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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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01-0609375
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2905 Premiere Parkway NW, Suite 300
Duluth, Georgia
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30097
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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x
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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Smaller Reporting Company
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o
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Page
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PART I—Financial Information
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PART II—Other Information
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September 30, 2016
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December 31, 2015
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||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3.7
|
|
|
$
|
2.8
|
|
Contracts-in-transit
|
128.9
|
|
|
175.7
|
|
||
Accounts receivable, net
|
111.9
|
|
|
119.5
|
|
||
Inventories
|
892.4
|
|
|
917.2
|
|
||
Deferred income taxes
|
12.2
|
|
|
11.8
|
|
||
Assets held for sale
|
94.3
|
|
|
27.6
|
|
||
Other current assets
|
93.7
|
|
|
88.4
|
|
||
Total current assets
|
1,337.1
|
|
|
1,343.0
|
|
||
PROPERTY AND EQUIPMENT, net
|
800.3
|
|
|
772.8
|
|
||
GOODWILL
|
128.0
|
|
|
130.2
|
|
||
INTANGIBLE FRANCHISE RIGHTS
|
48.5
|
|
|
48.5
|
|
||
OTHER LONG-TERM ASSETS
|
12.6
|
|
|
11.4
|
|
||
Total assets
|
$
|
2,326.5
|
|
|
$
|
2,305.9
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Floor plan notes payable—trade, net
|
$
|
105.3
|
|
|
$
|
138.8
|
|
Floor plan notes payable—non-trade, net
|
664.2
|
|
|
573.4
|
|
||
Current maturities of long-term debt
|
13.9
|
|
|
13.9
|
|
||
Accounts payable and accrued liabilities
|
271.1
|
|
|
281.7
|
|
||
Liabilities associated with assets held for sale
|
45.3
|
|
|
—
|
|
||
Total current liabilities
|
1,099.8
|
|
|
1,007.8
|
|
||
LONG-TERM DEBT
|
916.3
|
|
|
940.4
|
|
||
DEFERRED INCOME TAXES
|
18.7
|
|
|
13.7
|
|
||
OTHER LONG-TERM LIABILITIES
|
36.1
|
|
|
29.5
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 10)
|
|
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|
||||
SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; 90,000,000 shares authorized; 40,752,536 and 40,507,313 shares issued, including shares held in treasury, respectively
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
546.6
|
|
|
537.2
|
|
||
Retained earnings
|
544.4
|
|
|
444.3
|
|
||
Treasury stock, at cost; 18,592,091 and 15,696,543 shares, respectively
|
(829.4
|
)
|
|
(663.9
|
)
|
||
Accumulated other comprehensive loss
|
(6.4
|
)
|
|
(3.5
|
)
|
||
Total shareholders' equity
|
255.6
|
|
|
314.5
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,326.5
|
|
|
$
|
2,305.9
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
New vehicle
|
$
|
940.9
|
|
|
$
|
964.0
|
|
|
$
|
2,676.3
|
|
|
$
|
2,720.7
|
|
Used vehicle
|
476.4
|
|
|
493.0
|
|
|
1,407.5
|
|
|
1,474.0
|
|
||||
Parts and service
|
200.4
|
|
|
190.6
|
|
|
584.9
|
|
|
555.5
|
|
||||
Finance and insurance, net
|
65.4
|
|
|
68.8
|
|
|
192.6
|
|
|
197.6
|
|
||||
TOTAL REVENUE
|
1,683.1
|
|
|
1,716.4
|
|
|
4,861.3
|
|
|
4,947.8
|
|
||||
COST OF SALES:
|
|
|
|
|
|
|
|
||||||||
New vehicle
|
893.4
|
|
|
911.7
|
|
|
2,536.6
|
|
|
2,568.2
|
|
||||
Used vehicle
|
446.6
|
|
|
459.6
|
|
|
1,307.7
|
|
|
1,371.6
|
|
||||
Parts and service
|
77.4
|
|
|
72.4
|
|
|
222.9
|
|
|
207.6
|
|
||||
TOTAL COST OF SALES
|
1,417.4
|
|
|
1,443.7
|
|
|
4,067.2
|
|
|
4,147.4
|
|
||||
GROSS PROFIT
|
265.7
|
|
|
272.7
|
|
|
794.1
|
|
|
800.4
|
|
||||
OPERATING EXPENSES (INCOME):
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative
|
185.7
|
|
|
188.8
|
|
|
549.2
|
|
|
546.4
|
|
||||
Depreciation and amortization
|
7.8
|
|
|
7.5
|
|
|
23.0
|
|
|
22.0
|
|
||||
Other operating expenses (income), net
|
1.5
|
|
|
(0.2
|
)
|
|
4.2
|
|
|
0.1
|
|
||||
INCOME FROM OPERATIONS
|
70.7
|
|
|
76.6
|
|
|
217.7
|
|
|
231.9
|
|
||||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
||||||||
Floor plan interest expense
|
5.0
|
|
|
4.1
|
|
|
14.4
|
|
|
12.0
|
|
||||
Other interest expense, net
|
13.2
|
|
|
10.7
|
|
|
40.0
|
|
|
31.5
|
|
||||
Swap interest expense
|
0.8
|
|
|
1.0
|
|
|
2.4
|
|
|
2.0
|
|
||||
Gain on divestitures
|
—
|
|
|
(21.4
|
)
|
|
—
|
|
|
(21.4
|
)
|
||||
Total other expenses (income), net
|
19.0
|
|
|
(5.6
|
)
|
|
56.8
|
|
|
24.1
|
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
51.7
|
|
|
82.2
|
|
|
160.9
|
|
|
207.8
|
|
||||
Income tax expense
|
19.3
|
|
|
31.0
|
|
|
60.8
|
|
|
79.6
|
|
||||
INCOME FROM CONTINUING OPERATIONS
|
32.4
|
|
|
51.2
|
|
|
100.1
|
|
|
128.2
|
|
||||
Discontinued operations, net of tax
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
NET INCOME
|
$
|
32.4
|
|
|
$
|
51.1
|
|
|
$
|
100.1
|
|
|
$
|
128.1
|
|
EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic—
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.47
|
|
|
$
|
1.98
|
|
|
$
|
4.39
|
|
|
$
|
4.80
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
||||
Net income
|
$
|
1.47
|
|
|
$
|
1.97
|
|
|
$
|
4.39
|
|
|
$
|
4.80
|
|
Diluted—
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.47
|
|
|
$
|
1.96
|
|
|
$
|
4.37
|
|
|
$
|
4.77
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
||||
Net income
|
$
|
1.47
|
|
|
$
|
1.96
|
|
|
$
|
4.37
|
|
|
$
|
4.76
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
||||||||
Basic
|
22.0
|
|
|
25.9
|
|
|
22.8
|
|
|
26.7
|
|
||||
Restricted stock
|
0.0
|
|
|
0.1
|
|
|
0.0
|
|
|
0.1
|
|
||||
Performance share units
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Diluted
|
22.1
|
|
|
26.1
|
|
|
22.9
|
|
|
26.9
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
32.4
|
|
|
$
|
51.1
|
|
|
$
|
100.1
|
|
|
$
|
128.1
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Change in fair value of cash flow swaps
|
1.0
|
|
|
(4.0
|
)
|
|
(4.8
|
)
|
|
(5.0
|
)
|
||||
Income tax (expense) benefit associated with cash flow swaps
|
(0.4
|
)
|
|
1.5
|
|
|
1.9
|
|
|
1.9
|
|
||||
Comprehensive income
|
$
|
33.0
|
|
|
$
|
48.6
|
|
|
$
|
97.2
|
|
|
$
|
125.0
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
CASH FLOW FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
100.1
|
|
|
$
|
128.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities—
|
|
|
|
||||
Depreciation and amortization
|
23.0
|
|
|
22.0
|
|
||
Stock-based compensation
|
9.1
|
|
|
7.7
|
|
||
Deferred income taxes
|
6.4
|
|
|
1.0
|
|
||
Impairment expenses
|
3.1
|
|
|
—
|
|
||
Loaner vehicle amortization
|
15.6
|
|
|
13.0
|
|
||
Excess tax benefit on share-based arrangements
|
(0.2
|
)
|
|
(4.5
|
)
|
||
Gain on divestitures
|
—
|
|
|
(21.4
|
)
|
||
Other adjustments, net
|
2.5
|
|
|
3.0
|
|
||
Changes in operating assets and liabilities, net of acquisitions and divestitures—
|
|
|
|
||||
Contracts-in-transit
|
46.8
|
|
|
23.3
|
|
||
Accounts receivable
|
7.5
|
|
|
4.4
|
|
||
Inventories
|
78.1
|
|
|
55.2
|
|
||
Other current assets
|
(111.0
|
)
|
|
(90.8
|
)
|
||
Floor plan notes payable—trade, net
|
(20.4
|
)
|
|
(19.0
|
)
|
||
Accounts payable and accrued liabilities
|
(11.0
|
)
|
|
19.3
|
|
||
Other long-term assets and liabilities, net
|
1.5
|
|
|
3.7
|
|
||
Net cash provided by operating activities
|
151.1
|
|
|
145.0
|
|
||
CASH FLOW FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures—excluding real estate
|
(47.3
|
)
|
|
(34.6
|
)
|
||
Capital expenditures—real estate
|
(10.6
|
)
|
|
(22.4
|
)
|
||
Purchases of previously leased real estate
|
(19.6
|
)
|
|
—
|
|
||
Acquisitions
|
—
|
|
|
(69.4
|
)
|
||
Divestitures
|
—
|
|
|
56.3
|
|
||
Proceeds from the sale of assets
|
—
|
|
|
2.3
|
|
||
Net cash used in investing activities
|
(77.5
|
)
|
|
(67.8
|
)
|
||
CASH FLOW FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Floor plan borrowings—non-trade
|
2,920.4
|
|
|
3,151.2
|
|
||
Floor plan borrowings—acquisitions
|
—
|
|
|
16.7
|
|
||
Floor plan repayments—non-trade
|
(2,813.9
|
)
|
|
(3,036.7
|
)
|
||
Floor plan repayments—divestitures
|
—
|
|
|
(17.2
|
)
|
||
Proceeds from borrowings
|
—
|
|
|
82.9
|
|
||
Repayments of borrowings
|
(11.2
|
)
|
|
(8.6
|
)
|
||
Payment of debt issuance costs
|
(2.7
|
)
|
|
(1.3
|
)
|
||
Repurchases of common stock, including shares associated with net share settlement of employee share-based awards
|
(165.5
|
)
|
|
(267.7
|
)
|
||
Excess tax benefit on share-based arrangements
|
0.2
|
|
|
4.5
|
|
||
Net cash used in financing activities
|
(72.7
|
)
|
|
(76.2
|
)
|
||
Net increase in cash and cash equivalents
|
0.9
|
|
|
1.0
|
|
||
CASH AND CASH EQUIVALENTS, beginning of period
|
2.8
|
|
|
2.9
|
|
||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
3.7
|
|
|
$
|
3.9
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Vehicle receivables
|
$
|
39.5
|
|
|
$
|
46.3
|
|
Manufacturer receivables
|
42.1
|
|
|
43.1
|
|
||
Other receivables
|
31.7
|
|
|
31.4
|
|
||
Total accounts receivable
|
113.3
|
|
|
120.8
|
|
||
Less—Allowance for doubtful accounts
|
(1.4
|
)
|
|
(1.3
|
)
|
||
Accounts receivable, net
|
$
|
111.9
|
|
|
$
|
119.5
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
New vehicles
|
$
|
694.9
|
|
|
$
|
739.2
|
|
Used vehicles
|
156.4
|
|
|
134.1
|
|
||
Parts and accessories
|
41.1
|
|
|
43.9
|
|
||
Total inventories
|
$
|
892.4
|
|
|
$
|
917.2
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Assets:
|
|
|
|
||||
Inventories
|
$
|
33.5
|
|
|
$
|
—
|
|
Other current assets
|
3.1
|
|
|
—
|
|
||
Property and equipment, net
|
55.5
|
|
|
27.6
|
|
||
Goodwill
|
2.2
|
|
|
—
|
|
||
Total assets
|
94.3
|
|
|
27.6
|
|
||
Liabilities:
|
|
|
|
||||
Floor plan notes payable—trade
|
13.1
|
|
|
—
|
|
||
Floor plan notes payable—non-trade
|
15.7
|
|
|
—
|
|
||
Current maturities of long-term debt
|
1.0
|
|
|
—
|
|
||
Accounts payable and accrued liabilities
|
3.1
|
|
|
—
|
|
||
Long-term debt
|
12.4
|
|
|
—
|
|
||
Total liabilities
|
45.3
|
|
|
—
|
|
||
Net assets held for sale:
|
$
|
49.0
|
|
|
$
|
27.6
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Floor plan notes payable—trade (a)
|
$
|
117.5
|
|
|
$
|
138.8
|
|
Floor plan notes payable offset account
|
(12.2
|
)
|
|
—
|
|
||
Total floor plan notes payable—trade, net
|
$
|
105.3
|
|
|
$
|
138.8
|
|
|
|
|
|
||||
Floor plan notes payable—non-trade (b)
|
$
|
688.1
|
|
|
$
|
710.8
|
|
Floor plan notes payable offset account
|
(23.9
|
)
|
|
(137.4
|
)
|
||
Total floor plan notes payable—non-trade, net
|
$
|
664.2
|
|
|
$
|
573.4
|
|
(a)
|
Floor plan notes payable—trade as of
September 30, 2016
does not include
$13.1 million
classified as Liabilities Associated with Assets Held for Sale.
|
(b)
|
Floor plan notes payable—non-trade as of
September 30, 2016
does not include
$15.7 million
classified as Liabilities Associated with Assets Held for Sale.
|
|
As of
|
||||||
September 30, 2016
|
|
December 31, 2015
|
|||||
(In millions)
|
|||||||
6.0% Senior Subordinated Notes due 2024
|
$
|
600.0
|
|
|
$
|
600.0
|
|
Mortgage notes payable bearing interest at fixed and variable rates (a)
|
184.6
|
|
|
194.3
|
|
||
Real estate credit agreement (b)
|
52.2
|
|
|
64.0
|
|
||
Restated master loan agreement
|
95.0
|
|
|
97.9
|
|
||
Capital lease obligations
|
3.4
|
|
|
3.5
|
|
||
Total debt outstanding
|
935.2
|
|
|
959.7
|
|
||
Add: unamortized premium on 6.0% Senior Subordinated Notes due 2024
|
7.8
|
|
|
8.4
|
|
||
Less: debt issuance costs
|
(12.8
|
)
|
|
(13.8
|
)
|
||
Long-term debt, including current portion
|
930.2
|
|
|
954.3
|
|
||
Less: current portion
|
(13.9
|
)
|
|
(13.9
|
)
|
||
Long-term debt
|
$
|
916.3
|
|
|
$
|
940.4
|
|
(a)
|
Mortgage notes payable as of
September 30, 2016
does not include a
$4.3 million
mortgage note payable classified as Liabilities Associated with Assets Held for Sale.
|
(b)
|
Real estate credit agreement as of
September 30, 2016
does not include a
$9.1 million
mortgage note payable classified as Liabilities Associated with Assets Held for Sale.
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Carrying Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
607.8
|
|
|
$
|
608.4
|
|
Mortgage notes payable (a)
|
331.8
|
|
|
356.2
|
|
||
Total carrying value
|
$
|
939.6
|
|
|
$
|
964.6
|
|
|
|
|
|
||||
Fair Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
618.0
|
|
|
$
|
618.0
|
|
Mortgage notes payable (a)
|
351.5
|
|
|
362.6
|
|
||
Total fair value
|
$
|
969.5
|
|
|
$
|
980.6
|
|
(a)
|
Mortgage notes payable as of
September 30, 2016
does not include mortgages with an aggregate carrying value of
$13.4 million
classified as Liabilities Associated with Assets Held for Sale.
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Accounts payable and accrued liabilities
|
$
|
2.7
|
|
|
$
|
2.8
|
|
Other long-term liabilities
|
8.0
|
|
|
3.2
|
|
||
Total fair value
|
$
|
10.7
|
|
|
$
|
6.0
|
|
For the Three Months Ended September 30,
|
|
Results Recognized in Accumulated Other Comprehensive Loss
(Effective Portion)
|
|
Location of Results Reclassified from Accumulated Other Comprehensive Loss
to Earnings
|
|
Amount Reclassified from Accumulated Other Comprehensive Loss
to Earnings–Active Swaps
|
||||
2016
|
|
$
|
0.2
|
|
|
Swap interest expense
|
|
$
|
(0.8
|
)
|
2015
|
|
$
|
(5.0
|
)
|
|
Swap interest expense
|
|
$
|
(1.0
|
)
|
For the Nine Months Ended September 30,
|
|
Results Recognized in Accumulated Other Comprehensive Loss
(Effective Portion)
|
|
Location of Results Reclassified from Accumulated Other Comprehensive Loss
to Earnings
|
|
Amount Reclassified from Accumulated Other Comprehensive Loss
to Earnings–Active Swaps
|
||||
2016
|
|
$
|
(7.2
|
)
|
|
Swap interest expense
|
|
$
|
(2.4
|
)
|
2015
|
|
$
|
(7.0
|
)
|
|
Swap interest expense
|
|
$
|
(2.0
|
)
|
•
|
our ability to execute our business strategy;
|
•
|
the seasonally adjusted annual rate ("SAAR") of new vehicle sales in the U.S.;
|
•
|
our ability to further improve our operating cash flows, and the availability of capital and liquidity;
|
•
|
our estimated future capital expenditures;
|
•
|
general economic conditions and its impact on our revenues and expenses;
|
•
|
our parts and service revenue due to, among other things, improvements in manufacturing quality;
|
•
|
the variable nature of significant components of our cost structure;
|
•
|
our ability to limit our exposure to regional economic downturns due to our geographic diversity and brand mix;
|
•
|
manufacturers' willingness to continue to use incentive programs to drive demand for their product offerings;
|
•
|
our ability to leverage our common systems, infrastructure and processes in a cost-efficient manner;
|
•
|
our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;
|
•
|
the continued availability of financing, including floor plan financing for inventory;
|
•
|
the ability of consumers to secure vehicle financing at favorable rates;
|
•
|
the growth of import and luxury brands over the long-term;
|
•
|
our ability to mitigate any future negative trends in new vehicle sales; and
|
•
|
our ability to increase our cash flow and net income as a result of the foregoing and other factors.
|
•
|
changes in general economic and business conditions, including changes in employment levels, consumer demand, preferences and confidence levels, the availability and cost of credit, fuel prices, levels of discretionary personal income and interest rates;
|
•
|
our ability to execute our balanced automotive retailing and service business strategy;
|
•
|
adverse conditions affecting the vehicle manufactures whose brands we sell, and their ability to design, manufacture, deliver, and market their vehicles successfully;
|
•
|
changes in the mix, and total number, of vehicles we are able to sell;
|
•
|
our outstanding indebtedness and our continued ability to comply with applicable covenants in our various financing and lease agreements, or to obtain waivers of these covenants as necessary;
|
•
|
high levels of competition in our industry, which may create pricing and margin pressures on our products and services;
|
•
|
our relationships with manufacturers of the vehicles we sell and our ability to renew, and enter into new framework and dealer agreements with vehicle manufacturers whose brands we sell, on terms acceptable to us;
|
•
|
the availability of manufacturer incentive programs and our ability to earn these incentives;
|
•
|
failure of our management information systems or any security breaches;
|
•
|
changes in laws and regulations governing the operation of automobile franchises, including trade restrictions, consumer protections, accounting standards, taxation requirements, and environmental laws;
|
•
|
adverse results from litigation or other similar proceedings involving us;
|
•
|
our ability to generate sufficient cash flows, maintain our liquidity and obtain any necessary additional funds for working capital, capital expenditures, acquisitions, stock repurchases and/or dividends, debt maturity payments, and other corporate purposes;
|
•
|
any disruptions in the financial markets, which may impact our ability to access capital;
|
•
|
our relationships with, and the financial stability of, our lenders and lessors;
|
•
|
significant disruptions in the production and delivery of vehicles and parts for any reason, including natural disasters, product recalls, work stoppages, significant property loss or other occurrences that are outside of our control;
|
•
|
our ability to execute our initiatives and other strategies; and
|
•
|
our ability to leverage gains from our dealership portfolio.
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
940.9
|
|
|
$
|
964.0
|
|
|
$
|
(23.1
|
)
|
|
(2
|
)%
|
Used vehicle
|
476.4
|
|
|
493.0
|
|
|
(16.6
|
)
|
|
(3
|
)%
|
|||
Parts and service
|
200.4
|
|
|
190.6
|
|
|
9.8
|
|
|
5
|
%
|
|||
Finance and insurance, net
|
65.4
|
|
|
68.8
|
|
|
(3.4
|
)
|
|
(5
|
)%
|
|||
TOTAL REVENUE
|
1,683.1
|
|
|
1,716.4
|
|
|
(33.3
|
)
|
|
(2
|
)%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
47.5
|
|
|
52.3
|
|
|
(4.8
|
)
|
|
(9
|
)%
|
|||
Used vehicle
|
29.8
|
|
|
33.4
|
|
|
(3.6
|
)
|
|
(11
|
)%
|
|||
Parts and service
|
123.0
|
|
|
118.2
|
|
|
4.8
|
|
|
4
|
%
|
|||
Finance and insurance, net
|
65.4
|
|
|
68.8
|
|
|
(3.4
|
)
|
|
(5
|
)%
|
|||
TOTAL GROSS PROFIT
|
265.7
|
|
|
272.7
|
|
|
(7.0
|
)
|
|
(3
|
)%
|
|||
OPERATING EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
185.7
|
|
|
188.8
|
|
|
(3.1
|
)
|
|
(2
|
)%
|
|||
Depreciation and amortization
|
7.8
|
|
|
7.5
|
|
|
0.3
|
|
|
4
|
%
|
|||
Other operating expenses (income), net
|
1.5
|
|
|
(0.2
|
)
|
|
1.7
|
|
|
NM
|
|
|||
INCOME FROM OPERATIONS
|
70.7
|
|
|
76.6
|
|
|
(5.9
|
)
|
|
(8
|
)%
|
|||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
5.0
|
|
|
4.1
|
|
|
0.9
|
|
|
22
|
%
|
|||
Other interest expense, net
|
13.2
|
|
|
10.7
|
|
|
2.5
|
|
|
23
|
%
|
|||
Swap interest expense
|
0.8
|
|
|
1.0
|
|
|
(0.2
|
)
|
|
(20
|
)%
|
|||
Gain on divestitures
|
—
|
|
|
(21.4
|
)
|
|
21.4
|
|
|
100
|
%
|
|||
Total other expenses (income), net
|
19.0
|
|
|
(5.6
|
)
|
|
24.6
|
|
|
NM
|
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
51.7
|
|
|
82.2
|
|
|
(30.5
|
)
|
|
(37
|
)%
|
|||
Income tax expense
|
19.3
|
|
|
31.0
|
|
|
(11.7
|
)
|
|
(38
|
)%
|
|||
INCOME FROM CONTINUING OPERATIONS
|
32.4
|
|
|
51.2
|
|
|
(18.8
|
)
|
|
(37
|
)%
|
|||
Discontinued operations, net of tax
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
100
|
%
|
|||
NET INCOME
|
$
|
32.4
|
|
|
$
|
51.1
|
|
|
$
|
(18.7
|
)
|
|
(37
|
)%
|
Income from continuing operations per common share—Diluted
|
$
|
1.47
|
|
|
$
|
1.96
|
|
|
$
|
(0.49
|
)
|
|
(25
|
)%
|
Net income per common share—Diluted
|
$
|
1.47
|
|
|
$
|
1.96
|
|
|
$
|
(0.49
|
)
|
|
(25
|
)%
|
|
For the Three Months Ended September 30,
|
||||
|
2016
|
|
2015
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
55.9
|
%
|
|
56.2
|
%
|
Used vehicle retail
|
25.1
|
%
|
|
25.5
|
%
|
Used vehicle wholesale
|
3.2
|
%
|
|
3.2
|
%
|
Parts and service
|
11.9
|
%
|
|
11.1
|
%
|
Finance and insurance, net
|
3.9
|
%
|
|
4.0
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
17.9
|
%
|
|
19.2
|
%
|
Used vehicle retail
|
12.0
|
%
|
|
13.0
|
%
|
Used vehicle wholesale
|
(0.8
|
)%
|
|
(0.7
|
)%
|
Parts and service
|
46.3
|
%
|
|
43.3
|
%
|
Finance and insurance, net
|
24.6
|
%
|
|
25.2
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
15.8
|
%
|
|
15.9
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
69.9
|
%
|
|
69.2
|
%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
318.2
|
|
|
$
|
322.3
|
|
|
$
|
(4.1
|
)
|
|
(1
|
)%
|
Import
|
427.2
|
|
|
442.5
|
|
|
(15.3
|
)
|
|
(3
|
)%
|
|||
Domestic
|
195.5
|
|
|
199.2
|
|
|
(3.7
|
)
|
|
(2
|
)%
|
|||
Total new vehicle revenue
|
$
|
940.9
|
|
|
$
|
964.0
|
|
|
$
|
(23.1
|
)
|
|
(2
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
20.8
|
|
|
$
|
20.4
|
|
|
$
|
0.4
|
|
|
2
|
%
|
Import
|
18.3
|
|
|
20.5
|
|
|
(2.2
|
)
|
|
(11
|
)%
|
|||
Domestic
|
8.4
|
|
|
11.4
|
|
|
(3.0
|
)
|
|
(26
|
)%
|
|||
Total new vehicle gross profit
|
$
|
47.5
|
|
|
$
|
52.3
|
|
|
$
|
(4.8
|
)
|
|
(9
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
6,061
|
|
|
6,381
|
|
|
(320
|
)
|
|
(5
|
)%
|
|||
Import
|
15,522
|
|
|
16,501
|
|
|
(979
|
)
|
|
(6
|
)%
|
|||
Domestic
|
5,232
|
|
|
5,482
|
|
|
(250
|
)
|
|
(5
|
)%
|
|||
Total new vehicle units
|
26,815
|
|
|
28,364
|
|
|
(1,549
|
)
|
|
(5
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
318.2
|
|
|
$
|
321.8
|
|
|
$
|
(3.6
|
)
|
|
(1
|
)%
|
Import
|
423.2
|
|
|
417.6
|
|
|
5.6
|
|
|
1
|
%
|
|||
Domestic
|
195.5
|
|
|
199.2
|
|
|
(3.7
|
)
|
|
(2
|
)%
|
|||
Total new vehicle revenue
|
$
|
936.9
|
|
|
$
|
938.6
|
|
|
$
|
(1.7
|
)
|
|
—
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
20.8
|
|
|
$
|
20.4
|
|
|
$
|
0.4
|
|
|
2
|
%
|
Import
|
18.2
|
|
|
19.4
|
|
|
(1.2
|
)
|
|
(6
|
)%
|
|||
Domestic
|
8.4
|
|
|
11.4
|
|
|
(3.0
|
)
|
|
(26
|
)%
|
|||
Total new vehicle gross profit
|
$
|
47.4
|
|
|
$
|
51.2
|
|
|
$
|
(3.8
|
)
|
|
(7
|
)%
|
New vehicle units
|
|
|
|
|
|
|
|
|||||||
Luxury
|
6,061
|
|
|
6,371
|
|
|
(310
|
)
|
|
(5
|
)%
|
|||
Import
|
15,363
|
|
|
15,563
|
|
|
(200
|
)
|
|
(1
|
)%
|
|||
Domestic
|
5,232
|
|
|
5,482
|
|
|
(250
|
)
|
|
(5
|
)%
|
|||
Total new vehicle units
|
26,656
|
|
|
27,416
|
|
|
(760
|
)
|
|
(3
|
)%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,089
|
|
|
$
|
33,987
|
|
|
$
|
1,102
|
|
|
3
|
%
|
Gross profit per new vehicle sold
|
$
|
1,771
|
|
|
$
|
1,844
|
|
|
$
|
(73
|
)
|
|
(4
|
)%
|
New vehicle gross margin
|
5.0
|
%
|
|
5.4
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,432
|
|
|
$
|
3,197
|
|
|
$
|
235
|
|
|
7
|
%
|
New vehicle gross margin
|
6.5
|
%
|
|
6.3
|
%
|
|
0.2
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,179
|
|
|
$
|
1,242
|
|
|
$
|
(63
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.6
|
%
|
|
(0.3
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,606
|
|
|
$
|
2,080
|
|
|
$
|
(474
|
)
|
|
(23
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
5.7
|
%
|
|
(1.4
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,148
|
|
|
$
|
34,235
|
|
|
$
|
913
|
|
|
3
|
%
|
Gross profit per new vehicle sold
|
$
|
1,778
|
|
|
$
|
1,868
|
|
|
$
|
(90
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
5.1
|
%
|
|
5.5
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,432
|
|
|
$
|
3,202
|
|
|
$
|
230
|
|
|
7
|
%
|
New vehicle gross margin
|
6.5
|
%
|
|
6.3
|
%
|
|
0.2
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,185
|
|
|
$
|
1,247
|
|
|
$
|
(62
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.6
|
%
|
|
(0.3
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,606
|
|
|
$
|
2,080
|
|
|
$
|
(474
|
)
|
|
(23
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
5.7
|
%
|
|
(1.4
|
)%
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
423.3
|
|
|
$
|
438.8
|
|
|
$
|
(15.5
|
)
|
|
(4
|
)%
|
Used vehicle wholesale revenue
|
53.1
|
|
|
54.2
|
|
|
(1.1
|
)
|
|
(2
|
)%
|
|||
Used vehicle revenue
|
$
|
476.4
|
|
|
$
|
493.0
|
|
|
$
|
(16.6
|
)
|
|
(3
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
31.9
|
|
|
$
|
35.2
|
|
|
$
|
(3.3
|
)
|
|
(9
|
)%
|
Used vehicle wholesale gross profit
|
(2.1
|
)
|
|
(1.8
|
)
|
|
(0.3
|
)
|
|
(17
|
)%
|
|||
Used vehicle gross profit
|
$
|
29.8
|
|
|
$
|
33.4
|
|
|
$
|
(3.6
|
)
|
|
(11
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
20,030
|
|
|
21,306
|
|
|
(1,276
|
)
|
|
(6
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
419.6
|
|
|
$
|
422.0
|
|
|
$
|
(2.4
|
)
|
|
(1
|
)%
|
Used vehicle wholesale revenue
|
52.7
|
|
|
52.3
|
|
|
0.4
|
|
|
1
|
%
|
|||
Used vehicle revenue
|
$
|
472.3
|
|
|
$
|
474.3
|
|
|
$
|
(2.0
|
)
|
|
—
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
31.9
|
|
|
$
|
34.0
|
|
|
$
|
(2.1
|
)
|
|
(6
|
)%
|
Used vehicle wholesale gross profit
|
(2.0
|
)
|
|
(1.6
|
)
|
|
(0.4
|
)
|
|
(25
|
)%
|
|||
Used vehicle gross profit
|
$
|
29.9
|
|
|
$
|
32.4
|
|
|
$
|
(2.5
|
)
|
|
(8
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
19,774
|
|
|
20,294
|
|
|
(520
|
)
|
|
(3
|
)%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,133
|
|
|
$
|
20,595
|
|
|
$
|
538
|
|
|
3
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,593
|
|
|
$
|
1,652
|
|
|
$
|
(59
|
)
|
|
(4
|
)%
|
Used vehicle retail gross margin
|
7.5
|
%
|
|
8.0
|
%
|
|
(0.5
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,220
|
|
|
$
|
20,794
|
|
|
$
|
426
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,613
|
|
|
$
|
1,675
|
|
|
$
|
(62
|
)
|
|
(4
|
)%
|
Used vehicle retail gross margin
|
7.6
|
%
|
|
8.1
|
%
|
|
(0.5
|
)%
|
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
200.4
|
|
|
$
|
190.6
|
|
|
$
|
9.8
|
|
|
5
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
67.0
|
|
|
63.5
|
|
|
3.5
|
|
|
6
|
%
|
|||
Warranty
|
19.9
|
|
|
18.5
|
|
|
1.4
|
|
|
8
|
%
|
|||
Wholesale parts
|
5.1
|
|
|
5.3
|
|
|
(0.2
|
)
|
|
(4
|
)%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
92.0
|
|
|
$
|
87.3
|
|
|
$
|
4.7
|
|
|
5
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
45.9
|
%
|
|
45.8
|
%
|
|
0.1
|
%
|
|
|
||||
Reconditioning and preparation
|
$
|
31.0
|
|
|
$
|
30.9
|
|
|
$
|
0.1
|
|
|
—
|
%
|
Total parts and service gross profit
|
$
|
123.0
|
|
|
$
|
118.2
|
|
|
$
|
4.8
|
|
|
4
|
%
|
Total parts and service gross margin
|
61.4
|
%
|
|
62.0
|
%
|
|
(0.6
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
199.2
|
|
|
$
|
185.2
|
|
|
$
|
14.0
|
|
|
8
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
66.7
|
|
|
62.3
|
|
|
4.4
|
|
|
7
|
%
|
|||
Warranty
|
19.8
|
|
|
17.8
|
|
|
2.0
|
|
|
11
|
%
|
|||
Wholesale parts
|
5.0
|
|
|
5.0
|
|
|
—
|
|
|
—
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
91.5
|
|
|
$
|
85.1
|
|
|
$
|
6.4
|
|
|
8
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
45.9
|
%
|
|
46.0
|
%
|
|
(0.1
|
)%
|
|
|
||||
Reconditioning and preparation
|
$
|
30.7
|
|
|
$
|
29.6
|
|
|
$
|
1.1
|
|
|
4
|
%
|
Total parts and service gross profit
|
$
|
122.2
|
|
|
$
|
114.7
|
|
|
$
|
7.5
|
|
|
7
|
%
|
Total parts and service gross margin
|
61.3
|
%
|
|
61.9
|
%
|
|
(0.6
|
)%
|
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
65.4
|
|
|
$
|
68.8
|
|
|
$
|
(3.4
|
)
|
|
(5
|
)%
|
Finance and insurance, net per vehicle sold
|
$
|
1,396
|
|
|
$
|
1,385
|
|
|
$
|
11
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
64.7
|
|
|
$
|
66.4
|
|
|
$
|
(1.7
|
)
|
|
(3
|
)%
|
Finance and insurance, net per vehicle sold
|
$
|
1,393
|
|
|
$
|
1,392
|
|
|
$
|
1
|
|
|
—
|
%
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
% of Gross
Profit Increase (Decrease)
|
|||||||||||||||
|
2016
|
|
% of Gross
Profit
|
|
2015
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
86.4
|
|
|
32.5
|
%
|
|
$
|
86.1
|
|
|
31.6
|
%
|
|
$
|
0.3
|
|
|
0.9
|
%
|
Sales compensation
|
28.6
|
|
|
10.8
|
%
|
|
30.3
|
|
|
11.1
|
%
|
|
(1.7
|
)
|
|
(0.3
|
)%
|
|||
Share-based compensation
|
3.0
|
|
|
1.1
|
%
|
|
2.4
|
|
|
0.9
|
%
|
|
0.6
|
|
|
0.2
|
%
|
|||
Outside services
|
19.6
|
|
|
7.4
|
%
|
|
19.9
|
|
|
7.3
|
%
|
|
(0.3
|
)
|
|
0.1
|
%
|
|||
Advertising
|
8.5
|
|
|
3.2
|
%
|
|
10.0
|
|
|
3.7
|
%
|
|
(1.5
|
)
|
|
(0.5
|
)%
|
|||
Rent
|
7.6
|
|
|
2.9
|
%
|
|
8.0
|
|
|
2.9
|
%
|
|
(0.4
|
)
|
|
—
|
%
|
|||
Utilities
|
4.3
|
|
|
1.6
|
%
|
|
4.6
|
|
|
1.7
|
%
|
|
(0.3
|
)
|
|
(0.1
|
)%
|
|||
Insurance
|
4.0
|
|
|
1.5
|
%
|
|
3.0
|
|
|
1.1
|
%
|
|
1.0
|
|
|
0.4
|
%
|
|||
Other
|
23.7
|
|
|
8.9
|
%
|
|
24.5
|
|
|
8.9
|
%
|
|
(0.8
|
)
|
|
—
|
%
|
|||
Selling, general, and administrative expense
|
$
|
185.7
|
|
|
69.9
|
%
|
|
$
|
188.8
|
|
|
69.2
|
%
|
|
$
|
(3.1
|
)
|
|
0.7
|
%
|
Gross profit
|
$
|
265.7
|
|
|
|
|
$
|
272.7
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
85.7
|
|
|
32.4
|
%
|
|
$
|
83.4
|
|
|
31.5
|
%
|
|
$
|
2.3
|
|
|
0.9
|
%
|
Sales compensation
|
28.4
|
|
|
10.7
|
%
|
|
29.2
|
|
|
11.0
|
%
|
|
(0.8
|
)
|
|
(0.3
|
)%
|
|||
Share-based compensation
|
3.0
|
|
|
1.1
|
%
|
|
2.4
|
|
|
0.9
|
%
|
|
0.6
|
|
|
0.2
|
%
|
|||
Outside services
|
19.3
|
|
|
7.3
|
%
|
|
19.1
|
|
|
7.2
|
%
|
|
0.2
|
|
|
0.1
|
%
|
|||
Advertising
|
8.3
|
|
|
3.1
|
%
|
|
9.2
|
|
|
3.5
|
%
|
|
(0.9
|
)
|
|
(0.4
|
)%
|
|||
Rent
|
7.6
|
|
|
2.9
|
%
|
|
8.0
|
|
|
3.0
|
%
|
|
(0.4
|
)
|
|
(0.1
|
)%
|
|||
Utilities
|
4.2
|
|
|
1.6
|
%
|
|
4.4
|
|
|
1.7
|
%
|
|
(0.2
|
)
|
|
(0.1
|
)%
|
|||
Insurance
|
3.9
|
|
|
1.5
|
%
|
|
2.9
|
|
|
1.1
|
%
|
|
1.0
|
|
|
0.4
|
%
|
|||
Other
|
23.6
|
|
|
9.0
|
%
|
|
23.4
|
|
|
8.9
|
%
|
|
0.2
|
|
|
0.1
|
%
|
|||
Selling, general, and administrative expense
|
$
|
184.0
|
|
|
69.6
|
%
|
|
$
|
182.0
|
|
|
68.8
|
%
|
|
$
|
2.0
|
|
|
0.8
|
%
|
Gross profit
|
$
|
264.2
|
|
|
|
|
$
|
264.7
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
2,676.3
|
|
|
$
|
2,720.7
|
|
|
$
|
(44.4
|
)
|
|
(2
|
)%
|
Used vehicle
|
1,407.5
|
|
|
1,474.0
|
|
|
(66.5
|
)
|
|
(5
|
)%
|
|||
Parts and service
|
584.9
|
|
|
555.5
|
|
|
29.4
|
|
|
5
|
%
|
|||
Finance and insurance, net
|
192.6
|
|
|
197.6
|
|
|
(5.0
|
)
|
|
(3
|
)%
|
|||
TOTAL REVENUE
|
4,861.3
|
|
|
4,947.8
|
|
|
(86.5
|
)
|
|
(2
|
)%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
139.7
|
|
|
152.5
|
|
|
(12.8
|
)
|
|
(8
|
)%
|
|||
Used vehicle
|
99.8
|
|
|
102.4
|
|
|
(2.6
|
)
|
|
(3
|
)%
|
|||
Parts and service
|
362.0
|
|
|
347.9
|
|
|
14.1
|
|
|
4
|
%
|
|||
Finance and insurance, net
|
192.6
|
|
|
197.6
|
|
|
(5.0
|
)
|
|
(3
|
)%
|
|||
TOTAL GROSS PROFIT
|
794.1
|
|
|
800.4
|
|
|
(6.3
|
)
|
|
(1
|
)%
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
549.2
|
|
|
546.4
|
|
|
2.8
|
|
|
1
|
%
|
|||
Depreciation and amortization
|
23.0
|
|
|
22.0
|
|
|
1.0
|
|
|
5
|
%
|
|||
Other operating expenses, net
|
4.2
|
|
|
0.1
|
|
|
4.1
|
|
|
NM
|
|
|||
INCOME FROM OPERATIONS
|
217.7
|
|
|
231.9
|
|
|
(14.2
|
)
|
|
(6
|
)%
|
|||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
14.4
|
|
|
12.0
|
|
|
2.4
|
|
|
20
|
%
|
|||
Other interest expense, net
|
40.0
|
|
|
31.5
|
|
|
8.5
|
|
|
27
|
%
|
|||
Swap interest expense
|
2.4
|
|
|
2.0
|
|
|
0.4
|
|
|
20
|
%
|
|||
Gain on divestitures
|
—
|
|
|
(21.4
|
)
|
|
21.4
|
|
|
100
|
%
|
|||
Total other expenses, net
|
56.8
|
|
|
24.1
|
|
|
32.7
|
|
|
136
|
%
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
160.9
|
|
|
207.8
|
|
|
(46.9
|
)
|
|
(23
|
)%
|
|||
Income tax expense
|
60.8
|
|
|
79.6
|
|
|
(18.8
|
)
|
|
(24
|
)%
|
|||
INCOME FROM CONTINUING OPERATIONS
|
100.1
|
|
|
128.2
|
|
|
(28.1
|
)
|
|
(22
|
)%
|
|||
Discontinued operations, net of tax
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
100
|
%
|
|||
NET INCOME
|
$
|
100.1
|
|
|
$
|
128.1
|
|
|
$
|
(28.0
|
)
|
|
(22
|
)%
|
Income from continuing operations per common share—Diluted
|
$
|
4.37
|
|
|
$
|
4.77
|
|
|
$
|
(0.40
|
)
|
|
(8
|
)%
|
Net income per common share—Diluted
|
$
|
4.37
|
|
|
$
|
4.76
|
|
|
$
|
(0.39
|
)
|
|
(8
|
)%
|
|
For the Nine Months Ended September 30,
|
||||
|
2016
|
|
2015
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
55.1
|
%
|
|
55.0
|
%
|
Used vehicle retail
|
25.8
|
%
|
|
26.5
|
%
|
Used vehicle wholesale
|
3.1
|
%
|
|
3.3
|
%
|
Parts and service
|
12.0
|
%
|
|
11.2
|
%
|
Finance and insurance, net
|
4.0
|
%
|
|
4.0
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
17.6
|
%
|
|
19.1
|
%
|
Used vehicle retail
|
12.7
|
%
|
|
13.1
|
%
|
Used vehicle wholesale
|
(0.2
|
)%
|
|
(0.4
|
)%
|
Parts and service
|
45.6
|
%
|
|
43.5
|
%
|
Finance and insurance, net
|
24.3
|
%
|
|
24.7
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
16.3
|
%
|
|
16.2
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
69.2
|
%
|
|
68.3
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
909.7
|
|
|
$
|
948.7
|
|
|
$
|
(39.0
|
)
|
|
(4
|
)%
|
Import
|
1,206.0
|
|
|
1,265.5
|
|
|
(59.5
|
)
|
|
(5
|
)%
|
|||
Domestic
|
560.6
|
|
|
506.5
|
|
|
54.1
|
|
|
11
|
%
|
|||
Total new vehicle revenue
|
$
|
2,676.3
|
|
|
$
|
2,720.7
|
|
|
$
|
(44.4
|
)
|
|
(2
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
61.4
|
|
|
$
|
63.6
|
|
|
$
|
(2.2
|
)
|
|
(3
|
)%
|
Import
|
52.9
|
|
|
59.4
|
|
|
(6.5
|
)
|
|
(11
|
)%
|
|||
Domestic
|
25.4
|
|
|
29.5
|
|
|
(4.1
|
)
|
|
(14
|
)%
|
|||
Total new vehicle gross profit
|
$
|
139.7
|
|
|
$
|
152.5
|
|
|
$
|
(12.8
|
)
|
|
(8
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
17,469
|
|
|
18,632
|
|
|
(1,163
|
)
|
|
(6
|
)%
|
|||
Import
|
43,814
|
|
|
47,052
|
|
|
(3,238
|
)
|
|
(7
|
)%
|
|||
Domestic
|
15,326
|
|
|
14,137
|
|
|
1,189
|
|
|
8
|
%
|
|||
Total new vehicle units
|
76,609
|
|
|
79,821
|
|
|
(3,212
|
)
|
|
(4
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
909.7
|
|
|
$
|
928.1
|
|
|
$
|
(18.4
|
)
|
|
(2
|
)%
|
Import
|
1,176.3
|
|
|
1,178.0
|
|
|
(1.7
|
)
|
|
—
|
%
|
|||
Domestic
|
530.0
|
|
|
506.5
|
|
|
23.5
|
|
|
5
|
%
|
|||
Total new vehicle revenue
|
$
|
2,616.0
|
|
|
$
|
2,612.6
|
|
|
$
|
3.4
|
|
|
—
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
61.4
|
|
|
$
|
62.5
|
|
|
$
|
(1.1
|
)
|
|
(2
|
)%
|
Import
|
51.9
|
|
|
55.5
|
|
|
(3.6
|
)
|
|
(6
|
)%
|
|||
Domestic
|
23.4
|
|
|
29.5
|
|
|
(6.1
|
)
|
|
(21
|
)%
|
|||
Total new vehicle gross profit
|
$
|
136.7
|
|
|
$
|
147.5
|
|
|
$
|
(10.8
|
)
|
|
(7
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
17,469
|
|
|
18,254
|
|
|
(785
|
)
|
|
(4
|
)%
|
|||
Import
|
42,693
|
|
|
43,844
|
|
|
(1,151
|
)
|
|
(3
|
)%
|
|||
Domestic
|
14,414
|
|
|
14,137
|
|
|
277
|
|
|
2
|
%
|
|||
Total new vehicle units
|
74,576
|
|
|
76,235
|
|
|
(1,659
|
)
|
|
(2
|
)%
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
34,935
|
|
|
$
|
34,085
|
|
|
$
|
850
|
|
|
2
|
%
|
Gross profit per new vehicle sold
|
$
|
1,824
|
|
|
$
|
1,911
|
|
|
$
|
(87
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
5.2
|
%
|
|
5.6
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,515
|
|
|
$
|
3,413
|
|
|
$
|
102
|
|
|
3
|
%
|
New vehicle gross margin
|
6.7
|
%
|
|
6.7
|
%
|
|
—
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,207
|
|
|
$
|
1,262
|
|
|
$
|
(55
|
)
|
|
(4
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,657
|
|
|
$
|
2,087
|
|
|
$
|
(430
|
)
|
|
(21
|
)%
|
New vehicle gross margin
|
4.5
|
%
|
|
5.8
|
%
|
|
(1.3
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,078
|
|
|
$
|
34,270
|
|
|
$
|
808
|
|
|
2
|
%
|
Gross profit per new vehicle sold
|
$
|
1,833
|
|
|
$
|
1,935
|
|
|
$
|
(102
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
5.2
|
%
|
|
5.6
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,515
|
|
|
$
|
3,424
|
|
|
$
|
91
|
|
|
3
|
%
|
New vehicle gross margin
|
6.7
|
%
|
|
6.7
|
%
|
|
—
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,216
|
|
|
$
|
1,266
|
|
|
$
|
(50
|
)
|
|
(4
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,623
|
|
|
$
|
2,087
|
|
|
$
|
(464
|
)
|
|
(22
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
5.8
|
%
|
|
(1.4
|
)%
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
1,254.7
|
|
|
$
|
1,309.8
|
|
|
$
|
(55.1
|
)
|
|
(4
|
)%
|
Used vehicle wholesale revenue
|
152.8
|
|
|
164.2
|
|
|
(11.4
|
)
|
|
(7
|
)%
|
|||
Used vehicle revenue
|
$
|
1,407.5
|
|
|
$
|
1,474.0
|
|
|
$
|
(66.5
|
)
|
|
(5
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
101.4
|
|
|
$
|
105.6
|
|
|
$
|
(4.2
|
)
|
|
(4
|
)%
|
Used vehicle wholesale gross profit
|
(1.6
|
)
|
|
(3.2
|
)
|
|
1.6
|
|
|
50
|
%
|
|||
Used vehicle gross profit
|
$
|
99.8
|
|
|
$
|
102.4
|
|
|
$
|
(2.6
|
)
|
|
(3
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
59,378
|
|
|
63,164
|
|
|
(3,786
|
)
|
|
(6
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
1,227.5
|
|
|
$
|
1,243.2
|
|
|
$
|
(15.7
|
)
|
|
(1
|
)%
|
Used vehicle wholesale revenue
|
150.4
|
|
|
156.3
|
|
|
(5.9
|
)
|
|
(4
|
)%
|
|||
Used vehicle revenue
|
$
|
1,377.9
|
|
|
$
|
1,399.5
|
|
|
$
|
(21.6
|
)
|
|
(2
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
99.1
|
|
|
$
|
101.0
|
|
|
$
|
(1.9
|
)
|
|
(2
|
)%
|
Used vehicle wholesale gross profit
|
(1.4
|
)
|
|
(2.7
|
)
|
|
1.3
|
|
|
48
|
%
|
|||
Used vehicle gross profit
|
$
|
97.7
|
|
|
$
|
98.3
|
|
|
$
|
(0.6
|
)
|
|
(1
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
57,756
|
|
|
59,595
|
|
|
(1,839
|
)
|
|
(3
|
)%
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,131
|
|
|
$
|
20,736
|
|
|
$
|
395
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,708
|
|
|
$
|
1,672
|
|
|
$
|
36
|
|
|
2
|
%
|
Used vehicle retail gross margin
|
8.1
|
%
|
|
8.1
|
%
|
|
—
|
%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,253
|
|
|
$
|
20,861
|
|
|
$
|
392
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,716
|
|
|
$
|
1,695
|
|
|
$
|
21
|
|
|
1
|
%
|
Used vehicle retail gross margin
|
8.1
|
%
|
|
8.1
|
%
|
|
—
|
%
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
584.9
|
|
|
$
|
555.5
|
|
|
$
|
29.4
|
|
|
5
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
201.4
|
|
|
188.3
|
|
|
13.1
|
|
|
7
|
%
|
|||
Warranty
|
54.4
|
|
|
53.2
|
|
|
1.2
|
|
|
2
|
%
|
|||
Wholesale parts
|
15.6
|
|
|
16.0
|
|
|
(0.4
|
)
|
|
(3
|
)%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
271.4
|
|
|
$
|
257.5
|
|
|
$
|
13.9
|
|
|
5
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
46.4
|
%
|
|
46.4
|
%
|
|
—
|
%
|
|
|
|
|||
Reconditioning and preparation
|
$
|
90.6
|
|
|
$
|
90.4
|
|
|
$
|
0.2
|
|
|
—
|
%
|
Total parts and service gross profit
|
$
|
362.0
|
|
|
$
|
347.9
|
|
|
$
|
14.1
|
|
|
4
|
%
|
Total parts and service gross margin
|
61.9
|
%
|
|
62.6
|
%
|
|
(0.7
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
571.7
|
|
|
$
|
531.6
|
|
|
$
|
40.1
|
|
|
8
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
198.2
|
|
|
182.5
|
|
|
15.7
|
|
|
9
|
%
|
|||
Warranty
|
52.7
|
|
|
49.9
|
|
|
2.8
|
|
|
6
|
%
|
|||
Wholesale parts
|
15.0
|
|
|
14.9
|
|
|
0.1
|
|
|
1
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
265.9
|
|
|
$
|
247.3
|
|
|
$
|
18.6
|
|
|
8
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
46.5
|
%
|
|
46.5
|
%
|
|
—
|
%
|
|
|
|
|||
Reconditioning and preparation
|
$
|
88.4
|
|
|
$
|
86.0
|
|
|
$
|
2.4
|
|
|
3
|
%
|
Total parts and service gross profit
|
$
|
354.3
|
|
|
$
|
333.3
|
|
|
$
|
21.0
|
|
|
6
|
%
|
Total parts and service gross margin
|
62.0
|
%
|
|
62.7
|
%
|
|
(0.7
|
)%
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
192.6
|
|
|
$
|
197.6
|
|
|
$
|
(5.0
|
)
|
|
(3
|
)%
|
Finance and insurance, net per vehicle sold
|
$
|
1,416
|
|
|
$
|
1,382
|
|
|
$
|
34
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
187.4
|
|
|
$
|
189.4
|
|
|
$
|
(2.0
|
)
|
|
(1
|
)%
|
Finance and insurance, net per vehicle sold
|
$
|
1,416
|
|
|
$
|
1,394
|
|
|
$
|
22
|
|
|
2
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
% of Gross
Profit Increase (Decrease)
|
|||||||||||||||
|
2016
|
|
% of Gross
Profit
|
|
2015
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
257.1
|
|
|
32.4
|
%
|
|
$
|
251.6
|
|
|
31.4
|
%
|
|
$
|
5.5
|
|
|
1.0
|
%
|
Sales compensation
|
83.8
|
|
|
10.6
|
%
|
|
86.9
|
|
|
10.9
|
%
|
|
(3.1
|
)
|
|
(0.3
|
)%
|
|||
Share-based compensation
|
9.1
|
|
|
1.1
|
%
|
|
7.7
|
|
|
1.0
|
%
|
|
1.4
|
|
|
0.1
|
%
|
|||
Outside services
|
57.7
|
|
|
7.3
|
%
|
|
56.9
|
|
|
7.1
|
%
|
|
0.8
|
|
|
0.2
|
%
|
|||
Advertising
|
25.4
|
|
|
3.2
|
%
|
|
29.0
|
|
|
3.6
|
%
|
|
(3.6
|
)
|
|
(0.4
|
)%
|
|||
Rent
|
23.0
|
|
|
2.9
|
%
|
|
23.5
|
|
|
2.9
|
%
|
|
(0.5
|
)
|
|
—
|
%
|
|||
Utilities
|
11.7
|
|
|
1.5
|
%
|
|
12.9
|
|
|
1.6
|
%
|
|
(1.2
|
)
|
|
(0.1
|
)%
|
|||
Insurance
|
13.6
|
|
|
1.7
|
%
|
|
9.1
|
|
|
1.1
|
%
|
|
4.5
|
|
|
0.6
|
%
|
|||
Other
|
67.8
|
|
|
8.5
|
%
|
|
68.8
|
|
|
8.7
|
%
|
|
(1.0
|
)
|
|
(0.2
|
)%
|
|||
Selling, general, and administrative expense
|
$
|
549.2
|
|
|
69.2
|
%
|
|
$
|
546.4
|
|
|
68.3
|
%
|
|
$
|
2.8
|
|
|
0.9
|
%
|
Gross profit
|
$
|
794.1
|
|
|
|
|
$
|
800.4
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
251.0
|
|
|
32.3
|
%
|
|
240.5
|
|
|
31.3
|
%
|
|
10.5
|
|
|
1.0
|
%
|
|||
Sales compensation
|
81.7
|
|
|
10.5
|
%
|
|
82.9
|
|
|
10.8
|
%
|
|
(1.2
|
)
|
|
(0.3
|
)%
|
|||
Share-based compensation
|
9.1
|
|
|
1.2
|
%
|
|
7.7
|
|
|
1.0
|
%
|
|
1.4
|
|
|
0.2
|
%
|
|||
Outside services
|
56.0
|
|
|
7.2
|
%
|
|
54.2
|
|
|
7.1
|
%
|
|
1.8
|
|
|
0.1
|
%
|
|||
Advertising
|
24.5
|
|
|
3.2
|
%
|
|
26.6
|
|
|
3.5
|
%
|
|
(2.1
|
)
|
|
(0.3
|
)%
|
|||
Rent
|
22.9
|
|
|
3.0
|
%
|
|
23.4
|
|
|
3.0
|
%
|
|
(0.5
|
)
|
|
—
|
%
|
|||
Utilities
|
11.4
|
|
|
1.5
|
%
|
|
12.3
|
|
|
1.6
|
%
|
|
(0.9
|
)
|
|
(0.1
|
)%
|
|||
Insurance
|
13.3
|
|
|
1.7
|
%
|
|
8.6
|
|
|
1.1
|
%
|
|
4.7
|
|
|
0.6
|
%
|
|||
Other
|
$
|
67.2
|
|
|
8.6
|
%
|
|
$
|
65.3
|
|
|
8.5
|
%
|
|
$
|
1.9
|
|
|
0.1
|
%
|
Selling, general, and administrative expense
|
$
|
537.1
|
|
|
69.2
|
%
|
|
$
|
521.5
|
|
|
67.9
|
%
|
|
$
|
15.6
|
|
|
1.3
|
%
|
Gross profit
|
$
|
776.1
|
|
|
|
|
$
|
768.5
|
|
|
|
|
|
|
|
•
|
2016 Senior Credit Facility
—
On July 25, 2016, the Company and certain of its subsidiaries entered into an amended and restated senior secured credit agreement with Bank of America, N.A. ("Bank of America"), as administrative agent, and the other lenders party thereto (the "2016 Senior Credit Facility"). The 2016 Senior Credit Facility further amended and restated the Company's pre-existing senior secured credit agreement, dated as of August
|
◦
|
A $250.0 million revolving credit facility (the "Revolving Credit Facility") for, among other things, acquisitions, working capital and capital expenditures, including a $50.0 million sublimit for letters of credit. As of September 30, 2016, our borrowing capacity under the revolving credit facility was limited to $247.4 million, based on our borrowing base calculation, and we had
$9.4 million
in outstanding letters of credit, resulting in
$238.0 million
of borrowing availability. There were no amounts drawn under our revolving credit facility as of
September 30, 2016
.
|
◦
|
A $900.0 million new vehicle revolving floor plan facility (the "New Vehicle Floor Plan Facility"). In connection, with the new vehicle floor plan facility, we established an account with Bank of America that allows us to transfer cash to an account as an offset to floor plan notes payable. These transfers reduce the amount of outstanding new vehicle floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts within one to two days. As a result of the use of our floor plan offset account, we experience a reduction in Floor Plan Interest Expense on our Condensed Consolidated Statements of Income. As of
September 30, 2016
, we had $679.9 million, which is net of
$23.9 million
in our floor plan offset account, outstanding under our new vehicle floor plan facility (including
$15.7 million
classified as Liabilities Associated with Assets Held for Sale).
|
◦
|
A $150.0 million used vehicle revolving floor plan facility (the "Used Vehicle Floor Plan Facility") to finance the acquisition of used vehicle inventory and for, among other things, working capital and capital expenditures, as well as to refinance used vehicles. Our borrowing capacity under the used vehicle floor plan facility was limited to $119.7 million, based on our borrowing base calculation as of September 30, 2016. We began the year with nothing drawn on our used vehicle floor plan facility and during the
nine
months ended
September 30, 2016
, we had borrowings of $55.0 million and made repayments of $25.0 million, resulting in $30.0 million outstanding under our used vehicle floor plan facility as of
September 30, 2016
.
|
•
|
Manufacturer affiliated new vehicle floor plan and other financing facilities
—
We have a floor plan facility with the Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory. During August 2016, we established a floor plan offset account with Ford Credit, which operates in a similar manner to our floor plan offset account with Bank of America. As of
September 30, 2016
, we had $118.4 million, net of
$12.2 million
in our floor plan offset account, outstanding under our floor plan facility (including
$13.1 million
classified as Liabilities Associated with Assets Held for Sale). Additionally, we had $81.3 million outstanding under facilities with certain
|
•
|
Real Estate Credit Agreement
—
a real estate term loan credit agreement with an initial principal value of $75.0 million collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder. As of
September 30, 2016
, we had $61.3 million of mortgage note obligations outstanding under the Real Estate Credit Agreement, of which
$9.1 million
were classified as Liabilities Associated with Assets Held for Sale on our Condensed Consolidated Balance Sheet. There is no further borrowing availability under this agreement.
|
•
|
Restated Master Loan Agreement
—
provides for term loans to certain of our subsidiaries in an aggregate amount not to exceed $100.0 million. Borrowings under the Master Loan Facility are guaranteed by us and are collateralized by the real property financed under the Master Loan Agreement. As of
September 30, 2016
, the outstanding balance under the Restated Master Loan Agreement was
$95.0 million
. There is no further borrowing availability under this facility.
|
•
|
Mortgage notes
—
as of
September 30, 2016
, we had $188.9 million of mortgage note obligations, of which
$4.3 million
were classified as Liabilities Associated with Assets Held for Sale on our Condensed Consolidated Balance Sheet. These obligations are collateralized by the associated real estate at our dealership locations.
|
•
|
6.0% Senior Subordinated Notes due 2024 ("6.0% Notes")
—
as of
September 30, 2016
we had $600.0 million in aggregate principal amount of our 6.0% Notes outstanding. We are required to pay interest on the 6.0% Notes on June 15 and December 15 of each year until maturity on December 15, 2024.
|
|
For the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Reconciliation of Cash provided by operating activities to Cash provided by operating activities, as adjusted
|
|
|
|
||||
Cash provided by operating activities, as reported
|
$
|
151.1
|
|
|
$
|
145.0
|
|
New vehicle floor plan borrowings
—
non-trade, net
|
76.5
|
|
|
51.5
|
|
||
Cash provided by operating activities, as adjusted
|
$
|
227.6
|
|
|
$
|
196.5
|
|
•
|
$46.5 million related to a decrease in inventory, net of floor plan notes payable, primarily due to the decrease in our floor plan offset account from
$137.4 million
as of December 31, 2015 to
$36.1 million
as of
September 30, 2016
;
|
•
|
$26.6 million related to sales volume and the timing of collection of accounts receivable and contracts-in-transit during 2016 as compared to 2015; and
|
•
|
$10.7 million related to the non-cash adjustments to net income and the change in other long-term assets and liabilities.
|
•
|
$30.3 million related to a decrease in accounts payable and accrued liabilities; and
|
•
|
$22.4 million related to the change in other current and non-current assets and liabilities.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions)
|
||||||
07/01/2016 - 07/31/2016
|
|
437
|
|
|
$
|
49.97
|
|
|
437
|
|
|
$
|
138.1
|
|
08/01/2016 - 08/31/2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
09/01/2016 - 09/30/2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
Asbury Automotive Group, Inc.
|
||
|
|
|
|
Date: October 26, 2016
|
By:
|
|
/s/ Craig T. Monaghan
|
|
Name:
|
|
(Craig T. Monaghan)
|
|
Title:
|
|
Chief Executive Officer and President
|
|
Asbury Automotive Group, Inc.
|
||
|
|
|
|
Date: October 26, 2016
|
By:
|
|
/s/ Keith R. Style
|
|
Name:
|
|
(Keith R. Style)
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer
|
|
SIGNATURES
|
|
|
|
ASBURY AUTOMOTIVE GROUP, INC.
|
|
|
|
By:
/s/ George A. Villasana
|
|
Name: George A. Villasana
|
|
Title: Senior Vice President, General Counsel &
|
|
Secretary
|
|
|
|
ASBURY ATLANTA NIS II, LLC
|
|
|
|
By:
/s/ George C. Karolis
|
|
Name: George C. Karolis
|
|
Title: Vice President
|
|
|
|
Q AUTOMOTIVE HOLIDAY FL, LLC
|
|
|
|
By: /s/ George C. Karolis
|
|
Name: George C. Karolis
|
|
Title: Vice President
|
|
|
|
Q AUTOMOTIVE TAMPA FL, LLC
|
|
|
|
By: /s/ George C. Karolis
|
|
Name: George C. Karolis
|
|
Title: Vice President
|
|
|
|
U.S. BANK NATIONAL ASSOCIATION
|
|
|
|
By:
/s/ David Ferrell
|
|
Name: David Ferrell
|
|
Title: Vice President
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Asbury Automotive Group, 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 we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
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):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Craig T. Monaghan
|
|
Craig T. Monaghan
Chief Executive Officer
October 26, 2016
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Asbury Automotive Group, 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 we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
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):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(a)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Keith R. Style
|
|
Keith R. Style
Chief Financial Officer October 26, 2016 |
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Craig T. Monaghan
|
|
Craig T. Monaghan
Chief Executive Officer
October 26, 2016
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Keith R. Style
|
|
Keith R. Style
Chief Financial Officer
October 26, 2016
|
|