Accounts Receivable, Accounts Payable, Vehicle Floor Plan Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2023

Accounts Receivable, Accounts Payable, Vehicle Floor Plan Payable And Accrued Liabilities [Abstract]

Accounts Receivable, Accounts Payable, Vehicle Floor Plan Payable And Accrued Liabilities

ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE, VEHICLE FLOOR PLAN PAYABLE AND ACCRUED LIABILITIES

Accounts receivable consist of the following:

	As of
	September 30, 2023		December 31, 2022
(in thousands)
Receivables from contracts with customers, less estimated credit losses of $22,598 and $21,387	$	513,747	$	533,622
Other receivables	27,923		27,157
	$	541,670	$	560,779

Credit loss expense was $2.4 million and $0.6 million for the three months ended September 30, 2023 and 2022, respectively. Credit loss expense was $4.3 million and $2.8 million for the nine months ended September 30, 2023 and 2022, respectively.

Accounts payable, vehicle floor plan payable and accrued liabilities consist of the following:

	As of
	September 30, 2023		December 31, 2022
(in thousands)
Accounts payable	$	136,468	$	136,186
Vehicle floor plan payable	126,869		69,756
Accrued compensation and related benefits	137,232		149,823
Other accrued liabilities	229,156		207,240
	$	629,725	$	563,005

Cash overdrafts of $4.3 million and $0.5 million are included in accounts payable as of September 30, 2023 and December 31, 2022, respectively.

The Company finances new, used and service loaner vehicle inventory through standardized floor plan facilities with Truist Bank and Toyota Motor Credit Corporation (Truist and Toyota floor plan facility) and Ford Motor Credit Company (Ford floor plan facility). On September 26, 2023, the Company entered into a credit agreement with Truist Bank (see Note 7) to, among other things, establish a new revolving floor plan credit facility with an aggregate capacity of $115.0 million. The Truist and Toyota floor plan facility bears interest at variable rates that are based on Secured Overnight Financing Rate (SOFR) plus 1.25% per annum. In connection with the establishment of the Truist and Toyota floor plan facility, the previous Truist floor plan facility, dated July 5, 2022, was repaid and terminated. At September 30, 2023, the floor plan facilities bore interest at variable rates that are based on the SOFR and prime-based interest rates. The weighted average interest rate for the floor plan facilities was 6.6% and 3.5% for the three months ended September 30, 2023 and 2022, respectively. The weighted average interest rate for the floor plan facilities was 6.0% and 2.6% for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the aggregate capacity under the floor plan facilities was $142.9 million. Changes in the vehicle floor plan payable are reported as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows.

The floor plan facilities are collateralized by vehicle inventory and other assets of the relevant dealership subsidiary, and contain a number of covenants, including, among others, covenants restricting the dealership subsidiary with respect to the creation of liens and changes in ownership, officers and key management personnel. The Company was in compliance with all of these restrictive covenants as of September 30, 2023.

The floor plan interest expense related to the vehicle floor plan arrangements is offset by amounts received from manufacturers in the form of floor plan assistance capitalized in inventory and recorded against cost of goods sold in the Condensed Consolidated Statements of Operations when the associated inventory is sold. For the three months ended September 30, 2023 and 2022, the Company recognized a reduction in cost of goods sold of $1.6 million and $1.4 million, respectively, related to manufacturer floor plan assistance. For the nine months ended September 30, 2023 and 2022, the Company recognized a reduction in cost of goods sold of $4.5 million and $3.4 million, respectively, related to manufacturer floor plan assistance.