EX-99.1 2 a2021q3exx99earningsrelease.htm EX-99.1 Document

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LITHIA & DRIVEWAY (LAD) INCREASES REVENUE 70%, EPS 47 %, AND ADJUSTED EPS 63%, RECORD THIRD QUARTER PERFORMANCE
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ANNOUNCES DIVIDEND OF $0.35 PER SHARE FOR THIRD QUARTER

Medford, Oregon, October 20, 2021 - Lithia & Driveway (NYSE: LAD) today reported the highest third quarter revenue and earnings per share in company history.

Third quarter 2021 revenue increased 70% to $6.2 billion from $3.6 billion in the third quarter of 2020.

Third quarter 2021 net income attributable to LAD per diluted share was $10.11, a 47% increase from $6.86 per diluted share reported in the third quarter of 2020. Adjusted third quarter 2021 net income attributable to LAD per diluted share was $11.21, a 63% increase compared to $6.89 per diluted share in the same period of 2020.

Third quarter 2021 net income was $309 million, a 95% increase compared to net income of $159 million in the same period of 2020. Adjusted third quarter 2021 net income was $342 million, a 115% increase compared to adjusted net income of $160 million for the same period of 2020.

As shown in the attached non-GAAP reconciliation tables, the 2021 third quarter adjusted results exclude a $1.10 per diluted share net non-core charges related to a non-cash unrealized investment loss, the redemption of senior notes, acquisition expenses, an asset impairment, and insurance reserves. The 2020 third quarter adjusted results exclude a $0.03 per diluted share net non-core charge related to insurance reserves and acquisition expenses.

Third Quarter-over-Quarter Comparisons and Operating Highlights:
•Revenues increased 70.4%
•New vehicle retail revenues increased 53.9%
•Used vehicle retail revenues increased 90.2%
•36,600 unit sales generated from Lithia e-commerce platforms, 25% of total retail unit sales (excluding Driveway)
•Achieved milestone of 1,000 Driveway Shop units
•F&I per unit increased 25.8% to $2,074
•Service, body, and parts revenues increased 60.9%
•Total vehicle gross profit per unit increased 32.7% to $6,175
•Adjusted SG&A as a percentage of gross profit improved by 380 basis points from 59.6% to 55.8%

"Our third quarter results demonstrate the dynamism of LAD's model," said Bryan DeBoer, Lithia & Driveway's President and CEO. "We excelled at procuring used vehicles during the challenging environment, enabling us to offer consumers the most diverse inventory available, driving same store volume increases while continuing to increase margins. In addition, Driveway and our store e-commerce offerings are positioned to gain incremental market share as consumers seek out a more transparent and frictionless buying experience."

For the first nine months of 2021 revenues increased 80% to $16.5 billion, compared to $9.2 billion in 2020.

Net income attributable to LAD for the first nine months of 2021 was $26.91 per diluted share, compared to $12.18 per diluted share in 2020, an increase of 121%. Adjusted net income attributable to LAD per diluted share for the first nine months of 2021 increased 127% to $28.52 from $12.59 in the same period of 2020.

Corporate Development
During the quarter, we completed several acquisitions expected to contribute $1.7 billion in annualized revenue, including partnering with Pfaff Automotive to enter Canada, our first international acquisition, and expanding our United States footprint into new markets.



"Year-to-date we have acquired $6.2 billion in annualized revenue and are pacing ahead of schedule toward our goal of achieving $50 billion in revenue and $50 of earnings per share by 2025," said DeBoer. "The pipeline is robust and we continue to identify accretive deals that strategically expand our network while meeting our disciplined return thresholds."

Balance Sheet Update
We ended the third quarter with approximately $1.7 billion in cash and availability on our revolving lines of credit. In addition, our unfinanced real estate could provide additional liquidity of approximately $729 million.

Dividend Payment
Our Board of Directors approved a dividend of $0.35 per share related to third quarter 2021 financial results. We expect to pay the dividend on November 19, 2021 to shareholders of record on November 12, 2021.

Third Quarter Earnings Conference Call and Updated Presentation
The third quarter 2021 conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third quarter 2021 results has been added to our investor relations website. To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.

About Lithia & Driveway (LAD)
LAD is a growth company powered by people and innovation with a plan to profitably consolidate the largest retail sector in North America. As the leading provider of personal transportation solutions in North America, LAD is among the fastest-growing companies in the Fortune 500 and is currently ranked #231 (#2 on 10-Year EPS Growth, #3 on 10-Year TSR and #12 on 10-year Revenue growth in 2021). By providing a wide array of products and services for the entire vehicle ownership lifecycle through various consumer channels, LAD builds magnetic brand loyalty. Operational excellence is achieved by focusing the business on convenient and transparent consumer experiences supported by proprietary data science to improve market share, consumer loyalty and profitability. LAD's omni-channel strategy will continue to pragmatically disrupt the industry by leveraging experienced teams, vast owned inventories, technology, and physical network. LAD continues to lead the industry's consolidation, and this combined with Driveway's e-commerce in-home experiences, further accelerates the massive regenerating capital engine. Together, these endeavors create a unique and compelling high-growth strategy that provides transportation solutions wherever, whenever, and however consumers desire. 

Sites
www.lithia.com
www.lithiainvestorrelations.com
www.lithiacareers.com
www.driveway.com

Lithia & Driveway on Facebook
https://www.facebook.com/LithiaMotors
https://www.facebook.com/DrivewayHQ

Lithia & Driveway on Twitter
https://twitter.com/lithiamotors
https://twitter.com/DrivewayHQ

Contact:
Tina Miller 
SVP and Chief Financial Officer
IR@lithia.com 
(541) 864-1748



Forward-Looking Statements
Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as "project", "outlook", "target", "may", "will", "would", "should", "seek", "expect", "plan", "intend", "forecast", "anticipate", "believe", "estimate", "predict", "potential", "likely", "goal", "strategy", "future", "maintain", and "continue" or the negative of these terms or other comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:

•Future market conditions, including anticipated car sales levels;
•Anticipated impacts of the continued COVID-19 pandemic on the national and local economies in which we operate, our business operations and consumer demand;
•Continuation of our sales and services, including in-store appointments and home deliveries;
•Expected growth from our e-commerce home solutions and digital strategies;
•Expected operating results, such as improved store performance; continued improvement of selling, general and administrative expenses ("SG&A") as a percentage of gross profit and all projections;
•Anticipated integration, success and growth of acquired stores;
•Anticipated ability to capture additional market share;
•Anticipated ability to find accretive acquisitions;
•Expected revenues from acquired stores;
•Anticipated synergies, ability to monetize our investment in digital innovation;
•Anticipated additions of dealership locations to our portfolio in the future;
•Anticipated financial condition and liquidity, including from our cash, availability on our credit facility and unfinanced real estate;
•Anticipated use of proceeds from our financings;
•Anticipated allocations, uses and levels of capital expenditures in the future;
•Expectations regarding compliance with financial and restrictive covenants in our credit facility and other debt agreements;
•Statements regarding furloughed employees and cost reductions;
•Expectations regarding programs and initiatives for employee recruitment, training, and retention; and
•Our strategies for customer retention, growth, market position, financial results and risk management.


Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this presentation. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:

•Future economic and financial conditions (both nationally and locally), including as a result of the COVID-19 pandemic;
•Changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers;
•Risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms);
•The adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level;
•Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures, facilities or equipment; and
•Government regulations and legislation, and other risks set forth throughout "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and in "Part II, Item 1A. Risk Factors" of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.

Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
 


Non-GAAP Financial Measures
This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenue and gross profit, adjusted operating margin, adjusted operating profit as a percentage of revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total debt. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.




LAD
Consolidated Statements of Operations (Unaudited)
(In millions except per share data)
Three months ended September 30,%Nine months ended September 30,%
IncreaseIncrease
20212020(Decrease)20212020(Decrease)
Revenues:
New vehicle retail$2,898.2 $1,883.3 53.9 %$8,237.7 $4,624.6 78.1 %
Used vehicle retail2,079.5 1,093.2 90.2 5,236.6 2,889.7 81.2 
Used vehicle wholesale260.9 98.8 164.1 613.5 216.8 183.0 
Finance and insurance297.0 160.5 85.0 765.0 407.2 87.9 
Service, body and parts578.3 359.5 60.9 1,503.4 964.9 55.8 
Fleet and other55.9 24.9 124.5 166.0 79.3 109.3 
Total revenues
6,169.8 3,620.2 70.4 %16,522.2 9,182.5 79.9 %
Cost of sales:
New vehicle retail2,548.9 1,743.2 46.2 7,418.0 4,314.2 71.9 
Used vehicle retail1,846.9 948.4 94.7 4,635.2 2,556.8 81.3 
Used vehicle wholesale255.2 91.2 179.8 586.8 206.5 184.2 
Service, body and parts275.8 163.6 68.6 704.3 456.5 54.3 
Fleet and other53.9 22.2 142.8 162.7 71.6 127.2 
Total cost of sales
4,980.7 2,968.6 67.8 13,507.0 7,605.6 77.6 
Gross profit1,189.1 651.6 82.5 %3,015.2 1,576.9 91.2 %
Asset impairments1.9 — NM1.9 7.9 NM
SG&A expense673.3 389.1 73.0 1,757.6 1,039.6 69.1 
Depreciation and amortization34.4 22.9 50.2 91.5 67.3 36.0 
Income from operations479.5 239.6 100.1 %1,164.2 462.1 151.9 %
Floor plan interest expense(3.6)(6.1)(41.0)(16.9)(28.3)(40.3)
Other interest expense(28.0)(16.6)68.7 (79.6)(50.4)57.9 
Other income, net(25.7)2.2 NM(14.6)8.2 NM
Income before income taxes422.2 219.1 92.7  %1,053.0 391.6 168.9 %
Income tax expense (113.2)(60.3)87.7 (282.9)(108.9)159.8 
Income tax rate26.8 %27.5 %26.9 %27.8 %
Net income$309.0 $158.8 94.6 %$770.1 $282.7 172.4 %
Net income attributable to non-controlling interests(1.1)— NM(1.1)— NM
Net income attributable to LAD$307.9 $158.8 93.9 %$769.0 $282.7 172.0 %
Diluted earnings per share attributable to LAD:
Net income per share$10.11 $6.86 47.4  %$26.91 $12.18 120.9 %
Diluted shares outstanding30.523.132.0  %28.623.223.3 %
NM - not meaningful


LAD
Key Performance Metrics (Unaudited)
Three months ended September 30,%Nine months ended September 30,%
IncreaseIncrease
20212020(Decrease)20212020(Decrease)
Gross margin
New vehicle retail12.1  %7.4 %470 bps10.0 %6.7 %330 bps
Used vehicle retail11.2 13.2 (200)11.5 11.5 — 
Finance and insurance100.0 100.0 — 100.0 100.0 — 
Service, body and parts52.3 54.5 (220)53.2 52.7 50 
Gross profit margin19.3 18.0 130 18.2 17.2 100 
Unit sales
New vehicle retail66,894 47,923 39.6  %195,934 118,699 65.1  %
Used vehicle retail76,362 49,363 54.7 205,643 135,499 51.8 
Total retail units sold143,256 97,286 47.3 401,577 254,198 58.0 
Average selling price
New vehicle retail$43,325 $39,298 10.2 %$42,043 $38,960 7.9 %
Used vehicle retail27,233 22,145 23.0 25,464 21,326 19.4 
Average gross profit per unit
New vehicle retail$5,221 $2,922 78.7 %$4,184 $2,615 60.0 %
Used vehicle retail3,046 2,932 3.9 2,924 2,457 19.0 
Finance and insurance2,074 1,649 25.8 1,905 1,602 18.9 
Total vehicle(1)
6,175 4,655 32.7 5,510 4,173 32.0 
Revenue mix
New vehicle retail47.0  %52.0  %49.9 %50.4 %
Used vehicle retail33.7 30.2 31.7 31.5 
Used vehicle wholesale4.2 2.7 3.7 2.4 
Finance and insurance, net4.8 4.4 4.6 4.4 
Service, body and parts9.4 9.9 9.1 10.5 
Fleet and other0.9 0.8 1.0 0.8 
Gross Profit Mix
New vehicle retail29.4  %21.5  %27.2  %19.7  %
Used vehicle retail19.6 22.2 19.9 21.1 
Used vehicle wholesale0.5 1.2 0.9 0.7 
Finance and insurance, net25.0 24.6 25.4 25.8 
Service, body and parts25.3 30.1 26.5 32.2 
Fleet and other0.2 0.4 0.1 0.5 
AdjustedAs reportedAdjustedAs reported
Three months ended September 30,Three months ended September 30,Nine months ended September 30,Nine months ended September 30,
Other metrics20212020202120202021202020212020
SG&A as a % of revenue10.8  %10.7  %10.9  %10.7  %10.5 %11.3 %10.6 %11.3 %
SG&A as a % of gross profit55.8 59.6 56.6 59.7 57.4 65.5 58.3 65.9 
Operating profit as a % of revenue8.0 6.6 7.8 6.6 7.2 5.2 7.0 5.0 
Operating profit as a % of gross profit41.3 36.9 40.3 36.8 39.6 30.2 38.6 29.3 
Pretax margin7.6 6.1 6.8 6.1 6.8 4.4 6.4 4.3 
Net profit margin5.5 4.4 5.0 4.4 4.9 3.2 4.7 3.1 
(1)Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail


LAD
Same Store Operating Highlights (Unaudited)
Three months ended September 30,%Nine months ended September 30,%
IncreaseIncrease
20212020(Decrease)20212020(Decrease)
Revenues
New vehicle retail$1,765.0 $1,822.6 (3.2) %$5,566.6 $4,494.5 23.9  %
Used vehicle retail1,485.8 1,062.4 39.9 3,948.0 2,813.8 40.3 
Finance and insurance189.2 154.9 22.1 526.4 396.0 32.9 
Service, body and parts374.3 349.0 7.2 1,042.6 938.1 11.1 
Total revenues3,978.2 3,509.1 13.4 11,574.8 8,931.0 29.6 
Gross profit
New vehicle retail$213.9 $136.5 56.7  %$550.4 $302.9 81.7  %
Used vehicle retail172.0 141.5 21.6 472.1 327.0 44.4 
Finance and insurance189.2 154.9 22.1 526.4 396.0 32.9 
Service, body and parts201.5 189.5 6.3 563.7 493.8 14.2 
Total gross profit779.3 632.5 23.2 2,130.1 1,537.4 38.6 
Gross margin
New vehicle retail12.1  %7.5  %460 bps9.9 %6.7 %320 bps
Used vehicle retail11.6 13.3 (170)12.0 11.6 40 
Finance and insurance100.0 100.0 — 100.0 100.0 — 
Service, body and parts53.8 54.3 (50)54.1 52.6 150 
Gross profit margin19.6 18.0 160 18.4 17.2 120 
Unit sales
New vehicle retail39,886 46,161 (13.6) %131,478 115,031 14.3  %
Used vehicle retail54,300 47,863 13.4 155,375 131,686 18.0 
Average selling price
New vehicle retail$44,251 $39,484 12.1 %$42,339 $39,072 8.4 %
Used vehicle retail27,362 22,196 23.3 25,409 21,368 18.9 
Average gross profit per unit
New vehicle retail$5,362 $2,956 81.4 %$4,186 $2,633 59.0 %
Used vehicle retail3,167 2,956 7.1 3,039 2,483 22.4 
Finance and insurance2,009 1,647 22.0 1,835 1,605 14.3 
Total vehicle(1)
6,130 4,681 31.0 5,452 4,200 29.8 
(1)Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail


LAD
Other Highlights (Unaudited)

As of
September 30,December 31,September 30,
202120202020
Days Supply(1)
New vehicle inventory245050
Used vehicle inventory486564
(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.

Financial covenants
RequirementAs of September 30, 2021
Current ratioNot less than 1.10 to 11.91 to 1
Fixed charge coverage ratioNot less than 1.20 to 16.91 to 1
Leverage ratioNot more than 5.75 to 11.51 to 1

LAD
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
September 30, 2021December 31, 2020
Cash and cash equivalents$137.8 $160.1 
Trade receivables, net812.6 614.0 
Inventories, net2,012.6 2,492.9 
Other current assets 112.5 70.6 
Total current assets$3,075.5 $3,337.6 
Property and equipment, net2,352.9 2,197.5 
Intangibles1,348.7 943.2 
Other non-current assets 3,427.5 1,423.8 
Total assets$10,204.6 $7,902.1 
Floor plan notes payable1,018.3 1,797.2 
Other current liabilities1,163.5 682.5 
Total current liabilities$2,181.8 $2,479.7 
Long-term debt2,586.1 2,064.7 
Other long-term liabilities and deferred revenue858.9 696.2 
Total liabilities$5,626.8 $5,240.6 
Stockholder's Equity4,577.8 2,661.5 
Total liabilities & stockholders' equity$10,204.6 $7,902.1 



LAD
Summarized Cash Flow from Operations (Unaudited)
(In millions)
Nine months ended September 30,
20212020
Net income$770.1 $282.7 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments1.9 7.9 
Depreciation and amortization91.5 67.3 
Stock-based compensation25.6 17.2 
Loss on redemption of senior notes10.3 — 
Loss on disposal of assets(2.5)(0.5)
Loss (gain) on sale of franchises5.2 (1.4)
Unrealized investment loss22.3 — 
Deferred income taxes25.6 6.8 
Amortization of operating lease right-of-use assets27.0 20.8 
(Increase) decrease:
Trade receivables, net
(85.0)(11.3)
Inventories
1,003.2 457.0 
Other assets
(351.1)(36.4)
Increase (decrease):
Floor plan notes payable, net
91.3 (128.0)
Trade payables
97.2 25.0 
Accrued liabilities
236.9 66.8 
Other long-term liabilities and deferred revenue
19.7 26.7 
Net cash provided by operating activities$1,989.2 $800.6 



LAD
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In millions)
Nine months ended September 30,
Net cash provided by operating activities20212020
As reported$1,989.2 $800.6 
Floor plan notes payable, non-trade, net
(840.9)(317.8)
Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory
(317.1)(133.6)
Adjusted$831.2 $349.2 



LAD
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except for per share data)

Three Months Ended September 30, 2021
As reportedAsset impairmentInvestment lossInsurance reservesAcquisition expensesLoss on redemption of senior notesAdjusted
Asset impairments$1.9 $(1.9)$— $— $— $— $— 
Selling, general and administrative673.3 — — (3.4)(6.3)— 663.6 
Operating income479.5 1.9 — 3.4 6.3 — 491.1 
Other income (expense), net(25.7)— 23.2 — — 10.3 7.8 
Income before income taxes422.2 1.9 23.2 3.4 6.3 10.3 467.3 
Income tax (provision) benefit(113.2)(0.5)(6.2)(0.9)(1.4)(2.7)(124.9)
Net income$309.0 $1.4 $17.0 $2.5 $4.9 $7.6 $342.4 
Net income attributable to non-controlling interests(1.1)— — — — — (1.1)
Net income attributable to LAD$307.9 $1.4 $17.0 $2.5 $4.9 $7.6 $341.3 
Diluted earnings per share attributable to LAD$10.11 $0.05 $0.56 $0.08 $0.16 $0.25 $11.21 
Diluted share count30.5 

Three Months Ended September 30, 2020
As reportedInsurance reservesAcquisition expensesAdjusted
Selling, general and administrative$389.1 $(0.3)$(0.6)$388.2 
Operating income239.6 0.3 0.6 240.5 
Income before income taxes219.1 0.3 0.6 220.0 
Income tax (provision) benefit(60.3)— (0.1)(60.4)
Net income$158.8 $0.3 $0.5 $159.6 
Diluted earnings per share$6.86 $0.01 $0.02 $6.89 
Diluted share count23.1 



LAD
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except for per share data)

Nine Months Ended September 30, 2021
As reportedNet disposal loss on sale of storesAsset impairmentInvestment lossInsurance reservesAcquisition expensesLoss on redemption of senior notesAdjusted
Asset impairments$1.9 $— $(1.9)$— $— $— $— $— 
Selling, general and administrative1,757.6 (5.2)— — (5.0)(17.9)— 1,729.5 
Operating income1,164.2 5.2 1.9 — 5.0 17.9 — 1,194.2 
Other income (expense), net(14.6)— — 22.3 — — 10.3 18.0 
Income before income taxes1,053.0 5.2 1.9 22.3 5.0 17.9 10.3 1,115.6 
Income tax (provision) benefit(282.9)(1.4)(0.5)(6.0)(1.4)(4.5)(2.7)(299.4)
Net income$770.1 $3.8 $1.4 $16.3 $3.6 $13.4 $7.6 $816.2 
Net income attributable to non-controlling interests(1.1)— — — — — — (1.1)
Net income attributable to LAD$769.0 $3.8 $1.4 $16.3 $3.6 $13.4 $7.6 $815.1 
Diluted earnings per share attributable to LAD$26.91 $0.13 $0.05 $0.57 $0.13 $0.47 $0.26 $28.52 
Diluted share count28.6 

Nine Months Ended September 30, 2020
As reportedNet disposal gain on sale of storesAsset impairmentInsurance reservesAcquisition expensesTax attributeAdjusted
Asset impairments$7.9 $— $(7.9)$— $— $— $— 
Selling, general and administrative1,039.6 1.4 — (6.1)(1.6)— 1,033.3 
Operating income462.1 (1.4)7.9 6.1 1.6 — 476.3 
Income before income taxes391.6 (1.4)7.9 6.1 1.6 — 405.8 
Income tax (provision) benefit(108.9)0.4 (2.3)(1.6)(0.4)(0.8)(113.6)
Net income$282.7 $(1.0)$5.6 $4.5 $1.2 $(0.8)$292.2 
Diluted earnings per share$12.18 $(0.04)$0.24 $0.19 $0.05 $(0.03)$12.59 
Diluted share count23.2 




LAD
Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)
(In millions)
Three months ended September 30,%Nine months ended September 30,%
IncreaseIncrease
20212020(Decrease)20212020(Decrease)
EBITDA and Adjusted EBITDA
Net income$309.0 $158.8 94.6  %$770.1 $282.7 172.4  %
Flooring interest expense3.6 6.1 (41.0)16.9 28.3 (40.3)
Other interest expense28.0 16.6 68.7 79.6 50.4 57.9 
Income tax expense113.2 60.3 87.7 282.9 108.9 159.8 
Depreciation and amortization34.4 22.9 50.2 91.5 67.3 36.0 
EBITDA$488.2 $264.7 84.4  %$1,241.0 $537.6 130.8  %
Other adjustments:
Less: flooring interest expense$(3.6)$(6.1)(41.0)$(16.9)$(28.3)(40.3)
Less: used vehicle line of credit interest— (0.1)(100.0)— (0.5)(100.0)
Add: acquisition expenses6.3 0.6 950.0 17.9 1.6 1,018.8 
Add: loss (gain) on divestitures— — NM5.2 (1.4)NM
Add: investment loss23.2 — NM22.3 — NM
Add: insurance reserves3.4 0.3 1,033.35.0 6.1 (18.0)
Add: loss on redemption of senior notes10.3 — NM10.3 — NM
Add: asset impairment1.9 — NM1.9 7.9 NM
Adjusted EBITDA$529.7 $259.4 104.2 %$1,286.7 $523.0 146.0 %
NM - not meaningful



As of%
September 30,Increase
Net Debt to Adjusted EBITDA20212020(Decrease)
Floor plan notes payable: non-trade$688.9 $1,293.2 (46.7)%
Floor plan notes payable329.4 310.3 6.2 
Used and service loaner vehicle inventory financing facility— 357.0 (100.0)
Revolving lines of credit404.8 47.5 752.2
Real estate mortgages606.0 628.8 (3.6)
Finance lease obligations54.1 132.4 (59.1)
5.250% Senior notes due 2025— 300.0 (100.0)
4.625% Senior notes due 2027400.0 400.0 — 
4.375% Senior notes due 2031550.0 — NM
3.875% Senior notes due 2029800.0 — NM
Other debt10.0 2.6 284.6 
Unamortized debt issuance costs(31.9)(12.8)149.2 
Total debt$3,811.3 $3,459.0 10.2 %
Less: Floor plan related debt$(1,018.3)$(1,960.5)(48.1)%
Less: Investment in floorplan offset accounts(24.8)— — 
Less: Cash and cash equivalents(137.8)(57.1)141.3 
Less: Availability on used vehicle and service loaner financing facilities(707.1)(72.0)882.1 
Net Debt$1,923.3 $1,369.4 40.4 %
TTM Adjusted EBITDA$1,533.8 $655.3 134.1 %
Net debt to Adjusted EBITDA1.25 x2.09 x