 – Finance Receivables of Notes to Consolidated Financial Statements for information on finance receivables, including credit quality.
Previous wording
SG&A increased 8.2%, or $250.7 million, primarily due to increased personnel costs and other costs which resulted from our growth through acquisitions. Other expenses in 2023 included acquisition expenses of $27.2 million, one-time contract buyouts of $14.3 million, and $5.4 million of storm related insurance charges, offset by a $31.2 million net gain on disposal of stores.
Current wording
SG&A increased 5.0%, or $189.5 million, primarily due to increased personnel and other costs resulting from our growth through acquisitions. Other expenses in 2025 included acquisition expenses of $17.0 million and $6.7 million of storm related insurance charges. We also recognized a net gain on the disposal of stores of $20.3 million.
Previous wording
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 66.0% from 62.2% in the prior year.
Current wording
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 68.1% from 66.3% in the prior year.
Previous wording
SG&A increased 14.0%, or $460.4 million, primarily due to increased personnel and other costs resulting from our growth through acquisitions. Other expenses in 2024 included acquisition expenses of $10.0 million and $6.1 million of storm related insurance charges. We also recognized a gain on the disposal of stores of $8.2 million.
Current wording
SG&A increased 14.0%, or $460.4 million, primarily due to increased personnel costs and other costs which resulted from our growth through acquisitions. Other expenses in 2024 included acquisition expenses of $10.0 million, and $6.1 million of storm related insurance charges, offset by a net gain on the disposal of stores of $8.2 million.
Previous wording
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 61.9% from 59.5% in the prior year. We also recognized a gain on the disposal of stores of $31.2 million.
Current wording
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 66.1% from 62.3% in the prior year.
Previous wording
Floor plan interest expense increased $112.1 million, primarily due to higher interest rates, increases in vehicle inventory levels from acquisitions as well as existing locations recovering from prior year inventory shortages.
Current wording
Floor plan interest expense increased $127.9 million, primarily due to higher interest rates and increases in vehicle inventory levels from acquisitions as well as at existing locations.
Previous wording
Acquisition activity contributed to the increases in depreciation and amortization in 2024 compared to 2023 and in 2023 compared to 2022. We acquired approximately $409.5 million and $260.5 million of depreciable property as part of our 2024 and 2023 acquisitions, respectively. Capital expenditures totaled $351.4 million and $230.2 million, respectively, in 2024 and 2023. These investments increase the amount of depreciable assets. See the discussion under “Liquidity and Capital Resources” for additional information.
Current wording
Acquisition activity contributed to the increases in depreciation and amortization in 2025 compared to 2024 and in 2024 compared to 2023. We acquired approximately $121.8 million and $409.5 million of depreciable property as part of our 2025 and 2024 acquisitions, respectively. Capital expenditures totaled $350.9 million and $351.4 million, respectively, in 2025 and 2024. These investments increased the amount of depreciable assets. See the discussion under “Liquidity and Capital Resources” for additional information.
Previous wording
Our operating margin decreased 110 basis points compared to the prior year, driven by a decline in gross profit per new and used unit sold. Adjusting for non-core charges, including acquisition expenses and storm related insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 110 basis points.
Current wording
Our operating margin decreased 10 basis points compared to the prior year, driven by a decline in gross profit per new and used unit sold. Adjusting for non-core charges, including acquisition expenses and storm related insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 10 basis points.
Previous wording
Our operating margin decreased 140 basis points compared to the prior year, driven by an increase in SG&A as a percentage of gross profit. Adjusting for non-core charges, including acquisition expenses, one-time contract buyouts, and storm insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 120 basis points.
Current wording
Our operating margin decreased 120 basis points compared to the prior year, driven by an increase in SG&A as a percentage of gross profit. Adjusting for non-core charges, including acquisition expenses, one-time contract buyouts, and storm insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 110 basis points.
Previous wording
The increase in other interest expense was due to higher interest rates and increased borrowings on our credit facilities. See also Note 10 – Credit Facilities and Long-Term Debt of Notes to Consolidated Financial Statements for additional information.
Current wording
The increase in other interest expense was due to the issuance of $600 million in aggregate principal amount of 5.500% senior notes due 2030 issued in September 2025, as well as new mortgages on owned real estate. See also Note 10 – Credit Facilities and Long-Term Debt of Notes to Consolidated Financial Statements for additional information.
Previous wording
Other income (expense), net primarily includes other income associated with investment income and other non-recurring transactions.
Current wording
Other income, net primarily includes other income associated with investment income and other non-recurring transactions.
Previous wording
Other income (expense), net increased $65.2 million in 2023 compared to 2022, primarily as a result of a reduction in equity method investment losses, foreign currency translation gains, and interest income from foreign currency deposit accounts.
Current wording
Other income, net decreased $21.9 million in 2025 compared to 2024, primarily as a result of a decrease in equity method investment income, partially offset by foreign currency translation gains.
Previous wording
Other income (expense), net increased $17.3 million in 2024 compared to 2023, primarily as a result of increases in equity method investment income and insurance proceeds, partially offset by foreign currency translation losses and reduced interest income from foreign currency deposit accounts.
Current wording
Other income, net increased $17.3 million in 2024 compared to 2023, primarily as a result of an increase in equity method investment income, offset by foreign currency translation losses.
Previous wording
Our effective income tax rate was 23.8% for 2024 compared to 25.7% for 2023. Our effective income tax rate was positively affected by an increase in general business credits and a reduction in valuation allowance.
Current wording
Our effective income tax rate was 25.5% for 2025 compared to 23.8% for 2024. Our effective income tax rate was negatively affected by a decrease in general business credits and tax basis differences on divested assets, offset by a reduction in valuation allowance.
Previous wording
Adjusting for non-deductible acquisition costs and the benefit of transferable federal tax credits during 2024, our effective income tax rate excluding non-core items is 24.7%, a decrease of 60 basis points compared to the effective income tax rate excluding non-core items for 2023.
Current wording
Adjusting for non-deductible acquisition costs, tax basis differences on divested assets, and the benefit of transferable federal tax credits during 2025, our effective income tax rate excluding non-core items was 25.1%, an increase of 50 basis points compared to the effective income tax rate excluding non-core items for 2024.
Previous wording
We manage our liquidity and capital resources in the context of our overall business strategy, continually forecasting and managing our cash, working capital balances, and capital structure to meet the short-term and long-term obligations of our business while maintaining liquidity and financial flexibility. Our free cash flow deployment strategy targets an allocation of 35% to 45% investment in acquisitions, 25% investment in capital expenditures, innovation, and diversification, and 30% to 40% in shareholder return in the form of dividends and share repurchases.
Current wording
We manage our liquidity and capital resources in the context of our overall business strategy, continually forecasting and managing our cash, working capital balances, and capital structure to meet the short-term and long-term obligations of our business while maintaining liquidity and financial flexibility. Our free cash flow deployment strategy targets an allocation of 25% to 35% investment in acquisitions, 25% investment in capital expenditures, innovation, and diversification, and 40% to 50% in shareholder return in the form of dividends and share repurchases based on current valuation trends in acquisitions relative to stock price performance.
Previous wording
Inventories are one of the most significant components of our cash flow from operations. As of December 31, 2024, our new vehicle days’ supply was 59 days, or nine days higher than our days’ supply as of December 31, 2023. Our days’ supply of used vehicles was 53 days, which was eleven days higher than our days’ supply as of December 31, 2023. We calculate days’ supply of inventory on-ground inventory unit levels and a 30-day total units sales volume, both at the end of each reporting period. We have continued to focus on managing our unit mix and maintaining an appropriate level of new and used vehicle inventory.
Current wording
Inventories are one of the most significant components of our cash flow from operations. As of December 31, 2025, our new vehicle days’ supply was 54 days, or five days lower than our days’ supply as of December 31, 2024. Our days’ supply of used vehicles was 48 days, which was five days lower than our days’ supply as of December 31, 2024. We calculate days’ supply of inventory on-ground inventory unit levels and a 30-day total units sales volume, both at the end of each reporting period. We have continued to focus on managing our unit mix and maintaining an appropriate level of new and used vehicle inventory.
Previous wording
Net cash used in investing activities totaled $1.9 billion and $1.3 billion, respectively, for 2024 and 2023. Cash flows from investing activities relate primarily to capital expenditures, acquisition and divestiture activity and sales of property and equipment.
Current wording
Net cash used in investing activities totaled $1.0 billion and $1.9 billion, respectively, for 2025 and 2024. Cash flows from investing activities relate primarily to capital expenditures, acquisition and divestiture activity and sales of property and equipment.
Previous wording
During 2024, we raised net proceeds of $408.2 million through the issuance of debt, and had net borrowings of $346.8 million on our lines of credit. These funds were primarily used for acquisitions, share repurchases and capital expenditures.
Current wording
During 2025, we raised net proceeds of $786.8 million through the issuance of debt, and had net borrowings of $408.6 million on our lines of credit. These funds were primarily used for acquisitions, share repurchases and capital expenditures.
Previous wording
Our debt to total capital ratio, excluding floor plan notes payable and non-recourse notes payable, was 48.4% at December 31, 2024 compared to 47.1% at December 31, 2023.
Current wording
Our debt to total capital ratio, excluding floor plan notes payable and non-recourse notes payable, was 52.5% at December 31, 2025 compared to 48.4% at December 31, 2024.
Previous wording
During 2024, we repurchased 1,229,503 shares at a weighted average price of $283.02 under our current share repurchase authorization, with $469.0 million remaining.
Current wording
During 2025, we repurchased 3,019,951 shares at a weighted average price of $313.73 under our current share repurchase authorization, with $621.6 million remaining for future repurchases.
Previous wording
(1)As of December 31, 2024, we had a $2.8 billion new vehicle floor plan commitment as part of our USB credit facility, and a $1.1 billion CAD wholesale floorplan commitment as part of our BNS credit facility.
Current wording
(1)As of December 31, 2025, we had a $3.0 billion new vehicle floor plan commitment as part of our USB credit facility, and a $1.1 billion CAD wholesale floorplan commitment as part of our BNS credit facility.
Previous wording
(3)Available credit is based on the borrowing base amount effective as of November 30, 2024. This amount is reduced by $25.0 million for outstanding letters of credit.
Current wording
(3)Available credit is based on the borrowing base amount effective as of November 30, 2025. This amount is reduced by $6.4 million for outstanding letters of credit.
Previous wording
As of December 31, 2024, we had $2.1 billion of goodwill on our balance sheet associated with our reporting units. The annual goodwill impairment analysis resulted in no indications of impairment in 2024, 2023, or 2022.
Current wording
As of December 31, 2025, we had $2.5 billion of goodwill on our balance sheet associated with our reporting units. The annual goodwill impairment analysis resulted in no indications of impairment in 2025, 2024, or 2023.
Previous wording
As of December 31, 2024, we had $2.6 billion of franchise value on our balance sheet. No individual entity accounted for more than 3% of our total franchise value as of December 31, 2024. The annual franchise value impairment analysis, which we perform as of October 1 each year, resulted in no indications of impairment in 2024, 2023, or 2022.
Current wording
As of December 31, 2025, we had $2.8 billion of franchise value on our balance sheet. No individual entity accounted for more than 2% of our total franchise value as of December 31, 2025. The annual franchise value impairment analysis, which we perform as of October 1 each year, resulted in indications of impairment at an individual entity. We tested the franchise value for this location, which resulted in an impairment charge of $5.8 million. There were no indications of impairment in 2024 or 2023.
Previous wording
We are subject to financial statement risk to the extent that our goodwill or franchise rights become impaired due to decreases in the fair value. A future decline in performance, decreases in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position and results of operations. Furthermore, if a manufacturer becomes insolvent, we may be required to record a partial or total impairment on the franchise value and/or goodwill related to that manufacturer. No individual manufacturer accounted for more than 20% of our total franchise value as of December 31, 2024.
Current wording
We are subject to financial statement risk to the extent that our goodwill or franchise rights become impaired due to decreases in the fair value. A future decline in performance, decreases in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position and results of operations. Furthermore, if a manufacturer becomes insolvent, we may be required to record a partial or total impairment on the franchise value and/or goodwill related to that manufacturer. No individual manufacturer accounted for more than 17% of our total franchise value as of December 31, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our effective income tax rate in 2024 was positively affected by an increase in general business credits and a reduction in valuation allowance.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Floor plan interest expense increased $127.9 million, primarily due to higher interest rates and increases in vehicle inventory levels from acquisitions. Floor plan interest expense increased 41.5% due to higher interest rates, 38.9% due to acquisition volume, and 4.4% due to increases in inventory at existing locations.