Lithia Motors Files Q3 2024 10-Q

Ticker: LAD · Form: 10-Q · Filed: 2024-10-25T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, automotive, retail, financials

Related Tickers: GM, F, TSLA, PD

TL;DR

Lithia Motors (LAD) filed its Q3 2024 10-Q. Details on new/used vehicle sales inside.

AI Summary

Lithia Motors Inc. reported its third-quarter 2024 results on October 25, 2024. The company's financial performance for the period ending September 30, 2024, is detailed in this 10-Q filing. Key financial metrics and operational segments, including new and used vehicle retail and wholesale, are presented.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for Lithia Motors, crucial for understanding the company's current operational health and future outlook in the automotive retail sector.

Risk Assessment

Risk Level: medium — Automotive retail is subject to economic cycles, interest rate fluctuations, and inventory management challenges, all of which can impact financial performance.

Key Numbers

Key Players & Entities

FAQ

What were Lithia Motors' total revenues for the nine months ended September 30, 2024?

The filing indicates revenue data for the period January 1, 2024, to September 30, 2024, but specific total revenue figures are not provided in this excerpt.

How did new vehicle retail sales perform in Q3 2024 compared to Q3 2023?

The filing provides segment data for 'NewVehicleRetailMember' for both Q3 2024 (July 1, 2024 - September 30, 2024) and Q3 2023 (July 1, 2023 - September 30, 2023), suggesting a comparison is possible within the full document.

What is Lithia Motors' fiscal year end?

Lithia Motors' fiscal year ends on December 31.

What is the company's Standard Industrial Classification (SIC) code?

The SIC code for Lithia Motors is 5500, categorized under RETAIL-AUTO DEALERS & GASOLINE STATIONS.

What is the accession number for this 10-Q filing?

The accession number for this filing is 0001023128-24-000119.

Filing Stats: 4,615 words · 18 min read · ~15 pages · Grade level 6.7 · Accepted 2024-10-25 16:10:25

Filing Documents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 2 Consolidated Balance Sheets (Unaudited) - September 30, 2024, and December 31, 2023 2 Consolidated Statements of Operations (Unaudited) - Three and Nine Months Ended September 30, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months Ended September 30, 2024 and 2023 4 Consolidated Statements of Equity and Redeemable Non-controlling Interest (Unaudited) - Three and Nine Months Ended September 30, 2024 and 2023 5 Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2024 and 2023 6 Condensed Notes to Consolidated Financial Statements (Unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 21

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 41

Controls and Procedures

Item 4. Controls and Procedures 42

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings 42

Item 1. Legal Proceedings 42

Risk Factors

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Other Information 42

Item 5. Other Information 42

Exhibits

Item 6. Exhibits 43 SIGNATURE 44 Table of Contents GLOSSARY OF DEFINITIONS The following are abbreviations and definitions of terms used within this report: Terms Definitions AFS Available-for-sale ASC Accounting Standards Codification ASU Accounting standards update BOA Bank of America Board Board of directors BNS The Bank of Nova Scotia BPS Basis points CAD Canadian Dollar ($) CORRA Canadian Overnight Repo Rate Average CPO Certified pre-owned DFC Driveway Finance Corporation EBITDA Earnings before interest, taxes, depreciation, and amortization EPS Earnings per share FASB Financial Accounting Standards Board GAAP Generally accepted accounting principles GBP Great Britain Pound () JPM JPMorgan Chase Bank, N.A. LAD Lithia and Driveway LMMH Lithia Marubeni Mobility Holdings MD&A Management's discussion and analysis Mizuho Mizuho Bank, Ltd. NCI Non-controlling interest NM Not meaningful NYSE New York Stock Exchange PINE.L Pinewood Technologies Group PLC PPA Purchase price allocation QTD Quarter-to-date RSU Restricted stock units SEC Securities and Exchange Commission SG&A Selling, general, and administrative SOFR Secured Overnight Financing Rate SONIA Sterling Overnight Index Average U.K. United Kingdom U.S. United States of America USB US Bank National Association USD United States Dollar ($) YTD Year-to-date GLOSSARY 1 Table of Contents CONSOLIDATED BALANCE SHEETS (In millions; Unaudited) September 30, 2024 December 31, 2023 Assets Current assets: Cash, restricted cash, and cash equivalents $ 359.5 $ 941.4 Accounts receivable, net of allowance for doubtful accounts of $ 3.1 and $ 7.1 1,209.4 1,123.1 Inventories, net 6,100.2 4,753.9 Other current assets 224.0 136.8 Total current assets 7,893.1 6,955.2 Property and equipment, net of accumulated depreciation of $ 773.8 and $ 646.7 4,664.0 3,981.4 Operating lease right-of-use assets 722.5 478.8 Finance receivables, net of allowance for estim

FINANCIAL STATEMENTS 2

FINANCIAL STATEMENTS 2 Table of Contents CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share amounts; Unaudited) 2024 2023 2024 2023 Revenues: New vehicle retail $ 4,430.0 $ 3,885.8 $ 12,847.9 $ 11,179.5 Used vehicle retail 2,843.3 2,620.2 8,630.1 7,302.8 Used vehicle wholesale 390.9 316.1 1,018.1 1,082.4 Finance and insurance 360.4 349.4 1,061.9 1,005.6 Aftersales 1,012.8 838.0 2,876.3 2,378.8 Fleet and other 183.6 267.5 580.4 418.9 Total revenues 9,221.0 8,277.0 27,014.7 23,368.0 Cost of sales: New vehicle retail 4,123.6 3,526.9 11,925.4 10,099.6 Used vehicle retail 2,654.4 2,431.2 8,062.9 6,735.4 Used vehicle wholesale 393.0 322.1 1,020.7 1,091.9 Aftersales 453.0 375.2 1,285.1 1,077.7 Fleet and other 166.6 250.3 531.1 395.2 Total cost of sales 7,790.6 6,905.7 22,825.2 19,399.8 Gross profit 1,430.4 1,371.3 4,189.5 3,968.2 Finance operations income (loss) 0.9 ( 4.4 ) 6.4 ( 43.8 ) Selling, general and administrative 943.6 850.8 2,853.0 2,458.1 Depreciation and amortization 63.5 50.8 183.6 146.4 Operating profit 424.2 465.3 1,159.3 1,319.9 Floor plan interest expense ( 76.6 ) ( 40.2 ) ( 214.0 ) ( 102.6 ) Other interest expense, net ( 64.5 ) ( 58.5 ) ( 189.3 ) ( 141.5 ) Other income (expense),net 5.1 ( 5.3 ) 35.4 6.8 Income before income taxes 288.2 361.3 791.4 1,082.6 Income tax provision ( 65.3 ) ( 96.4 ) ( 187.0 ) ( 287.0 ) Net income 222.9 264.9 604.4 795.6 Net income attributable to non-controlling interest ( 1.2 ) ( 2.1 ) ( 3.8 ) ( 4.7 ) Net income attributable to redeemable non-controlling interest ( 12.6 ) ( 1.3 ) ( 14.8 ) ( 3.6 ) Net income attributable to Lithia Motors, Inc. $ 209.1 $ 261.5 $ 585.8 $ 787.3 Basic earnings per share attributable to Lithia Motors, Inc. common stockholders $ 7.82 $ 9.49 $ 21.57 $ 28.60 Shares used in basic per share calculations 26.7 27.6 27.2 27.5 Diluted earnings per share attributable to Lithia Motors, I

FINANCIAL STATEMENTS 3

FINANCIAL STATEMENTS 3 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended September 30, Nine Months Ended September 30, (In millions; Unaudited) 2024 2023 2024 2023 Net income $ 222.9 $ 264.9 $ 604.4 $ 795.6 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment 71.6 ( 25.9 ) 54.6 3.3 Unrealized gain on debt securities, net of tax provision of $( 0.3 ), $ 0.0 , $( 0.2 ) and $ 0.0 , respectively 1.2 — 0.7 — Total other comprehensive income (loss), net of tax 72.8 ( 25.9 ) 55.3 3.3 Comprehensive income 295.7 239.0 659.7 798.9 Comprehensive income attributable to non-controlling interest ( 1.2 ) ( 2.1 ) ( 3.8 ) ( 4.7 ) Comprehensive income attributable to redeemable non-controlling interest ( 12.6 ) ( 1.3 ) ( 14.8 ) ( 3.6 ) Comprehensive income attributable to Lithia Motors, Inc. $ 281.9 $ 235.6 $ 641.1 $ 790.6 See accompanying condensed notes to consolidated financial statements.

FINANCIAL STATEMENTS 4

FINANCIAL STATEMENTS 4 Table of Contents CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST Three Months Ended September 30, Nine Months Ended September 30, (In millions; Unaudited) 2024 2023 2024 2023 Total equity, beginning balances $ 6,392.4 $ 5,759.7 $ 6,238.9 $ 5,210.4 Common stock, beginning balances 924.0 1,116.1 1,100.6 1,082.1 Stock-based compensation 1.5 2.5 29.7 36.1 Issuance of stock in connection with employee stock purchase plans 7.4 7.9 21.2 22.8 Repurchase of common stock, including excise tax ( 54.6 ) — ( 273.2 ) ( 14.5 ) Common stock, ending balances 878.3 1,126.5 878.3 1,126.5 Additional paid-in capital, beginning balances 79.5 62.5 79.9 76.8 Stock-based compensation 14.8 8.6 14.4 ( 5.7 ) Additional paid-in capital, ending balances 94.3 71.1 94.3 71.1 Accumulated other comprehensive income (loss), beginning balances 2.6 11.2 20.1 ( 18.0 ) Foreign currency translation adjustment 71.6 ( 25.9 ) 54.6 3.3 Unrealized gain on debt securities, net of tax provision of $( 0.3 ), $ 0.0 , $( 0.2 ), and $ 0.0 , respectively 1.2 — 0.7 — Accumulated other comprehensive income (loss), ending balances 75.4 ( 14.7 ) 75.4 ( 14.7 ) Retained earnings, beginning balances 5,361.8 4,565.8 5,013.3 4,065.3 Net income attributable to Lithia Motors, Inc. 209.1 261.5 585.8 787.3 Dividends paid ( 14.2 ) ( 13.8 ) ( 42.4 ) ( 39.1 ) Retained earnings, ending balances 5,556.7 4,813.5 5,556.7 4,813.5 Non-controlling interest, beginning balances 24.5 4.1 25.0 4.2 (Distribution) contribution of non-controlling interest ( 2.2 ) 19.9 ( 5.3 ) 17.2 Net income attributable to non-controlling interest 1.2 2.1 3.8 4.7 Non-controlling interest, ending balances 23.5 26.1 23.5 26.1 Total equity, ending balances $ 6,628.2 $ 6,022.5 $ 6,628.2 $ 6,022.5 Redeemable non-controlling interest, beginning balances $ 46.2 $ 43.0 $ 44.0 $ 40.7 Distribution of redeemable non-controlling interest ( 0.1 ) — ( 0.1 ) — Net income attributab

FINANCIAL STATEMENTS 5

FINANCIAL STATEMENTS 5 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, (In millions; Unaudited) 2024 2023 Cash flows from operating activities: Net income $ 604.4 $ 795.6 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 219.7 154.9 Stock-based compensation 44.1 30.4 Net loss on disposal of other assets 3.8 0.1 Net gain on disposal of stores ( 0.3 ) ( 31.4 ) Unrealized investment gain, net ( 27.6 ) ( 0.1 ) Deferred income taxes 86.9 47.2 Amortization of operating lease right-of-use assets 70.6 49.1 Decrease (increase) (net of acquisitions and dispositions): Accounts receivable, net 44.7 ( 110.6 ) Inventories ( 324.3 ) ( 498.2 ) Finance receivables ( 526.5 ) ( 907.0 ) Other assets ( 114.7 ) 5.8 Increase (decrease) (net of acquisitions and dispositions): Floor plan notes payable 325.0 292.0 Trade payables ( 26.7 ) ( 34.1 ) Accrued liabilities ( 6.2 ) 9.7 Other long-term liabilities and deferred revenue ( 9.6 ) 19.4 Net cash provided by (used in) operating activities 363.3 ( 177.2 ) Cash flows from investing activities: Capital expenditures ( 271.9 ) ( 163.7 ) Proceeds from sales of assets 5.3 3.1 Cash paid for other investments ( 329.1 ) ( 11.1 ) Cash paid for acquisitions, net of cash acquired ( 1,247.0 ) ( 1,204.7 ) Proceeds from sales of stores 21.9 136.1 Net cash used in investing activities ( 1,820.8 ) ( 1,240.3 ) Cash flows from financing activities: Borrowings on floor plan notes payable, net: non-trade 280.1 426.7 Borrowings on lines of credit 10,325.4 9,625.1 Repayments on lines of credit ( 9,627.0 ) ( 9,681.0 ) Principal payments on long-term debt and finance lease liabilities, scheduled ( 29.0 ) ( 26.2 ) Principal payments on long-term debt and finance lease liabilities, other ( 48.2 ) ( 3.4 ) Proceeds from issuance of long-term debt 279.5 79.8 Principal payments on non-recourse notes payable ( 661.6 )

FINANCIAL STATEMENTS 6

FINANCIAL STATEMENTS 6 Table of Contents SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Nine Months Ended September 30, (In millions) 2024 2023 Reconciliation of cash, restricted cash, and cash equivalents to the consolidated balance sheets Cash and cash equivalents $ 209.8 $ 146.9 Restricted cash from collections on auto loans receivable and customer deposits 149.7 109.3 Cash, restricted cash, and cash equivalents 359.5 256.2 Restricted cash on deposit in reserve accounts, included in other non-current assets 39.1 30.5 Total cash, restricted cash, and cash equivalents reported in the Consolidated Statements of Cash Flows $ 398.6 $ 286.7 Supplemental cash flow information: Cash paid during the period for interest $ 546.5 $ 359.3 Cash paid during the period for income taxes, net 149.8 203.5 Debt paid in connection with store disposals 13.1 13.2 Non-cash activities: Contingent consideration in connection with acquisitions $ — $ 7.3 Debt assumed in connection with acquisitions 868.1 401.6 Acquisition of finance leases in connection with acquisitions 22.7 45.0 Right-of-use assets obtained in exchange for lease liabilities 310.7 139.1 See accompanying condensed notes to consolidated financial statements.

FINANCIAL STATEMENTS 7

FINANCIAL STATEMENTS 7 Table of Contents CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. INTERIM FINANCIAL STATEMENTS Basis of Presentation These condensed Consolidated Financial Statements contain unaudited information as of September 30, 2024, and for the three and nine months ended September 30, 2024 and 2023. The unaudited interim financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by accounting principles generally accepted in the United States of America for annual financial statements are not included herein. In management's opinion, these unaudited financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with our 2023 audited Consolidated Financial Statements and the related notes thereto. The financial information as of December 31, 2023, is derived from our Annual Report on Form 10-K filed with the SEC on February 23, 2024. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency and comparability between periods presented. Within our financing operations income, we disaggregated our "lease income" out of our previously reported "interest, fee, and lease income" to be its own separately presented line item, as well as revised the related "lease depreciation and amortization" to now be reported as "lease costs," reclassifying amounts previously reported net within "lease income." NOTE 2. ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: (in millions) September 30, 2024 December 31, 2023 Contracts in transit $ 451.4 $ 559.7 Trade receivables 190.2 153.3

NOTES TO FINANCIAL STATEMENTS 8

NOTES TO FINANCIAL STATEMENTS 8 Table of Contents NOTE 4. FINANCE RECEIVABLES Interest income on finance receivables is recognized based on the contractual terms of each receivable and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with originations are capitalized and expensed as an offset to interest income when recognized on the receivables. The balances of finance receivables are made up of loans and finance leases secured by the related vehicles. More than 98 % of the portfolio is aged less than 60 days past due with less than 2 % on non-accrual status. Finance Receivables, net (in millions) September 30, 2024 December 31, 2023 Asset-backed term funding $ 2,267.8 $ 2,146.5 Warehouse facilities 1,332.5 749.3 Other managed receivables 285.7 452.9 Total finance receivables 3,886.0 3,348.7 Less: Allowance for finance receivable losses ( 120.5 ) ( 106.4 ) Finance receivables, net $ 3,765.5 $ 3,242.3 Finance Receivables by FICO Score As of September 30, 2024 Year of Origination ($ in millions) 2024 2023 2022 2021 2020 Total <599 $ 44.4 $ 45.3 $ 26.1 $ 11.9 $ 1.6 $ 129.3 600-699 428.7 452.6 338.2 103.9 10.0 1,333.4 700-774 434.4 444.4 317.9 44.8 3.8 1,245.3 775+ 418.9 364.0 197.4 10.4 1.6 992.3 Total auto loan receivables $ 1,326.4 $ 1,306.3 $ 879.6 $ 171.0 $ 17.0 3,700.3 Other finance receivables 1 185.7 Total finance receivables $ 3,886.0 As of December 31, 2023 Year of Origination ($ in millions) 2023 2022 2021 2020 Total <599 $ 62.2 $ 39.0 $ 17.6 $ 2.4 $ 121.2 600-699 586.6 463.6 152.7 16.1 1,219.0 700-774 568.1 422.5 63.9 5.9 1,060.4 775+ 490.3 263.5 14.7 2.7 771.2 Total auto loan receivables $ 1,707.2 $ 1,188.6 $ 248.9 $ 27.1 3,171.8 Other finance receivables 1 176.9 Total finance receivables $ 3,348.7 1 Includes legacy portfolio, loans that are originated with no FICO score available, lease receivables, and deferred origination fees. In accordance wi

NOTES TO FINANCIAL STATEMENTS 9

NOTES TO FINANCIAL STATEMENTS 9 Table of Contents Rollforward of Allowance for Finance Receivable Losses Our allowance for finance receivable losses represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowances for credit losses related to finance receivables consisted of the following changes during the period: Nine Months Ended September 30, (in millions) 2024 2023 Allowance at beginning of period $ 106.4 $ 69.3 Charge-offs ( 106.8 ) ( 79.1 ) Recoveries 44.2 35.5 Sold loans ( 0.3 ) — Initial allowance for credit-deteriorated receivables — 2.3 Provision expense 77.0 75.0 Allowance at end of period $ 120.5 $ 103.0 Charge-off Activity by Year of Origination Nine Months Ended September 30, (in millions) 2024 2023 2024 $ 5.3 $ — 2023 45.4 5.0 2022 39.5 47.1 2021 13.6 23.0 2020 1.2 2.3 Other finance receivables 1 1.8 1.7 Total charge-offs $ 106.8 $ 79.1 1 Includes legacy portfolio, loans that are originated with no FICO score available, and finance lease receivables. NOTE 5. GOODWILL AND FRANCHISE VALUE The changes in the carrying amounts of goodwill are as follows: (in millions) Vehicle Operations Financing Operations Consolidated Balance as of December 31, 2022 $ 1,443.5 $ 17.2 $ 1,460.7 Additions through acquisitions 1 519.1 — 519.1 Reductions through disposals ( 51.1 ) — ( 51.1 ) Currency translation 1.5 0.4 1.9 Balance as of December 31, 2023 1,913.0 17.6 1,930.6 Adjustments to purchase price allocations 2 47.6 — 47.6 Additions through acquisitions 3 142.7 — 142.7 Reductions through disposals ( 0.6 ) — ( 0.6 ) Currency translation 6.3 ( 0.4 ) 5.9 Balance as of September 30, 2024 $ 2,109.0 $ 17.2 $ 2,126.2 1 Our purchase price allocation (PPA) for the 2022 acquisitions were finalized in 2023. As a result, we added $ 285.9 million of goodwill. Preliminary PPA for a portion of our 2023 acquisitions resulted in adding $ 233.2 million of goodwill. Our PPA fo

NOTES TO FINANCIAL STATEMENTS 10

NOTES TO FINANCIAL STATEMENTS 10 Table of Contents The changes in the carrying amounts of franchise value are as follows: (in millions) Franchise Value Balance as of December 31, 2022 $ 1,856.2 Additions through acquisitions 1 556.5 Reductions through divestitures ( 14.5 ) Currency translation 4.0 Balance as of December 31, 2023 2,402.2 Additions through acquisitions 2 172.5 Reductions through divestitures ( 5.3 ) Currency translation 5.9 Balance as of September 30, 2024 $ 2,575.3 1 Our PPA for the 2022 acquisitions were finalized in 2023. As a result, we added $ 363.1 million of franchise value. Preliminary PPA for a portion of our 2023 acquisitions resulted in adding $ 193.4 million of franchise value. Our PPA for the remaining 2023 acquisitions is preliminary and franchise value is not yet allocated to our reporting units. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 – Acquisitions. 2 Our PPA for the remainder of the 2023 acquisitions were finalized in 2024. As a result, we added $ 172.5 million of franchise value. Our PPA for the 2024 acquisitions are preliminary and franchise value is not yet allocated to our reporting units. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 – Acquisitions. NOTE 6. INVESTMENTS Marketable Securities In 2024, our captive insurance subsidiary began investing cash in excess of current needs in marketable securities. The marketable securities are recorded within other current assets in the Consolidated Balance Sheets and consist of debt securities accounted for as available-for-sale (AFS) and equity securities measured at fair value. Changes in the fair value of equity securities are recognized as a component of other income (expense), net in the Consolidated Statements of Operations and unrealized gains (losses) on AFS debt securities are recorded as a component of other comprehen

NOTES TO FINANCIAL STATEMENTS 11

NOTES TO FINANCIAL STATEMENTS 11 Table of Contents Equity Method Investments Our investment in Pinewood Technologies, PLC (PINE.L), U.K. based automotive dealership management system provider, consists of 25.5 % common stock voting interests accounted for as an equity method investment. The investment is measured at fair value based on quoted market prices, and all fair market value changes in the investment are recorded as unrealized gains as a component of other income (expense), net in the Consolidated Statements of Operations. The fair value of our investment was $ 105.4 million as of September 30, 2024. See Note 12 – Fair Value Measurements. Our investment in Wheels, Inc., automotive fleet management provider, through LMMH consists of 26.5 % common stock voting interests accounted for as an equity method investment. The investment is measured at cost plus or minus our share of equity method investee income or loss as a component of other non-current assets in the Consolidated Balance Sheets. The book value of our investment was $ 208.0 million as of September 30, 2024. We reported unrealized gains on equity method investments of $ 0.7 million and $ 30.5 million for the three and nine months ended September 30, 2024, respectively. Comparatively, we recorded a loss of $ 0.7 million and gain of $ 0.1 million in the same periods of 2023, respectively. NOTE 7. NET INVESTMENT IN OPERATING LEASES Net investment in operating leases consists primarily of lease contracts for vehicles with individuals and business entities. Assets subject to operating lease

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