Earlier today, we reported the highest adjusted fourth-quarter earnings per share in company history at $11.39 per share, 109% increase over last year.
Our full-year adjusted earnings per share was also a record, coming in at $40.03, 120% increase over last year's $18.19 per share.
Record annual revenues of $22.8 billion were driven by contributions from acquired businesses, our growing e-commerce platform and successful navigation of the supply and-demand environment.
SG&A as a percentage of gross profit decreased to 57.2%, 730 basis points better than last year, resulting in SG&A generating over $1.8 billion in adjusted EBITDA for the year.
18 months ago, we launched our plan to grow from just under $13 billion in revenue and $12 in earnings per share to $50 billion in revenue and $50 in EPS.
The transformation of our company into a diversified omnichannel retailer leveraging our nationwide network and over 7 million annual customers is now well underway.
to grow from just under $13 billion in revenue and $12 in earnings per share to $50 billion in revenue and $50 in EPS.
The transformation of our company into a diversified omnichannel retailer leveraging our nationwide network and over 7 million annual customers is now well underway.
Through these efforts, we are de-linking the historical relationship of each $1 billion of revenue producing only $1 of earnings per share as follows: We just completed a year where, despite inventory constraints, we generated nearly $23 billion in revenue and earned $40 in EPS.
Including a full year of performance from 2021 acquisitions, our annual run rate is well beyond $25 billion in revenue.
Next, we have acquired businesses that will contribute $11.1 billion in annualized steady-state revenues and entered the Canadian market.
Our physical footprint now reaches 95% of consumers within a 250-mile radius.
In January, the 13th month since the inception of Driveway, we achieved over 2,000 transactions.
In addition, 28,000 of our Lithia channel sales in Q4 were e-commerce, representing a combined annual revenue run rate of $6 billion in LAD e-commerce revenues.
Driveway Finance or DFC's portfolio stands at over $700 million as of December 31.
When we reach $50 billion in revenue in 2025, we now believe that every $1 billion in revenue will produce $1.10 to $1.20 in earnings per share or $55 to $60 in EPS.
Sales volumes reflect a blended 2.5% new and used vehicle U.S. market share; next, continued investment to scale Driveway and GreenCars is included; total vehicle GPUs returning to pre-pandemic levels; improvements in personnel productivity, increased leverage of our underutilized network and economies of scale in marketing from national brand awareness, driving SG&A as a percentage of gross profit toward 60%; acquiring a further $9 billion to $10 billion in annual revenues to complete the build-out of our North American footprint of 400 to 500 locations.
Next, an investment-grade rating and utilization of free cash flows for M&A and internal investment, driving decreased borrowing costs; flexibility and headroom and capital allocation for share buybacks in the event of valuation disconnect; continued drag on DFC's profitability due to building of CECL reserves as we scale from our current penetration rate of approximately 4% to a targeted 15%; and finally, early benefits from adjacencies with higher pre-tax margins that also carry structurally lower SG&A costs.
market share, we see opportunity for each $1 billion of revenue to produce up to $2 in EPS.
Our future state contemplates the following additional drivers: up to 20% of units are financed with DFC, and there is no headwind from recording the CECL reserves outpacing the recognition of interest income; our cost structure is optimized to below 50% SG&A as a percentage of gross profit; and finally, our horizontals, such as fleet and lease management, consumer insurance and new verticals, are further developed.
Since the end of the third quarter, we have completed acquisitions that are expected to generate $1.4 billion in annualized revenues, adding critical density to the North Central Region 3 and the Southeast Region 6.
Looking forward, we have $1.1 billion in annualized revenue under contract or LOI.
In addition, our active deal pipeline has grown to over $13 billion.
We remain confident in our ability to find deals that build out our physical network and that are priced at 15% to 30% of revenues or three to seven times EBITDA.
This discipline ensures that we will meet our after-tax return threshold of 15% in a post-pandemic profit environment.
LAD is known in the industry as the buyer of choice due to smooth manufacturer approvability, timely, confidential and certain completion of transactions and retaining over 95% of its employees.
Last month, we shared that Driveway had significantly outperformed its December volume target by 32% with 1,650 transactions.
This momentum continued into January with over 2,000 transactions, taking us one step closer to our 2022 target of over 40,000 transactions or an estimated $1 billion in revenue.
Over 97% of our transactions were incremental to Lithia or Driveway and have never transacted with us in the past 15 years.
In addition, our average shipping distance was 932 miles, though we believe once the network is fully built out and inventories return to normal, shipping distances will be meaningfully less.
For 2022, the expected $1 billion in revenues contributed by Driveway represents the amount generated from shop transactions, along with the revenue associated with the subsequent retailing or wholesaling of vehicles procured by Driveway.
Under his leadership, we completed the inaugural offering and today have grown the DFC portfolio to nearly $0.75 billion.
Sustainable vehicles appear to have lower repair and maintenance needs than comparable ICE vehicles through their first seven to 10 years of ownership.
Now that we are approaching the expected battery replacement windows for Gen 1 DEV and paid PHEVs, ultimate affordability will become much clearer.
LAD has a track record of exceeding targets through strong execution in any environment, as demonstrated in the 18 months since the launch of its 2025 plan, the 25 years since becoming a high-growth public company and our 75-year history since our inception here in Southern Oregon.
During 2021, DFC originated over 21,000 loans, penetrating approximately 4% of our retail units and in Q4 became LAD's largest retail lender.
Of the loans originated in 2021, the average loan amount was $33,000, the average interest rate was 8%, and the average FICO score was 670.
In our future state, however, DFC's contribution is clear, assuming a 15% to 20% penetration rate on 1.5 million units sold, DFC could originate between 225,000 and 300,000 loans and contribute up to $650 million of pre-tax earnings annually.
New vehicle sales volumes continue to be impacted in the fourth quarter by the current supply demand environment with same-store revenues decreasing 8% and volumes decreasing 21% compared to last year, consistent with the decrease in national SAAR.
Volume declines were offset by higher gross profit per unit, including F&I, which increased 84% over last year.
Our teams excelled in increasing used vehicle volumes to offset the decline in new volumes with same-store sales revenues up 39% and volumes up 11% compared to last year.
Used vehicle gross profit per unit, including F&I, increased 37% over last year.
For the fourth quarter, we saw 74% of used vehicles direct from consumers and 26% were from other channels, such as auctions, other dealers, or wholesalers.
In the fourth quarter, we increased the percentage of vehicles we source from consumers by 8%, earned over $1,400 more in gross profit and turn them 14 days faster.
Same-store revenues grew 12%, which was driven by an 18% increase in customer pay work and a 27% increase in wholesale parts, offset by a 9% decline in warranty and a 2% decline in body shops.
Same-store SG&A as a percentage of gross profit for the fourth quarter was 58.2%, a 320-basis-point improvement over last year.
The $45 million incurred during the quarter are a headwind to our SG&A but lay the foundation for significantly increasing profitability in the future that Bryan shared with you.
For the quarter, we generated $538 million of adjusted EBITDA, a 118% increase over 2020; and $304 million of free cash flow, defined as adjusted EBITDA plus stock-based compensation, less the following items paid in cash: interest, income taxes, dividends, and capital expenditures.
We ended the quarter with $1.5 billion in cash and available credit, which is deployed today would support network growth of up to $6 billion in annualized revenues.
As of quarter end, our ratio to net debt -- of net debt-to-adjusted EBITDA was 1.35 times.
Our targets for the deployment of our free cash flows remain unchanged at 65% toward acquisitions; 25% toward internal investment in Driveway and DFC, along with capital expenditures, modernization, and diversification; and 10% toward shareholder return in the form of dividends and share repurchases.
In the fourth quarter and to date in 2022, we've repurchased approximately 912,000 shares, representing 3% of our outstanding shares at an average price of $284.
In November, we obtained an additional $750 million repurchase authorization from the board, and as of today, have a remaining availability of $679 million.
We remain well-positioned for accelerated disciplined growth on the path toward achieving our plan to reach $50 billion of revenue and $55 to $60 of earnings per share by 2025 with even more significant upside into the future.

Summary:
Earlier today, we reported the highest adjusted fourth-quarter earnings per share in company history at $11.39 per share, 109% increase over last year.
18 months ago, we launched our plan to grow from just under $13 billion in revenue and $12 in earnings per share to $50 billion in revenue and $50 in EPS.
to grow from just under $13 billion in revenue and $12 in earnings per share to $50 billion in revenue and $50 in EPS.
Sales volumes reflect a blended 2.5% new and used vehicle U.S. market share; next, continued investment to scale Driveway and GreenCars is included; total vehicle GPUs returning to pre-pandemic levels; improvements in personnel productivity, increased leverage of our underutilized network and economies of scale in marketing from national brand awareness, driving SG&A as a percentage of gross profit toward 60%; acquiring a further $9 billion to $10 billion in annual revenues to complete the build-out of our North American footprint of 400 to 500 locations.
Same-store revenues grew 12%, which was driven by an 18% increase in customer pay work and a 27% increase in wholesale parts, offset by a 9% decline in warranty and a 2% decline in body shops.