|
Oregon
|
|
93-0572810
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
150 N. Bartlett Street, Medford, Oregon
|
|
97501
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Class A common stock, without par value
|
|
New York Stock Exchange
|
|
|
Page
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Item 16.
|
Form 10-K Summary
|
||
|
|
|
|
•
|
Future market conditions;
|
•
|
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 additions of dealership locations to our portfolio in the future;
|
•
|
Anticipated availability of liquidity from our unfinanced operating real estate;
|
•
|
Anticipated levels of capital expenditures in the future; and
|
•
|
Our strategies for customer retention, growth, market position, financial results and risk management.
|
State
|
|
Number of
Stores
|
|
Percent of 2017 Revenue
|
|
California
|
|
42
|
|
24.6
|
%
|
Oregon
|
|
26
|
|
15.1
|
|
New Jersey
|
|
11
|
|
12.3
|
|
Texas
|
|
16
|
|
11.0
|
|
New York
|
|
11
|
|
6.8
|
|
Montana
|
|
11
|
|
5.4
|
|
Washington
|
|
6
|
|
4.5
|
|
Alaska
|
|
9
|
|
3.9
|
|
Pennsylvania
|
|
8
|
|
2.7
|
|
Nevada
|
|
4
|
|
2.6
|
|
Idaho
|
|
4
|
|
2.6
|
|
Hawaii
|
|
5
|
|
2.4
|
|
Iowa
|
|
7
|
|
2.3
|
|
North Dakota
|
|
3
|
|
1.1
|
|
Vermont
|
|
2
|
|
0.8
|
|
New Mexico
|
|
2
|
|
0.7
|
|
Massachusetts
|
|
1
|
|
0.6
|
|
Wyoming
|
|
1
|
|
0.6
|
|
Total
|
|
169
|
|
100.0
|
%
|
•
|
increasing revenues in all core business lines;
|
•
|
capturing a greater percentage of overall new vehicle sales in our local markets;
|
•
|
capitalizing on a used vehicle market that is approximately three times larger than the new vehicle market by increasing sales of late model, lower-mileage used vehicles and value autos, which are older, higher mileage vehicles; and
|
•
|
growing our service, body and parts revenues as units in operation increase.
|
Manufacturer
|
|
Percent of 2017 New Vehicle Revenue
|
|
Percent of 2017 New Vehicle Gross Profit
|
|
||
Chrysler, Jeep, Dodge, Ram, Alfa Romeo
|
|
18.5
|
%
|
|
14.6
|
%
|
|
Honda, Acura
|
|
16.4
|
|
|
20.0
|
|
|
Toyota
|
|
15.6
|
|
|
15.6
|
|
|
Chevrolet, Cadillac, GMC, Buick
|
|
10.9
|
|
|
9.8
|
|
|
BMW, MINI
|
|
7.6
|
|
|
8.9
|
|
|
Ford, Lincoln
|
|
8.5
|
|
|
7.5
|
|
|
Subaru
|
|
5.9
|
|
|
3.4
|
|
|
Volkswagen, Audi
|
|
4.8
|
|
|
4.9
|
|
|
Nissan
|
|
3.5
|
|
|
4.9
|
|
|
Mercedes, Smart
|
|
2.9
|
|
|
4.2
|
|
|
Hyundai
|
|
1.9
|
|
|
2.4
|
|
|
Lexus
|
|
1.1
|
|
|
1.1
|
|
|
Kia
|
|
1.2
|
|
|
0.8
|
|
|
Mazda
|
|
0.2
|
|
|
0.2
|
|
|
Porsche
|
|
0.8
|
|
|
1.4
|
|
|
Fiat
|
|
0.1
|
|
|
0.2
|
|
|
Volvo
|
|
0.1
|
|
|
0.1
|
|
|
Mitsubishi
|
|
—
|
|
*
|
—
|
|
*
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
•
|
generate sales to customers unable or unwilling to purchase a new vehicle;
|
•
|
generate sales of vehicle brands other than the store’s new vehicle franchise(s);
|
•
|
increase vehicle sales by aggressively pursuing customer trade-ins; and
|
•
|
increase finance and insurance revenues and service and parts sales.
|
•
|
locate our stores and identify the new vehicle brands sold at each store;
|
•
|
search new and pre-owned vehicle inventory;
|
•
|
view current pricing and specials;
|
•
|
calculate payments for purchase or lease;
|
•
|
obtain a value for their vehicle to trade or sell to us;
|
•
|
submit credit applications;
|
•
|
shop for and order manufacturers’ vehicle parts;
|
•
|
schedule service appointments; and
|
•
|
provide feedback about their experience.
|
•
|
facilities and equipment;
|
•
|
inventories of vehicles and parts;
|
•
|
minimum working capital;
|
•
|
training of personnel; and
|
•
|
performance standards for market share and customer satisfaction.
|
•
|
a change of management or ownership without manufacturer consent;
|
•
|
insolvency or bankruptcy of the dealer;
|
•
|
death or incapacity of the dealer/manager;
|
•
|
conviction of a dealer/manager or owner of certain crimes;
|
•
|
misrepresentation of certain sales or inventory information by the store, dealer/manager or owner to the manufacturer;
|
•
|
failure to adequately operate the store;
|
•
|
failure to maintain any license, permit or authorization required for the conduct of business;
|
•
|
poor market share; or
|
•
|
low customer satisfaction index scores.
|
•
|
customer rebates;
|
•
|
dealer incentives on new vehicles;
|
•
|
special financing rates on certified, pre-owned cars; and
|
•
|
below-market financing on new vehicles and special leasing terms.
|
•
|
number of such manufacturers’ stores that may be acquired by a single owner;
|
•
|
number of stores that may be acquired in any market or region;
|
•
|
percentage of market share that may be controlled by one automotive retailer group;
|
•
|
ownership of stores in contiguous markets;
|
•
|
performance requirements for existing stores; and
|
•
|
frequency of acquisitions.
|
•
|
failing to assimilate the operations and personnel of acquired dealerships;
|
•
|
straining our existing systems, procedures, structures and personnel;
|
•
|
failing to achieve predicted sales levels;
|
•
|
incurring significantly higher capital expenditures and operating expenses, which could substantially limit our operating or financial flexibility;
|
•
|
entering new, unfamiliar markets;
|
•
|
encountering undiscovered liabilities and operational difficulties at acquired dealerships;
|
•
|
disrupting our ongoing business;
|
•
|
diverting our management resources;
|
•
|
failing to maintain uniform standards, controls and policies;
|
•
|
impairing relationships with employees, manufacturers and customers as a result of changes in management;
|
•
|
incurring increased expenses for accounting and computer systems, as well as integration difficulties;
|
•
|
failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us;
|
•
|
incorrectly valuing entities to be acquired; and
|
•
|
incurring additional facility renovation costs or other expenses required by the manufacturer.
|
•
|
the availability of suitable acquisition candidates;
|
•
|
competition with other dealer groups for suitable acquisitions;
|
•
|
the negotiation of acceptable terms with sellers and with manufacturers;
|
•
|
our financial capabilities and ability to obtain financing on acceptable terms;
|
•
|
our stock price;
|
•
|
our ability to maintain required financial covenant levels after the acquisition; and
|
•
|
the availability of skilled employees to manage the acquired businesses.
|
•
|
limitations on our ability to make acquisitions;
|
•
|
impaired ability to obtain additional financing for acquisitions, capital expenditures, working capital or general corporate purposes;
|
•
|
reduced funds available for our operations and other purposes, as a larger portion of our cash flow from operations would be dedicated to the payment of principal and interest on our indebtedness; and
|
•
|
exposure to the risk of increasing interest rates as certain borrowings are, and will continue to be, at variable rates of interest.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
2016
|
|
High
|
|
Low
|
||||
First quarter
|
|
$
|
105.38
|
|
|
$
|
72.30
|
|
Second quarter
|
|
93.16
|
|
|
68.70
|
|
||
Third quarter
|
|
95.67
|
|
|
69.36
|
|
||
Fourth quarter
|
|
101.89
|
|
|
75.85
|
|
||
|
|
|
|
|
||||
2017
|
|
|
|
|
||||
First quarter
|
|
$
|
105.32
|
|
|
$
|
83.38
|
|
Second quarter
|
|
98.05
|
|
|
80.88
|
|
||
Third quarter
|
|
120.48
|
|
|
87.90
|
|
||
Fourth quarter
|
|
123.50
|
|
|
105.00
|
|
Quarter declared:
|
|
Dividend amount per share
|
|
Total amount of dividends paid (in thousands)
|
||||
2015
|
|
|
|
|
||||
First quarter
|
|
$
|
0.16
|
|
|
$
|
4,216
|
|
Second quarter
|
|
0.20
|
|
|
5,266
|
|
||
Third quarter
|
|
0.20
|
|
|
5,257
|
|
||
Fourth quarter
|
|
0.20
|
|
|
5,246
|
|
||
2016
|
|
|
|
|
||||
First quarter
|
|
$
|
0.20
|
|
|
$
|
5,151
|
|
Second quarter
|
|
0.25
|
|
|
6,373
|
|
||
Third quarter
|
|
0.25
|
|
|
6,299
|
|
||
Fourth quarter
|
|
0.25
|
|
|
6,308
|
|
||
2017
|
|
|
|
|
||||
First quarter
|
|
$
|
0.25
|
|
|
$
|
6,292
|
|
Second quarter
|
|
0.27
|
|
|
6,760
|
|
||
Third quarter
|
|
0.27
|
|
|
6,751
|
|
||
Fourth quarter
|
|
0.27
|
|
|
6,741
|
|
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plan
(1)
|
|
Maximum dollar value of shares that may yet be purchased under publicly announced plan (in thousands)
(1)
|
||||||
October
|
|
19,000
|
|
|
$
|
116.58
|
|
|
19,000
|
|
|
$
|
162,559
|
|
November
|
|
157
|
|
|
113.95
|
|
|
—
|
|
|
162,559
|
|
||
December
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162,559
|
|
||
Total
(2)
|
|
19,157
|
|
|
116.56
|
|
|
19,000
|
|
|
162,559
|
|
(1)
|
In February 2016, our Board of Directors authorized the repurchase of up to $250 million of our Class A common stock. Through
December 31, 2017
, we have repurchased
1,042,725
shares at an average price of
$92.79
per share. This authority to repurchase shares does not have an expiration date.
|
(2)
|
Includes
157
shares repurchased in association with tax withholdings on the vesting of RSUs.
|
|
|
Base
Period
|
|
Indexed Returns for the Year Ended
|
||||||||||||||||||||
Company/Index
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
||||||||||||
Lithia Motors, Inc.
|
|
|
$100.00
|
|
|
$
|
186.73
|
|
|
$
|
235.10
|
|
|
$
|
291.34
|
|
|
$
|
267.51
|
|
|
$
|
317.13
|
|
Auto Peer Group
|
|
100.00
|
|
|
135.40
|
|
|
161.18
|
|
|
147.93
|
|
|
145.09
|
|
|
142.69
|
|
||||||
Russell 2000
|
|
100.00
|
|
|
138.83
|
|
|
145.62
|
|
|
139.19
|
|
|
168.85
|
|
|
193.59
|
|
(In thousands, except per share amounts)
|
|
Year Ended December 31,
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New vehicle
|
|
$
|
5,763,587
|
|
|
$
|
4,938,436
|
|
|
$
|
4,552,301
|
|
|
$
|
3,077,670
|
|
|
$
|
2,256,598
|
|
Used vehicle retail
|
|
2,544,379
|
|
|
2,226,951
|
|
|
1,927,016
|
|
|
1,362,481
|
|
|
1,032,224
|
|
|||||
Used vehicle wholesale
|
|
277,844
|
|
|
276,616
|
|
|
261,530
|
|
|
195,699
|
|
|
158,235
|
|
|||||
Finance and insurance
|
|
385,863
|
|
|
330,922
|
|
|
283,018
|
|
|
190,381
|
|
|
139,007
|
|
|||||
Service, body and parts
|
|
1,015,773
|
|
|
844,505
|
|
|
738,990
|
|
|
512,124
|
|
|
383,483
|
|
|||||
Fleet and other
|
|
99,064
|
|
|
60,727
|
|
|
101,397
|
|
|
51,971
|
|
|
36,202
|
|
|||||
Total revenues
|
|
$
|
10,086,510
|
|
|
$
|
8,678,157
|
|
|
$
|
7,864,252
|
|
|
$
|
5,390,326
|
|
|
$
|
4,005,749
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New vehicle
|
|
$
|
339,843
|
|
|
$
|
289,412
|
|
|
$
|
280,370
|
|
|
$
|
198,184
|
|
|
$
|
151,118
|
|
Used vehicle retail
|
|
286,835
|
|
|
263,684
|
|
|
241,249
|
|
|
179,253
|
|
|
150,858
|
|
|||||
Used vehicle wholesale
|
|
4,786
|
|
|
4,313
|
|
|
4,457
|
|
|
3,646
|
|
|
2,711
|
|
|||||
Finance and insurance
|
|
385,863
|
|
|
330,922
|
|
|
283,018
|
|
|
190,381
|
|
|
139,007
|
|
|||||
Service, body and parts
|
|
493,124
|
|
|
410,283
|
|
|
363,921
|
|
|
249,736
|
|
|
185,570
|
|
|||||
Fleet and other
|
|
5,635
|
|
|
2,701
|
|
|
2,619
|
|
|
2,122
|
|
|
1,689
|
|
|||||
Total gross profit
|
|
$
|
1,516,086
|
|
|
$
|
1,301,315
|
|
|
$
|
1,175,634
|
|
|
$
|
823,322
|
|
|
$
|
630,953
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
(1) (2)
|
|
$
|
408,986
|
|
|
$
|
338,364
|
|
|
$
|
302,735
|
|
|
$
|
231,899
|
|
|
$
|
183,518
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
(1)
|
|
$
|
347,069
|
|
|
$
|
283,523
|
|
|
$
|
262,704
|
|
|
$
|
210,495
|
|
|
$
|
165,788
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
(1)
|
|
$
|
245,217
|
|
|
$
|
197,058
|
|
|
$
|
182,999
|
|
|
$
|
135,540
|
|
|
$
|
105,214
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share from continuing operations
|
|
$
|
9.78
|
|
|
$
|
7.76
|
|
|
$
|
6.96
|
|
|
$
|
5.19
|
|
|
$
|
4.08
|
|
Basic income per share from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
|
0.03
|
|
|||||
Basic net income per share
|
|
$
|
9.78
|
|
|
$
|
7.76
|
|
|
$
|
6.96
|
|
|
$
|
5.31
|
|
|
$
|
4.11
|
|
Shares used in basic per share
|
|
25,065
|
|
|
25,409
|
|
|
26,290
|
|
|
26,121
|
|
|
25,805
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted income per share from continuing operations
|
|
$
|
9.75
|
|
|
$
|
7.72
|
|
|
$
|
6.91
|
|
|
$
|
5.14
|
|
|
$
|
4.02
|
|
Diluted income per share from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
|
0.03
|
|
|||||
Diluted net income per share
|
|
$
|
9.75
|
|
|
$
|
7.72
|
|
|
$
|
6.91
|
|
|
$
|
5.26
|
|
|
$
|
4.05
|
|
Shares used in diluted per share
|
|
25,145
|
|
|
25,521
|
|
|
26,490
|
|
|
26,382
|
|
|
26,191
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid per common share
|
|
$
|
1.06
|
|
|
$
|
0.95
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
0.39
|
|
(In thousands)
|
|
As of December 31,
|
||||||||||||||||||
Consolidated Balance Sheets Data:
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Working capital
|
|
$
|
481,801
|
|
|
$
|
365,200
|
|
|
$
|
288,040
|
|
|
$
|
172,909
|
|
|
$
|
209,038
|
|
Inventories
|
|
2,132,744
|
|
|
1,772,587
|
|
|
1,470,987
|
|
|
1,249,659
|
|
|
859,019
|
|
|||||
Total assets
|
|
4,683,066
|
|
|
3,844,150
|
|
|
3,225,130
|
|
|
2,879,093
|
|
|
1,723,930
|
|
|||||
Floor plan notes payable
|
|
1,919,026
|
|
|
1,601,497
|
|
|
1,313,955
|
|
|
1,178,679
|
|
|
713,855
|
|
|||||
Long-term debt, including current maturities
|
|
1,047,352
|
|
|
790,881
|
|
|
643,186
|
|
|
639,138
|
|
|
251,363
|
|
|||||
Total stockholders’ equity
(2)
|
|
1,083,218
|
|
|
910,776
|
|
|
828,164
|
|
|
673,105
|
|
|
534,722
|
|
(1)
|
Includes
$14.0 million
,
$20.1 million
, and
$1.9 million
in non-cash charges related to asset impairments for the years ended
2016
,
2015
and
2014
, respectively. We did not record any non-cash charges related to asset impairments in 2017 and 2013. See Notes 1, 4 and 17 of Notes to Consolidated Financial Statements for additional information.
|
(2)
|
Reclassifications of amounts previously reported have been made to the selected financial data to maintain consistency and comparability between periods presented.
|
2017
|
|
Revenues
|
|
Percent of
Total Revenues
|
|
Gross Profit
|
|
Gross Profit
Margin
|
|
Percent of Total
Gross Profit
|
|||||||
New vehicle
|
|
$
|
5,763,587
|
|
|
57.1
|
%
|
|
$
|
339,843
|
|
|
5.9
|
%
|
|
22.4
|
%
|
Used vehicle retail
|
|
2,544,379
|
|
|
25.2
|
|
|
286,835
|
|
|
11.3
|
|
|
18.9
|
|
||
Used vehicle wholesale
|
|
277,844
|
|
|
2.8
|
|
|
4,786
|
|
|
1.7
|
|
|
0.3
|
|
||
Finance and insurance
(1)
|
|
385,863
|
|
|
3.8
|
|
|
385,863
|
|
|
100.0
|
|
|
25.5
|
|
||
Service, body and parts
|
|
1,015,773
|
|
|
10.1
|
|
|
493,124
|
|
|
48.5
|
|
|
32.5
|
|
||
Fleet and other
|
|
99,064
|
|
|
1.0
|
|
|
5,635
|
|
|
5.7
|
|
|
0.4
|
|
||
|
|
$
|
10,086,510
|
|
|
100.0
|
%
|
|
$
|
1,516,086
|
|
|
15.0
|
%
|
|
100.0
|
%
|
2016
|
|
Revenues
|
|
Percent of
Total Revenues
|
|
Gross Profit
|
|
Gross Profit
Margin
|
|
Percent of Total
Gross Profit
|
|||||||
New vehicle
|
|
$
|
4,938,436
|
|
|
56.9
|
%
|
|
$
|
289,412
|
|
|
5.9
|
%
|
|
22.2
|
%
|
Used vehicle retail
|
|
2,226,951
|
|
|
25.7
|
|
|
263,684
|
|
|
11.8
|
|
|
20.3
|
|
||
Used vehicle wholesale
|
|
276,616
|
|
|
3.2
|
|
|
4,313
|
|
|
1.6
|
|
|
0.3
|
|
||
Finance and insurance
(1)
|
|
330,922
|
|
|
3.8
|
|
|
330,922
|
|
|
100.0
|
|
|
25.4
|
|
||
Service, body and parts
|
|
844,505
|
|
|
9.7
|
|
|
410,283
|
|
|
48.6
|
|
|
31.5
|
|
||
Fleet and other
|
|
60,727
|
|
|
0.7
|
|
|
2,701
|
|
|
4.4
|
|
|
0.3
|
|
||
|
|
$
|
8,678,157
|
|
|
100.0
|
%
|
|
$
|
1,301,315
|
|
|
15.0
|
%
|
|
100.0
|
%
|
2015
|
|
Revenues
|
|
Percent of
Total Revenues
|
|
Gross Profit
|
|
Gross Profit
Margin
|
|
Percent of Total
Gross Profit
|
|||||||
New vehicle
|
|
$
|
4,552,301
|
|
|
57.9
|
%
|
|
$
|
280,370
|
|
|
6.2
|
%
|
|
23.8
|
%
|
Used vehicle retail
|
|
1,927,016
|
|
|
24.5
|
|
|
241,249
|
|
|
12.5
|
|
|
20.5
|
|
||
Used vehicle wholesale
|
|
261,530
|
|
|
3.3
|
|
|
4,457
|
|
|
1.7
|
|
|
0.4
|
|
||
Finance and insurance
(1)
|
|
283,018
|
|
|
3.6
|
|
|
283,018
|
|
|
100.0
|
|
|
24.1
|
|
||
Service, body and parts
|
|
738,990
|
|
|
9.4
|
|
|
363,921
|
|
|
49.2
|
|
|
31.0
|
|
||
Fleet and other
|
|
101,397
|
|
|
1.3
|
|
|
2,619
|
|
|
2.6
|
|
|
0.2
|
|
||
|
|
$
|
7,864,252
|
|
|
100.0
|
%
|
|
$
|
1,175,634
|
|
|
14.9
|
%
|
|
100.0
|
%
|
(1)
|
Commissions reported net of anticipated cancellations.
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2017
|
|
2016
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
5,763,587
|
|
|
$
|
4,938,436
|
|
|
$
|
825,151
|
|
|
16.7
|
%
|
Gross profit
|
|
$
|
339,843
|
|
|
$
|
289,412
|
|
|
$
|
50,431
|
|
|
17.4
|
|
Gross margin
|
|
5.9
|
%
|
|
5.9
|
%
|
|
—
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
167,146
|
|
|
145,772
|
|
|
21,374
|
|
|
14.7
|
|
|||
Average selling price per retail unit
|
|
$
|
34,482
|
|
|
$
|
33,878
|
|
|
$
|
604
|
|
|
1.8
|
|
Average gross profit per retail unit
|
|
$
|
2,033
|
|
|
$
|
1,985
|
|
|
$
|
48
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
4,959,751
|
|
|
$
|
4,898,292
|
|
|
$
|
61,459
|
|
|
1.3
|
%
|
Gross profit
|
|
$
|
290,309
|
|
|
$
|
286,519
|
|
|
$
|
3,790
|
|
|
1.3
|
|
Gross margin
|
|
5.9
|
%
|
|
5.8
|
%
|
|
10
|
bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
144,308
|
|
|
144,728
|
|
|
(420
|
)
|
|
(0.3
|
)
|
|||
Average selling price per retail unit
|
|
$
|
34,369
|
|
|
$
|
33,845
|
|
|
$
|
524
|
|
|
1.5
|
|
Average gross profit per retail unit
|
|
$
|
2,012
|
|
|
$
|
1,980
|
|
|
$
|
32
|
|
|
1.6
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2016
|
|
2015
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
4,938,436
|
|
|
$
|
4,552,301
|
|
|
$
|
386,135
|
|
|
8.5
|
%
|
Gross profit
|
|
$
|
289,412
|
|
|
$
|
280,370
|
|
|
$
|
9,042
|
|
|
3.2
|
|
Gross margin
|
|
5.9
|
%
|
|
6.2
|
%
|
|
(30
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
145,772
|
|
|
137,486
|
|
|
8,286
|
|
|
6.0
|
|
|||
Average selling price per retail unit
|
|
$
|
33,878
|
|
|
$
|
33,111
|
|
|
$
|
767
|
|
|
2.3
|
|
Average gross profit per retail unit
|
|
$
|
1,985
|
|
|
$
|
2,039
|
|
|
$
|
(54
|
)
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
4,670,738
|
|
|
$
|
4,520,429
|
|
|
$
|
150,309
|
|
|
3.3
|
%
|
Gross profit
|
|
$
|
273,207
|
|
|
$
|
277,724
|
|
|
$
|
(4,517
|
)
|
|
(1.6
|
)
|
Gross margin
|
|
5.8
|
%
|
|
6.1
|
%
|
|
(30
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
137,998
|
|
|
136,707
|
|
|
1,291
|
|
|
0.9
|
|
|||
Average selling price per retail unit
|
|
$
|
33,846
|
|
|
$
|
33,067
|
|
|
$
|
779
|
|
|
2.4
|
|
Average gross profit per retail unit
|
|
$
|
1,980
|
|
|
$
|
2,032
|
|
|
$
|
(52
|
)
|
|
(2.6
|
)
|
(1)
|
A basis point is equal to 1/100
th
of one percent.
|
|
|
2017 compared to 2016
|
|
National growth in 2017 compared to 2016
|
|
2016 compared to 2015
|
|
National growth in 2016 compared to 2015
|
||||
Domestic brand same store unit sales growth
|
|
(1.6
|
)%
|
|
(3.3
|
)%
|
|
(0.7
|
)%
|
|
(0.7
|
)%
|
Import brand same store unit sales growth
|
|
2.1
|
|
|
(1.1
|
)
|
|
3.1
|
|
|
1.2
|
|
Luxury brand same store unit sales growth
|
|
(7.8
|
)
|
|
1.2
|
|
|
(3.7
|
)
|
|
1.7
|
|
Overall
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
1.0
|
|
|
0.4
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2017
|
|
2016
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
|
$
|
2,544,379
|
|
|
$
|
2,226,951
|
|
|
$
|
317,428
|
|
|
14.3
|
%
|
Retail gross profit
|
|
$
|
286,835
|
|
|
$
|
263,684
|
|
|
$
|
23,151
|
|
|
8.8
|
|
Retail gross margin
|
|
11.3
|
%
|
|
11.8
|
%
|
|
(50
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
129,913
|
|
|
113,498
|
|
|
16,415
|
|
|
14.5
|
|
|||
Average selling price per retail unit
|
|
$
|
19,585
|
|
|
$
|
19,621
|
|
|
$
|
(36
|
)
|
|
(0.2
|
)
|
Average gross profit per retail unit
|
|
$
|
2,208
|
|
|
$
|
2,323
|
|
|
$
|
(115
|
)
|
|
(5.0
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
|
$
|
2,288,290
|
|
|
$
|
2,204,795
|
|
|
$
|
83,495
|
|
|
3.8
|
%
|
Retail gross profit
|
|
$
|
263,119
|
|
|
$
|
261,589
|
|
|
$
|
1,530
|
|
|
0.6
|
|
Retail gross margin
|
|
11.5
|
%
|
|
11.9
|
%
|
|
(40
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
116,359
|
|
|
112,387
|
|
|
3,972
|
|
|
3.5
|
|
|||
Average selling price per retail unit
|
|
$
|
19,666
|
|
|
$
|
19,618
|
|
|
$
|
48
|
|
|
0.2
|
|
Average gross profit per retail unit
|
|
$
|
2,261
|
|
|
$
|
2,328
|
|
|
$
|
(67
|
)
|
|
(2.9
|
)
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2016
|
|
2015
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
|
$
|
2,226,951
|
|
|
$
|
1,927,016
|
|
|
$
|
299,935
|
|
|
15.6
|
%
|
Retail gross profit
|
|
$
|
263,684
|
|
|
$
|
241,249
|
|
|
$
|
22,435
|
|
|
9.3
|
|
Retail gross margin
|
|
11.8
|
%
|
|
12.5
|
%
|
|
(70
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
113,498
|
|
|
99,109
|
|
|
14,389
|
|
|
14.5
|
|
|||
Average selling price per retail unit
|
|
$
|
19,621
|
|
|
$
|
19,443
|
|
|
$
|
178
|
|
|
0.9
|
|
Average gross profit per retail unit
|
|
$
|
2,323
|
|
|
$
|
2,434
|
|
|
$
|
(111
|
)
|
|
(4.6
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
|
$
|
2,119,831
|
|
|
$
|
1,909,209
|
|
|
$
|
210,622
|
|
|
11.0
|
%
|
Retail gross profit
|
|
$
|
251,484
|
|
|
$
|
239,444
|
|
|
$
|
12,040
|
|
|
5.0
|
|
Retail gross margin
|
|
11.9
|
%
|
|
12.5
|
%
|
|
(60
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Retail units sold
|
|
107,519
|
|
|
98,235
|
|
|
9,284
|
|
|
9.5
|
|
|||
Average selling price per retail unit
|
|
$
|
19,716
|
|
|
$
|
19,435
|
|
|
$
|
281
|
|
|
1.4
|
|
Average gross profit per retail unit
|
|
$
|
2,339
|
|
|
$
|
2,437
|
|
|
$
|
(98
|
)
|
|
(4.0
|
)
|
|
|
2017 compared to 2016
|
|
2016 compared to 2015
|
||
Manufacturer CPO vehicles
|
|
(2.7
|
)%
|
|
11.1
|
%
|
Core vehicles
|
|
6.2
|
|
|
12.2
|
|
Value autos
|
|
9.9
|
|
|
6.5
|
|
Overall
|
|
3.8
|
|
|
11.0
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2017
|
|
2016
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Wholesale revenue
|
|
$
|
277,844
|
|
|
$
|
276,616
|
|
|
$
|
1,228
|
|
|
0.4
|
%
|
Wholesale gross profit
|
|
$
|
4,786
|
|
|
$
|
4,313
|
|
|
$
|
473
|
|
|
11.0
|
|
Wholesale gross margin
|
|
1.7
|
%
|
|
1.6
|
%
|
|
10
|
bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Wholesale units sold
|
|
43,912
|
|
|
40,615
|
|
|
3,297
|
|
|
8.1
|
|
|||
Average selling price per wholesale unit
|
|
$
|
6,327
|
|
|
$
|
6,811
|
|
|
$
|
(484
|
)
|
|
(7.1
|
)
|
Average gross profit per retail unit
|
|
$
|
109
|
|
|
$
|
106
|
|
|
$
|
3
|
|
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Wholesale revenue
|
|
$
|
238,474
|
|
|
$
|
273,679
|
|
|
$
|
(35,205
|
)
|
|
(12.9
|
)%
|
Wholesale gross profit
|
|
$
|
4,019
|
|
|
$
|
4,394
|
|
|
$
|
(375
|
)
|
|
(8.5
|
)
|
Wholesale gross margin
|
|
1.7
|
%
|
|
1.6
|
%
|
|
10
|
bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Wholesale units sold
|
|
37,150
|
|
|
40,349
|
|
|
(3,199
|
)
|
|
(7.9
|
)
|
|||
Average selling price per wholesale unit
|
|
$
|
6,419
|
|
|
$
|
6,783
|
|
|
$
|
(364
|
)
|
|
(5.4
|
)
|
Average gross profit per retail unit
|
|
$
|
108
|
|
|
$
|
109
|
|
|
$
|
(1
|
)
|
|
(0.9
|
)
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2016
|
|
2015
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Wholesale revenue
|
|
$
|
276,616
|
|
|
$
|
261,530
|
|
|
$
|
15,086
|
|
|
5.8
|
%
|
Wholesale gross profit
|
|
$
|
4,313
|
|
|
$
|
4,457
|
|
|
$
|
(144
|
)
|
|
(3.2
|
)
|
Wholesale gross margin
|
|
1.6
|
%
|
|
1.7
|
%
|
|
(10
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Wholesale units sold
|
|
40,615
|
|
|
38,167
|
|
|
2,448
|
|
|
6.4
|
|
|||
Average selling price per wholesale unit
|
|
$
|
6,811
|
|
|
$
|
6,852
|
|
|
$
|
(41
|
)
|
|
(0.6
|
)
|
Average gross profit per retail unit
|
|
$
|
106
|
|
|
$
|
117
|
|
|
$
|
(11
|
)
|
|
(9.4
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Wholesale revenue
|
|
$
|
260,809
|
|
|
$
|
259,772
|
|
|
$
|
1,037
|
|
|
0.4
|
%
|
Wholesale gross profit
|
|
$
|
4,171
|
|
|
$
|
4,606
|
|
|
$
|
(435
|
)
|
|
(9.4
|
)
|
Wholesale gross margin
|
|
1.6
|
%
|
|
1.8
|
%
|
|
(20
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Wholesale units sold
|
|
38,158
|
|
|
37,909
|
|
|
249
|
|
|
0.7
|
|
|||
Average selling price per wholesale unit
|
|
$
|
6,835
|
|
|
$
|
6,853
|
|
|
$
|
(18
|
)
|
|
(0.3
|
)
|
Average gross profit per retail unit
|
|
$
|
109
|
|
|
$
|
122
|
|
|
$
|
(13
|
)
|
|
(10.7
|
)
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2017
|
|
2016
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
385,863
|
|
|
$
|
330,922
|
|
|
$
|
54,941
|
|
|
16.6
|
%
|
Average finance and insurance per retail unit
|
|
1,299
|
|
|
1,276
|
|
|
23
|
|
|
1.8
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
347,583
|
|
|
$
|
329,031
|
|
|
$
|
18,552
|
|
|
5.6
|
%
|
Average finance and insurance per retail unit
|
|
1,333
|
|
|
1,280
|
|
|
53
|
|
|
4.1
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands, except per unit amounts)
|
|
2016
|
|
2015
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
330,922
|
|
|
$
|
283,018
|
|
|
$
|
47,904
|
|
|
16.9
|
%
|
Average finance and insurance per retail unit
|
|
1,276
|
|
|
1,196
|
|
|
80
|
|
|
6.7
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
|
$
|
317,015
|
|
|
$
|
281,351
|
|
|
$
|
35,664
|
|
|
12.7
|
%
|
Average finance and insurance per retail unit
|
|
1,291
|
|
|
1,198
|
|
|
93
|
|
|
7.8
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Vehicle financing
|
|
76
|
%
|
|
76
|
%
|
|
77
|
%
|
Service contracts
|
|
44
|
%
|
|
44
|
%
|
|
42
|
%
|
Lifetime lube, oil and filter contracts
|
|
25
|
%
|
|
26
|
%
|
|
25
|
%
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
|
$
|
547,102
|
|
|
$
|
462,492
|
|
|
$
|
84,610
|
|
|
18.3
|
%
|
Warranty
|
|
239,834
|
|
|
199,049
|
|
|
40,785
|
|
|
20.5
|
|
|||
Wholesale parts
|
|
153,059
|
|
|
123,440
|
|
|
29,619
|
|
|
24.0
|
|
|||
Body shop
|
|
75,778
|
|
|
59,524
|
|
|
16,254
|
|
|
27.3
|
|
|||
Total service, body and parts
|
|
$
|
1,015,773
|
|
|
$
|
844,505
|
|
|
$
|
171,268
|
|
|
20.3
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service, body and parts gross profit
|
|
$
|
493,124
|
|
|
$
|
410,283
|
|
|
$
|
82,841
|
|
|
20.2
|
%
|
Service, body and parts gross margin
|
|
48.5
|
%
|
|
48.6
|
%
|
|
(10
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
|
$
|
481,796
|
|
|
$
|
457,782
|
|
|
$
|
24,014
|
|
|
5.2
|
%
|
Warranty
|
|
207,074
|
|
|
197,428
|
|
|
9,646
|
|
|
4.9
|
|
|||
Wholesale parts
|
|
126,375
|
|
|
122,001
|
|
|
4,374
|
|
|
3.6
|
|
|||
Body shop
|
|
61,977
|
|
|
57,791
|
|
|
4,186
|
|
|
7.2
|
|
|||
Total service, body and parts
|
|
$
|
877,222
|
|
|
$
|
835,002
|
|
|
$
|
42,220
|
|
|
5.1
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service, body and parts gross profit
|
|
$
|
428,169
|
|
|
$
|
405,661
|
|
|
$
|
22,508
|
|
|
5.5
|
%
|
Service, body and parts gross margin
|
|
48.8
|
%
|
|
48.6
|
%
|
|
20
|
bps
|
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
|
|||||||||
Reported
|
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
|
$
|
462,492
|
|
|
$
|
414,197
|
|
|
$
|
48,295
|
|
|
11.7
|
%
|
Warranty
|
|
199,049
|
|
|
165,902
|
|
|
33,147
|
|
|
20.0
|
|
|||
Wholesale parts
|
|
123,440
|
|
|
111,557
|
|
|
11,883
|
|
|
10.7
|
|
|||
Body shop
|
|
59,524
|
|
|
47,334
|
|
|
12,190
|
|
|
25.8
|
|
|||
Total service, body and parts
|
|
$
|
844,505
|
|
|
$
|
738,990
|
|
|
$
|
105,515
|
|
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service, body and parts gross profit
|
|
$
|
410,283
|
|
|
$
|
363,921
|
|
|
$
|
46,362
|
|
|
12.7
|
%
|
Service, body and parts gross margin
|
|
48.6
|
%
|
|
49.2
|
%
|
|
(60
|
) bps
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Same store
|
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
|
$
|
437,650
|
|
|
$
|
408,740
|
|
|
$
|
28,910
|
|
|
7.1
|
%
|
Warranty
|
|
187,410
|
|
|
164,213
|
|
|
23,197
|
|
|
14.1
|
|
|||
Wholesale parts
|
|
112,393
|
|
|
110,754
|
|
|
1,639
|
|
|
1.5
|
|
|||
Body shop
|
|
55,099
|
|
|
47,334
|
|
|
7,765
|
|
|
16.4
|
|
|||
Total service, body and parts
|
|
$
|
792,552
|
|
|
$
|
731,041
|
|
|
$
|
61,511
|
|
|
8.4
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service, body and parts gross profit
|
|
$
|
387,091
|
|
|
$
|
359,834
|
|
|
$
|
27,257
|
|
|
7.6
|
%
|
Service, body and parts gross margin
|
|
48.8
|
%
|
|
49.2
|
%
|
|
(40
|
) bps
|
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
|
|||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||
Domestic
|
|
$
|
3,845,830
|
|
|
$
|
3,381,715
|
|
|
$
|
464,115
|
|
|
13.7
|
%
|
Import
|
|
4,432,760
|
|
|
3,764,255
|
|
|
668,505
|
|
|
17.8
|
|
|||
Luxury
|
|
1,810,085
|
|
|
1,528,760
|
|
|
281,325
|
|
|
18.4
|
|
|||
|
|
10,088,675
|
|
|
8,674,730
|
|
|
1,413,945
|
|
|
16.3
|
|
|||
Corporate and other
|
|
(2,165
|
)
|
|
3,427
|
|
|
(5,592
|
)
|
|
(163.2
|
)
|
|||
|
|
$
|
10,086,510
|
|
|
$
|
8,678,157
|
|
|
$
|
1,408,353
|
|
|
16.2
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
|
|||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||
Domestic
|
|
$
|
3,381,715
|
|
|
$
|
3,038,883
|
|
|
$
|
342,832
|
|
|
11.3
|
%
|
Import
|
|
3,764,255
|
|
|
3,330,949
|
|
|
433,306
|
|
|
13.0
|
|
|||
Luxury
|
|
1,528,760
|
|
|
1,490,632
|
|
|
38,128
|
|
|
2.6
|
|
|||
|
|
8,674,730
|
|
|
7,860,464
|
|
|
814,266
|
|
|
10.4
|
|
|||
Corporate and other
|
|
3,427
|
|
|
3,788
|
|
|
(361
|
)
|
|
(9.5
|
)
|
|||
|
|
$
|
8,678,157
|
|
|
$
|
7,864,252
|
|
|
$
|
813,905
|
|
|
10.3
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
|
|||||||||
Segment income*:
|
|
|
|
|
|
|
|
|
|||||||
Domestic
|
|
$
|
105,208
|
|
|
$
|
106,210
|
|
|
$
|
(1,002
|
)
|
|
(0.9
|
)%
|
Import
|
|
117,776
|
|
|
110,204
|
|
|
7,572
|
|
|
6.9
|
|
|||
Luxury
|
|
37,022
|
|
|
31,467
|
|
|
5,555
|
|
|
17.7
|
|
|||
|
|
260,006
|
|
|
247,881
|
|
|
12,125
|
|
|
4.9
|
|
|||
Corporate and other
|
|
167,366
|
|
|
114,321
|
|
|
53,045
|
|
|
46.4
|
|
|||
Depreciation and amortization
|
|
(57,722
|
)
|
|
(49,369
|
)
|
|
8,353
|
|
|
16.9
|
|
|||
Other interest expense
|
|
(34,776
|
)
|
|
(23,207
|
)
|
|
11,569
|
|
|
49.9
|
|
|||
Other (expense) income, net
|
|
12,195
|
|
|
(6,103
|
)
|
|
18,298
|
|
|
NM
|
|
|||
Income before income taxes
|
|
$
|
347,069
|
|
|
$
|
283,523
|
|
|
$
|
63,546
|
|
|
22.4
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
|
|||||||||
Segment income*:
|
|
|
|
|
|
|
|
|
|||||||
Domestic
|
|
$
|
106,210
|
|
|
$
|
115,145
|
|
|
$
|
(8,935
|
)
|
|
(7.8
|
)%
|
Import
|
|
110,204
|
|
|
98,751
|
|
|
11,453
|
|
|
11.6
|
|
|||
Luxury
|
|
31,467
|
|
|
36,391
|
|
|
(4,924
|
)
|
|
(13.5
|
)
|
|||
|
|
247,881
|
|
|
250,287
|
|
|
(2,406
|
)
|
|
(1.0
|
)
|
|||
Corporate and other
|
|
114,321
|
|
|
74,514
|
|
|
39,807
|
|
|
53.4
|
|
|||
Depreciation and amortization
|
|
(49,369
|
)
|
|
(41,600
|
)
|
|
7,769
|
|
|
18.7
|
|
|||
Other interest expense
|
|
(23,207
|
)
|
|
(19,491
|
)
|
|
3,716
|
|
|
19.1
|
|
|||
Other (expense) income, net
|
|
(6,103
|
)
|
|
(1,006
|
)
|
|
5,097
|
|
|
NM
|
|
|||
Income before income taxes
|
|
$
|
283,523
|
|
|
$
|
262,704
|
|
|
$
|
20,819
|
|
|
7.9
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
||||||
|
|
2017
|
|
2016
|
|
|
||||||
Retail new vehicle unit sales:
|
|
|
|
|
|
|
|
|
||||
Domestic
|
|
53,288
|
|
|
47,707
|
|
|
5,581
|
|
|
11.7
|
%
|
Import
|
|
94,634
|
|
|
80,769
|
|
|
13,865
|
|
|
17.2
|
|
Luxury
|
|
19,597
|
|
|
17,591
|
|
|
2,006
|
|
|
11.4
|
|
|
|
167,519
|
|
|
146,067
|
|
|
21,452
|
|
|
14.7
|
|
Allocated to management
|
|
(373
|
)
|
|
(295
|
)
|
|
(78
|
)
|
|
(26.4
|
)
|
|
|
167,146
|
|
|
145,772
|
|
|
21,374
|
|
|
14.7
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
||||||
|
|
2016
|
|
2015
|
|
|
||||||
Retail new vehicle unit sales:
|
|
|
|
|
|
|
|
|
||||
Domestic
|
|
47,707
|
|
|
45,080
|
|
|
2,627
|
|
|
5.8
|
%
|
Import
|
|
80,769
|
|
|
75,091
|
|
|
5,678
|
|
|
7.6
|
|
Luxury
|
|
17,591
|
|
|
17,556
|
|
|
35
|
|
|
0.2
|
|
|
|
146,067
|
|
|
137,727
|
|
|
8,340
|
|
|
6.1
|
|
Allocated to management
|
|
(295
|
)
|
|
(241
|
)
|
|
54
|
|
|
22.4
|
|
|
|
145,772
|
|
|
137,486
|
|
|
8,286
|
|
|
6.0
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
|
|||||||||
Revenue
|
|
$
|
3,845,830
|
|
|
$
|
3,381,715
|
|
|
$
|
464,115
|
|
|
13.7
|
%
|
Segment income
|
|
$
|
105,208
|
|
|
$
|
106,210
|
|
|
$
|
(1,002
|
)
|
|
(0.9
|
)
|
Retail new vehicle unit sales
|
|
53,288
|
|
|
47,707
|
|
|
5,581
|
|
|
11.7
|
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease)
|
|
% Increase (Decrease)
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
|
|||||||||
Revenue
|
|
$
|
3,381,715
|
|
|
$
|
3,038,883
|
|
|
$
|
342,832
|
|
|
11.3
|
%
|
Segment income
|
|
$
|
106,210
|
|
|
$
|
115,145
|
|
|
$
|
(8,935
|
)
|
|
(7.8
|
)
|
Retail new vehicle unit sales
|
|
47,707
|
|
|
45,080
|
|
|
2,627
|
|
|
5.8
|
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
|||||||
Revenue
|
|
$
|
4,432,760
|
|
|
$
|
3,764,255
|
|
|
$
|
668,505
|
|
|
17.8
|
%
|
Segment income
|
|
$
|
117,776
|
|
|
$
|
110,204
|
|
|
$
|
7,572
|
|
|
6.9
|
|
Retail new vehicle unit sales
|
|
94,634
|
|
|
80,769
|
|
|
13,865
|
|
|
17.2
|
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
Increase
|
|
Increase
|
|||||||
Revenue
|
|
$
|
3,764,255
|
|
|
$
|
3,330,949
|
|
|
$
|
433,306
|
|
|
13.0
|
%
|
Segment income
|
|
$
|
110,204
|
|
|
$
|
98,751
|
|
|
$
|
11,453
|
|
|
11.6
|
|
Retail new vehicle unit sales
|
|
80,769
|
|
|
75,091
|
|
|
5,678
|
|
|
7.6
|
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
|||||||
Revenue
|
|
$
|
1,810,085
|
|
|
$
|
1,528,760
|
|
|
$
|
281,325
|
|
|
18.4
|
%
|
Segment income
|
|
$
|
37,022
|
|
|
$
|
31,467
|
|
|
$
|
5,555
|
|
|
17.7
|
|
Retail new vehicle unit sales
|
|
19,597
|
|
|
17,591
|
|
|
2,006
|
|
|
11.4
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenue
|
|
$
|
1,528,760
|
|
|
$
|
1,490,632
|
|
|
$
|
38,128
|
|
|
2.6
|
%
|
Segment income
|
|
$
|
31,467
|
|
|
$
|
36,391
|
|
|
$
|
(4,924
|
)
|
|
(13.5
|
)
|
Retail new vehicle unit sales
|
|
17,591
|
|
|
17,556
|
|
|
35
|
|
|
0.2
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenue
|
|
$
|
(2,165
|
)
|
|
$
|
3,427
|
|
|
$
|
(5,592
|
)
|
|
NM
|
|
Segment income
|
|
$
|
167,366
|
|
|
$
|
114,321
|
|
|
$
|
53,045
|
|
|
46.4
|
%
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenue
|
|
$
|
3,427
|
|
|
$
|
3,788
|
|
|
$
|
(361
|
)
|
|
(9.5
|
)%
|
Segment income
|
|
$
|
114,321
|
|
|
$
|
74,514
|
|
|
$
|
39,807
|
|
|
53.4
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Equity-method investment
|
|
$
|
—
|
|
|
$
|
13,992
|
|
|
$
|
16,521
|
|
Long-lived assets
|
|
—
|
|
|
—
|
|
|
3,603
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
% Increase
|
|||||||
Personnel
|
|
$
|
695,527
|
|
|
$
|
597,185
|
|
|
$
|
98,342
|
|
|
16.5
|
%
|
Advertising
|
|
93,312
|
|
|
81,363
|
|
|
11,949
|
|
|
14.7
|
|
|||
Rent
|
|
33,399
|
|
|
26,785
|
|
|
6,614
|
|
|
24.7
|
|
|||
Facility costs
|
|
55,813
|
|
|
43,883
|
|
|
11,930
|
|
|
27.2
|
|
|||
Other
|
|
171,327
|
|
|
150,374
|
|
|
20,953
|
|
|
13.9
|
|
|||
Total SG&A
|
|
$
|
1,049,378
|
|
|
$
|
899,590
|
|
|
$
|
149,788
|
|
|
16.7
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|||||
As a % of gross profit
|
|
2017
|
|
2016
|
|
(Decrease)
|
|||
Personnel
|
|
45.9
|
%
|
|
45.9
|
%
|
|
—
|
|
Advertising
|
|
6.2
|
|
|
6.3
|
|
|
(10
|
)
|
Rent
|
|
2.2
|
|
|
2.1
|
|
|
10
|
|
Facility costs
|
|
3.7
|
|
|
3.4
|
|
|
30
|
|
Other
|
|
11.2
|
|
|
11.4
|
|
|
(20
|
)
|
Total SG&A
|
|
69.2
|
%
|
|
69.1
|
%
|
|
10
|
bps
|
|
|
Year Ended
December 31,
|
|
|
|
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
Increase
|
|
% Increase
|
|||||||
Personnel
|
|
$
|
597,185
|
|
|
$
|
556,719
|
|
|
$
|
40,466
|
|
|
7.3
|
%
|
Advertising
|
|
81,363
|
|
|
69,935
|
|
|
11,428
|
|
|
16.3
|
|
|||
Rent
|
|
26,785
|
|
|
23,817
|
|
|
2,968
|
|
|
12.5
|
|
|||
Facility costs
|
|
43,883
|
|
|
39,738
|
|
|
4,145
|
|
|
10.4
|
|
|||
Other
|
|
150,374
|
|
|
120,966
|
|
|
29,408
|
|
|
24.3
|
|
|||
Total SG&A
|
|
$
|
899,590
|
|
|
$
|
811,175
|
|
|
$
|
88,415
|
|
|
10.9
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|||||
As a % of gross profit
|
|
2016
|
|
2015
|
|
(Decrease)
|
|||
Personnel
|
|
45.9
|
%
|
|
47.4
|
%
|
|
(150
|
) bps
|
Advertising
|
|
6.3
|
|
|
5.9
|
|
|
40
|
|
Rent
|
|
2.1
|
|
|
2.0
|
|
|
10
|
|
Facility costs
|
|
3.4
|
|
|
3.4
|
|
|
—
|
|
Other
|
|
11.4
|
|
|
10.3
|
|
|
110
|
|
Total SG&A
|
|
69.1
|
%
|
|
69.0
|
%
|
|
10
|
bps
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
|||||||
Personnel
|
|
$
|
695,527
|
|
|
$
|
597,185
|
|
|
$
|
98,342
|
|
|
16.5
|
%
|
Advertising
|
|
93,312
|
|
|
81,363
|
|
|
11,949
|
|
|
14.7
|
|
|||
Rent
|
|
33,399
|
|
|
26,785
|
|
|
6,614
|
|
|
24.7
|
|
|||
Facility costs
|
|
60,918
|
|
|
44,971
|
|
|
15,947
|
|
|
35.5
|
|
|||
Other
|
|
160,091
|
|
|
146,437
|
|
|
13,654
|
|
|
9.3
|
|
|||
Total SG&A
|
|
$
|
1,043,247
|
|
|
$
|
896,741
|
|
|
$
|
146,506
|
|
|
16.3
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|||||
As a % of gross profit
|
|
2017
|
|
2016
|
|
(Decrease)
|
|||
Personnel
|
|
45.9
|
%
|
|
45.9
|
%
|
|
—
|
|
Advertising
|
|
6.2
|
|
|
6.3
|
|
|
(10
|
)
|
Rent
|
|
2.2
|
|
|
2.1
|
|
|
10
|
|
Facility costs
|
|
4.0
|
|
|
3.5
|
|
|
50
|
|
Other
|
|
10.5
|
|
|
11.1
|
|
|
(60
|
)
|
Total SG&A
|
|
68.8
|
%
|
|
68.9
|
%
|
|
(10
|
) bps
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Personnel
|
|
$
|
597,185
|
|
|
$
|
538,423
|
|
|
$
|
58,762
|
|
|
10.9
|
%
|
Advertising
|
|
81,363
|
|
|
69,935
|
|
|
11,428
|
|
|
16.3
|
|
|||
Rent
|
|
26,785
|
|
|
23,817
|
|
|
2,968
|
|
|
12.5
|
|
|||
Facility costs
|
|
44,971
|
|
|
45,656
|
|
|
(685
|
)
|
|
(1.5
|
)
|
|||
Other
|
|
146,437
|
|
|
120,967
|
|
|
25,470
|
|
|
21.1
|
|
|||
Total SG&A
|
|
$
|
896,741
|
|
|
$
|
798,798
|
|
|
$
|
97,943
|
|
|
12.3
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|||||
As a % of gross profit
|
|
2016
|
|
2015
|
|
(Decrease)
|
|||
Personnel
|
|
45.9
|
%
|
|
45.8
|
%
|
|
10
|
bps
|
Advertising
|
|
6.3
|
|
|
5.9
|
|
|
40
|
|
Rent
|
|
2.1
|
|
|
2.0
|
|
|
10
|
|
Facility costs
|
|
3.5
|
|
|
3.9
|
|
|
(40
|
)
|
Other
|
|
11.1
|
|
|
10.3
|
|
|
80
|
|
Total SG&A
|
|
68.9
|
%
|
|
67.9
|
%
|
|
100
|
bps
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
|||||||
Depreciation and amortization
|
|
$
|
57,722
|
|
|
$
|
49,369
|
|
|
$
|
8,353
|
|
|
16.9
|
%
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
Increase
|
|
Increase
|
|||||||
Depreciation and amortization
|
|
$
|
49,369
|
|
|
$
|
41,600
|
|
|
$
|
7,769
|
|
|
18.7
|
%
|
|
|
Year Ended December 31,
|
||||
|
|
2017
|
|
2016
|
|
2015
|
Operating margin
|
|
4.1%
|
|
3.9%
|
|
3.8%
|
Operating margin adjusted for non-core charges
(1)
|
|
4.1%
|
|
4.1%
|
|
4.3%
|
(1)
|
See “Non-GAAP Reconciliations” for additional information.
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Floor plan interest expense (new vehicles)
|
|
$
|
39,336
|
|
|
$
|
25,531
|
|
|
$
|
13,805
|
|
|
54.1
|
%
|
Floor plan assistance (included as an offset to cost of sales)
|
|
(55,962
|
)
|
|
(46,328
|
)
|
|
9,634
|
|
|
20.8
|
|
|||
Net new vehicle carrying costs (benefit)
|
|
$
|
(16,626
|
)
|
|
$
|
(20,797
|
)
|
|
$
|
(4,171
|
)
|
|
(20.1
|
)
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Floor plan interest expense (new vehicles)
|
|
$
|
25,531
|
|
|
$
|
19,534
|
|
|
$
|
5,997
|
|
|
30.7
|
%
|
Floor plan assistance (included as an offset to cost of sales)
|
|
(46,328
|
)
|
|
(41,438
|
)
|
|
4,890
|
|
|
11.8
|
|
|||
Net new vehicle carrying costs (benefit)
|
|
$
|
(20,797
|
)
|
|
$
|
(21,904
|
)
|
|
$
|
(1,107
|
)
|
|
(5.1
|
)
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Mortgage interest
|
|
$
|
19,054
|
|
|
$
|
15,102
|
|
|
$
|
3,952
|
|
|
26.2
|
%
|
Other interest
|
|
16,246
|
|
|
8,519
|
|
|
7,727
|
|
|
90.7
|
|
|||
Capitalized interest
|
|
(524
|
)
|
|
(414
|
)
|
|
110
|
|
|
26.6
|
|
|||
Total other interest expense
|
|
$
|
34,776
|
|
|
$
|
23,207
|
|
|
$
|
11,569
|
|
|
49.9
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
%
|
|||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
Increase
|
|||||||
Mortgage interest
|
|
$
|
15,102
|
|
|
$
|
13,295
|
|
|
$
|
1,807
|
|
|
13.6
|
%
|
Other interest
|
|
8,519
|
|
|
6,646
|
|
|
1,873
|
|
|
28.2
|
|
|||
Capitalized interest
|
|
(414
|
)
|
|
(450
|
)
|
|
(36
|
)
|
|
(8.0
|
)
|
|||
Total other interest expense
|
|
$
|
23,207
|
|
|
$
|
19,491
|
|
|
$
|
3,716
|
|
|
19.1
|
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
||||||
Other (expense) income, net
|
|
$
|
12,195
|
|
|
$
|
(6,103
|
)
|
|
$
|
18,298
|
|
|
NM
|
|
|
Year Ended
December 31,
|
|
|
|
%
|
||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
Increase
|
|
Increase
|
||||||
Other (expense) income, net
|
|
$
|
(6,103
|
)
|
|
$
|
(1,006
|
)
|
|
$
|
5,097
|
|
|
NM
|
|
|
Year Ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Effective income tax rate
|
|
29.3
|
%
|
|
30.5
|
%
|
|
30.3
|
%
|
Effective income tax rate excluding tax credits generated through our equity-method investment and other non-core items
(1)
|
|
38.7
|
%
|
|
38.6
|
%
|
|
38.4
|
%
|
(1)
|
See “Non-GAAP Reconciliations” for more details.
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||||||
|
|
As reported
|
|
Insurance Reserves
|
|
Acquisition expense
|
|
OEM Settlement
|
|
Disposal gain on sale of stores
|
|
Tax reform
|
|
Adjusted
|
||||||||||||||
Selling, general and administrative
|
|
$
|
1,049,378
|
|
|
$
|
(5,582
|
)
|
|
$
|
(5,653
|
)
|
|
$
|
—
|
|
|
$
|
5,104
|
|
|
$
|
—
|
|
|
$
|
1,043,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income
|
|
408,986
|
|
|
5,582
|
|
|
5,653
|
|
|
—
|
|
|
(5,104
|
)
|
|
—
|
|
|
415,117
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other (expense) income, net
|
|
12,195
|
|
|
—
|
|
|
—
|
|
|
(9,111
|
)
|
|
—
|
|
|
—
|
|
|
3,084
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income before income taxes
|
|
$
|
347,069
|
|
|
$
|
5,582
|
|
|
$
|
5,653
|
|
|
$
|
(9,111
|
)
|
|
$
|
(5,104
|
)
|
|
$
|
—
|
|
|
$
|
344,089
|
|
Income tax (provision) benefit
|
|
(101,852
|
)
|
|
(2,174
|
)
|
|
(2,202
|
)
|
|
3,423
|
|
|
2,482
|
|
|
(32,901
|
)
|
|
(133,224
|
)
|
|||||||
Net income
|
|
$
|
245,217
|
|
|
$
|
3,408
|
|
|
$
|
3,451
|
|
|
$
|
(5,688
|
)
|
|
$
|
(2,622
|
)
|
|
$
|
(32,901
|
)
|
|
$
|
210,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted net income per share
|
|
$
|
9.75
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
8.39
|
|
Diluted share count
|
|
25,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||
|
|
As
reported
|
|
Disposal gain on sale of stores
|
|
Equity-method investment
|
|
Legal Reserve
|
|
Tax attribute
|
|
Adjusted
|
||||||||||||
Asset impairments
|
|
$
|
13,992
|
|
|
$
|
—
|
|
|
$
|
(13,992
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
|
|
899,590
|
|
|
1,087
|
|
|
—
|
|
|
(3,936
|
)
|
|
—
|
|
|
896,741
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
|
338,364
|
|
|
(1,087
|
)
|
|
13,992
|
|
|
3,936
|
|
|
—
|
|
|
355,205
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (expense) income, net
|
|
(6,103
|
)
|
|
—
|
|
|
8,262
|
|
|
—
|
|
|
—
|
|
|
2,159
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
$
|
283,523
|
|
|
$
|
(1,087
|
)
|
|
$
|
22,254
|
|
|
$
|
3,936
|
|
|
$
|
—
|
|
|
$
|
308,626
|
|
Income tax (provision) benefit
|
|
(86,465
|
)
|
|
426
|
|
|
(28,530
|
)
|
|
(3,250
|
)
|
|
(1,320
|
)
|
|
(119,139
|
)
|
||||||
Net income
|
|
$
|
197,058
|
|
|
$
|
(661
|
)
|
|
$
|
(6,276
|
)
|
|
$
|
686
|
|
|
$
|
(1,320
|
)
|
|
$
|
189,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted net income per share
|
|
$
|
7.72
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.05
|
)
|
|
$
|
7.42
|
|
Diluted share count
|
|
25,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||
|
|
As
reported
|
|
Disposal gain on sale of stores
|
|
Asset impairment
|
|
Equity-method investment
|
|
Transition Agreement
|
|
Adjusted
|
||||||||||||
Asset impairments
|
|
$
|
20,124
|
|
|
$
|
—
|
|
|
$
|
(3,603
|
)
|
|
$
|
(16,521
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and
administrative
|
|
811,175
|
|
|
5,919
|
|
|
—
|
|
|
—
|
|
|
(18,296
|
)
|
|
798,798
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from operations
|
|
302,735
|
|
|
(5,919
|
)
|
|
3,603
|
|
|
16,521
|
|
|
18,296
|
|
|
335,236
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other (expense) income, net
|
|
(1,006
|
)
|
|
—
|
|
|
—
|
|
|
6,930
|
|
|
—
|
|
|
5,924
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
$
|
262,704
|
|
|
$
|
(5,919
|
)
|
|
$
|
3,603
|
|
|
$
|
23,451
|
|
|
$
|
18,296
|
|
|
$
|
302,135
|
|
Income tax (provision) benefit
|
|
(79,705
|
)
|
|
2,309
|
|
|
(1,385
|
)
|
|
(30,832
|
)
|
|
(6,507
|
)
|
|
(116,120
|
)
|
||||||
Net income
|
|
$
|
182,999
|
|
|
$
|
(3,610
|
)
|
|
$
|
2,218
|
|
|
$
|
(7,381
|
)
|
|
$
|
11,789
|
|
|
$
|
186,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted net income per share
|
|
$
|
6.91
|
|
|
$
|
(0.14
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.45
|
|
|
$
|
7.02
|
|
Diluted share count
|
|
26,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
%
|
|||||||||
|
|
2017
|
|
2016
|
|
Increase
|
|
Increase
|
|||||||
Cash and cash equivalents
|
|
$
|
57,253
|
|
|
$
|
50,282
|
|
|
$
|
6,971
|
|
|
13.9
|
%
|
Available credit on the credit facilities
|
|
222,502
|
|
|
138,090
|
|
|
84,412
|
|
|
61.1
|
|
|||
Total current available funds
|
|
279,755
|
|
|
188,372
|
|
|
91,383
|
|
|
48.5
|
|
|||
Estimated funds from unfinanced real estate
|
|
236,135
|
|
|
168,383
|
|
|
67,752
|
|
|
40.2
|
|
|||
Total estimated available funds
|
|
$
|
515,890
|
|
|
$
|
356,755
|
|
|
$
|
159,135
|
|
|
44.6
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
148,856
|
|
|
$
|
90,905
|
|
|
$
|
79,551
|
|
Net cash used in investing activities
|
|
(538,198
|
)
|
|
(351,693
|
)
|
|
(169,733
|
)
|
|||
Net cash provided by financing activities
|
|
396,313
|
|
|
266,062
|
|
|
105,292
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
||||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
Net cash provided by operating activities – as reported
|
|
$
|
148,856
|
|
|
$
|
90,905
|
|
|
$
|
57,951
|
|
Add: Net borrowings on floor plan notes payable: non-trade
|
|
241,479
|
|
|
252,893
|
|
|
(11,414
|
)
|
|||
Less: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory
|
|
(111,017
|
)
|
|
(94,550
|
)
|
|
(16,467
|
)
|
|||
Net cash provided by operating activities – adjusted
|
|
$
|
279,318
|
|
|
$
|
249,248
|
|
|
$
|
30,070
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
||||||||
|
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
Net cash provided by operating activities – as reported
|
|
$
|
90,905
|
|
|
$
|
79,551
|
|
|
$
|
11,354
|
|
Add: Net borrowings on floor plan notes payable: non-trade
|
|
252,893
|
|
|
136,201
|
|
|
116,692
|
|
|||
Less: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory
|
|
(94,550
|
)
|
|
(25,642
|
)
|
|
(68,908
|
)
|
|||
Net cash provided by operating activities – adjusted
|
|
$
|
249,248
|
|
|
$
|
190,110
|
|
|
$
|
59,138
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
||||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
Capital expenditures
|
|
$
|
(105,378
|
)
|
|
$
|
(100,761
|
)
|
|
$
|
(4,617
|
)
|
Cash paid for acquisitions, net of cash acquired
|
|
(460,394
|
)
|
|
(234,700
|
)
|
|
(225,694
|
)
|
|||
Cash paid for other investments
|
|
(8,570
|
)
|
|
(30,280
|
)
|
|
21,710
|
|
|||
Proceeds from sales of stores
|
|
20,943
|
|
|
11,837
|
|
|
9,106
|
|
|
|
Year Ended
December 31,
|
|
Increase
|
||||||||
|
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
Capital expenditures
|
|
$
|
(100,761
|
)
|
|
$
|
(83,244
|
)
|
|
$
|
(17,517
|
)
|
Cash paid for acquisitions, net of cash acquired
|
|
(234,700
|
)
|
|
(71,615
|
)
|
|
(163,085
|
)
|
|||
Cash paid for other investments
|
|
(30,280
|
)
|
|
(28,110
|
)
|
|
(2,170
|
)
|
|||
Proceeds from sales of stores
|
|
11,837
|
|
|
12,966
|
|
|
(1,129
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Post-acquisition capital improvements
|
|
$
|
41,193
|
|
|
$
|
31,489
|
|
|
$
|
32,802
|
|
Facilities for open points
|
|
511
|
|
|
—
|
|
|
3,338
|
|
|||
Purchases of previously leased facilities
|
|
—
|
|
|
24,016
|
|
|
9,946
|
|
|||
Existing facility improvements
|
|
29,563
|
|
|
24,249
|
|
|
20,245
|
|
|||
Maintenance
|
|
34,111
|
|
|
21,007
|
|
|
16,913
|
|
|||
Total capital expenditures
|
|
$
|
105,378
|
|
|
$
|
100,761
|
|
|
$
|
83,244
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Number of stores acquired
|
|
18
|
|
|
15
|
|
|
6
|
|
|||
Number of stores opened
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Number of franchises added
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
|
|
|
|
|
|
|
||||||
Cash paid for acquisitions, net of cash acquired
|
|
$
|
(460,394
|
)
|
|
$
|
(234,700
|
)
|
|
$
|
(71,615
|
)
|
Less: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory
|
|
111,017
|
|
|
94,550
|
|
|
25,642
|
|
|||
Cash paid for acquisitions, net of cash acquired – adjusted
|
|
$
|
(349,377
|
)
|
|
$
|
(140,150
|
)
|
|
$
|
(45,973
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash provided by financing activities, as reported
|
|
$
|
396,313
|
|
|
$
|
266,062
|
|
|
$
|
105,292
|
|
Less: cash provided by borrowings of floor plan notes payable:
non-trade
|
|
(241,479
|
)
|
|
(252,893
|
)
|
|
(136,201
|
)
|
|||
Cash provided by (used in) financing activities, as adjusted
|
|
$
|
154,834
|
|
|
$
|
13,169
|
|
|
$
|
(30,909
|
)
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease) in
|
||||||||
|
|
2017
|
|
2016
|
|
Cash Flow
|
||||||
Net borrowings (repayments) on lines of credit
|
|
$
|
(81,717
|
)
|
|
$
|
121,261
|
|
|
$
|
(202,978
|
)
|
Principal payments on long-term debt and capital leases, other
|
|
(50,288
|
)
|
|
(27,703
|
)
|
|
(22,585
|
)
|
|||
Proceeds from the issuance of long-term debt
|
|
395,905
|
|
|
66,466
|
|
|
329,439
|
|
|||
Payments of debt issuance costs
|
|
(4,664
|
)
|
|
—
|
|
|
(4,664
|
)
|
|||
Repurchases of common stock
|
|
(33,753
|
)
|
|
(112,939
|
)
|
|
79,186
|
|
|||
Dividends paid
|
|
(26,544
|
)
|
|
(24,131
|
)
|
|
(2,413
|
)
|
|||
Other financing activity
|
|
(33,396
|
)
|
|
—
|
|
|
(33,396
|
)
|
|
|
Year Ended
December 31,
|
|
Increase (Decrease) in
|
||||||||
|
|
2016
|
|
2015
|
|
Cash Flow
|
||||||
Net borrowings (repayments) on lines of credit
|
|
$
|
121,261
|
|
|
$
|
(36,523
|
)
|
|
$
|
157,784
|
|
Principal payments on long-term debt, unscheduled
|
|
(27,703
|
)
|
|
(9,189
|
)
|
|
(18,514
|
)
|
|||
Proceeds from the issuance of long-term debt
|
|
66,466
|
|
|
75,675
|
|
|
(9,209
|
)
|
|||
Repurchases of common stock
|
|
(112,939
|
)
|
|
(31,548
|
)
|
|
(81,391
|
)
|
|||
Dividends paid
|
|
(24,131
|
)
|
|
(19,985
|
)
|
|
(4,146
|
)
|
Dividend paid:
|
|
Dividend amount per share
|
|
Total amount of dividend (in thousands)
|
||||
March 2017
|
|
$
|
0.25
|
|
|
$
|
6,292
|
|
May 2017
|
|
0.27
|
|
|
6,760
|
|
||
August 2017
|
|
0.27
|
|
|
6,751
|
|
||
November 2017
|
|
0.27
|
|
|
6,741
|
|
|
|
Outstanding as of December 31, 2017
|
|
Remaining Available as of December 31, 2017
|
|
||||
Floor plan notes payable: non-trade
|
|
$
|
1,802,252
|
|
|
$
|
—
|
|
(1)
|
Floor plan notes payable
|
|
116,774
|
|
|
—
|
|
|
||
Used vehicle inventory financing facility
|
|
177,222
|
|
|
—
|
|
(2)
|
||
Revolving lines of credit
|
|
94,568
|
|
|
222,502
|
|
(2),(3)
|
||
Real estate mortgages
|
|
469,969
|
|
|
—
|
|
|
||
5.25% Senior notes due 2025
|
|
$
|
300,000
|
|
|
—
|
|
|
|
Other debt
|
|
12,512
|
|
|
—
|
|
|
||
Unamortized debt issuance costs
|
|
(6,919
|
)
|
|
—
|
|
(4)
|
||
Total debt
|
|
$
|
2,966,378
|
|
|
$
|
222,502
|
|
|
(1)
|
As of December 31, 2017
, we had a
$1.9 billion
new vehicle floor plan commitment as part of our credit facility.
|
(2)
|
The amount available on the credit facility is limited based on a borrowing base calculation and fluctuates monthly.
|
(3)
|
Available credit is based on the borrowing base amount effective as of November 30, 2017. This amount is reduced by
$9.2 million
for outstanding letters of credit.
|
(4)
|
We adopted an accounting standard update that requires debt issuance costs be presented on the balance sheet as a reduction from the carrying amount of the related debt liability. We adopted the standard retrospectively and have presented all debt issuance costs as a reduction from the carrying amount of the related debt liability for both current and prior periods. See Note 6 of the Notes to Consolidated Financial Statements for additional information.
|
Debt Covenant Ratio
|
|
Requirement
|
|
As of December 31, 2017
|
Current ratio
|
|
Not less than 1.10 to 1
|
|
1.21 to 1
|
Fixed charge coverage ratio
|
|
Not less than 1.20 to 1
|
|
2.82 to 1
|
Leverage ratio
|
|
Not more than 5.00 to 1
|
|
2.59 to 1
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligation
|
|
Total
|
|
2018
|
|
2019 and 2020
|
|
2021 and 2022
|
|
2023 and beyond
|
||||||||||
Floor plan notes payable: non-trade
(1)
|
|
$
|
1,802,252
|
|
|
$
|
1,802,252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor plan notes payable
(1)
|
|
116,774
|
|
|
116,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Used vehicle inventory financing facility
(1)
|
|
177,222
|
|
|
—
|
|
|
—
|
|
|
177,222
|
|
|
—
|
|
|||||
Revolving lines of credit
(1)(3)
|
|
94,568
|
|
|
111
|
|
|
457
|
|
|
94,000
|
|
|
—
|
|
|||||
Real estate mortgages, including interest
(3)
|
|
571,549
|
|
|
36,327
|
|
|
119,187
|
|
|
128,164
|
|
|
287,871
|
|
|||||
5.25% Senior Notes Due 2025, including interest
(3)
|
|
426,339
|
|
|
16,089
|
|
|
31,500
|
|
|
31,500
|
|
|
347,250
|
|
|||||
Other debt, including capital leases and interest
|
|
327,909
|
|
|
1,731
|
|
|
3,305
|
|
|
3,282
|
|
|
319,591
|
|
|||||
Charge-backs on various contracts
|
|
52,744
|
|
|
27,352
|
|
|
22,495
|
|
|
2,856
|
|
|
41
|
|
|||||
Operating leases
(2)
|
|
408,396
|
|
|
38,357
|
|
|
67,139
|
|
|
59,658
|
|
|
243,242
|
|
|||||
Self-insurance programs
|
|
31,227
|
|
|
14,354
|
|
|
7,385
|
|
|
3,765
|
|
|
5,723
|
|
|||||
|
|
$
|
4,008,980
|
|
|
$
|
2,053,347
|
|
|
$
|
251,468
|
|
|
$
|
500,447
|
|
|
$
|
1,203,718
|
|
(1)
|
Amounts for new vehicle floor plan commitment, floor plan notes payable, the used vehicle inventory financing facility and the revolving lines of credit do not include estimated interest payments. See Notes 1 and 6 in the Notes to Consolidated Financial Statements.
|
(2)
|
Amounts for operating lease commitments do not include sublease income, and certain operating expenses such as maintenance, insurance and real estate taxes. See Note 7 in the Notes to Consolidated Financial Statements.
|
(3)
|
Balances exclude net impact of debt issuance costs. See Note 6 in the Notes to Consolidated Financial Statements.
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
|
|
Weighted average exercise price of outstanding options, warrants and rights (b)
|
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
(2)
|
||
Equity compensation plans approved by shareholders
|
|
344,804
|
|
|
$—
|
(1)
|
|
1,665,697
|
|
Equity compensation plans not approved by shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
344,804
|
|
|
$—
|
|
|
1,665,697
|
|
(1)
|
There is no exercise price associated with our restricted stock units.
|
(2)
|
Includes
1,383,827
shares available pursuant to our 2013 Amended and Restated Stock Incentive Plan and
281,870
shares available pursuant to our Employee Stock Purchase Plan.
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
|
Selected Quarterly Financial Information (Unaudited)
|
Exhibit
|
Description
|
|
|
10.1.1
*
|
Amendment 2014-1 to the Lithia Motors, Inc. 2009 Employee Stock Purchase Plan (incorporated by reference to exhibit 10.1.1 to the Company’s Form 10-K for the year ended December 31, 2014)
|
|
|
10.2
*
|
Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 2, 2013)
|
|
|
10.2.1
*
|
RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011)
|
|
|
10.2.2
*
|
Amendment to RSU Deferral Plan (incorporated by reference to exhibit 10.2.2 to the Company’s Form 10-K for the year ended December 31, 2014)
|
|
|
10.2.3
*
|
Restricted Stock Unit (RSU) Deferral Election Form (incorporated by reference to exhibit 10.2.3 to the Company’s Form 10-K for the year ended December 31, 2014)
|
|
|
10.3
*
|
Form of Restricted Stock Unit Agreement (2016 Performance- and Time-Vesting) (for Senior Executives) (incorporated by reference to exhibit 10.3.3 to the Company’s Form 10-K for the year ended December 31, 2015)
|
|
|
10.3.1
*
|
Form of Restricted Stock Unit Agreement (2017 Performance- and Time-Vesting) (for Senior Executives) (incorporated by reference to exhibit 10.3.1 to the Company's Form 10-K for the year ended December 31, 2016)
|
|
|
10.3.2
*
|
Form of Restricted Stock Unit Agreement (2018 Performance- and Time-Vesting) (for Senior Executives)
|
|
|
10.3.3
*
|
Form of Restricted Stock Unit Agreement (Time-Vesting) (incorporated by reference to exhibit 10.3.2 to the Company's Form 10-K for the year ended December 31, 2016)
|
|
|
10.4
*
|
Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 2, 2013)
|
|
|
10.5
*
|
Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005)
|
|
|
Amended and Restated Loan Agreement among Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S. Bank National Association (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed October 3, 2014)
|
|
|
|
First Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2015)
|
|
|
|
Second Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 22, 2015)
|
|
|
|
Third Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2016)
|
|
|
|
Fourth Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2016)
|
|
|
|
Sixth Amendment to Amended and Restated Loan Agreement dated July 12, 2017. (incorporated by reference to exhibit 10.1 to the Company's Form 10-Q for the quarter ended September 30, 2017)
|
|
|
|
Seventh Amendment to Amended and Restated Loan Agreement dated August 1, 2017 (incorporated by reference to exhibit 10.1 to Form 8-K dated August 1, 2017 and filed with the Securities and Exchange Commission on August 3, 2017)
|
|
|
|
10.7
*
|
Amended and Restated Split-Dollar Agreement (incorporated by reference to exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2012)
|
|
|
10.8
*
|
Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009)
|
|
|
10.9
*
|
Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009)
|
|
|
10.10
*
|
Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31, 2016)
|
|
|
Exhibit
|
Description
|
|
|
10.10.1
*
|
Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan – Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010)
|
|
|
10.10.2
*
|
Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan – Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010)
|
|
|
10.11
*
|
Transition Agreement dated September 14, 2015 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed September 17, 2015)
|
|
|
10.12
*
|
Director Service Agreement effective January 1, 2016 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed September 17, 2015)
|
|
|
10.13
*
|
Form of Employment and Change in Control Agreement dated February 4, 2016 between Lithia Motors, Inc. and Bryan DeBoer (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed February 5, 2016)
(1)
|
|
|
Ratio of Earnings to Combined Fixed Charges
|
|
|
|
Subsidiaries of Lithia Motors, Inc.
|
|
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
|
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Substantially similar agreements exist between Lithia Motors, Inc. and each of Scott Hillier, Christopher S. Holzshu, John F. North III, George Liang, Mark DeBoer, Tom Dobry and Bryan Osterhout. The "Cash Change in Control Benefits" under the agreements with Mr. Mark DeBoer and Mr. Dobry provide for 12 months of base salary rather than 24 months.
|
Date: February 23, 2018
|
LITHIA MOTORS, INC.
|
|
|
|
By /s/ Bryan B. DeBoer
|
|
Bryan B. DeBoer
|
|
Director, President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/s/ Bryan B. DeBoer
|
|
Director, President and Chief Executive Officer.
(Principal Executive Officer)
|
Bryan B. DeBoer
|
|
|
|
|
|
/s/ John F. North, III
|
|
Senior Vice President and Chief Financial Officer
(Principal Accounting Officer)
|
John F. North, III
|
|
|
|
|
|
/s/ Sidney B. DeBoer
|
|
Chairman of the Board
|
Sidney B. DeBoer
|
|
|
|
|
|
/s/ Thomas R. Becker
|
|
Director
|
Thomas Becker
|
|
|
|
|
|
/s/ Susan O. Cain
|
|
Director
|
Susan O. Cain
|
|
|
|
|
|
/s/ Kenneth E. Roberts
|
|
Director
|
Kenneth E. Roberts
|
|
|
|
|
|
/s/ David J. Robino
|
|
Director
|
David J. Robino
|
|
|
LITHIA MOTORS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (In thousands) |
||||||||
|
December 31,
|
|||||||
|
2017
|
|
2016
|
|||||
Assets
|
|
|
|
|||||
Current Assets:
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
57,253
|
|
|
$
|
50,282
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $7,386 and $5,281
|
521,938
|
|
|
417,714
|
|
|||
Inventories, net
|
2,132,744
|
|
|
1,772,587
|
|
|||
Other current assets
|
70,847
|
|
|
46,611
|
|
|||
Total Current Assets
|
2,782,782
|
|
|
2,287,194
|
|
|||
|
|
|
|
|||||
Property and equipment, net of accumulated depreciation of $197,802 and $167,300
|
1,185,169
|
|
|
1,006,130
|
|
|||
Goodwill
|
256,320
|
|
|
259,399
|
|
|||
Franchise value
|
186,977
|
|
|
184,268
|
|
|||
Other non-current assets
|
271,818
|
|
|
107,159
|
|
|||
Total Assets
|
$
|
4,683,066
|
|
|
$
|
3,844,150
|
|
|
|
|
|
|
|||||
Liabilities and Stockholders' Equity
|
|
|
|
|||||
Current Liabilities:
|
|
|
|
|||||
Floor plan notes payable
|
$
|
116,774
|
|
|
$
|
94,602
|
|
|
Floor plan notes payable: non-trade
|
1,802,252
|
|
|
1,506,895
|
|
|||
Current maturities of long-term debt
|
18,876
|
|
|
20,965
|
|
|||
Trade payables
|
111,362
|
|
|
88,423
|
|
|||
Accrued liabilities
|
251,717
|
|
|
211,109
|
|
|||
Total Current Liabilities
|
2,300,981
|
|
|
1,921,994
|
|
|||
|
|
|
|
|||||
Long-term debt, less current maturities
|
1,028,476
|
|
|
769,916
|
|
|||
Deferred revenue
|
103,111
|
|
|
81,929
|
|
|||
Deferred income taxes
|
56,277
|
|
|
59,075
|
|
|||
Other long-term liabilities
|
111,003
|
|
|
100,460
|
|
|||
Total Liabilities
|
3,599,848
|
|
|
2,933,374
|
|
|||
|
|
|
|
|||||
Stockholders' Equity:
|
|
|
|
|||||
Preferred stock - no par value; authorized 15,000 shares; none outstanding
|
—
|
|
|
—
|
|
|||
Class A common stock - no par value; authorized 100,000 shares; issued and outstanding 23,968 and 23,382
|
149,123
|
|
|
165,512
|
|
|||
Class B common stock - no par value; authorized 25,000 shares; issued and outstanding 1,000 and 1,762
|
124
|
|
|
219
|
|
|||
Additional paid-in capital
|
11,309
|
|
|
41,225
|
|
|||
Retained earnings
|
922,662
|
|
|
703,820
|
|
|||
Total Stockholders' Equity
|
1,083,218
|
|
|
910,776
|
|
|||
Total Liabilities and Stockholders' Equity
|
$
|
4,683,066
|
|
|
$
|
3,844,150
|
|
LITHIA MOTORS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (In thousands, except per share amounts) |
||||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||
Revenues:
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
5,763,587
|
|
|
$
|
4,938,436
|
|
|
$
|
4,552,301
|
|
|
Used vehicle retail
|
2,544,379
|
|
|
2,226,951
|
|
|
1,927,016
|
|
||||
Used vehicle wholesale
|
277,844
|
|
|
276,616
|
|
|
261,530
|
|
||||
Finance and insurance
|
385,863
|
|
|
330,922
|
|
|
283,018
|
|
||||
Service, body and parts
|
1,015,773
|
|
|
844,505
|
|
|
738,990
|
|
||||
Fleet and other
|
99,064
|
|
|
60,727
|
|
|
101,397
|
|
||||
Total revenues
|
10,086,510
|
|
|
8,678,157
|
|
|
7,864,252
|
|
||||
Cost of sales:
|
|
|
|
|
|
|||||||
New vehicle
|
5,423,744
|
|
|
4,649,024
|
|
|
4,271,931
|
|
||||
Used vehicle retail
|
2,257,544
|
|
|
1,963,267
|
|
|
1,685,767
|
|
||||
Used vehicle wholesale
|
273,058
|
|
|
272,303
|
|
|
257,073
|
|
||||
Service, body and parts
|
522,649
|
|
|
434,222
|
|
|
375,069
|
|
||||
Fleet and other
|
93,429
|
|
|
58,026
|
|
|
98,778
|
|
||||
Total cost of sales
|
8,570,424
|
|
|
7,376,842
|
|
|
6,688,618
|
|
||||
Gross profit
|
1,516,086
|
|
|
1,301,315
|
|
|
1,175,634
|
|
||||
Asset impairments
|
—
|
|
|
13,992
|
|
|
20,124
|
|
||||
Selling, general and administrative
|
1,049,378
|
|
|
899,590
|
|
|
811,175
|
|
||||
Depreciation and amortization
|
57,722
|
|
|
49,369
|
|
|
41,600
|
|
||||
Operating income
|
408,986
|
|
|
338,364
|
|
|
302,735
|
|
||||
Floor plan interest expense
|
(39,336
|
)
|
|
(25,531
|
)
|
|
(19,534
|
)
|
||||
Other interest expense
|
(34,776
|
)
|
|
(23,207
|
)
|
|
(19,491
|
)
|
||||
Other (expense) income, net
|
12,195
|
|
|
(6,103
|
)
|
|
(1,006
|
)
|
||||
Income before income taxes
|
347,069
|
|
|
283,523
|
|
|
262,704
|
|
||||
Income tax provision
|
(101,852
|
)
|
|
(86,465
|
)
|
|
(79,705
|
)
|
||||
Net income
|
$
|
245,217
|
|
|
$
|
197,058
|
|
|
$
|
182,999
|
|
|
|
|
|
|
|
|
|||||||
Basic net income per share
|
$
|
9.78
|
|
|
$
|
7.76
|
|
|
$
|
6.96
|
|
|
Shares used in basic per share calculations
|
25,065
|
|
|
25,409
|
|
|
26,290
|
|
||||
|
|
|
|
|
|
|||||||
Diluted net income per share
|
$
|
9.75
|
|
|
$
|
7.72
|
|
|
$
|
6.91
|
|
|
Shares used in diluted per share calculations
|
25,145
|
|
|
25,521
|
|
|
26,490
|
|
||||
|
|
|
|
|
|
|||||||
Cash dividends paid per Class A and Class B share
|
$
|
1.06
|
|
|
$
|
0.95
|
|
|
$
|
0.76
|
|
LITHIA MOTORS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (In thousands) |
||||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||
Net income
|
$
|
245,217
|
|
|
$
|
197,058
|
|
|
$
|
182,999
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|||||||
Gain on cash flow hedges, net of tax expense of $0, $175 and $399
|
—
|
|
|
277
|
|
|
649
|
|
||||
Comprehensive income
|
$
|
245,217
|
|
|
$
|
197,335
|
|
|
$
|
183,648
|
|
LITHIA MOTORS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (In thousands) |
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||
Balance at December 31, 2014
|
23,671
|
|
|
$
|
276,058
|
|
|
2,562
|
|
|
$
|
319
|
|
|
$
|
29,775
|
|
|
$
|
(926
|
)
|
|
$
|
367,879
|
|
|
$
|
673,105
|
|
|||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
182,999
|
|
|
182,999
|
|
|||||||||
Gain on cash flow hedges, net of tax expense of $399
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
649
|
|
|
—
|
|
|
649
|
|
|||||||||
Issuance of stock in connection with employee stock plans
|
74
|
|
|
6,065
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,065
|
|
|||||||||
Issuance of restricted stock to employees
|
217
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Repurchase of Class A common stock
|
(306
|
)
|
|
(31,548
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,548
|
)
|
|||||||||
Class B common stock converted to Class A common stock
|
20
|
|
|
3
|
|
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises
|
—
|
|
|
7,832
|
|
|
—
|
|
|
—
|
|
|
9,047
|
|
|
—
|
|
|
—
|
|
|
16,879
|
|
|||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,985
|
)
|
|
(19,985
|
)
|
|||||||||
Balance at December 31, 2015
|
23,676
|
|
|
258,410
|
|
|
2,542
|
|
|
316
|
|
|
38,822
|
|
|
(277
|
)
|
|
530,893
|
|
|
828,164
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197,058
|
|
|
197,058
|
|
|||||||||
Gain on cash flow hedges, net of tax expense of $175
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
277
|
|
|||||||||
Issuance of stock in connection with employee stock plans
|
93
|
|
|
6,932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,932
|
|
|||||||||
Issuance of restricted stock to employees
|
241
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Repurchase of Class A common stock
|
(1,408
|
)
|
|
(112,939
|
)
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112,939
|
)
|
|||||||||
Class B common stock converted to Class A common stock
|
780
|
|
|
97
|
|
|
(780
|
)
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises
|
—
|
|
|
13,012
|
|
|
—
|
|
|
—
|
|
|
2,403
|
|
|
—
|
|
|
—
|
|
|
15,415
|
|
|||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,131
|
)
|
|
(24,131
|
)
|
|||||||||
Balance at December 31, 2016
|
23,382
|
|
|
165,512
|
|
|
1,762
|
|
|
219
|
|
|
41,225
|
|
|
—
|
|
|
703,820
|
|
|
910,776
|
|
|||||||||
Adjustment to adopt ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
169
|
|
|
—
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
245,217
|
|
|
245,217
|
|
|||||||||
Issuance of stock in connection with employee stock plans
|
90
|
|
|
7,509
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,509
|
|
|||||||||
Issuance of restricted stock to employees
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Repurchase of Class A common stock
|
(361
|
)
|
|
(33,753
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,753
|
)
|
|||||||||
Class B common stock converted to Class A common stock
|
762
|
|
|
95
|
|
|
(762
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises
|
—
|
|
|
7,623
|
|
|
—
|
|
|
—
|
|
|
3,649
|
|
|
—
|
|
|
—
|
|
|
11,272
|
|
|||||||||
Option premiums paid
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(33,396
|
)
|
|
—
|
|
|
—
|
|
|
(33,396
|
)
|
|||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,544
|
)
|
|
(26,544
|
)
|
|||||||||
Issuance of stock in connection with acquisitions
|
4
|
|
|
2,137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,137
|
|
|||||||||
Balance at December 31, 2017
|
23,968
|
|
|
$
|
149,123
|
|
|
1,000
|
|
|
$
|
124
|
|
|
$
|
11,309
|
|
|
$
|
—
|
|
|
$
|
922,662
|
|
|
$
|
1,083,218
|
|
LITHIA MOTORS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (In thousands) |
||||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||
Cash flows from operating activities:
|
|
|
|
|
|
|||||||
Net income
|
$
|
245,217
|
|
|
$
|
197,058
|
|
|
$
|
182,999
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Asset impairments
|
—
|
|
|
13,992
|
|
|
20,124
|
|
||||
Depreciation and amortization
|
57,722
|
|
|
49,369
|
|
|
41,600
|
|
||||
Stock-based compensation
|
11,272
|
|
|
11,047
|
|
|
11,871
|
|
||||
(Gain) loss on disposal of other assets
|
(438
|
)
|
|
(4,343
|
)
|
|
203
|
|
||||
Gain from disposal activities
|
(5,110
|
)
|
|
(1,102
|
)
|
|
(5,919
|
)
|
||||
Deferred income taxes
|
(2,798
|
)
|
|
10,138
|
|
|
12,341
|
|
||||
(Increase) decrease (net of acquisitions and dispositions):
|
|
|
|
|
|
|||||||
Trade receivables, net
|
(57,360
|
)
|
|
(105,961
|
)
|
|
(13,047
|
)
|
||||
Inventories
|
(193,099
|
)
|
|
(168,847
|
)
|
|
(197,079
|
)
|
||||
Other assets
|
(3,120
|
)
|
|
(13,305
|
)
|
|
(31,290
|
)
|
||||
Increase (decrease) (net of acquisitions and dispositions):
|
|
|
|
|
|
|||||||
Floor plan notes payable
|
20,273
|
|
|
16,385
|
|
|
7,035
|
|
||||
Trade payables
|
20,008
|
|
|
16,449
|
|
|
674
|
|
||||
Accrued liabilities
|
37,227
|
|
|
42,852
|
|
|
16,273
|
|
||||
Other long-term liabilities and deferred revenue
|
19,062
|
|
|
27,173
|
|
|
33,766
|
|
||||
Net cash provided by operating activities
|
148,856
|
|
|
90,905
|
|
|
79,551
|
|
||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities:
|
|
|
|
|
|
|||||||
Capital expenditures
|
(105,378
|
)
|
|
(100,761
|
)
|
|
(83,244
|
)
|
||||
Proceeds from sales of assets
|
15,201
|
|
|
2,211
|
|
|
270
|
|
||||
Cash paid for other investments
|
(8,570
|
)
|
|
(30,280
|
)
|
|
(28,110
|
)
|
||||
Cash paid for acquisitions, net of cash acquired
|
(460,394
|
)
|
|
(234,700
|
)
|
|
(71,615
|
)
|
||||
Proceeds from sales of stores
|
20,943
|
|
|
11,837
|
|
|
12,966
|
|
||||
Net cash used in investing activities
|
(538,198
|
)
|
|
(351,693
|
)
|
|
(169,733
|
)
|
||||
|
|
|
|
|
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|||||||
Borrowings on floor plan notes payable: non-trade, net
|
241,479
|
|
|
252,893
|
|
|
136,201
|
|
||||
Borrowings on lines of credit
|
1,754,450
|
|
|
1,244,343
|
|
|
1,261,597
|
|
||||
Repayments on lines of credit
|
(1,836,167
|
)
|
|
(1,123,082
|
)
|
|
(1,298,120
|
)
|
||||
Principal payments on long-term debt, scheduled
|
(18,218
|
)
|
|
(16,717
|
)
|
|
(15,404
|
)
|
||||
Principal payments on long-term debt and capital leases, other
|
(50,288
|
)
|
|
(27,703
|
)
|
|
(9,189
|
)
|
||||
Proceeds from issuance of long-term debt
|
395,905
|
|
|
66,466
|
|
|
75,675
|
|
||||
Payment of debt issuance costs
|
(4,664
|
)
|
|
—
|
|
|
—
|
|
||||
Proceeds from issuance of common stock
|
7,509
|
|
|
6,932
|
|
|
6,065
|
|
||||
Repurchase of common stock
|
(33,753
|
)
|
|
(112,939
|
)
|
|
(31,548
|
)
|
||||
Dividends paid
|
(26,544
|
)
|
|
(24,131
|
)
|
|
(19,985
|
)
|
||||
Other financing activity
|
(33,396
|
)
|
|
—
|
|
|
—
|
|
||||
Net cash provided by financing activities
|
396,313
|
|
|
266,062
|
|
|
105,292
|
|
||||
Increase in cash and cash equivalents
|
6,971
|
|
|
5,274
|
|
|
15,110
|
|
||||
Cash and cash equivalents at beginning of year
|
50,282
|
|
|
45,008
|
|
|
29,898
|
|
||||
Cash and cash equivalents at end of year
|
$
|
57,253
|
|
|
$
|
50,282
|
|
|
$
|
45,008
|
|
|
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|||||||
Cash paid during the period for interest
|
$
|
68,850
|
|
|
$
|
49,730
|
|
|
$
|
41,098
|
|
|
Cash paid during the period for income taxes, net
|
127,258
|
|
|
57,236
|
|
|
86,533
|
|
||||
Floor plan debt paid in connection with store disposals
|
3,699
|
|
|
5,284
|
|
|
4,400
|
|
||||
|
|
|
|
|
|
|||||||
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
|||||||
Debt issued in connection with acquisitions
|
$
|
1,748
|
|
|
$
|
—
|
|
|
$
|
2,160
|
|
|
Non-cash assets transferred in connection with acquisitions
|
—
|
|
|
2,637
|
|
|
—
|
|
||||
Debt forgiven in connection with acquisitions
|
—
|
|
|
—
|
|
|
1,374
|
|
||||
Debt assumed in connection with acquisitions
|
84,333
|
|
|
48,081
|
|
|
—
|
|
||||
Acquisition of assets with capital leases
|
—
|
|
|
8,916
|
|
|
—
|
|
||||
Issuance of Class A common stock in connection with acquisition
|
2,137
|
|
|
—
|
|
|
—
|
|
•
|
Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within
five
to
ten days
of selling a vehicle.
|
•
|
Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products.
|
•
|
Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer.
|
•
|
Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims.
|
•
|
Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products.
|
Buildings and improvements
|
5 to 40 years
|
Service equipment
|
5 to 15 years
|
Furniture, office equipment, signs and fixtures
|
3 to 10 years
|
•
|
certain of our Franchise Agreements continue indefinitely by their terms;
|
•
|
certain of our Franchise Agreements have limited terms, but are routinely renewed without substantial cost to us;
|
•
|
other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers terminating Franchise Agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time;
|
•
|
state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise;
|
•
|
we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and
|
•
|
as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the Franchise Agreements acquired with the dealerships we purchase based on the understanding and industry practice that the Franchise Agreements will be renewed indefinitely by the manufacturer.
|
•
|
an other than temporary decline in fair value is reflected as an asset impairment;
|
•
|
our portion of the operating gains and losses is included as a component of other (expense) income, net;
|
•
|
the amortization related to the discounted fair value of future equity contributions is recognized over the life of the investments as non-cash interest expense; and
|
•
|
tax benefits and credits are reflected as a component of our income tax provision.
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Advertising expense, gross
|
|
$
|
116,124
|
|
|
$
|
101,656
|
|
|
$
|
89,736
|
|
Manufacturer cooperative advertising credits
|
|
(22,812
|
)
|
|
(20,293
|
)
|
|
(19,801
|
)
|
|||
Advertising expense, net
|
|
$
|
93,312
|
|
|
$
|
81,363
|
|
|
$
|
69,935
|
|
•
|
Reclassified
$0.2 million
as a decrease to additional paid-in capital and an increase to retained earnings upon adoption related to our policy election to record forfeitures as they occur.
|
•
|
All prior periods presented in our Consolidated Statements of Cash Flows have been adjusted for the presentation of excess tax benefits on the cash flow statement. This resulted in a
$4.4 million
and a
$5.0 million
reclassification between financing and operating cash flows for the years ended December 31, 2016 and 2015, respectively.
|
•
|
We had
$0.3 million
of tax-affected state net operating loss carryforwards related to excess tax benefits for which a deferred tax asset had not been recognized. At adoption, this amount was recorded with the offset to retained earnings. Additionally, we do not believe that it is more-likely-than-not that the asset will be utilized and, as a result, a valuation allowance in the same amount was recorded that offset the impact to retained earnings. See Note 13.
|
December 31,
|
|
2017
|
|
2016
|
||||
Contracts in transit
|
|
$
|
286,578
|
|
|
$
|
233,506
|
|
Trade receivables
|
|
45,895
|
|
|
45,193
|
|
||
Vehicle receivables
|
|
60,022
|
|
|
43,937
|
|
||
Manufacturer receivables
|
|
96,141
|
|
|
76,948
|
|
||
Auto loan receivables
|
|
75,052
|
|
|
69,859
|
|
||
Other receivables
|
|
14,634
|
|
|
3,857
|
|
||
|
|
578,322
|
|
|
473,300
|
|
||
Less: Allowance for doubtful accounts
|
|
(7,386
|
)
|
|
(5,281
|
)
|
||
Less: Long-term portion of accounts receivable, net
|
|
(48,998
|
)
|
|
(50,305
|
)
|
||
Total accounts receivable, net
|
|
$
|
521,938
|
|
|
$
|
417,714
|
|
•
|
Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within
five
to
ten days
of selling a vehicle.
|
•
|
Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products.
|
•
|
Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer.
|
•
|
Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims.
|
•
|
Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products.
|
December 31,
|
|
2017
|
|
2016
|
||||
New vehicles
|
|
$
|
1,553,751
|
|
|
$
|
1,338,110
|
|
Used vehicles
|
|
500,011
|
|
|
368,067
|
|
||
Parts and accessories
|
|
78,982
|
|
|
66,410
|
|
||
Total inventories
|
|
$
|
2,132,744
|
|
|
$
|
1,772,587
|
|
December 31,
|
|
2017
|
|
2016
|
||||
Land
|
|
$
|
346,680
|
|
|
$
|
318,832
|
|
Building and improvements
|
|
685,516
|
|
|
611,798
|
|
||
Service equipment
|
|
94,121
|
|
|
80,953
|
|
||
Furniture, office equipment, signs and fixtures
|
|
231,454
|
|
|
141,248
|
|
||
|
|
1,357,771
|
|
|
1,152,831
|
|
||
Less accumulated depreciation
|
|
(197,802
|
)
|
|
(167,300
|
)
|
||
|
|
1,159,969
|
|
|
985,531
|
|
||
Construction in progress
|
|
25,200
|
|
|
20,599
|
|
||
|
|
$
|
1,185,169
|
|
|
$
|
1,006,130
|
|
|
|
Domestic
|
|
Import
|
|
Luxury
|
|
Consolidated
|
||||||||
Balance as of December 31, 2015 ¹
|
|
$
|
97,903
|
|
|
$
|
84,384
|
|
|
$
|
30,933
|
|
|
$
|
213,220
|
|
Additions through acquisitions
2
|
|
18,154
|
|
|
21,795
|
|
|
7,448
|
|
|
47,397
|
|
||||
Reductions through divestitures
|
|
(1,218
|
)
|
|
—
|
|
|
—
|
|
|
(1,218
|
)
|
||||
Balance as of December 31, 2016 ¹
|
|
114,839
|
|
|
106,179
|
|
|
38,381
|
|
|
259,399
|
|
||||
Adjustments to purchase price allocations
2,3
|
|
(817
|
)
|
|
(1,006
|
)
|
|
(391
|
)
|
|
(2,214
|
)
|
||||
Reductions through divestitures
|
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(865
|
)
|
||||
Balance as of December 31, 2017 ¹
|
|
$
|
114,022
|
|
|
$
|
104,308
|
|
|
$
|
37,990
|
|
|
$
|
256,320
|
|
(1)
|
Net of accumulated impairment losses of
$299.3 million
recorded during the year ended December 31, 2008.
|
(2)
|
Our purchase price allocation for the acquisition of the Carbone Auto Group was finalized in the third quarter of 2017, resulting in a reclassification of
$2.2 million
from goodwill to franchise value.
|
(3)
|
Our purchase price allocation is preliminary for the acquisition of the Baierl Auto Group, Downtown LA Auto Group, Albany CJD Fiat, Crater Lake Ford Lincoln, and Crater Lake Mazda and the associated goodwill has not been allocated to each of our segments. See Note 14.
|
|
|
Franchise Value
|
||
Balance as of December 31, 2015
|
|
$
|
157,699
|
|
Additions through acquisitions
|
|
27,087
|
|
|
Reductions through divestitures
|
|
(518
|
)
|
|
Balance as of December 31, 2016
|
|
184,268
|
|
|
Additions through acquisitions
1
|
|
495
|
|
|
Adjustments to purchase price allocations
2
|
|
2,214
|
|
|
Balance as of December 31, 2017
|
|
$
|
186,977
|
|
(1)
|
Our purchase price allocation is preliminary for the acquisition of the Baierl Auto Group, Downtown LA Auto Group, Albany Chrysler, Crater Lake Ford Lincoln, and Crater Lake Mazda and the associated franchise value has not been allocated to each of our segments. See Note 14.
|
(2)
|
Our purchase price allocation for the acquisition of the Carbone Auto Group was finalized in the third quarter of 2017, resulting in a reclassification of
$2.2 million
from goodwill to franchise value.
|
December 31,
|
|
2017
|
|
2016
|
||||
Floor plan notes payable: non-trade
|
|
$
|
1,802,252
|
|
|
$
|
1,506,895
|
|
Floor plan notes payable
|
|
116,774
|
|
|
94,602
|
|
||
Total floor plan debt
|
|
$
|
1,919,026
|
|
|
$
|
1,601,497
|
|
|
|
|
|
|
||||
Used vehicle inventory financing facility
|
|
$
|
177,222
|
|
|
$
|
211,000
|
|
Revolving lines of credit
|
|
94,568
|
|
|
142,507
|
|
||
Real estate mortgages
|
|
469,969
|
|
|
428,367
|
|
||
5.25% Senior notes due 2025
|
|
300,000
|
|
|
—
|
|
||
Other debt
|
|
12,512
|
|
|
11,191
|
|
||
Total long-term debt outstanding
|
|
1,054,271
|
|
|
793,065
|
|
||
Less: unamortized debt issuance costs
|
|
(6,919
|
)
|
|
(2,184
|
)
|
||
Less: current maturities (net of current debt issuance costs)
|
|
(18,876
|
)
|
|
(20,965
|
)
|
||
Long-term debt
|
|
$
|
1,028,476
|
|
|
$
|
769,916
|
|
Debt Covenant Ratio
|
|
Requirement
|
|
As of December 31, 2017
|
Current ratio
|
|
Not less than 1.10 to 1
|
|
1.21 to 1
|
Fixed charge coverage ratio
|
|
Not less than 1.20 to 1
|
|
2.82 to 1
|
Leverage ratio
|
|
Not more than 5.00 to 1
|
|
2.59 to 1
|
Year Ending December 31,
|
|
|
||
2018
|
|
$
|
18,948
|
|
2019
|
|
47,888
|
|
|
2020
|
|
40,236
|
|
|
2021
|
|
43,291
|
|
|
2022
|
|
61,103
|
|
|
Thereafter
|
|
571,014
|
|
|
Total principal payments
|
|
$
|
782,480
|
|
Year Ending December 31,
|
|
|
||
2018
|
|
$
|
38,357
|
|
2019
|
|
34,587
|
|
|
2020
|
|
32,552
|
|
|
2021
|
|
30,673
|
|
|
2022
|
|
28,985
|
|
|
Thereafter
|
|
243,242
|
|
|
Total minimum lease payments
|
|
408,396
|
|
|
Less: sublease rentals
|
|
(8,005
|
)
|
|
|
|
$
|
400,391
|
|
Year Ending December 31,
|
|
|
||
2018
|
|
$
|
27,352
|
|
2019
|
|
16,113
|
|
|
2020
|
|
6,382
|
|
|
2021
|
|
2,183
|
|
|
2022
|
|
673
|
|
|
Thereafter
|
|
41
|
|
|
Total
|
|
$
|
52,744
|
|
|
|
Repurchases Occurring in 2017
|
|
Cumulative Repurchases as of December 31, 2017
|
||||||||||
|
|
Shares
|
|
Average Price
|
|
Shares
|
|
Average Price
|
||||||
2016 Share Repurchase Authorization
|
|
329,000
|
|
|
$
|
92.79
|
|
|
1,042,725
|
|
|
$
|
83.86
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Shares repurchased pursuant to repurchase authorizations
|
|
329,000
|
|
|
1,312,848
|
|
|
228,737
|
|
|||
Total purchase price (in thousands)
|
|
$
|
30,527
|
|
|
$
|
104,370
|
|
|
$
|
24,676
|
|
Average purchase price per share
|
|
$
|
92.79
|
|
|
$
|
79.50
|
|
|
$
|
107.88
|
|
Shares repurchased in association with tax withholdings on the vesting of RSUs
|
|
32,457
|
|
|
94,826
|
|
|
77,649
|
|
Quarter declared
|
|
Dividend amount per Class A and Class B share
|
|
Total amount of dividends paid
(in thousands)
|
||||
2015
|
|
|
|
|
||||
First quarter
|
|
$
|
0.16
|
|
|
$
|
4,216
|
|
Second quarter
|
|
0.20
|
|
|
5,266
|
|
||
Third quarter
|
|
0.20
|
|
|
5,257
|
|
||
Fourth quarter
|
|
0.20
|
|
|
5,246
|
|
||
2016
|
|
|
|
|
||||
First quarter
|
|
$
|
0.20
|
|
|
$
|
5,151
|
|
Second quarter
|
|
0.25
|
|
|
6,373
|
|
||
Third quarter
|
|
0.25
|
|
|
6,299
|
|
||
Fourth quarter
|
|
0.25
|
|
|
6,308
|
|
||
2017
|
|
|
|
|
||||
First quarter
|
|
$
|
0.25
|
|
|
$
|
6,292
|
|
Second quarter
|
|
0.27
|
|
|
6,760
|
|
||
Third quarter
|
|
0.27
|
|
|
6,751
|
|
||
Fourth quarter
|
|
0.27
|
|
|
6,741
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
Affected Line Item
in the Consolidated Statement of Operations
|
||||||
Loss on cash flow hedges
|
|
$
|
—
|
|
|
$
|
(219
|
)
|
|
$
|
(449
|
)
|
|
Floor plan interest expense
|
Income tax benefits
|
|
—
|
|
|
85
|
|
|
174
|
|
|
Income tax provision
|
|||
Loss on cash flow hedges, net
|
|
$
|
—
|
|
|
$
|
(134
|
)
|
|
$
|
(275
|
)
|
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Compensation expense
|
|
$
|
1,059
|
|
|
$
|
1,081
|
|
|
$
|
1,812
|
|
Total discretionary contribution
|
|
$
|
1,730
|
|
|
$
|
1,785
|
|
|
$
|
2,249
|
|
Guaranteed annual return
|
|
5.00
|
%
|
|
5.25
|
%
|
|
5.25
|
%
|
Year Ended December 31,
|
|
2017
|
||
Shares purchased pursuant to 2009 ESPP
|
|
90,881
|
|
|
Weighted average per share price of shares purchased
|
|
$
|
86.13
|
|
Weighted average per share discount from market value for shares purchased
|
|
$
|
15.20
|
|
|
|
|
||
As of December 31,
|
|
2017
|
||
Shares available for purchase pursuant to 2009 ESPP
|
|
281,870
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Per share intrinsic value of non-vested stock granted
|
|
$
|
99.24
|
|
|
$
|
82.90
|
|
|
$
|
88.74
|
|
Weighted average per share discount for compensation expense recognized under the 2009 ESPP
|
|
15.20
|
|
|
13.00
|
|
|
15.89
|
|
|||
Total intrinsic value of stock options exercised (in millions)
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||
Fair value of non-vested stock that vested during the period (in millions)
|
|
69.6
|
|
47.5
|
|
|
19.3
|
|
||||
Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative expense (in millions)
|
|
11.3
|
|
11.0
|
|
|
11.9
|
|
||||
Tax benefit recognized in Consolidated Statements of Operations (in millions)
|
|
3.5
|
|
3.8
|
|
|
4.2
|
|
||||
Cash received from options exercised and shares purchased under all share-based arrangements (in millions)
|
|
7.8
|
|
7.0
|
|
|
6.5
|
|
||||
Tax deduction realized related to stock options exercised (in millions)
|
|
9.0
|
|
8.9
|
|
|
7.6
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
Amount of gain recognized in Accumulated OCI (effective portion)
|
|
Location of loss reclassified from Accumulated OCI into Income (effective portion)
|
|
Amount of loss reclassified from Accumulated OCI into Income (effective portion)
|
|
Location of loss recognized in Income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
|
Amount of loss recognized in Income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap contract
|
|
$
|
233
|
|
|
Floor plan interest expense
|
|
$
|
(219
|
)
|
|
Floor plan interest expense
|
|
$
|
(352
|
)
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap contract
|
|
$
|
599
|
|
|
Floor plan interest expense
|
|
$
|
(449
|
)
|
|
Floor plan interest expense
|
|
$
|
(758
|
)
|
•
|
Level 1 - quoted prices in active markets for identical securities;
|
•
|
Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and
|
•
|
Level 3 - significant unobservable inputs, including our own assumptions in determining fair value.
|
December 31,
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Carrying value
|
|
|
|
|
||||
5.25% Senior Notes due 2025
|
|
$
|
300,000
|
|
|
$
|
—
|
|
Real Estate Mortgages and Other Debt
|
|
376,880
|
|
|
286,660
|
|
||
|
|
$
|
676,880
|
|
|
$
|
286,660
|
|
|
|
|
|
|
||||
Fair value
|
|
|
|
|
||||
5.25% Senior Notes due 2025
|
|
$
|
312,750
|
|
|
$
|
—
|
|
Real Estate Mortgages and Other Debt
|
|
385,337
|
|
|
293,522
|
|
||
|
|
$
|
698,087
|
|
|
$
|
293,522
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
95,128
|
|
|
$
|
68,088
|
|
|
$
|
58,408
|
|
State
|
|
16,883
|
|
|
13,884
|
|
|
14,572
|
|
|||
|
|
112,011
|
|
|
81,972
|
|
|
72,980
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(14,257
|
)
|
|
4,893
|
|
|
6,046
|
|
|||
State
|
|
4,098
|
|
|
(400
|
)
|
|
679
|
|
|||
|
|
(10,159
|
)
|
|
4,493
|
|
|
6,725
|
|
|||
Total
|
|
$
|
101,852
|
|
|
$
|
86,465
|
|
|
$
|
79,705
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Federal tax provision at statutory rate
|
|
$
|
121,474
|
|
|
$
|
99,233
|
|
|
$
|
91,947
|
|
State taxes, net of federal income tax benefit
|
|
13,308
|
|
|
10,784
|
|
|
9,357
|
|
|||
Equity investment basis difference
|
|
—
|
|
|
9,470
|
|
|
11,048
|
|
|||
Non-deductible items
|
|
1,316
|
|
|
1,436
|
|
|
882
|
|
|||
Permanent differences related to stock-based compensation
|
|
(822
|
)
|
|
139
|
|
|
156
|
|
|||
Net change in valuation allowance
|
|
330
|
|
|
(5,133
|
)
|
|
(3,303
|
)
|
|||
General business credits
|
|
(934
|
)
|
|
(27,950
|
)
|
|
(29,093
|
)
|
|||
Deferred revaluation for change in statutory tax rate
|
|
(32,901
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
81
|
|
|
(1,514
|
)
|
|
(1,289
|
)
|
|||
Income tax provision
|
|
$
|
101,852
|
|
|
$
|
86,465
|
|
|
$
|
79,705
|
|
December 31,
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Deferred revenue and cancellation reserves
|
|
$
|
39,397
|
|
|
$
|
49,332
|
|
Allowances and accruals, including state NOL carryforward amounts
|
|
36,314
|
|
|
49,074
|
|
||
Credits and other
|
|
1,112
|
|
|
1,781
|
|
||
Valuation allowance
|
|
(557
|
)
|
|
(227
|
)
|
||
Total deferred tax assets
|
|
76,266
|
|
|
99,960
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Inventories
|
|
(20,926
|
)
|
|
(22,253
|
)
|
||
Goodwill
|
|
(35,042
|
)
|
|
(41,107
|
)
|
||
Property and equipment, principally due to differences in depreciation
|
|
(73,399
|
)
|
|
(93,943
|
)
|
||
Prepaid expenses and other
|
|
(3,176
|
)
|
|
(1,732
|
)
|
||
Total deferred tax liabilities
|
|
(132,543
|
)
|
|
(159,035
|
)
|
||
Total
|
|
$
|
(56,277
|
)
|
|
$
|
(59,075
|
)
|
Balance, December 31, 2015
|
$
|
1,031
|
|
Decrease related to tax positions taken - prior year
|
(1,031
|
)
|
|
Balance, December 31, 2016
|
$
|
—
|
|
Decrease related to tax positions taken - prior year
|
—
|
|
|
Balance, December 31, 2017
|
$
|
—
|
|
Federal
|
2014 - 2017
|
20 states
|
2013 - 2017
|
•
|
On
May 1, 2017
, we acquired
Baierl Auto Group
: an
eight
store platform based in Pennsylvania.
|
•
|
On
August 7, 2017
, we acquired
Downtown LA ("DTLA") Auto Group
, a
seven
store platform based in California.
|
•
|
On
November 11, 2017
, we acquired
Albany CJD Fiat
in Albany, New York.
|
•
|
On
November 15, 2017
, we acquired
Crater Lake Ford Lincoln
and
Crater Lake Mazda
in Medford, Oregon.
|
Year Ended December 31,
|
|
2017
|
||
Revenue
|
|
$
|
617,300
|
|
Operating income
|
|
9,316
|
|
•
|
On January 26, 2016, we acquired Riverside Subaru in Riverside, California.
|
•
|
On February 1, 2016, we acquired Ira Toyota in Milford, Massachusetts.
|
•
|
On June 23, 2016, we acquired the Helena Buick GMC franchises in Helena, Montana.
|
•
|
On August 1, 2016, we acquired Thousand Oaks Ford in Thousand Oaks, California.
|
•
|
On September 12, 2016, we acquired Carbone Auto Group: a
nine
store platform in New York and Vermont.
|
•
|
On September 28, 2016, we acquired Greiner Ford Lincoln in Casper, Wyoming.
|
•
|
On October 5, 2016, we acquired Woodland Hills Audi in Woodland Hills, California.
|
•
|
On November 16, 2016, we acquired Honolulu Ford in Honolulu, Hawaii.
|
Consideration paid for the Year Ended December 31,
|
2017
|
|
2016
|
||||
Cash paid, net of cash acquired
|
$
|
460,394
|
|
|
$
|
234,700
|
|
Property and equipment transferred
|
—
|
|
|
2,637
|
|
||
Equity securities issued
|
2,137
|
|
|
—
|
|
||
Debt issued
|
1,748
|
|
|
—
|
|
||
|
$
|
464,279
|
|
|
$
|
237,337
|
|
Assets acquired and liabilities assumed for the Year Ended December 31,
|
|
2017
|
|
2016
|
||||
Trade receivables, net
|
|
$
|
46,864
|
|
|
$
|
—
|
|
Inventories
|
|
189,747
|
|
|
148,915
|
|
||
Franchise value
|
|
—
|
|
|
27,087
|
|
||
Property and equipment
|
|
146,835
|
|
|
75,345
|
|
||
Other assets
|
|
187,549
|
|
|
990
|
|
||
Floor plan notes payable
|
|
(72,495
|
)
|
|
(30,134
|
)
|
||
Debt and capital lease obligations
|
|
(13,727
|
)
|
|
(22,813
|
)
|
||
Other liabilities
|
|
(20,494
|
)
|
|
(9,450
|
)
|
||
|
|
464,279
|
|
|
189,940
|
|
||
Goodwill
|
|
—
|
|
|
47,397
|
|
||
|
|
$
|
464,279
|
|
|
$
|
237,337
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||
Revenue
|
|
$
|
10,879,567
|
|
|
$
|
10,727,906
|
|
Net income
|
|
254,966
|
|
|
219,756
|
|
||
Basic net income per share
|
|
10.17
|
|
|
8.65
|
|
||
Diluted net income per share
|
|
10.14
|
|
|
8.61
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(in thousands, except per share data)
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||
Net income applicable to common stockholders - basic
|
|
$
|
233,399
|
|
|
$
|
11,818
|
|
|
$
|
182,369
|
|
|
$
|
14,689
|
|
|
$
|
165,172
|
|
|
$
|
17,827
|
|
Reallocation of distributed net income as a result of conversion of dilutive stock options
|
|
4
|
|
|
(4
|
)
|
|
8
|
|
|
(8
|
)
|
|
15
|
|
|
(15
|
)
|
||||||
Reallocation of distributed net income due to conversion of Class B to Class A common shares outstanding
|
|
1,275
|
|
|
—
|
|
|
1,791
|
|
|
—
|
|
|
1,932
|
|
|
—
|
|
||||||
Conversion of Class B common shares into Class A common shares
|
|
10,505
|
|
|
—
|
|
|
12,833
|
|
|
—
|
|
|
15,760
|
|
|
—
|
|
||||||
Effect of dilutive stock options on net income
|
|
34
|
|
|
(34
|
)
|
|
57
|
|
|
(57
|
)
|
|
120
|
|
|
(120
|
)
|
||||||
Net income applicable to common stockholders - diluted
|
|
$
|
245,217
|
|
|
$
|
11,780
|
|
|
$
|
197,058
|
|
|
$
|
14,624
|
|
|
$
|
182,999
|
|
|
$
|
17,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding – basic
|
|
23,857
|
|
|
1,208
|
|
|
23,515
|
|
|
1,894
|
|
|
23,729
|
|
|
2,561
|
|
||||||
Conversion of Class B common shares into Class A common shares
|
|
1,208
|
|
|
—
|
|
|
1,894
|
|
|
—
|
|
|
2,561
|
|
|
—
|
|
||||||
Effect of employee stock purchases and restricted stock units on weighted average common shares
|
|
80
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
200
|
|
|
—
|
|
||||||
Weighted average common shares outstanding – diluted
|
|
25,145
|
|
|
1,208
|
|
|
25,521
|
|
|
1,894
|
|
|
26,490
|
|
|
2,561
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income per common share - basic
|
|
$
|
9.78
|
|
|
$
|
9.78
|
|
|
$
|
7.76
|
|
|
$
|
7.76
|
|
|
$
|
6.96
|
|
|
$
|
6.96
|
|
Net income per common share - diluted
|
|
$
|
9.75
|
|
|
$
|
9.75
|
|
|
$
|
7.72
|
|
|
$
|
7.72
|
|
|
$
|
6.91
|
|
|
$
|
6.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Antidilutive Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Shares issuable pursuant to employee stock purchases not included since they were antidulutive
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Asset impairments to write investment down to fair value
|
|
$
|
—
|
|
|
$
|
13,992
|
|
|
$
|
16,521
|
|
Our portion of the partnership’s operating losses
|
|
—
|
|
|
8,262
|
|
|
6,929
|
|
|||
Non-cash interest expense related to the amortization of the discounted fair value of future equity contributions
|
|
—
|
|
|
185
|
|
|
674
|
|
|||
Tax benefits and credits generated
|
|
—
|
|
|
28,530
|
|
|
30,831
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
3,845,830
|
|
|
$
|
3,381,715
|
|
|
$
|
3,038,883
|
|
Import
|
|
4,432,760
|
|
|
3,764,255
|
|
|
3,330,949
|
|
|||
Luxury
|
|
1,810,085
|
|
|
1,528,760
|
|
|
1,490,632
|
|
|||
|
|
10,088,675
|
|
|
8,674,730
|
|
|
7,860,464
|
|
|||
Corporate and other
|
|
(2,165
|
)
|
|
3,427
|
|
|
3,788
|
|
|||
|
|
$
|
10,086,510
|
|
|
$
|
8,678,157
|
|
|
$
|
7,864,252
|
|
|
|
|
|
|
|
|
||||||
Segment income*:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
105,208
|
|
|
$
|
106,210
|
|
|
$
|
115,145
|
|
Import
|
|
117,776
|
|
|
110,204
|
|
|
98,751
|
|
|||
Luxury
|
|
37,022
|
|
|
31,467
|
|
|
36,391
|
|
|||
|
|
260,006
|
|
|
247,881
|
|
|
250,287
|
|
|||
Corporate and other
|
|
167,366
|
|
|
114,321
|
|
|
74,514
|
|
|||
Depreciation and amortization
|
|
(57,722
|
)
|
|
(49,369
|
)
|
|
(41,600
|
)
|
|||
Other interest expense
|
|
(34,776
|
)
|
|
(23,207
|
)
|
|
(19,491
|
)
|
|||
Other (expense) income, net
|
|
12,195
|
|
|
(6,103
|
)
|
|
(1,006
|
)
|
|||
Income before income taxes
|
|
$
|
347,069
|
|
|
$
|
283,523
|
|
|
$
|
262,704
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Floor plan interest expense:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
37,196
|
|
|
$
|
26,445
|
|
|
$
|
21,061
|
|
Import
|
|
29,009
|
|
|
18,665
|
|
|
14,959
|
|
|||
Luxury
|
|
15,756
|
|
|
10,999
|
|
|
9,096
|
|
|||
|
|
81,961
|
|
|
56,109
|
|
|
45,116
|
|
|||
Corporate and other
|
|
(42,625
|
)
|
|
(30,578
|
)
|
|
(25,582
|
)
|
|||
|
|
$
|
39,336
|
|
|
$
|
25,531
|
|
|
$
|
19,534
|
|
December 31,
|
|
2017
|
|
2016
|
||||
Total assets:
|
|
|
|
|
||||
Domestic
|
|
$
|
1,338,232
|
|
|
$
|
1,225,387
|
|
Import
|
|
1,137,934
|
|
|
959,355
|
|
||
Luxury
|
|
641,118
|
|
|
511,779
|
|
||
Corporate and other
|
|
1,565,782
|
|
|
1,147,629
|
|
||
|
|
$
|
4,683,066
|
|
|
$
|
3,844,150
|
|
•
|
A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and subject to accelerated recognition under the new standard. Upon adoption, we will recognize an asset associated with future estimated variable consideration and do not believe there will be a significant impact to future revenue recognized.
|
•
|
The guidance provided clarification on how to determine and capitalize direct costs incurred. As a result, we reassessed the method used to capitalize and amortize direct cost associated with the sale of lifetime oil, lube and filter contracts.
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
(2)
|
|||||||||
Revenue
|
2017
|
$
|
2,236,101
|
|
|
$
|
2,467,036
|
|
|
$
|
2,680,342
|
|
|
$
|
2,703,030
|
|
|
2016
|
1,982,861
|
|
|
2,133,339
|
|
|
2,269,967
|
|
|
2,291,990
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
2017
|
341,652
|
|
|
375,271
|
|
|
403,021
|
|
|
396,141
|
|
||||
|
2016
|
307,182
|
|
|
322,036
|
|
|
337,261
|
|
|
334,837
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
2017
|
86,141
|
|
|
103,950
|
|
|
105,952
|
|
|
112,942
|
|
||||
|
2016
|
72,915
|
|
|
90,509
|
|
|
93,423
|
|
|
81,518
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
2017
|
81,263
|
|
|
87,836
|
|
|
86,543
|
|
|
91,427
|
|
||||
|
2016
|
60,021
|
|
|
77,303
|
|
|
80,077
|
|
|
66,122
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
2017
|
50,727
|
|
|
53,200
|
|
|
51,886
|
|
|
89,404
|
|
||||
|
2016
|
40,270
|
|
|
51,428
|
|
|
54,041
|
|
|
51,319
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share
|
2017
|
2.01
|
|
|
2.12
|
|
|
2.07
|
|
|
3.58
|
|
||||
|
2016
|
1.56
|
|
|
2.02
|
|
|
2.15
|
|
|
2.04
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per share
|
2017
|
2.01
|
|
|
2.12
|
|
|
2.07
|
|
|
3.56
|
|
||||
|
2016
|
1.55
|
|
|
2.01
|
|
|
2.15
|
|
|
2.03
|
|
||||
|
|
|
|
|
|
|
|
|
(1)
|
Quarterly data may not add to yearly totals due to rounding.
|
(2)
|
During the fourth quarter of 2017, we recognized a
$32.9 million
provisional income tax benefit due to the revaluation of our deferred tax liability as a result of the U.S. tax reform bill enacted in December 2017 and a
$4.9 million
LIFO benefit, net of tax, primarily related to amounts expensed in the prior three quarters of 2017.
|
(i)
|
The RSUs are subject to forfeiture based on the Company’s 2018 pro forma earnings per share, calculated as specified in Section 1.2(a)(iii) of this Agreement (the “
2018 Pro Forma EPS
”). The number of RSUs that will be forfeited is determined according to the highest earnings per share threshold set forth on the table below (each, an “
EPS Threshold
”) that the 2018 Pro Forma EPS meets or exceeds. The table below specifies the applicable percentage of RSUs that will be retained (the “
Earned RSUs
”), subject to adjustment as provided in Section 1.2(a)(ii), at the specified EPS Threshold. When the Committee certifies the number of Earned RSUs as provided in Section 1.2(a)(iii), all RSUs that are not Earned RSUs will be forfeited.
|
EPS Threshold
|
Percentage of Earned RSUs
|
$10.50 (highest)
|
150.0%
|
Any amount between $8.95 and $9.25 (inclusive)
|
100.0%
|
$6.80
|
50.0%
|
Any amount between $0.01 and $6.79 (inclusive)
|
41.667%
|
$ 0.00 or negative 2018 Pro Forma EPS (lowest)
|
0.0%
|
Example 1:
If the 2018 Pro Forma EPS is $7.26, the percentage of Earned RSUs would be 50.0% plus an additional percentage calculated as follows: (a) 50%, multiplied by a fraction, (i) the numerator of which is the amount by which 2018 Prof Forma EPS exceeds $6.80 and (ii) the denominator of which is $2.15:
50% ($0.46/2.15) = 10.7%
The resulting percentage of Earned RSUs correlating to an EPS of $7.26 would be 60.7%. If the Award were 1,000 RSUs, the number of Earned RSUs would be 60.7% of 1,000, or 607 RSUs. The number of forfeited RSUs would be 1,000 minus 607, or 393. The Earned RSUs would be subject to the vesting according to the schedule specified in Section 1.2(b) of this Agreement.
|
iv.
|
reserves for real estate leases, Company-owned service contracts (e.g., lifetime oil), and legal matters; and
|
Vesting Date
|
Vesting of
Award
|
January 1, 2020
|
33%
|
January 1, 2021
|
33%
|
January 1, 2022
|
34%
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
|
$
|
347,069
|
|
|
$
|
283,523
|
|
|
$
|
262,704
|
|
|
$
|
210,495
|
|
|
$
|
165,788
|
|
Fixed charges
|
|
83,453
|
|
|
54,096
|
|
|
46,413
|
|
|
29,797
|
|
|
25,820
|
|
|||||
Amortization of capitalized interest
|
|
320
|
|
|
308
|
|
|
297
|
|
|
287
|
|
|
280
|
|
|||||
Capitalized interest
|
|
(524
|
)
|
|
(414
|
)
|
|
(450
|
)
|
|
(407
|
)
|
|
(85
|
)
|
|||||
Total earnings
|
|
430,318
|
|
|
240,172
|
|
|
191,803
|
|
|
155,820
|
|
|
115,243
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Floor plan interest expense
|
|
39,336
|
|
|
25,531
|
|
|
19,534
|
|
|
13,861
|
|
|
12,373
|
|
|||||
Other interest expense
(1)
|
|
34,776
|
|
|
23,207
|
|
|
19,491
|
|
|
10,742
|
|
|
8,350
|
|
|||||
Capitalized interest costs
|
|
524
|
|
|
414
|
|
|
450
|
|
|
407
|
|
|
85
|
|
|||||
Interest component of rent expense
|
|
8,817
|
|
|
4,944
|
|
|
6,938
|
|
|
4,787
|
|
|
5,012
|
|
|||||
Total fixed charges
|
|
83,453
|
|
|
54,096
|
|
|
46,413
|
|
|
29,797
|
|
|
25,820
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
5.2
|
x
|
|
4.4
|
x
|
|
4.1
|
x
|
|
5.2
|
x
|
|
4.5
|
x
|
NAME OF ENTITY
|
STATE OF ORIGIN
|
ASSUMED BUSINESS NAME(S)
(if different than entity name)
|
Lithia Imports of Anchorage, Inc.
|
Alaska
|
Lithia Hyundai of Anchorage
Lithia Kia of Anchorage
Lithia Anchorage Auto Body
|
Lithia NA, Inc.
|
Alaska
|
BMW of Anchorage
MINI of Anchorage
|
Lithia of Anchorage, Inc.
|
Alaska
|
Lithia Chrysler Jeep Dodge of Anchorage
Lithia Value Autos
|
Lithia of Fairbanks, Inc.
|
Alaska
|
Chevrolet Buick GMC of Fairbanks
|
Lithia of South Central AK, Inc.
|
Alaska
|
Chevrolet of South Anchorage
Chevrolet of Wasilla
|
Lithia of Wasilla, LLC
|
Alaska
|
Lithia Chrysler Jeep Dodge Ram of Wasilla
|
DCH (Oxnard) Inc.
|
California
|
DCH Honda of Oxnard
Honda of Oxnard
Supercraft Auto Body & Paint
DCH Used Car Superstore
|
DCH CA LLC
|
California
|
DCH Acura of Temecula
DCH Acura Temecula
|
DCH Calabasas-A, LLC
|
California
|
Audi Calabasas
|
DCH California Investments LLC
|
California
|
|
DCH California Motors Inc.
|
California
|
DCH Toyota of Oxnard
Toyota of Oxnard
DCH Scion of Oxnard
|
DCH Del Norte, INC.
|
California
|
DCH Lexus of Oxnard
Lexus of Oxnard
DCH Lexus of Santa Barbara
|
DCH Korean Imports LLC
|
California
|
DCH Kia of Temecula
|
DCH Mission Valley LLC
|
California
|
DCH Honda of Mission Valley
|
DCH Oxnard 1521 Imports Inc.
|
California
|
DCH Audi of Oxnard
Audi of Oxnard
|
DCH Riverside-S, Inc.
|
California
|
DCH Subaru of Riverside
|
DCH Simi Valley Inc.
|
California
|
DCH Toyota of Simi Valley
Toyota of Simi Valley
DCH Scion of Simi Valley
|
DCH Temecula Imports LLC
|
California
|
DCH Honda of Temecula
DCH Honda Temecula
|
DCH Temecula Motors LLC
|
California
|
DCH Chrysler Jeep Dodge of Temecula
DCH Chrysler Jeep of Temecula
DCH Dodge of Temecula
|
DCH Thousand Oaks-F, Inc.
|
California
|
DCH Ford of Thousand Oaks
|
DCH Torrance Imports Inc.
|
California
|
DCH Toyota of Torrance
DCH Scion of Torrance
Torrance Toyota
Torrance Scion
Toyota Scion
|
LA Motors Holding, LLC
|
California
|
|
LAD Carson-N, LLC
|
California
|
Carson Nissan
|
LAD-AU, LLC
|
California
|
Audi Downtown LA
|
LAD-MB, LLC
|
California
|
Downtown LA Motors
|
LAD-N, LLC
|
California
|
Nissan of Downtown LA
|
LAD-P, LLC
|
California
|
Porsche Downtown LA
|
LAD-T, LLC
|
California
|
Toyota of Downtown LA
|
LAD-V, LLC
|
California
|
Volkswagen of Downtown LA
|
Lithia CIMR, Inc.
|
California
|
Lithia Chevrolet of Redding
|
Lithia FMF, Inc.
|
California
|
Lithia Ford of Fresno
Lithia Ford Lincoln of Fresno
|
Lithia Fresno, Inc.
|
California
|
Lithia Subaru of Fresno
Fresno Mitsubishi
|
Lithia JEF, Inc.
|
California
|
Lithia Hyundai of Fresno
|
Lithia MMF, Inc.
|
California
|
Lithia Mazda of Fresno
Lithia Suzuki of Fresno
|
Lithia NC, Inc.
|
California
|
Nissan of Clovis
|
Lithia NF, Inc.
|
California
|
Lithia Nissan of Fresno
|
Lithia of Concord I, Inc.
|
California
|
Lithia Chrysler Dodge Jeep Ram of Concord
|
Lithia of Concord II, Inc.
|
California
|
Lithia FIAT of Concord
|
Lithia of Eureka, Inc.
|
California
|
Lithia Chrysler Jeep Dodge of Eureka
|
Lithia of Lodi, Inc.
|
California
|
Lodi Toyota
Lodi Scion
|
Lithia of Santa Rosa, Inc.
|
California
|
Lithia Chrysler Jeep Dodge of Santa Rosa
|
Lithia of Stockton, Inc.
|
California
|
Nissan of Stockton,
Kia of Stockton
|
Lithia of Stockton-V, Inc.
|
California
|
Volkswagen of Stockton
|
Lithia of Walnut Creek, Inc.
|
California
|
Diablo Subaru of Walnut Creek
|
Lithia Sea P, Inc.
|
California
|
Porsche of Monterey
|
Lithia Seaside, Inc.
|
California
|
BMW of Monterey
|
Lithia TR, Inc.
|
California
|
Lithia Toyota of Redding
Lithia Scion of Redding
|
Lithia VF, Inc.
|
California
|
Volvo of Fresno
|
LLL Sales CO LLC
|
California
|
DCH Gardena Honda
Gardena Honda
Gardena Honda, a DCH Company
All-Savers Auto Sales & Leasing
|
Tustin Motors Inc.
|
California
|
Honda Acura
DCH Tustin Acura
Tustin Acura
|
Dah Chong Hong CA Trading LLC
|
Delaware
|
|
DCH Auto Group (USA) Inc.
|
Delaware
|
|
DCH Holdings LLC
|
Delaware
|
|
DCH Mamaroneck LLC
|
Delaware
|
DCH Toyota City
DCH Scion City
|
DCH North America Inc.
|
Delaware
|
|
DCH NY Motors LLC
|
Delaware
|
DCH Wappingers Falls Toyota
DCH Wappingers Falls Auto Group
DCH Wappingers Falls Scion
|
DCH TL Holdings LLC
|
Delaware
|
|
DCH TL NY Holdings LLC
|
Delaware
|
|
Lithia Armory Garage, LLC
|
Delaware
|
Armory Chrysler Dodge Jeep Ram Fiat of Albany
|
Lithia Auction & Recon, LLC
|
Delaware
|
Auction & Recon
|
Lithia BA Holding, Inc.
|
Delaware
|
|
Lithia Buffalo-A, LLC
|
Delaware
|
Ray Laks Acura of Buffalo
|
Lithia Crater Lake-F, Inc.
|
Delaware
|
Crater Lake Ford Lincoln
|
Lithia Crater Lake-M, Inc.
|
Delaware
|
Crater Lake Mazda
|
Lithia of Honolulu-F, LLC
|
Delaware
|
Honolulu Ford
|
Lithia Orchard Park-H, LLC
|
Delaware
|
Ray Laks Honda of Orchard Park
|
Lithia of Honolulu-A, Inc.
|
Hawaii
|
Acura of Honolulu
|
Lithia of Honolulu-BGMCC, LLC
|
Hawaii
|
Honolulu Buick GMC
Honolulu Buick GMC Cadillac
Honolulu Cadillac
|
Lithia of Honolulu-V, LLC
|
Hawaii
|
Honolulu Volkswagen
|
Lithia of Maui-H, LLC
|
Hawaii
|
Island Honda
|
Lithia CCTF, Inc.
|
Idaho
|
Chevrolet of Twin Falls
|
Lithia Ford of Boise, Inc.
|
Idaho
|
Lithia Ford of Boise
Lithia Ford Lincoln of Boise
Auto Credit of Idaho
Lithia Body & Paint of Boise
|
Lithia of Pocatello, Inc.
|
Idaho
|
Lithia Chrysler Jeep Dodge of Pocatello
Lithia Hyundai of Pocatello
Lithia Dodge Trucks of Pocatello
|
Lithia of TF, Inc.
|
Idaho
|
Lithia Chrysler Jeep Dodge of Twin Falls
|
Lithia AcDM, Inc.
|
Iowa
|
Acura of Johnston
|
Lithia HDM, Inc.
|
Iowa
|
Honda of Ames
|
Lithia MBDM, Inc.
|
Iowa
|
Mercedes Benz of Des Moines
European Motorcars Des Moines
|
Lithia NDM, Inc.
|
Iowa
|
Lithia Nissan of Ames
|
Lithia of Des Moines, Inc.
|
Iowa
|
BMW of Des Moines
European Motorcars Des Moines
Lithia Body and Paint of Des Moines
|
Lithia VAuDM, Inc.
|
Iowa
|
Audi Des Moines
Lithia Volkswagen of Des Moines
Assured Used Cars & Trucks
Lithia Audi of Des Moines
|
Milford DCH, Inc.
|
Massachusetts
|
DCH Toyota of Milford
|
Lithia CDH, Inc.
|
Montana
|
Lithia Chrysler Jeep Dodge of Helena
|
Lithia HGF, Inc.
|
Montana
|
Honda of Great Falls
|
Lithia LBGGF, Inc.
|
Montana
|
Lithia Buick GMC of Great Falls
|
Lithia LHGF, Inc.
|
Montana
|
Lithia Hyundai of Great Falls
|
Lithia LSGF, Inc.
|
Montana
|
Lithia Subaru of Great Falls
|
Lithia of Billings II LLC
|
Montana
|
Lithia Toyota of Billings
Lithia Scion of Billings
|
Lithia of Billings, Inc.
|
Montana
|
Lithia Chrysler Jeep Dodge of Billings
|
Lithia of Great Falls, Inc.
|
Montana
|
Lithia Chrysler Jeep Dodge of Great Falls
|
Lithia of Helena, Inc.
|
Montana
|
Chevrolet of Helena
|
Lithia of Missoula II LLC
|
Montana
|
Lithia Toyota of Missoula
Lithia Scion of Missoula
|
Lithia of Missoula, Inc.
|
Montana
|
Lithia Chrysler Jeep Dodge of Missoula
Lithia Auto Center of Missoula
|
Lithia of Missoula III, Inc.
|
Montana
|
Lithia Ford of Missoula
|
Lithia Reno Sub-Hyun, Inc.
|
Nevada
|
Lithia Reno Subaru
Lithia Body & Paint
|
Lithia SALMIR, Inc.
|
Nevada
|
Lithia Volkswagen of Reno
Lithia Hyundai of Reno
Lithia Chrysler Jeep of Reno
|
797 Valley Street, LLC
|
New Jersey
|
|
Dah Chong Hong Trading Corporation
|
New Jersey
|
|
Daron Motors LLC
|
New Jersey
|
DCH Academy Honda
Academy Honda
|
DCH Bloomfield LLC
|
New Jersey
|
DCH Bloomfield BMW
DCH Essex BMW
Essex BMW
BMW of Bloomfield
Parkway BMW
|
DCH DMS NJ, LLC
|
New Jersey
|
|
DCH Essex Inc. fka DCH-Millburn Inc. (fka DCH Essex LLC)
|
New Jersey
|
DCH Audi
DCH Maplewood Audi
DCH Millburn Audi
Essex Motors
Millburn Audi
|
DCH Financial NJ, LLC
|
New Jersey
|
|
DCH Freehold LLC
|
New Jersey
|
Freehold Toyota
DCH Freehold Toyota
DCH Freehold Scion
|
DCH Freehold-V, LLC
|
New Jersey
|
DCH Volkswagen of Freehold
|
DCH Investments Inc. (New Jersey)
|
New Jersey
|
|
DCH Leasing Corporation
|
New Jersey
|
|
DCH Monmouth LLC
|
New Jersey
|
BMW of Freehold
|
DCH Montclair LLC
|
New Jersey
|
Montclair Acura
DCH Montclair Acura
|
DCH Motors LLC
|
New Jersey
|
Kay Honda
DCH Motors
DCH Kay Honda
|
DCH Support Services, LLC
|
New Jersey
|
|
Freehold Nissan LLC
|
New Jersey
|
DCH Freehold Nissan
Freehold Nissan
|
Lithia Eatontown-F, LLC
|
New Jersey
|
|
Lithia Paramus-M, LLC
|
New Jersey
|
|
Lithia Ramsey-B, LLC
|
New Jersey
|
|
Lithia Ramsey-L, LLC
|
New Jersey
|
|
Lithia Ramsey-M, LLC
|
New Jersey
|
|
Lithia Ramsey-T, LLC
|
New Jersey
|
|
Paramus Collision, LLC
|
New Jersey
|
|
Paramus World Motors LLC
|
New Jersey
|
DCH Paramus Honda
Paramus Honda
Crown Leasing
|
Sharlene Realty LLC
|
New Jersey
|
DCH Brunswick Toyota
DCH Brunswick Scion
DCH Collision Center
|
LDLC, LLC
|
New Mexico
|
Lithia Dodge of Las Cruces
|
Lithia CJDSF, Inc.
|
New Mexico
|
Lithia Chrysler Jeep Dodge of Santa Fe
|
Carbone Auto Body, LLC
|
New York
|
|
DCH Investments, Inc. (New York)
|
New York
|
|
DCH Management Inc.
|
New York
|
|
DCH Nanuet LLC
|
New York
|
DCH Honda of Nanuet
|
Lithia Middletown-L, LLC
|
New York
|
|
Lithia of Troy, LLC
|
New York
|
Carbone Subaru
|
Lithia of Utica-1, LLC
|
New York
|
BMW of Utica
|
Lithia of Utica-2, LLC
|
New York
|
Don’s Ford
|
Lithia of Utica-3, LLC
|
New York
|
Don’s Subaru
|
Lithia of Yorkville-1, LLC
|
New York
|
Carbone Chevrolet Buick Cadillac GMC
|
Lithia of Yorkville-2, LLC
|
New York
|
Carbone Chrysler Dodge Jeep Ram
|
Lithia of Yorkville-3, LLC
|
New York
|
Carbone Honda
|
Lithia of Yorkville-4, LLC
|
New York
|
Carbone Hyundai
|
Lithia of Yorkville-5, LLC
|
New York
|
Carbone Nissan
|
Lithia ND Acquisition Corp. #1
|
North Dakota
|
Lithia Ford Lincoln of Grand Forks
|
Lithia ND Acquisition Corp. #3
|
North Dakota
|
Lithia Chrysler Jeep Dodge of Grand Forks
|
Lithia ND Acquisition Corp. #4
|
North Dakota
|
Lithia Toyota of Grand Forks
Lithia Scion of Grand Forks
Lithia Toyota Scion of Grand Forks
|
Cadillac of Portland Lloyd Center, LLC
|
Oregon
|
Cadillac of Portland
|
Fuse Auto Sales, LLC
|
Oregon
|
|
Hutchins Eugene Nissan, Inc.
|
Oregon
|
Lithia Nissan of Eugene
|
Hutchins Imported Motors, Inc.
|
Oregon
|
Lithia Toyota of Springfield
Lithia Scion of Springfield
Lithia Toyota Scion of Springfield
|
LAD Advertising, Inc.
|
Oregon
|
LAD Advertising
LAD Printing
The Print Shop at the Commons
The Print Shop
|
LBMP, LLC
|
Oregon
|
BMW Portland
|
LFKF, LLC
|
Oregon
|
Lithia Ford of Klamath Falls
|
LGPAC, Inc.
|
Oregon
|
Lithia’s Grants Pass Auto Center
Xpress Lube
|
Lithia Aircraft, Inc.
|
Oregon
|
|
Lithia Auto Services, Inc.
|
Oregon
|
|
Lithia BNM, Inc.
|
Oregon
|
|
Lithia Community Development Company, Inc.
|
Oregon
|
|
Lithia DE, Inc.
|
Oregon
|
Lithia Chrysler Jeep Dodge of Eugene
|
Lithia DM, Inc.
|
Oregon
|
Lithia Dodge
Lithia Chrysler Jeep Dodge
Xpress Lube
|
Lithia Financial Corporation
|
Oregon
|
Lithia Leasing
|
Lithia HPI, Inc.
|
Oregon
|
|
Lithia Klamath, Inc.
|
Oregon
|
Lithia Chrysler Jeep Dodge of Klamath Falls
Lithia Toyota of Klamath Falls
Lithia Scion of Klamath Falls
Lithia Klamath Falls Auto Center
Lithia Body and Paint of Klamath Falls
|
Lithia Medford Hon, Inc.
|
Oregon
|
Lithia Honda
|
Lithia Motors Support Services, Inc.
|
Oregon
|
Lithia’s LAD Travel Service
|
Lithia MTLM, Inc.
|
Oregon
|
Lithia Toyota
Lithia Scion
Lithia Toyota Scion
|
Lithia of Bend #1, LLC
|
Oregon
|
Bend Honda
|
Lithia of Bend #2, LLC
|
Oregon
|
Chevrolet Cadillac of Bend
Lithia Body & Paint of Bend
|
Lithia of Eugene, LLC
|
Oregon
|
Lithia FIAT of Eugene
|
Lithia of Portland, LLC
|
Oregon
|
Buick GMC of Portland
|
Lithia of Portland I, Inc.
|
Oregon
|
Lithia Chrysler Dodge Jeep Ram of Portland
Lithia Chrysler Dodge Ram of Portland
|
Lithia of Roseburg, Inc.
|
Oregon
|
Lithia Chrysler Jeep Dodge of Roseburg
Lithia Roseburg Auto Center
|
Lithia Oregon Investments - 1, LLC
|
Oregon
|
N/A
|
Lithia Oregon Investments - 2, LLC
|
Oregon
|
N/A
|
Lithia Real Estate, Inc.
|
Oregon
|
|
Lithia Rose-FT, Inc.
|
Oregon
|
Lithia Ford Lincoln of Roseburg
Assured Dealer Services of Roseburg
|
Lithia SOC, Inc.
|
Oregon
|
Lithia Subaru of Oregon City
|
LMBB, LLC
|
Oregon
|
Mercedes-Benz of Beaverton
|
LMBP, LLC
|
Oregon
|
Mercedes-Benz of Portland
Smart Center of Portland
|
LMOP, LLC
|
Oregon
|
MINI of Portland
|
LSTAR, LLC
|
Oregon
|
|
Medford Insurance, LLC
|
Oregon
|
|
RFA Holdings, LLC
|
Oregon
|
|
Salem-B, LLC
|
Oregon
|
BMW of Salem
|
Salem-H, LLC
|
Oregon
|
Honda of Salem
|
Salem-V, LLC
|
Oregon
|
Volkswagen of Salem
|
Southern Cascades Finance Corporation
|
Oregon
|
|
Baierl Auto Parts, Inc.
|
Pennsylvania
|
|
Baierl Automotive Corporation
|
Pennsylvania
|
Baierl Acura
Baierl Automotive
|
Baierl Chevrolet, Inc.
|
Pennsylvania
|
Baierl Automotive
Baierl Budget Cars
Baierl Buick
Baierl Chevrolet
Baierl Chevrolet Cadillac
Baierl Cadillac
Baierl Collision Center
Baierl Daewoo
Baierl Honda
Baierl Honda Pre-Owned
Baierl Isuzu Truck
Baierl Kia
Baierl Mitsubishi
Baierl Subaru
Baierl Subaru-Buick
Baierl Subaru-Mitsubishi
Baierl Truck Depot
Baierl Used Car Supercenter
Baierl Used Cars
|
Baierl Holding Corporation
|
Pennsylvania
|
|
Cranberry Automotive, Inc.
|
Pennsylvania
|
Baierl Automotive
Baierl Toyota-Scion
Baierl Toyota
|
Elizabeth Collision, LLC
|
Pennsylvania
|
|
Lithia Monroeville-A, LLC
|
Pennsylvania
|
|
Lithia Monroeville-C, LLC
|
Pennsylvania
|
|
Lithia Monroeville-F, LLC
|
Pennsylvania
|
|
Lithia Monroeville-V, LLC
|
Pennsylvania
|
|
Lithia Moon-S, LLC
|
Pennsylvania
|
|
Lithia Moon-V, LLC
|
Pennsylvania
|
|
Lithia Pittsburgh-S, LLC
|
Pennsylvania
|
|
Lithia Pleasant Hills-T, LLC
|
Pennsylvania
|
|
Lithia Uniontown-C, LLC
|
Pennsylvania
|
|
Northland Ford Inc.
|
Pennsylvania
|
Baierl Ford
Baierl Collision Center
|
PA Real Estate, LLC
|
Pennsylvania
|
|
PA Support Services, LLC
|
Pennsylvania
|
|
Zelienople Real Estate I, L.P.
|
Pennsylvania
|
|
Zelienople Real Estate, L.L.C.
|
Pennsylvania
|
|
Lithia Automotive, Inc.
|
South Dakota
|
|
Lithia Bryan Texas, Inc.
|
Texas
|
Lithia Chrysler Jeep Dodge of Bryan College Station
|
Lithia CJDO, Inc.
|
Texas
|
All American Chrysler Jeep Dodge of Odessa
|
Lithia CJDSA, Inc.
|
Texas
|
All American Chrysler Jeep Dodge of San Angelo
All American Autoplex
|
Lithia CM, Inc.
|
Texas
|
All American Chevrolet of Midland
|
Lithia CO, Inc.
|
Texas
|
All American Chevrolet of Odessa
|
Lithia CSA, Inc.
|
Texas
|
All American Chevrolet of San Angelo
|
Lithia DMID, Inc.
|
Texas
|
All American Chrysler Jeep Dodge of Midland
|
Lithia FLCC, LLC
|
Texas
|
Access Ford Lincoln of Corpus Christi
|
Lithia HMID, Inc.
|
Texas
|
Lithia Hyundai of Odessa
|
Lithia NSA, Inc.
|
Texas
|
Honda of San Angelo
All American Autoplex
|
Lithia of Abilene, Inc.
|
Texas
|
Honda of Abilene
|
Lithia of Clear Lake, LLC
|
Texas
|
Subaru of Clear Lake
|
Lithia of Corpus Christi, Inc.
|
Texas
|
Lithia Chrysler Jeep Dodge of Corpus Christi
Lithia Dodge of Corpus Christi
|
Lithia of Killeen, LLC
|
Texas
|
All American Chevrolet of Killeen
|
Lithia TA, Inc.
|
Texas
|
Lithia Toyota of Abilene
Lithia Scion of Abilene
|
Lithia TO, Inc.
|
Texas
|
Lithia Toyota of Odessa
Lithia Scion of Odessa
|
Lithia of Bennington - 1, LLC
|
Vermont
|
Carbone Ford of Bennington
|
Lithia of Bennington - 2, LLC
|
Vermont
|
Carbone Hyundai of Bennington
|
Lithia of Bennington - 3, LLC
|
Vermont
|
Carbone Honda of Bennington
|
Lithia of Bennington - 4, LLC
|
Vermont
|
Carbone Toyota of Bennington
|
Camp Automotive, Inc.
|
Washington
|
Camp BMW
Camp Chevrolet
Subaru of Spokane
Camp Cadillac
|
Lithia Dodge of Tri-Cities, Inc.
|
Washington
|
Lithia Chrysler Jeep Dodge of Tri-Cities
|
Lithia of Bellingham, LLC
|
Washington
|
Chevrolet Cadillac of Bellingham
Chambers Chevrolet Cadillac of Bellingham
Chevrolet Buick GMC Cadillac of Bellingham
|
Lithia of Seattle, Inc.
|
Washington
|
BMW Seattle
|
Lithia of Spokane, Inc.
|
Washington
|
Mercedes Benz of Spokane
|
Lithia of Spokane II, Inc.
|
Washington
|
Lithia Chrysler Dodge Jeep Ram of Spokane
|
Lithia of Casper, LLC
|
Wyoming
|
Greiner Ford Lincoln of Casper
|
1.
|
I have reviewed this annual report on Form 10-K of Lithia Motors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
1.
|
I have reviewed this annual report on Form 10-K of Lithia Motors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|