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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
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New York Stock Exchange
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Large Accelerated Filer
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x
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Accelerated filer
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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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Emerging growth company
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o
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Page
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PART I
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PART II
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PART III
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PART IV
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•
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our ability to execute our business strategy;
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•
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the seasonally adjusted annual rate ("SAAR") of new vehicle sales in the U.S.;
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•
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our ability to further improve our operating cash flows, and the availability of capital and liquidity;
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•
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our estimated future capital expenditures;
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•
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general economic conditions and its impact on our revenues and expenses;
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•
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our parts and service revenue due to, among other things, improvements in vehicle technology;
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•
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the variable nature of significant components of our cost structure;
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•
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our ability to limit our exposure to regional economic downturns due to our geographic diversity and brand mix;
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•
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manufacturers' willingness to continue to use incentive programs to drive demand for their product offerings;
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•
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our ability to leverage our common systems, infrastructure and processes in a cost-efficient manner;
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•
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our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;
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•
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the continued availability of financing, including floor plan financing for inventory;
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•
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the ability of consumers to secure vehicle financing at favorable rates;
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•
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the growth of the brands that comprise our portfolio over the long-term;
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•
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our ability to mitigate any future negative trends in new vehicle sales; and
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•
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our ability to increase our cash flow and net income as a result of the foregoing and other factors.
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•
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changes in general economic and business conditions, including changes in employment levels, consumer demand, preferences and confidence levels, the availability and cost of credit in a rising interest rate environment, fuel prices, levels of discretionary personal income and interest rates;
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•
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our ability to execute our balanced automotive retailing and service business strategy;
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•
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our ability to attract and retain skilled employees;
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•
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adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver, and market their vehicles successfully;
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•
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changes in the mix, and total number, of vehicles we are able to sell;
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•
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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;
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•
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high levels of competition in our industry, which may create pricing and margin pressures on our products and services;
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•
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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;
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•
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the availability of manufacturer incentive programs and our ability to earn these incentives;
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•
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failure of our management information systems or any security breaches;
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•
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changes in laws and regulations governing the operation of automobile franchises, including consumer protections, accounting standards, taxation requirements, and environmental laws;
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•
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changes in, or the imposition of, new tariffs or trade restrictions on imported vehicles or parts;
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•
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adverse results from litigation or other similar proceedings involving us;
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•
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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;
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•
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any disruptions in the financial markets, which may impact our ability to access capital;
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•
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our relationships with, and the financial stability of, our lenders and lessors;
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•
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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;
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•
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our ability to execute our initiatives and other strategies; and
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•
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our ability to leverage gains from our dealership portfolio.
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•
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the respective charters of our audit committee, governance and nominating committee, compensation and human resources committee, and capital allocation and risk management committee;
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•
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our criteria for independence of the members of our board of directors, audit committee, and compensation and human resources committee;
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•
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our Corporate Governance Guidelines; and
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•
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our Code of Business Conduct and Ethics for Directors, Officers, and Employees.
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Dealership Group
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Market
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Franchise Brand Name
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Coggin Automotive Group
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Fort Pierce, FL
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Acura, BMW, Honda, Mercedes-Benz
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Jacksonville, FL
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Buick, Chevrolet, Ford, GMC, Honda(a), Nissan(a), Toyota
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Orlando, FL
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Ford, Honda(a), Hyundai, Lincoln
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Courtesy Autogroup
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Tampa, FL
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Chrysler, Dodge, Honda, Hyundai, Infiniti, Jeep, Kia, Mercedes-Benz, Nissan, smart (c), Sprinter, Toyota
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Crown Automotive Company
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Durham, NC
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Honda
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Fayetteville, NC
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Dodge, Ford
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Greensboro, NC
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Acura, BMW, Chrysler, Dodge, Honda, Jeep, Nissan, Volvo
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Greenville, SC
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Jaguar, Land Rover, Lexus, Nissan, Porsche, Toyota, Volvo
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Charlottesville, VA
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BMW
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Richmond, VA
|
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Acura, BMW(a), MINI
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|
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David McDavid Auto Group
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Austin, TX
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Acura
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Dallas/Fort Worth, TX
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Acura, Ford, Honda(a), Lincoln
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Houston, TX
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Nissan
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|
|
|
|
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Gray-Daniels Auto Family
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Jackson, MS
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Chevrolet, Ford, Lincoln, Nissan(a), Toyota
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Hare Automotive Group
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Indianapolis, IN
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Chevrolet, Honda, Isuzu
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Nalley Automotive Group
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Atlanta, GA
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Acura, Audi, Bentley, BMW, Chevrolet, Ford, Honda, Hyundai, Infiniti(a), Kia, Lexus(a), Nissan(a), Toyota(b), Volkswagen
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Plaza Motor Company
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St. Louis, MO
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Audi, BMW, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz(a), smart (c), Sprinter(a)
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(a)
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This market has two of these franchises.
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(b)
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This market has three of these franchises.
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(c)
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Parts and service operations only.
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Class/Franchise
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Number of
Franchises Owned |
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% of New
Vehicle Revenues |
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Luxury
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Mercedes-Benz
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4
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6
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%
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Lexus
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4
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7
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BMW
|
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7
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5
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Acura
|
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6
|
|
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4
|
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Infiniti
|
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4
|
|
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3
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Audi
|
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2
|
|
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3
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Lincoln
|
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3
|
|
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2
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Volvo
|
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2
|
|
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1
|
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Land Rover
|
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2
|
|
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2
|
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Jaguar
|
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2
|
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*
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Porsche
|
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1
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|
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*
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Bentley
|
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1
|
|
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*
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Total Luxury
|
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38
|
|
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33
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%
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Import
|
|
|
|
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Honda
|
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12
|
|
|
19
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%
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Toyota
|
|
7
|
|
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12
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Nissan
|
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10
|
|
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11
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Kia
|
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2
|
|
|
2
|
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Hyundai
|
|
3
|
|
|
2
|
|
Volkswagen
|
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1
|
|
|
1
|
|
MINI
|
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1
|
|
|
*
|
|
smart (a)
|
|
—
|
|
|
*
|
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Isuzu
|
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1
|
|
|
*
|
|
Sprinter
|
|
3
|
|
|
*
|
|
Total Import
|
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40
|
|
|
47
|
%
|
Domestic
|
|
|
|
|
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Ford
|
|
6
|
|
|
10
|
%
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Chevrolet
|
|
4
|
|
|
5
|
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Dodge
|
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3
|
|
|
3
|
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Jeep
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2
|
|
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1
|
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GMC
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1
|
|
|
1
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Chrysler
|
|
2
|
|
|
*
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Buick
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1
|
|
|
*
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Total Domestic
|
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19
|
|
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20
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%
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Total Franchises
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97
|
|
|
100
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%
|
•
|
Extended service contracts – covers certain repair work after the expiration of the manufacturer warranty;
|
•
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GAP debt cancellation – covers the customer after a total loss for the difference between the value of the vehicle and the outstanding loan or lease obligation after insurance proceeds;
|
•
|
Prepaid maintenance – covers certain routine maintenance work, such as oil changes, cleaning and adjusting of brakes, multi-point vehicle inspections, and tire rotations; and
|
•
|
Credit life and disability – covers the remaining amounts due on an auto loan or a lease in the event of death or disability.
|
•
|
inventories of new vehicles and manufacturer replacement parts;
|
•
|
maintenance of minimum net working capital requirements, and in some cases, minimum net worth requirements;
|
•
|
achievement of certain sales and customer satisfaction targets;
|
•
|
advertising and marketing practices;
|
•
|
facilities and signs;
|
•
|
products offered to customers;
|
•
|
dealership management;
|
•
|
personnel training;
|
•
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information systems;
|
•
|
geographic market, including but not limited to requirements to meet sales and service targets within an assigned market area, geographic limitations on where the dealership may locate or advertise, and restrictions on the export of vehicles; and
|
•
|
dealership monthly and annual financial reporting.
|
•
|
insolvency or bankruptcy of the dealership;
|
•
|
failure to adequately operate the dealership or to maintain required capitalization levels;
|
•
|
impairment of the reputation or financial condition of the dealership;
|
•
|
change of ownership or management of the dealership without manufacturer consent;
|
•
|
certain extraordinary corporate transactions such as a merger or sale of all or substantially all of our assets without manufacturer consent;
|
•
|
failure to complete facility upgrades required by the manufacturer or agreed to by the dealer;
|
•
|
failure to maintain any license, permits or authorization required to conduct the dealership's business;
|
•
|
conviction of a dealer/manager or owner for certain crimes; or
|
•
|
material breach of other provisions of a dealer agreement.
|
•
|
company-wide performance criteria;
|
•
|
capitalization requirements;
|
•
|
limitations on changes in our ownership or management;
|
•
|
limitations on the number of a particular manufacturer's franchises owned by us;
|
•
|
restrictions or prohibitions on our ability to pledge the stock of certain of our subsidiaries; and
|
•
|
conditions for consent to proposed acquisitions, including sales and customer satisfaction criteria, as well as limitations on the total local, regional, and national market share percentage that would be represented by a particular manufacturer's franchises owned by us after giving effect to a proposed acquisition.
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Manufacturer (Vehicle Brands):
|
|
% of Total
New Vehicle
Revenues
|
|
American Honda Motor Co., Inc. (
Honda and Acura
)
|
|
23.7
|
%
|
Toyota Motor Sales, U.S.A., Inc. (
Toyota and Lexus
)
|
|
18.4
|
%
|
Nissan North America, Inc. (
Nissan and Infiniti
)
|
|
14.4
|
%
|
Ford Motor Company (
Ford and Lincoln
)
|
|
11.1
|
%
|
Mercedes-Benz USA, LLC (
Mercedes-Benz, smart and Sprinter
)
|
|
6.5
|
%
|
BMW of North America, LLC (
BMW and Mini
)
|
|
5.6
|
%
|
|
|
Dealerships
|
|
|
Collision Repair Centers
|
||||||||
Dealership Group:
|
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Owned
|
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Leased
|
|
|
Owned
|
|
Leased
|
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Coggin Automotive Group
|
|
12
|
|
|
4
|
|
(a)
|
|
5
|
|
|
2
|
|
Courtesy Autogroup
|
|
5
|
|
|
3
|
|
|
|
2
|
|
|
—
|
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Crown Automotive Company
|
|
13
|
|
|
5
|
|
(b)
|
|
3
|
|
|
—
|
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David McDavid Auto Group
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7
|
|
|
—
|
|
|
|
4
|
|
|
1
|
|
Gray-Daniels Auto Family
|
|
—
|
|
|
5
|
|
(b)
|
|
—
|
|
|
1
|
|
Hare Automotive Group
|
|
3
|
|
|
—
|
|
|
|
—
|
|
|
1
|
|
Nalley Automotive Group
|
|
18
|
|
|
1
|
|
|
|
4
|
|
|
1
|
|
Plaza Motor Company
|
|
6
|
|
|
1
|
|
(b)
|
|
—
|
|
|
1
|
|
Total
|
|
64
|
|
|
19
|
|
|
|
18
|
|
|
7
|
|
(a)
|
Includes one dealership that leases a new vehicle facility and operates a separate used vehicle facility that is owned.
|
(b)
|
Includes one dealership location where we lease the underlying land but own the building facilities on that land.
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Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
||||
Fiscal Year Ended December 31, 2017
|
|
|
|
||||
First Quarter
|
$
|
69.45
|
|
|
$
|
60.10
|
|
Second Quarter
|
63.65
|
|
|
52.25
|
|
||
Third Quarter
|
61.60
|
|
|
50.15
|
|
||
Fourth Quarter
|
$
|
67.75
|
|
|
$
|
55.05
|
|
Fiscal Year Ended December 31, 2018
|
|
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|
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First Quarter
|
$
|
75.85
|
|
|
$
|
63.25
|
|
Second Quarter
|
75.80
|
|
|
63.65
|
|
||
Third Quarter
|
77.40
|
|
|
67.35
|
|
||
Fourth Quarter
|
$
|
71.51
|
|
|
$
|
59.04
|
|
Period
|
|
Total Number of Shares Purchased(1)
|
|
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 Program (in millions)(1)
|
||||||
10/1/2018 - 10/31/2018
|
|
621,553
|
|
|
$
|
63.48
|
|
|
621,201
|
|
|
$
|
90.4
|
|
11/1/2018 - 11/30/2018
|
|
56,546
|
|
|
$
|
67.12
|
|
|
56,482
|
|
|
$
|
86.6
|
|
12/1/2018 - 12/31/2018
|
|
79,169
|
|
|
$
|
64.76
|
|
|
79,169
|
|
|
$
|
81.5
|
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
Income Statement Data:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(in millions, except per share data)
|
||||||||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New vehicle
|
|
$
|
3,788.7
|
|
|
$
|
3,561.1
|
|
|
$
|
3,611.9
|
|
|
$
|
3,652.5
|
|
|
$
|
3,230.6
|
|
Used vehicle
|
|
1,972.4
|
|
|
1,834.1
|
|
|
1,876.4
|
|
|
1,931.7
|
|
|
1,741.5
|
|
|||||
Parts and service
|
|
821.0
|
|
|
786.1
|
|
|
778.5
|
|
|
740.7
|
|
|
666.6
|
|
|||||
Finance and insurance, net
|
|
292.3
|
|
|
275.2
|
|
|
261.0
|
|
|
263.4
|
|
|
229.0
|
|
|||||
TOTAL REVENUE
|
|
6,874.4
|
|
|
6,456.5
|
|
|
6,527.8
|
|
|
6,588.3
|
|
|
5,867.7
|
|
|||||
COST OF SALES
|
|
5,771.4
|
|
|
5,400.6
|
|
|
5,469.1
|
|
|
5,527.5
|
|
|
4,900.5
|
|
|||||
GROSS PROFIT
|
|
1,103.0
|
|
|
1,055.9
|
|
|
1,058.7
|
|
|
1,060.8
|
|
|
967.2
|
|
|||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general, and administrative expenses
|
|
755.8
|
|
|
729.7
|
|
|
732.5
|
|
|
729.9
|
|
|
671.6
|
|
|||||
Depreciation and amortization
|
|
33.7
|
|
|
32.1
|
|
|
30.7
|
|
|
29.5
|
|
|
26.4
|
|
|||||
Franchise rights impairment
|
|
3.7
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other operating expense (income), net
|
|
(1.1
|
)
|
|
1.3
|
|
|
(2.3
|
)
|
|
(0.2
|
)
|
|
1.0
|
|
|||||
INCOME FROM OPERATIONS
|
|
310.9
|
|
|
287.7
|
|
|
297.8
|
|
|
301.6
|
|
|
268.2
|
|
|||||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Floor plan interest expense
|
|
32.5
|
|
|
22.7
|
|
|
19.3
|
|
|
16.1
|
|
|
12.4
|
|
|||||
Other interest expense, net
|
|
53.1
|
|
|
53.9
|
|
|
53.1
|
|
|
44.0
|
|
|
38.9
|
|
|||||
Swap interest expense
|
|
0.5
|
|
|
2.0
|
|
|
3.1
|
|
|
3.0
|
|
|
2.0
|
|
|||||
Loss on extinguishment of long-term debt, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.9
|
|
|||||
Gain on divestitures
|
|
—
|
|
|
—
|
|
|
(45.5
|
)
|
|
(34.9
|
)
|
|
—
|
|
|||||
Total other expenses, net
|
|
86.1
|
|
|
78.6
|
|
|
30.0
|
|
|
28.2
|
|
|
85.2
|
|
|||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX
|
|
224.8
|
|
|
209.1
|
|
|
267.8
|
|
|
273.4
|
|
|
183.0
|
|
|||||
Income tax expense
|
|
56.8
|
|
|
70.0
|
|
|
100.6
|
|
|
104.0
|
|
|
71.0
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
|
168.0
|
|
|
139.1
|
|
|
167.2
|
|
|
169.4
|
|
|
112.0
|
|
|||||
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||||
NET INCOME
|
|
$
|
168.0
|
|
|
$
|
139.1
|
|
|
$
|
167.2
|
|
|
$
|
169.2
|
|
|
$
|
111.6
|
|
Income from continuing operations per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
8.36
|
|
|
$
|
6.69
|
|
|
$
|
7.43
|
|
|
$
|
6.44
|
|
|
$
|
3.75
|
|
Diluted
|
|
$
|
8.28
|
|
|
$
|
6.62
|
|
|
$
|
7.40
|
|
|
$
|
6.42
|
|
|
$
|
3.72
|
|
|
|
As of December 31,
|
||||||||||||||||||
Balance Sheet Data:
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Working capital
|
|
$
|
249.7
|
|
|
$
|
243.9
|
|
|
$
|
227.5
|
|
|
$
|
323.4
|
|
|
$
|
225.4
|
|
Inventories
|
|
1,067.6
|
|
|
826.0
|
|
|
894.9
|
|
|
917.2
|
|
|
886.0
|
|
|||||
Total assets
|
|
2,695.4
|
|
|
2,356.7
|
|
|
2,336.1
|
|
|
2,294.1
|
|
|
2,178.0
|
|
|||||
Floor plan notes payable
|
|
966.1
|
|
|
732.1
|
|
|
781.8
|
|
|
712.2
|
|
|
766.8
|
|
|||||
Total debt
|
|
905.3
|
|
|
875.5
|
|
|
926.7
|
|
|
954.3
|
|
|
697.4
|
|
|||||
Total shareholders' equity
|
|
$
|
473.2
|
|
|
$
|
394.2
|
|
|
$
|
279.7
|
|
|
$
|
314.5
|
|
|
$
|
444.9
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
3,788.7
|
|
|
$
|
3,561.1
|
|
|
$
|
227.6
|
|
|
6
|
%
|
Used vehicle
|
1,972.4
|
|
|
1,834.1
|
|
|
138.3
|
|
|
8
|
%
|
|||
Parts and service
|
821.0
|
|
|
786.1
|
|
|
34.9
|
|
|
4
|
%
|
|||
Finance and insurance, net
|
292.3
|
|
|
275.2
|
|
|
17.1
|
|
|
6
|
%
|
|||
TOTAL REVENUE
|
6,874.4
|
|
|
6,456.5
|
|
|
417.9
|
|
|
6
|
%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
165.2
|
|
|
169.0
|
|
|
(3.8
|
)
|
|
(2
|
)%
|
|||
Used vehicle
|
129.7
|
|
|
121.9
|
|
|
7.8
|
|
|
6
|
%
|
|||
Parts and service
|
515.8
|
|
|
489.8
|
|
|
26.0
|
|
|
5
|
%
|
|||
Finance and insurance, net
|
292.3
|
|
|
275.2
|
|
|
17.1
|
|
|
6
|
%
|
|||
TOTAL GROSS PROFIT
|
1,103.0
|
|
|
1,055.9
|
|
|
47.1
|
|
|
4
|
%
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
755.8
|
|
|
729.7
|
|
|
26.1
|
|
|
4
|
%
|
|||
Depreciation and amortization
|
33.7
|
|
|
32.1
|
|
|
1.6
|
|
|
5
|
%
|
|||
Franchise rights impairment
|
3.7
|
|
|
5.1
|
|
|
(1.4
|
)
|
|
(27
|
)%
|
|||
Other operating (income) expenses, net
|
(1.1
|
)
|
|
1.3
|
|
|
(2.4
|
)
|
|
(185
|
)%
|
|||
INCOME FROM OPERATIONS
|
310.9
|
|
|
287.7
|
|
|
23.2
|
|
|
8
|
%
|
|||
OTHER EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
32.5
|
|
|
22.7
|
|
|
9.8
|
|
|
43
|
%
|
|||
Other interest expense, net
|
53.1
|
|
|
53.9
|
|
|
(0.8
|
)
|
|
(1
|
)%
|
|||
Swap interest expense
|
0.5
|
|
|
2.0
|
|
|
(1.5
|
)
|
|
(75
|
)%
|
|||
Total other expenses, net
|
86.1
|
|
|
78.6
|
|
|
7.5
|
|
|
10
|
%
|
|||
INCOME BEFORE INCOME TAXES
|
224.8
|
|
|
209.1
|
|
|
15.7
|
|
|
8
|
%
|
|||
Income tax expense
|
56.8
|
|
|
70.0
|
|
|
(13.2
|
)
|
|
(19
|
)%
|
|||
NET INCOME
|
$
|
168.0
|
|
|
$
|
139.1
|
|
|
$
|
28.9
|
|
|
21
|
%
|
Net income per common share—Diluted
|
$
|
8.28
|
|
|
$
|
6.62
|
|
|
$
|
1.66
|
|
|
25
|
%
|
|
For the Year Ended December 31,
|
||||
|
2018
|
|
2017
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicles
|
55.1
|
%
|
|
55.2
|
%
|
Used retail vehicles
|
25.9
|
%
|
|
25.2
|
%
|
Used vehicle wholesale
|
2.8
|
%
|
|
3.1
|
%
|
Parts and service
|
11.9
|
%
|
|
12.2
|
%
|
Finance and insurance, net
|
4.3
|
%
|
|
4.3
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicles
|
15.0
|
%
|
|
16.0
|
%
|
Used retail vehicles
|
11.5
|
%
|
|
11.4
|
%
|
Used vehicle wholesale
|
0.2
|
%
|
|
0.1
|
%
|
Parts and service
|
46.8
|
%
|
|
46.4
|
%
|
Finance and insurance, net
|
26.5
|
%
|
|
26.1
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
16.0
|
%
|
|
16.4
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
68.5
|
%
|
|
69.1
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
1,235.3
|
|
|
$
|
1,200.2
|
|
|
$
|
35.1
|
|
|
3
|
%
|
Import
|
1,790.2
|
|
|
1,637.4
|
|
|
152.8
|
|
|
9
|
%
|
|||
Domestic
|
763.2
|
|
|
723.5
|
|
|
39.7
|
|
|
5
|
%
|
|||
Total new vehicle revenue
|
$
|
3,788.7
|
|
|
$
|
3,561.1
|
|
|
$
|
227.6
|
|
|
6
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
80.0
|
|
|
$
|
78.9
|
|
|
$
|
1.1
|
|
|
1
|
%
|
Import
|
52.6
|
|
|
56.8
|
|
|
(4.2
|
)
|
|
(7
|
)%
|
|||
Domestic
|
32.6
|
|
|
33.3
|
|
|
(0.7
|
)
|
|
(2
|
)%
|
|||
Total new vehicle gross profit
|
$
|
165.2
|
|
|
$
|
169.0
|
|
|
$
|
(3.8
|
)
|
|
(2
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
22,979
|
|
|
22,525
|
|
|
454
|
|
|
2
|
%
|
|||
Import
|
62,939
|
|
|
58,685
|
|
|
4,254
|
|
|
7
|
%
|
|||
Domestic
|
19,357
|
|
|
18,765
|
|
|
592
|
|
|
3
|
%
|
|||
Total new vehicle units
|
105,275
|
|
|
99,975
|
|
|
5,300
|
|
|
5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
1,235.3
|
|
|
$
|
1,200.2
|
|
|
$
|
35.1
|
|
|
3
|
%
|
Import
|
1,706.7
|
|
|
1,636.2
|
|
|
70.5
|
|
|
4
|
%
|
|||
Domestic
|
740.3
|
|
|
722.2
|
|
|
18.1
|
|
|
3
|
%
|
|||
Total new vehicle revenue
|
$
|
3,682.3
|
|
|
$
|
3,558.6
|
|
|
$
|
123.7
|
|
|
3
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
80.0
|
|
|
$
|
78.9
|
|
|
$
|
1.1
|
|
|
1
|
%
|
Import
|
49.7
|
|
|
56.7
|
|
|
(7.0
|
)
|
|
(12
|
)%
|
|||
Domestic
|
31.7
|
|
|
33.2
|
|
|
(1.5
|
)
|
|
(5
|
)%
|
|||
Total new vehicle gross profit
|
$
|
161.4
|
|
|
$
|
168.8
|
|
|
$
|
(7.4
|
)
|
|
(4
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
22,979
|
|
|
22,525
|
|
|
454
|
|
|
2
|
%
|
|||
Import
|
60,010
|
|
|
58,648
|
|
|
1,362
|
|
|
2
|
%
|
|||
Domestic
|
18,676
|
|
|
18,727
|
|
|
(51
|
)
|
|
—
|
%
|
|||
Total new vehicle units
|
101,665
|
|
|
99,900
|
|
|
1,765
|
|
|
2
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,989
|
|
|
$
|
35,620
|
|
|
$
|
369
|
|
|
1
|
%
|
Gross profit per new vehicle sold
|
$
|
1,569
|
|
|
$
|
1,690
|
|
|
$
|
(121
|
)
|
|
(7
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
3,481
|
|
|
3,503
|
|
|
(22
|
)
|
|
(1
|
)%
|
|||
New vehicle gross margin
|
6.5
|
%
|
|
6.6
|
%
|
|
(0.1
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
836
|
|
|
$
|
968
|
|
|
$
|
(132
|
)
|
|
(14
|
)%
|
New vehicle gross margin
|
2.9
|
%
|
|
3.5
|
%
|
|
(0.6
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,684
|
|
|
$
|
1,775
|
|
|
$
|
(91
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.6
|
%
|
|
(0.3
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
36,220
|
|
|
$
|
35,622
|
|
|
$
|
598
|
|
|
2
|
%
|
Gross profit per new vehicle sold
|
$
|
1,588
|
|
|
$
|
1,690
|
|
|
$
|
(102
|
)
|
|
(6
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,481
|
|
|
$
|
3,503
|
|
|
$
|
(22
|
)
|
|
(1
|
)%
|
New vehicle gross margin
|
6.5
|
%
|
|
6.6
|
%
|
|
(0.1
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
828
|
|
|
$
|
967
|
|
|
$
|
(139
|
)
|
|
(14
|
)%
|
New vehicle gross margin
|
2.9
|
%
|
|
3.5
|
%
|
|
(0.6
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,697
|
|
|
$
|
1,773
|
|
|
$
|
(76
|
)
|
|
(4
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.6
|
%
|
|
(0.3
|
)%
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenues
|
$
|
1,783.3
|
|
|
$
|
1,635.3
|
|
|
$
|
148.0
|
|
|
9
|
%
|
Used vehicle wholesale revenues
|
189.1
|
|
|
198.8
|
|
|
(9.7
|
)
|
|
(5
|
)%
|
|||
Used vehicle revenue
|
$
|
1,972.4
|
|
|
$
|
1,834.1
|
|
|
$
|
138.3
|
|
|
8
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
127.8
|
|
|
$
|
121.1
|
|
|
$
|
6.7
|
|
|
6
|
%
|
Used vehicle wholesale gross profit
|
1.9
|
|
|
0.8
|
|
|
1.1
|
|
|
138
|
%
|
|||
Used vehicle gross profit
|
$
|
129.7
|
|
|
$
|
121.9
|
|
|
$
|
7.8
|
|
|
6
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
82,377
|
|
|
76,929
|
|
|
5,448
|
|
|
7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenues
|
$
|
1,737.2
|
|
|
$
|
1,625.0
|
|
|
$
|
112.2
|
|
|
7
|
%
|
Used vehicle wholesale revenues
|
185.8
|
|
|
197.7
|
|
|
(11.9
|
)
|
|
(6
|
)%
|
|||
Used vehicle revenue
|
$
|
1,923.0
|
|
|
$
|
1,822.7
|
|
|
$
|
100.3
|
|
|
6
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
124.5
|
|
|
$
|
120.4
|
|
|
$
|
4.1
|
|
|
3
|
%
|
Used vehicle wholesale gross profit
|
2.1
|
|
|
1.2
|
|
|
0.9
|
|
|
75
|
%
|
|||
Used vehicle gross profit
|
$
|
126.6
|
|
|
$
|
121.6
|
|
|
$
|
5.0
|
|
|
4
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
79,789
|
|
|
76,285
|
|
|
3,504
|
|
|
5
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,648
|
|
|
$
|
21,257
|
|
|
$
|
391
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,551
|
|
|
$
|
1,574
|
|
|
$
|
(23
|
)
|
|
(1
|
)%
|
Used vehicle retail gross margin
|
7.2
|
%
|
|
7.4
|
%
|
|
(0.2
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,772
|
|
|
$
|
21,302
|
|
|
$
|
470
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,560
|
|
|
$
|
1,578
|
|
|
$
|
(18
|
)
|
|
(1
|
)%
|
Used vehicle retail gross margin
|
7.2
|
%
|
|
7.4
|
%
|
|
(0.2
|
)%
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
821.0
|
|
|
$
|
786.1
|
|
|
$
|
34.9
|
|
|
4
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
$
|
292.0
|
|
|
$
|
272.3
|
|
|
$
|
19.7
|
|
|
7
|
%
|
Warranty
|
76.8
|
|
|
81.7
|
|
|
(4.9
|
)
|
|
(6
|
)%
|
|||
Wholesale parts
|
22.8
|
|
|
21.2
|
|
|
1.6
|
|
|
8
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
391.6
|
|
|
$
|
375.2
|
|
|
$
|
16.4
|
|
|
4
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.7
|
%
|
|
47.7
|
%
|
|
—
|
%
|
|
|
||||
Reconditioning and preparation
|
124.2
|
|
|
114.6
|
|
|
9.6
|
|
|
8
|
%
|
|||
Total parts and service gross profit
|
515.8
|
|
|
489.8
|
|
|
26.0
|
|
|
5
|
%
|
|||
Total parts and service gross margin
|
62.8
|
%
|
|
62.3
|
%
|
|
0.5
|
%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
804.1
|
|
|
$
|
785.6
|
|
|
$
|
18.5
|
|
|
2
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
$
|
286.2
|
|
|
$
|
272.1
|
|
|
$
|
14.1
|
|
|
5
|
%
|
Warranty
|
75.5
|
|
|
81.7
|
|
|
(6.2
|
)
|
|
(8
|
)%
|
|||
Wholesale parts
|
22.3
|
|
|
21.1
|
|
|
1.2
|
|
|
6
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
384.0
|
|
|
$
|
374.9
|
|
|
$
|
9.1
|
|
|
2
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.8
|
%
|
|
47.7
|
%
|
|
0.1
|
%
|
|
|
||||
Reconditioning and preparation
|
121.1
|
|
|
114.3
|
|
|
6.8
|
|
|
6
|
%
|
|||
Total parts and service gross profit
|
505.1
|
|
|
489.2
|
|
|
15.9
|
|
|
3
|
%
|
|||
Total parts and service gross margin
|
62.8
|
%
|
|
62.3
|
%
|
|
0.5
|
%
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
292.3
|
|
|
$
|
275.2
|
|
|
$
|
17.1
|
|
|
6
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,558
|
|
|
$
|
1,556
|
|
|
$
|
2
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
284.9
|
|
|
$
|
274.3
|
|
|
$
|
10.6
|
|
|
4
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,570
|
|
|
$
|
1,557
|
|
|
$
|
13
|
|
|
1
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
% of Gross
Profit Increase (Decrease) |
|||||||||||||||
|
2018
|
|
% of Gross
Profit
|
|
2017
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
362.6
|
|
|
32.9
|
%
|
|
$
|
348.7
|
|
|
33.0
|
%
|
|
$
|
13.9
|
|
|
(0.1
|
)%
|
Sales compensation
|
115.6
|
|
|
10.5
|
%
|
|
111.1
|
|
|
10.5
|
%
|
|
4.5
|
|
|
—
|
%
|
|||
Share-based compensation
|
10.5
|
|
|
1.0
|
%
|
|
13.6
|
|
|
1.3
|
%
|
|
(3.1
|
)
|
|
(0.3
|
)%
|
|||
Outside services
|
83.0
|
|
|
7.5
|
%
|
|
80.8
|
|
|
7.7
|
%
|
|
2.2
|
|
|
(0.2
|
)%
|
|||
Advertising
|
30.6
|
|
|
2.8
|
%
|
|
30.3
|
|
|
2.9
|
%
|
|
0.3
|
|
|
(0.1
|
)%
|
|||
Rent
|
25.6
|
|
|
2.3
|
%
|
|
26.7
|
|
|
2.5
|
%
|
|
(1.1
|
)
|
|
(0.2
|
)%
|
|||
Utilities
|
16.2
|
|
|
1.5
|
%
|
|
15.4
|
|
|
1.5
|
%
|
|
0.8
|
|
|
—
|
%
|
|||
Insurance
|
14.7
|
|
|
1.3
|
%
|
|
13.4
|
|
|
1.3
|
%
|
|
1.3
|
|
|
—
|
%
|
|||
Other
|
97.0
|
|
|
8.7
|
%
|
|
89.7
|
|
|
8.4
|
%
|
|
7.3
|
|
|
0.3
|
%
|
|||
Selling, general, and administrative expense
|
$
|
755.8
|
|
|
68.5
|
%
|
|
$
|
729.7
|
|
|
69.1
|
%
|
|
$
|
26.1
|
|
|
(0.6
|
)%
|
Gross profit
|
$
|
1,103.0
|
|
|
|
|
$
|
1,055.9
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
353.9
|
|
|
32.8
|
%
|
|
$
|
347.4
|
|
|
33.0
|
%
|
|
$
|
6.5
|
|
|
(0.2
|
)%
|
Sales compensation
|
112.3
|
|
|
10.4
|
%
|
|
110.7
|
|
|
10.5
|
%
|
|
1.6
|
|
|
(0.1
|
)%
|
|||
Share-based compensation
|
10.5
|
|
|
1.0
|
%
|
|
13.6
|
|
|
1.3
|
%
|
|
(3.1
|
)
|
|
(0.3
|
)%
|
|||
Outside services
|
81.1
|
|
|
7.5
|
%
|
|
80.2
|
|
|
7.6
|
%
|
|
0.9
|
|
|
(0.1
|
)%
|
|||
Advertising
|
29.1
|
|
|
2.7
|
%
|
|
30.0
|
|
|
2.8
|
%
|
|
(0.9
|
)
|
|
(0.1
|
)%
|
|||
Rent
|
25.5
|
|
|
2.4
|
%
|
|
26.7
|
|
|
2.5
|
%
|
|
(1.2
|
)
|
|
(0.1
|
)%
|
|||
Utilities
|
15.7
|
|
|
1.5
|
%
|
|
15.3
|
|
|
1.5
|
%
|
|
0.4
|
|
|
—
|
%
|
|||
Insurance
|
14.2
|
|
|
1.3
|
%
|
|
13.3
|
|
|
1.3
|
%
|
|
0.9
|
|
|
—
|
%
|
|||
Other
|
95.4
|
|
|
8.8
|
%
|
|
89.3
|
|
|
8.4
|
%
|
|
6.1
|
|
|
0.4
|
%
|
|||
Selling, general, and administrative expense
|
$
|
737.7
|
|
|
68.4
|
%
|
|
$
|
726.5
|
|
|
68.9
|
%
|
|
$
|
11.2
|
|
|
(0.5
|
)%
|
Gross profit
|
$
|
1,078.0
|
|
|
|
|
$
|
1,053.9
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
3,561.1
|
|
|
$
|
3,611.9
|
|
|
$
|
(50.8
|
)
|
|
(1
|
)%
|
Used vehicle
|
1,834.1
|
|
|
1,876.4
|
|
|
(42.3
|
)
|
|
(2
|
)%
|
|||
Parts and service
|
786.1
|
|
|
778.5
|
|
|
7.6
|
|
|
1
|
%
|
|||
Finance and insurance, net
|
275.2
|
|
|
261.0
|
|
|
14.2
|
|
|
5
|
%
|
|||
TOTAL REVENUE
|
6,456.5
|
|
|
6,527.8
|
|
|
(71.3
|
)
|
|
(1
|
)%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
169.0
|
|
|
187.1
|
|
|
(18.1
|
)
|
|
(10
|
)%
|
|||
Used vehicle
|
121.9
|
|
|
127.3
|
|
|
(5.4
|
)
|
|
(4
|
)%
|
|||
Parts and service
|
489.8
|
|
|
483.3
|
|
|
6.5
|
|
|
1
|
%
|
|||
Finance and insurance, net
|
275.2
|
|
|
261.0
|
|
|
14.2
|
|
|
5
|
%
|
|||
TOTAL GROSS PROFIT
|
1,055.9
|
|
|
1,058.7
|
|
|
(2.8
|
)
|
|
—
|
%
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
729.7
|
|
|
732.5
|
|
|
(2.8
|
)
|
|
—
|
%
|
|||
Depreciation and amortization
|
32.1
|
|
|
30.7
|
|
|
1.4
|
|
|
5
|
%
|
|||
Franchise rights impairment
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|
—
|
%
|
|||
Other operating expenses (income), net
|
1.3
|
|
|
(2.3
|
)
|
|
3.6
|
|
|
NM
|
|
|||
INCOME FROM OPERATIONS
|
287.7
|
|
|
297.8
|
|
|
(10.1
|
)
|
|
(3
|
)%
|
|||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
22.7
|
|
|
19.3
|
|
|
3.4
|
|
|
18
|
%
|
|||
Other interest expense, net
|
53.9
|
|
|
53.1
|
|
|
0.8
|
|
|
2
|
%
|
|||
Swap interest expense
|
2.0
|
|
|
3.1
|
|
|
(1.1
|
)
|
|
(35
|
)%
|
|||
Gain on divestitures
|
—
|
|
|
(45.5
|
)
|
|
45.5
|
|
|
(100
|
)%
|
|||
Total other expenses, net
|
78.6
|
|
|
30.0
|
|
|
48.6
|
|
|
162
|
%
|
|||
INCOME BEFORE INCOME TAXES
|
209.1
|
|
|
267.8
|
|
|
(58.7
|
)
|
|
(22
|
)%
|
|||
Income tax expense
|
70.0
|
|
|
100.6
|
|
|
(30.6
|
)
|
|
(30
|
)%
|
|||
NET INCOME
|
$
|
139.1
|
|
|
$
|
167.2
|
|
|
$
|
(28.1
|
)
|
|
(17
|
)%
|
Net income per common share—Diluted
|
$
|
6.62
|
|
|
$
|
7.40
|
|
|
$
|
(0.78
|
)
|
|
(11
|
)%
|
|
For the Year Ended December 31,
|
||||
|
2017
|
|
2016
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicles
|
55.2
|
%
|
|
55.3
|
%
|
Used retail vehicles
|
25.2
|
%
|
|
25.7
|
%
|
Used vehicle wholesale
|
3.1
|
%
|
|
3.1
|
%
|
Parts and service
|
12.2
|
%
|
|
11.9
|
%
|
Finance and insurance, net
|
4.3
|
%
|
|
4.0
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicles
|
16.0
|
%
|
|
17.7
|
%
|
Used retail vehicles
|
11.4
|
%
|
|
12.3
|
%
|
Used vehicle wholesale
|
0.1
|
%
|
|
(0.3
|
)%
|
Parts and service
|
46.4
|
%
|
|
45.6
|
%
|
Finance and insurance, net
|
26.1
|
%
|
|
24.7
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
16.4
|
%
|
|
16.2
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
69.1
|
%
|
|
69.2
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
1,200.2
|
|
|
$
|
1,251.3
|
|
|
$
|
(51.1
|
)
|
|
(4
|
)%
|
Import
|
1,637.4
|
|
|
1,617.8
|
|
|
19.6
|
|
|
1
|
%
|
|||
Domestic
|
723.5
|
|
|
742.8
|
|
|
(19.3
|
)
|
|
(3
|
)%
|
|||
Total new vehicle revenue
|
$
|
3,561.1
|
|
|
$
|
3,611.9
|
|
|
$
|
(50.8
|
)
|
|
(1
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
78.9
|
|
|
$
|
84.4
|
|
|
$
|
(5.5
|
)
|
|
(7
|
)%
|
Import
|
56.8
|
|
|
68.9
|
|
|
(12.1
|
)
|
|
(18
|
)%
|
|||
Domestic
|
33.3
|
|
|
33.8
|
|
|
(0.5
|
)
|
|
(1
|
)%
|
|||
Total new vehicle gross profit
|
$
|
169.0
|
|
|
$
|
187.1
|
|
|
$
|
(18.1
|
)
|
|
(10
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
22,525
|
|
|
23,875
|
|
|
(1,350
|
)
|
|
(6
|
)%
|
|||
Import
|
58,685
|
|
|
58,466
|
|
|
219
|
|
|
—
|
%
|
|||
Domestic
|
18,765
|
|
|
20,019
|
|
|
(1,254
|
)
|
|
(6
|
)%
|
|||
Total new vehicle units
|
99,975
|
|
|
102,360
|
|
|
(2,385
|
)
|
|
(2
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
1,200.2
|
|
|
$
|
1,226.5
|
|
|
$
|
(26.3
|
)
|
|
(2
|
)%
|
Import
|
1,610.3
|
|
|
1,557.8
|
|
|
52.5
|
|
|
3
|
%
|
|||
Domestic
|
652.2
|
|
|
698.4
|
|
|
(46.2
|
)
|
|
(7
|
)%
|
|||
Total new vehicle revenue
|
$
|
3,462.7
|
|
|
$
|
3,482.7
|
|
|
$
|
(20.0
|
)
|
|
(1
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
79.0
|
|
|
$
|
82.4
|
|
|
$
|
(3.4
|
)
|
|
(4
|
)%
|
Import
|
56.3
|
|
|
67.0
|
|
|
(10.7
|
)
|
|
(16
|
)%
|
|||
Domestic
|
28.7
|
|
|
31.9
|
|
|
(3.2
|
)
|
|
(10
|
)%
|
|||
Total new vehicle gross profit
|
$
|
164.0
|
|
|
$
|
181.3
|
|
|
$
|
(17.3
|
)
|
|
(10
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
22,525
|
|
|
23,424
|
|
|
(899
|
)
|
|
(4
|
)%
|
|||
Import
|
57,813
|
|
|
56,430
|
|
|
1,383
|
|
|
2
|
%
|
|||
Domestic
|
16,731
|
|
|
18,716
|
|
|
(1,985
|
)
|
|
(11
|
)%
|
|||
Total new vehicle units
|
97,069
|
|
|
98,570
|
|
|
(1,501
|
)
|
|
(2
|
)%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,620
|
|
|
$
|
35,286
|
|
|
$
|
334
|
|
|
1
|
%
|
Gross profit per new vehicle sold
|
$
|
1,690
|
|
|
$
|
1,828
|
|
|
$
|
(138
|
)
|
|
(8
|
)%
|
New vehicle gross margin
|
4.7
|
%
|
|
5.2
|
%
|
|
(0.5
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,503
|
|
|
$
|
3,535
|
|
|
$
|
(32
|
)
|
|
(1
|
)%
|
New vehicle gross margin
|
6.6
|
%
|
|
6.7
|
%
|
|
(0.1
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
968
|
|
|
$
|
1,178
|
|
|
$
|
(210
|
)
|
|
(18
|
)%
|
New vehicle gross margin
|
3.5
|
%
|
|
4.3
|
%
|
|
(0.8
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,775
|
|
|
$
|
1,688
|
|
|
$
|
87
|
|
|
5
|
%
|
New vehicle gross margin
|
4.6
|
%
|
|
4.6
|
%
|
|
—
|
%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,673
|
|
|
$
|
35,332
|
|
|
$
|
341
|
|
|
1
|
%
|
Gross profit per new vehicle sold
|
$
|
1,690
|
|
|
$
|
1,839
|
|
|
$
|
(149
|
)
|
|
(8
|
)%
|
New vehicle gross margin
|
4.7
|
%
|
|
5.2
|
%
|
|
(0.5
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,507
|
|
|
$
|
3,518
|
|
|
$
|
(11
|
)
|
|
—
|
%
|
New vehicle gross margin
|
6.6
|
%
|
|
6.7
|
%
|
|
(0.1
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
974
|
|
|
$
|
1,187
|
|
|
$
|
(213
|
)
|
|
(18
|
)%
|
New vehicle gross margin
|
3.5
|
%
|
|
4.3
|
%
|
|
(0.8
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,715
|
|
|
$
|
1,704
|
|
|
$
|
11
|
|
|
1
|
%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.6
|
%
|
|
(0.2
|
)%
|
|
|
|
For the Year Ended December 31,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenues
|
$
|
1,635.3
|
|
|
$
|
1,675.0
|
|
|
$
|
(39.7
|
)
|
|
(2
|
)%
|
Used vehicle wholesale revenues
|
198.8
|
|
|
201.4
|
|
|
(2.6
|
)
|
|
(1
|
)%
|
|||
Used vehicle revenue
|
$
|
1,834.1
|
|
|
$
|
1,876.4
|
|
|
$
|
(42.3
|
)
|
|
(2
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
121.1
|
|
|
$
|
131.0
|
|
|
$
|
(9.9
|
)
|
|
(8
|
)%
|
Used vehicle wholesale gross profit
|
0.8
|
|
|
(3.7
|
)
|
|
4.5
|
|
|
(122
|
)%
|
|||
Used vehicle gross profit
|
$
|
121.9
|
|
|
$
|
127.3
|
|
|
$
|
(5.4
|
)
|
|
(4
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
76,929
|
|
|
79,259
|
|
|
(2,330
|
)
|
|
(3
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenues
|
$
|
1,577.3
|
|
|
$
|
1,571.4
|
|
|
$
|
5.9
|
|
|
—
|
%
|
Used vehicle wholesale revenues
|
190.5
|
|
|
192.3
|
|
|
(1.8
|
)
|
|
(1
|
)%
|
|||
Used vehicle revenue
|
$
|
1,767.8
|
|
|
$
|
1,763.7
|
|
|
$
|
4.1
|
|
|
—
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
115.4
|
|
|
$
|
123.0
|
|
|
$
|
(7.6
|
)
|
|
(6
|
)%
|
Used vehicle wholesale gross profit
|
1.1
|
|
|
(2.9
|
)
|
|
4.0
|
|
|
(138
|
)%
|
|||
Used vehicle gross profit
|
$
|
116.5
|
|
|
$
|
120.1
|
|
|
$
|
(3.6
|
)
|
|
(3
|
)%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
73,772
|
|
|
73,490
|
|
|
282
|
|
|
—
|
%
|
|
For the Year Ended December 31,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,257
|
|
|
$
|
21,133
|
|
|
$
|
124
|
|
|
1
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,574
|
|
|
$
|
1,653
|
|
|
$
|
(79
|
)
|
|
(5
|
)%
|
Used vehicle retail gross margin
|
7.4
|
%
|
|
7.8
|
%
|
|
(0.4
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,381
|
|
|
$
|
21,383
|
|
|
$
|
(2
|
)
|
|
—
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,564
|
|
|
$
|
1,674
|
|
|
$
|
(110
|
)
|
|
(7
|
)%
|
Used vehicle retail gross margin
|
7.3
|
%
|
|
7.8
|
%
|
|
(0.5
|
)%
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change |
|||||||||
|
2017
|
|
2016
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
786.1
|
|
|
$
|
778.5
|
|
|
$
|
7.6
|
|
|
1
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
$
|
272.3
|
|
|
$
|
268.2
|
|
|
$
|
4.1
|
|
|
2
|
%
|
Warranty
|
81.7
|
|
|
73.7
|
|
|
8.0
|
|
|
11
|
%
|
|||
Wholesale parts
|
21.2
|
|
|
20.7
|
|
|
0.5
|
|
|
2
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
375.2
|
|
|
$
|
362.6
|
|
|
$
|
12.6
|
|
|
3
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.7
|
%
|
|
46.6
|
%
|
|
1.1
|
%
|
|
|
||||
Reconditioning and preparation
|
114.6
|
|
|
120.7
|
|
|
(6.1
|
)
|
|
(5
|
)%
|
|||
Total parts and service gross profit
|
$
|
489.8
|
|
|
$
|
483.3
|
|
|
$
|
6.5
|
|
|
1
|
%
|
Total parts and service gross margin
|
62.3
|
%
|
|
62.1
|
%
|
|
0.2
|
%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
772.7
|
|
|
$
|
743.8
|
|
|
$
|
28.9
|
|
|
4
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
$
|
267.2
|
|
|
$
|
257.3
|
|
|
$
|
9.9
|
|
|
4
|
%
|
Warranty
|
80.5
|
|
|
71.4
|
|
|
9.1
|
|
|
13
|
%
|
|||
Wholesale parts
|
21.0
|
|
|
19.4
|
|
|
1.6
|
|
|
8
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
368.7
|
|
|
$
|
348.1
|
|
|
$
|
20.6
|
|
|
6
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.7
|
%
|
|
46.8
|
%
|
|
0.9
|
%
|
|
|
||||
Reconditioning and preparation
|
112.0
|
|
|
114.7
|
|
|
(2.7
|
)
|
|
(2
|
)%
|
|||
Total parts and service gross profit
|
$
|
480.7
|
|
|
$
|
462.8
|
|
|
$
|
17.9
|
|
|
4
|
%
|
Total parts and service gross margin
|
62.2
|
%
|
|
62.2
|
%
|
|
—
|
%
|
|
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
%
Change
|
|||||||||
|
2017
|
|
2016
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
275.2
|
|
|
$
|
261.0
|
|
|
$
|
14.2
|
|
|
5
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,556
|
|
|
$
|
1,437
|
|
|
$
|
119
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
266.9
|
|
|
$
|
249.1
|
|
|
$
|
17.8
|
|
|
7
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,562
|
|
|
$
|
1,448
|
|
|
$
|
114
|
|
|
8
|
%
|
|
For the Year Ended December 31,
|
|
Increase
(Decrease) |
|
% of Gross
Profit (Decrease) Increase
|
|||||||||||||||
|
2017
|
|
% of Gross
Profit
|
|
2016
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
348.7
|
|
|
33.0
|
%
|
|
$
|
343.1
|
|
|
32.4
|
%
|
|
$
|
5.6
|
|
|
0.6
|
%
|
Sales compensation
|
111.1
|
|
|
10.5
|
%
|
|
112.0
|
|
|
10.6
|
%
|
|
(0.9
|
)
|
|
(0.1
|
)%
|
|||
Share-based compensation
|
13.6
|
|
|
1.3
|
%
|
|
12.0
|
|
|
1.1
|
%
|
|
1.6
|
|
|
0.2
|
%
|
|||
Outside services
|
80.8
|
|
|
7.7
|
%
|
|
78.3
|
|
|
7.4
|
%
|
|
2.5
|
|
|
0.3
|
%
|
|||
Advertising
|
30.3
|
|
|
2.9
|
%
|
|
34.0
|
|
|
3.2
|
%
|
|
(3.7
|
)
|
|
(0.3
|
)%
|
|||
Rent
|
26.7
|
|
|
2.5
|
%
|
|
29.9
|
|
|
2.8
|
%
|
|
(3.2
|
)
|
|
(0.3
|
)%
|
|||
Utilities
|
15.4
|
|
|
1.5
|
%
|
|
15.5
|
|
|
1.5
|
%
|
|
(0.1
|
)
|
|
—
|
%
|
|||
Insurance
|
13.4
|
|
|
1.3
|
%
|
|
15.9
|
|
|
1.5
|
%
|
|
(2.5
|
)
|
|
(0.2
|
)%
|
|||
Other
|
89.7
|
|
|
8.4
|
%
|
|
91.8
|
|
|
8.7
|
%
|
|
(2.1
|
)
|
|
(0.3
|
)%
|
|||
Selling, general, and administrative expense
|
$
|
729.7
|
|
|
69.1
|
%
|
|
$
|
732.5
|
|
|
69.2
|
%
|
|
$
|
(2.8
|
)
|
|
(0.1
|
)%
|
Gross profit
|
$
|
1,055.9
|
|
|
|
|
$
|
1,058.7
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
338.2
|
|
|
32.9
|
%
|
|
$
|
327.1
|
|
|
32.3
|
%
|
|
$
|
11.1
|
|
|
0.6
|
%
|
Sales compensation
|
107.2
|
|
|
10.4
|
%
|
|
106.6
|
|
|
10.5
|
%
|
|
0.6
|
|
|
(0.1
|
)%
|
|||
Share-based compensation
|
13.6
|
|
|
1.3
|
%
|
|
12.1
|
|
|
1.2
|
%
|
|
1.5
|
|
|
0.1
|
%
|
|||
Outside services
|
78.7
|
|
|
7.7
|
%
|
|
73.6
|
|
|
7.3
|
%
|
|
5.1
|
|
|
0.4
|
%
|
|||
Advertising
|
28.9
|
|
|
2.8
|
%
|
|
30.1
|
|
|
3.0
|
%
|
|
(1.2
|
)
|
|
(0.2
|
)%
|
|||
Rent
|
26.7
|
|
|
2.6
|
%
|
|
29.9
|
|
|
3.0
|
%
|
|
(3.2
|
)
|
|
(0.4
|
)%
|
|||
Utilities
|
15.0
|
|
|
1.5
|
%
|
|
14.5
|
|
|
1.4
|
%
|
|
0.5
|
|
|
0.1
|
%
|
|||
Insurance
|
13.0
|
|
|
1.3
|
%
|
|
14.9
|
|
|
1.5
|
%
|
|
(1.9
|
)
|
|
(0.2
|
)%
|
|||
Other
|
87.8
|
|
|
8.5
|
%
|
|
87.9
|
|
|
8.6
|
%
|
|
(0.1
|
)
|
|
(0.1
|
)%
|
|||
Selling, general, and administrative expense
|
$
|
709.1
|
|
|
69.0
|
%
|
|
$
|
696.7
|
|
|
68.8
|
%
|
|
$
|
12.4
|
|
|
0.2
|
%
|
Gross profit
|
$
|
1,028.1
|
|
|
|
|
$
|
1,013.3
|
|
|
|
|
|
|
|
•
|
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, as administrative agent, and the other lenders party thereto. The 2016 Senior Credit Facility amended and restated the Company's pre-existing senior secured credit agreement, dated as of August 8, 2013, by and among the Company and certain of its subsidiaries and Bank of America, as administrative agent, and the other agents and lenders party thereto (the "Restated Credit Agreement").
|
•
|
Manufacturer affiliated new vehicle floor plan facilities 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, which matures on December 5, 2019. We also have 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
December 31, 2018
, we had
$114.0
|
•
|
6.0% Senior Subordinated Notes due 2024 ("6.0% Notes")
—
as of
December 31, 2018
we had $600.0 million in aggregate principal amounts outstanding related to our 6.0% Notes. 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.
|
•
|
Mortgage notes
—
as of
December 31, 2018
, we had
$132.2 million
of mortgage note obligations. These obligations are collateralized by the associated real estate at our dealership locations.
|
•
|
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 Restated Master Loan Agreement are guaranteed by us and are collateralized by the real property financed under the Restated Master Loan Agreement. As of
December 31, 2018
, the outstanding balance under the Restated Master Loan Agreement was
$83.3 million
. There is no further borrowing availability under this facility.
|
•
|
Prior Real Estate Credit Agreement
—
a real estate term loan credit agreement (the "Prior Real Estate 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
December 31, 2018
, we had
$40.8 million
of mortgage note obligations outstanding under the Prior Real Estate Credit Agreement. There is no further borrowing availability under the Prior Real Estate Credit Agreement.
|
•
|
2018 Bank of America Facility -
On November 13, 2018, the Company and certain of its subsidiaries entered into a real estate term loan credit agreement (the “Bank of America Credit Agreement") with Bank of America N.A. which provides for term loans in an aggregate amount not to exceed $128.1 million (the "Bank of America Facility"). The borrowers under the Bank of America Credit Agreement may borrow thereunder from time to time during the period beginning on November 13, 2018 until and including November 12, 2019. On November 13, 2018, certain of the borrowers borrowed an aggregate amount of
$25.7 million
under the Bank of America Credit Agreement, a portion of which was used to refinance certain of the Company’s other outstanding mortgage indebtedness. All of the real property financed by an operating dealership subsidiary of the Company under the Bank of America Facility is collateralized by first priority liens, subject to certain permitted exceptions. As of
December 31, 2018
, we had
$25.7 million
of outstanding borrowings under the Bank of America Facility.
|
•
|
2018 Wells Fargo Master Loan Facility -
On November 16, 2018, certain subsidiaries of the Company entered into a master loan agreement (the “Wells Fargo Master Loan Agreement”) with Wells Fargo Bank, National Association, as lender which provides for term loans to certain of the Company’s subsidiaries that are borrowers under the Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (the "Wells Fargo Master Loan Facility"). The borrowers under the Wells Fargo Master Loan Agreement may borrow thereunder from time to time during the period beginning on November 16, 2018 until and including December 31, 2019 (the "Wells Fargo Draw Termination Date"). On November 16, 2018, certain of the borrowers borrowed an aggregate amount of
$25.0 million
under the Wells Fargo Master Loan Facility, the proceeds of which were used for general corporate purposes. Borrowings under the Wells Fargo Master Loan Facility are guaranteed by the Company pursuant to a unconditional guaranty (the "Company Guaranty"), and all of the real property financed by any operating dealership subsidiary of the Company under the Wells Fargo Master Loan Facility is collateralized by first priority liens, subject to certain permitted exceptions. As of
December 31, 2018
, we had
$25.0 million
outstanding borrowings under the Wells Fargo Master Loan Facility.
|
•
|
Restricted payments in an aggregate amount not to exceed $20.0 million in any fiscal year;
|
•
|
General restricted payments allowance of $150.0 million; and
|
•
|
Subject to our continued compliance with a minimum consolidated current ratio, a consolidated fixed charge coverage ratio and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Indenture, restricted payments capacity additions (or subtractions if negative) equal to (i) 50% of our net income (as defined in the 2016 Senior Credit Facility and the Indenture) beginning on October 1, 2014 and ending on the date of the most recently
|
|
Payments due by period
|
||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Floor plan notes payable (Notes10&11)
|
$
|
966.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
966.1
|
|
Operating leases (Note 18)
|
22.5
|
|
|
22.2
|
|
|
19.2
|
|
|
14.0
|
|
|
6.0
|
|
|
25.5
|
|
|
109.4
|
|
|||||||
Long-term debt (Note 13)
|
40.8
|
|
|
33.9
|
|
|
17.2
|
|
|
32.0
|
|
|
53.9
|
|
|
732.3
|
|
|
910.1
|
|
|||||||
Interest on long-term debt (a)
|
50.2
|
|
|
48.5
|
|
|
47.6
|
|
|
45.5
|
|
|
43.5
|
|
|
42.0
|
|
|
277.3
|
|
|||||||
Total contractual obligations
|
$
|
1,079.6
|
|
|
$
|
104.6
|
|
|
$
|
84.0
|
|
|
$
|
91.5
|
|
|
$
|
103.4
|
|
|
$
|
799.8
|
|
|
$
|
2,262.9
|
|
(a)
|
Includes variable rate interest payments calculated using an estimated LIBOR rate of 2.52%, and assumes that borrowings will not be refinanced prior to or upon maturity.
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Reconciliation of Cash provided by operating activities to Cash provided by operating activities, as adjusted
|
|
|
|
|
|
||||||
Cash provided by operating activities, as reported
|
$
|
10.1
|
|
|
$
|
266.3
|
|
|
$
|
142.5
|
|
New vehicle floor plan borrowings (repayments)
—
non-trade, net
|
171.5
|
|
|
(70.7
|
)
|
|
118.0
|
|
|||
Cash provided by operating activities, as adjusted
|
$
|
181.6
|
|
|
$
|
195.6
|
|
|
$
|
260.5
|
|
•
|
$19.8 million related to the change in inventory, net of floor plan notes payable, including both trade and non-trade;
|
•
|
$13.6 million related to the change in accounts payable and accrued liabilities;
|
•
|
$6.0 million related timing and collection of accounts receivable and contracts-in-transit during 2018 as compared to 2017; and
|
•
|
$2.0 million related to the change in other current and non-current assets and liabilities.
|
•
|
$27.4 million related to non-cash adjustments to net income.
|
•
|
$29.4 million related to an increase in inventory, net of floor plan notes payable, including both trade and non-trade;
|
•
|
$47.1 million related to the change in other current and non-current assets and liabilities; and
|
•
|
$34.0 million related to the change in accounts payable and accrued liabilities.
|
•
|
$25.9 million related to sales volume and the timing of collection of accounts receivable and contracts-in-transit during 2017 as compared to 2016; and
|
•
|
$19.7 million related to non-cash adjustments to net income.
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
8.3
|
|
|
$
|
4.7
|
|
Contracts-in-transit, net
|
198.3
|
|
|
193.3
|
|
||
Accounts receivable, net
|
130.3
|
|
|
128.5
|
|
||
Inventories, net
|
1,067.6
|
|
|
826.0
|
|
||
Assets held for sale
|
26.3
|
|
|
30.3
|
|
||
Other current assets
|
122.2
|
|
|
119.3
|
|
||
Total current assets
|
1,553.0
|
|
|
1,302.1
|
|
||
PROPERTY AND EQUIPMENT, net
|
886.1
|
|
|
834.2
|
|
||
GOODWILL
|
181.2
|
|
|
160.8
|
|
||
INTANGIBLE FRANCHISE RIGHTS
|
65.8
|
|
|
49.6
|
|
||
OTHER LONG-TERM ASSETS
|
9.3
|
|
|
10.0
|
|
||
Total assets
|
$
|
2,695.4
|
|
|
$
|
2,356.7
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Floor plan notes payable—trade, net
|
$
|
114.0
|
|
|
$
|
104.2
|
|
Floor plan notes payable—non-trade, net
|
852.1
|
|
|
627.9
|
|
||
Current maturities of long-term debt
|
38.8
|
|
|
12.9
|
|
||
Accounts payable and accrued liabilities
|
298.4
|
|
|
313.2
|
|
||
Total current liabilities
|
1,303.3
|
|
|
1,058.2
|
|
||
LONG-TERM DEBT
|
866.5
|
|
|
862.6
|
|
||
DEFERRED INCOME TAXES
|
21.7
|
|
|
12.5
|
|
||
OTHER LONG-TERM LIABILITIES
|
30.7
|
|
|
29.2
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 19)
|
|
|
|
||||
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; 41,065,069 and 40,969,987 shares issued, including shares held in treasury, respectively
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
572.9
|
|
|
563.5
|
|
||
Retained earnings
|
922.7
|
|
|
750.3
|
|
||
Treasury stock, at cost; 21,719,339 and 20,156,962 shares, respectively
|
(1,023.4
|
)
|
|
(919.1
|
)
|
||
Accumulated other comprehensive loss
|
0.6
|
|
|
(0.9
|
)
|
||
Total shareholders' equity
|
473.2
|
|
|
394.2
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,695.4
|
|
|
$
|
2,356.7
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
New vehicle
|
$
|
3,788.7
|
|
|
$
|
3,561.1
|
|
|
$
|
3,611.9
|
|
Used vehicle
|
1,972.4
|
|
|
1,834.1
|
|
|
1,876.4
|
|
|||
Parts and service
|
821.0
|
|
|
786.1
|
|
|
778.5
|
|
|||
Finance and insurance, net
|
292.3
|
|
|
275.2
|
|
|
261.0
|
|
|||
TOTAL REVENUE
|
6,874.4
|
|
|
6,456.5
|
|
|
6,527.8
|
|
|||
COST OF SALES:
|
|
|
|
|
|
||||||
New vehicle
|
3,623.5
|
|
|
3,392.1
|
|
|
3,424.8
|
|
|||
Used vehicle
|
1,842.7
|
|
|
1,712.2
|
|
|
1,749.1
|
|
|||
Parts and service
|
305.2
|
|
|
296.3
|
|
|
295.2
|
|
|||
TOTAL COST OF SALES
|
5,771.4
|
|
|
5,400.6
|
|
|
5,469.1
|
|
|||
GROSS PROFIT
|
1,103.0
|
|
|
1,055.9
|
|
|
1,058.7
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
755.8
|
|
|
729.7
|
|
|
732.5
|
|
|||
Depreciation and amortization
|
33.7
|
|
|
32.1
|
|
|
30.7
|
|
|||
Franchise rights impairment
|
3.7
|
|
|
5.1
|
|
|
—
|
|
|||
Other operating (income) expenses, net
|
(1.1
|
)
|
|
1.3
|
|
|
(2.3
|
)
|
|||
INCOME FROM OPERATIONS
|
310.9
|
|
|
287.7
|
|
|
297.8
|
|
|||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
||||||
Floor plan interest expense
|
32.5
|
|
|
22.7
|
|
|
19.3
|
|
|||
Other interest expense, net
|
53.1
|
|
|
53.9
|
|
|
53.1
|
|
|||
Swap interest expense
|
0.5
|
|
|
2.0
|
|
|
3.1
|
|
|||
Gain on divestitures
|
—
|
|
|
—
|
|
|
(45.5
|
)
|
|||
Total other expenses, net
|
86.1
|
|
|
78.6
|
|
|
30.0
|
|
|||
INCOME BEFORE INCOME TAXES
|
224.8
|
|
|
209.1
|
|
|
267.8
|
|
|||
Income tax expense
|
56.8
|
|
|
70.0
|
|
|
100.6
|
|
|||
NET INCOME
|
$
|
168.0
|
|
|
$
|
139.1
|
|
|
$
|
167.2
|
|
EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
||||||
Basic—
|
|
|
|
|
|
||||||
Net Income
|
$
|
8.36
|
|
|
$
|
6.69
|
|
|
$
|
7.43
|
|
Diluted—
|
|
|
|
|
|
||||||
Net Income
|
$
|
8.28
|
|
|
$
|
6.62
|
|
|
$
|
7.40
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
||||||
Basic
|
20.1
|
|
|
20.8
|
|
|
22.5
|
|
|||
Restricted stock
|
0.1
|
|
|
0.1
|
|
|
0.0
|
|
|||
Performance share units
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Diluted
|
20.3
|
|
|
21.0
|
|
|
22.6
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
168.0
|
|
|
$
|
139.1
|
|
|
$
|
167.2
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Change in fair value of cash flow swaps
|
2.3
|
|
|
1.9
|
|
|
2.3
|
|
|||
Income tax expense associated with cash flow swaps
|
(0.8
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|||
Comprehensive income
|
$
|
169.5
|
|
|
$
|
140.3
|
|
|
$
|
168.6
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
||||||||||||||||||
Balances, December 31, 2015
|
40,507,313
|
|
|
$
|
0.4
|
|
|
$
|
537.2
|
|
|
$
|
444.3
|
|
|
15,696,543
|
|
|
$
|
(663.9
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
314.5
|
|
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
167.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167.2
|
|
||||||
Change in fair value of cash flow swaps, net of reclassification adjustment and $0.9 tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
167.2
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
168.6
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
||||||
Issuance of common stock in connection with share-based payment arrangements, including $0.2 excess tax benefit
|
243,452
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||||
Repurchase of common stock associated with net share settlements of employee share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,411
|
|
|
(3.7
|
)
|
|
—
|
|
|
(3.7
|
)
|
||||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,730,642
|
|
|
(211.9
|
)
|
|
—
|
|
|
(211.9
|
)
|
||||||
Balances, December 31, 2016
|
40,750,765
|
|
|
$
|
0.4
|
|
|
$
|
549.4
|
|
|
$
|
611.5
|
|
|
19,497,596
|
|
|
$
|
(879.5
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
279.7
|
|
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
139.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139.1
|
|
||||||
Change in fair value of cash flow swaps, net of reclassification adjustment and $0.7 tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
139.1
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
140.3
|
|
||||||
Cumulative Effect Adjustment of ASU 2016-09
|
|
|
|
|
0.5
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
0.2
|
|
|||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
||||||
Issuance of common stock in connection with share-based payment arrangements
|
219,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of common stock associated with net share settlements of employee share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,670
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
584,696
|
|
|
(34.8
|
)
|
|
—
|
|
|
(34.8
|
)
|
||||||
Balances, December 31, 2017
|
40,969,987
|
|
|
$
|
0.4
|
|
|
$
|
563.5
|
|
|
$
|
750.3
|
|
|
20,156,962
|
|
|
$
|
(919.1
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
394.2
|
|
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
168.0
|
|
|
—
|
|
|
—
|
|
|
|
|
168.0
|
|
|||||||
Change in fair value of cash flow swaps, net of reclassification adjustment and $0.8 tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
1.5
|
|
||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
168.0
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
169.5
|
|
||||||
Cumulative Effect Adjustment of ASU 2014-09 (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
10.5
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
10.5
|
|
|||||||
Issuance of common stock in connection with share-based payment arrangements
|
185,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of common stock associated with net share settlements of employee share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,434
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||||
Purchase of treasury shares
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,580,910
|
|
|
(105.4
|
)
|
|
—
|
|
|
(105.4
|
)
|
|||||||
Retirement of previously repurchased common stock
|
(89,967
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
(4.8
|
)
|
|
(89,967
|
)
|
|
5.9
|
|
|
—
|
|
|
—
|
|
||||||
Balances, December 31, 2018
|
41,065,069
|
|
|
$
|
0.4
|
|
|
$
|
572.9
|
|
|
$
|
922.7
|
|
|
21,719,339
|
|
|
$
|
(1,023.4
|
)
|
|
$
|
0.6
|
|
|
$
|
473.2
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
CASH FLOW FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
168.0
|
|
|
$
|
139.1
|
|
|
$
|
167.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities—
|
|
|
|
|
|
||||||
Depreciation and amortization
|
33.7
|
|
|
32.1
|
|
|
30.7
|
|
|||
Share-based compensation
|
10.5
|
|
|
13.6
|
|
|
12.0
|
|
|||
Deferred income taxes
|
5.3
|
|
|
2.8
|
|
|
6.1
|
|
|||
Franchise rights impairment
|
3.7
|
|
|
5.1
|
|
|
—
|
|
|||
Non-cash impairment charges
|
—
|
|
|
—
|
|
|
3.6
|
|
|||
Loaner vehicle amortization
|
22.5
|
|
|
22.4
|
|
|
21.5
|
|
|||
Gain on divestitures
|
—
|
|
|
—
|
|
|
(45.5
|
)
|
|||
Other adjustments, net
|
3.1
|
|
|
4.3
|
|
|
4.1
|
|
|||
Changes in operating assets and liabilities, net of acquisitions and divestitures—
|
|
|
|
|
|
||||||
Contracts-in-transit
|
(5.0
|
)
|
|
(10.7
|
)
|
|
(6.9
|
)
|
|||
Accounts receivable
|
(1.5
|
)
|
|
10.2
|
|
|
(19.5
|
)
|
|||
Inventories
|
(24.4
|
)
|
|
251.5
|
|
|
105.3
|
|
|||
Other current assets
|
(200.8
|
)
|
|
(197.2
|
)
|
|
(152.2
|
)
|
|||
Floor plan notes payable—trade, net
|
9.8
|
|
|
(4.1
|
)
|
|
(17.2
|
)
|
|||
Accounts payable and accrued liabilities
|
(16.2
|
)
|
|
(2.6
|
)
|
|
31.4
|
|
|||
Other long-term assets and liabilities, net
|
1.4
|
|
|
(0.2
|
)
|
|
1.9
|
|
|||
Net cash provided by operating activities
|
10.1
|
|
|
266.3
|
|
|
142.5
|
|
|||
CASH FLOW FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures—excluding real estate
|
(40.3
|
)
|
|
(42.3
|
)
|
|
(81.4
|
)
|
|||
Capital expenditures—real estate
|
(17.6
|
)
|
|
(5.8
|
)
|
|
(10.6
|
)
|
|||
Purchases of previously leased real estate
|
(4.4
|
)
|
|
(5.4
|
)
|
|
(19.6
|
)
|
|||
Acquisitions
|
(91.3
|
)
|
|
(80.1
|
)
|
|
—
|
|
|||
Divestitures
|
—
|
|
|
—
|
|
|
114.3
|
|
|||
Proceeds from the sale of assets
|
4.0
|
|
|
5.8
|
|
|
2.2
|
|
|||
Net cash (used in) provided by investing activities
|
(149.6
|
)
|
|
(127.8
|
)
|
|
4.9
|
|
|||
CASH FLOW FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Floor plan borrowings—non-trade
|
4,591.9
|
|
|
3,850.3
|
|
|
3,866.3
|
|
|||
Floor plan borrowings—acquisitions
|
22.7
|
|
|
25.1
|
|
|
—
|
|
|||
Floor plan repayments—non-trade
|
(4,390.4
|
)
|
|
(3,921.0
|
)
|
|
(3,748.3
|
)
|
|||
Floor plan repayments—divestitures
|
—
|
|
|
—
|
|
|
(31.2
|
)
|
|||
Proceeds from borrowings
|
50.7
|
|
|
—
|
|
|
—
|
|
|||
Repayments of borrowings
|
(19.9
|
)
|
|
(52.0
|
)
|
|
(15.2
|
)
|
|||
Payment of debt issuance costs
|
(1.7
|
)
|
|
—
|
|
|
(2.8
|
)
|
|||
Repurchases of common stock, including amounts associated with net share settlements of employee share-based awards
|
(110.2
|
)
|
|
(39.6
|
)
|
|
(215.6
|
)
|
|||
Net cash provided by (used in) financing activities
|
143.1
|
|
|
(137.2
|
)
|
|
(146.8
|
)
|
|||
Net increase in cash and cash equivalents
|
3.6
|
|
|
1.3
|
|
|
0.6
|
|
|||
CASH AND CASH EQUIVALENTS, beginning of period
|
4.7
|
|
|
3.4
|
|
|
2.8
|
|
|||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
8.3
|
|
|
$
|
4.7
|
|
|
$
|
3.4
|
|
Manufacturer (Vehicle Brands):
|
|
% of Total
New Vehicle
Revenues
|
|
American Honda Motor Co., Inc.
(Honda and Acura)
|
|
23.7
|
%
|
Toyota Motor Sales, U.S.A., Inc.
(Toyota and Lexus)
|
|
18.4
|
%
|
Nissan North America, Inc.
(Nissan and Infiniti)
|
|
14.4
|
%
|
Ford Motor Company
(Ford and Lincoln)
|
|
11.1
|
%
|
Mercedes-Benz USA, LLC (
Mercedes-Benz, Smart and Sprinter
)
|
|
6.5
|
%
|
BMW of North America, LLC
(BMW and Mini)
|
|
5.6
|
%
|
|
For the Year Ended December 31, 2018
|
||
Revenue:
|
|
||
New vehicle
|
$
|
3,788.7
|
|
Used vehicle retail
|
1,783.3
|
|
|
Used vehicle wholesale
|
189.1
|
|
|
New and used vehicle
|
5,761.1
|
|
|
Sale of vehicle parts and accessories
|
139.2
|
|
|
Vehicle repair and maintenance services
|
681.8
|
|
|
Parts and services
|
821.0
|
|
|
Finance and insurance, net
|
292.3
|
|
|
Total revenue
|
$
|
6,874.4
|
|
|
As Reported
|
|
Adjustments
|
|
Balance at
|
||||||||||
|
December 31, 2017
|
|
Vehicle Repair and Maintenance Services
|
|
Finance and Insurance, net
|
|
January 1, 2018
|
||||||||
|
(In millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Inventories
|
$
|
826.0
|
|
|
$
|
(4.1
|
)
|
|
$
|
—
|
|
|
$
|
821.9
|
|
Other current assets
|
119.3
|
|
|
6.4
|
|
|
10.0
|
|
|
135.7
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred income taxes
|
$
|
12.5
|
|
|
$
|
0.6
|
|
|
$
|
2.5
|
|
|
$
|
15.6
|
|
Equity:
|
|
|
|
|
|
|
|
||||||||
Retained earnings
|
$
|
750.3
|
|
|
$
|
1.7
|
|
|
$
|
7.5
|
|
|
$
|
759.5
|
|
|
As of December 31, 2018
|
||||||||||
|
As Reported
|
|
Amounts Under ASC 605
|
|
Effect of Change Increase/(Decrease)
|
||||||
|
(In millions)
|
||||||||||
Balance Sheet:
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
130.3
|
|
|
$
|
143.6
|
|
|
$
|
(13.3
|
)
|
Inventories
|
1,067.6
|
|
|
1,070.2
|
|
|
(2.6
|
)
|
|||
Other current assets
|
122.2
|
|
|
107.5
|
|
|
14.7
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
$
|
298.4
|
|
|
$
|
298.5
|
|
|
$
|
(0.1
|
)
|
Deferred income taxes
|
21.7
|
|
|
18.6
|
|
|
3.1
|
|
|||
Equity:
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
922.7
|
|
|
$
|
926.9
|
|
|
$
|
(4.2
|
)
|
|
For the Year Ended December 31, 2018
|
||||||||||
|
As Reported
|
|
Amounts Under ASC 605
|
|
Effect of Change Increase/(Decrease)
|
||||||
|
(In millions, except per share data)
|
||||||||||
Statement of Income:
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Parts and service
|
$
|
821.0
|
|
|
$
|
823.3
|
|
|
$
|
(2.3
|
)
|
Finance and insurance, net
|
292.3
|
|
|
291.7
|
|
|
0.6
|
|
|||
Cost of Sales:
|
|
|
|
|
|
||||||
Parts and service
|
305.2
|
|
|
306.7
|
|
|
(1.5
|
)
|
|||
Income before income taxes
|
224.8
|
|
|
225.0
|
|
|
(0.2
|
)
|
|||
Income tax expense
|
56.8
|
|
|
56.9
|
|
|
(0.1
|
)
|
|||
Net income
|
$
|
168.0
|
|
|
$
|
168.1
|
|
|
$
|
(0.1
|
)
|
Earnings Per Common Share:
|
|
|
|
|
|
||||||
Basic
|
$
|
8.36
|
|
|
$
|
8.36
|
|
|
$
|
—
|
|
Diluted
|
$
|
8.28
|
|
|
$
|
8.28
|
|
|
$
|
—
|
|
•
|
ASC 606 accelerated the recognition of revenue and costs related to open vehicle repair orders in which recognition was previously deferred until the completion of the repair order. For the
year ended December 31, 2018
, gross profit decreased $
0.8 million
due to differences in open repair orders as of
December 31, 2018
compared to open repair orders as of December 31, 2017.
|
•
|
ASC 606 accelerated the timing of recognition of certain retro-commission arrangements (i.e. variable consideration) reported within finance and insurance, net. Under ASC 605, retro-commission income was recorded at the time it was received from our third-party provider. For the
year ended December 31, 2018
, net revenue increased
$0.6 million
due to the difference between the amounts received compared to the Company's estimate of variable consideration, subject to a constraint, for products arranged during the same comparative period.
|
|
Vehicle Repair and Maintenance Services
|
|
Finance and Insurance, net
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Contract Assets (Current), January 1, 2018
|
$
|
6.4
|
|
|
$
|
10.0
|
|
|
$
|
16.4
|
|
Transferred to receivables from contract assets recognized at the beginning of the period
|
(6.4
|
)
|
|
(3.2
|
)
|
|
(9.6
|
)
|
|||
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period
|
5.1
|
|
|
2.6
|
|
|
7.7
|
|
|||
Contract Assets (Current), March 31, 2018
|
5.1
|
|
|
9.4
|
|
|
14.5
|
|
|||
Transferred to receivables from contract assets recognized at the beginning of the period
|
(5.1
|
)
|
|
(3.2
|
)
|
|
(8.3
|
)
|
|||
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period
|
4.0
|
|
|
2.7
|
|
|
6.7
|
|
|||
Contract Assets (Current), June 30, 2018
|
4.0
|
|
|
8.9
|
|
|
12.9
|
|
|||
Transferred to receivables from contract assets recognized at the beginning of the period
|
(4.0
|
)
|
|
(3.0
|
)
|
|
(7.0
|
)
|
|||
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period
|
4.3
|
|
|
3.1
|
|
|
7.4
|
|
|||
Contract Assets (Current), September 30, 2018
|
4.3
|
|
|
9.0
|
|
|
13.3
|
|
|||
Transferred to receivables from contract assets recognized at the beginning of the period
|
$
|
(4.3
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(8.2
|
)
|
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period
|
$
|
4.1
|
|
|
$
|
5.5
|
|
|
$
|
9.6
|
|
Contract Assets (Current), December 31, 2018
|
$
|
4.1
|
|
|
$
|
10.6
|
|
|
$
|
14.7
|
|
|
For the Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Inventory
|
$
|
27.3
|
|
|
$
|
25.9
|
|
Real estate
|
23.5
|
|
|
12.2
|
|
||
Property and equipment
|
0.6
|
|
|
1.4
|
|
||
Goodwill
|
20.4
|
|
|
32.7
|
|
||
Manufacturer franchise rights
|
19.9
|
|
|
6.2
|
|
||
Loaner vehicles
|
1.7
|
|
|
3.2
|
|
||
Liabilities assumed
|
(0.2
|
)
|
|
$
|
(1.5
|
)
|
|
Total purchase price
|
$
|
93.2
|
|
|
$
|
80.1
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Vehicle receivables
|
$
|
45.7
|
|
|
$
|
48.3
|
|
Manufacturer receivables
|
51.2
|
|
|
47.0
|
|
||
Other receivables
|
34.7
|
|
|
34.8
|
|
||
Total accounts receivable
|
131.6
|
|
|
130.1
|
|
||
Less—Allowance for doubtful accounts
|
(1.3
|
)
|
|
(1.6
|
)
|
||
Accounts receivable, net
|
$
|
130.3
|
|
|
$
|
128.5
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
New vehicles
|
$
|
867.2
|
|
|
$
|
646.5
|
|
Used vehicles
|
158.9
|
|
|
135.9
|
|
||
Parts and accessories
|
41.5
|
|
|
43.6
|
|
||
Total inventories
|
$
|
1,067.6
|
|
|
$
|
826.0
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Service loaner vehicles
|
$
|
87.0
|
|
|
$
|
85.4
|
|
Contract Assets (see Note 2)
|
14.7
|
|
|
—
|
|
||
Prepaid expenses
|
5.9
|
|
|
5.2
|
|
||
Prepaid taxes
|
9.1
|
|
|
19.5
|
|
||
Other
|
5.5
|
|
|
9.2
|
|
||
Other current assets
|
$
|
122.2
|
|
|
$
|
119.3
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Land
|
$
|
330.4
|
|
|
$
|
303.9
|
|
Buildings and leasehold improvements
|
617.5
|
|
|
582.0
|
|
||
Machinery and equipment
|
94.8
|
|
|
93.7
|
|
||
Furniture and fixtures
|
62.2
|
|
|
61.7
|
|
||
Company vehicles
|
8.8
|
|
|
8.8
|
|
||
Construction in progress
|
30.1
|
|
|
22.4
|
|
||
Gross property and equipment
|
1,143.8
|
|
|
1,072.5
|
|
||
Less—Accumulated depreciation
|
(257.7
|
)
|
|
(238.3
|
)
|
||
Property and equipment, net
|
$
|
886.1
|
|
|
$
|
834.2
|
|
|
Goodwill
|
||
|
(In millions)
|
||
Balance as of December 31, 2016 (a)
|
$
|
128.1
|
|
Acquisitions
|
32.7
|
|
|
Balance as of December 31, 2017 (a)
|
160.8
|
|
|
Acquisitions
|
20.4
|
|
|
Balance as of December 31, 2018 (a)
|
$
|
181.2
|
|
(a)
|
Net of accumulated impairment losses of
$537.7 million
recorded prior to the year ended
December 31, 2016
.
|
|
Intangible Franchise Rights
|
||
|
(In millions)
|
||
Balance as of December 31, 2016
|
$
|
48.5
|
|
Acquisitions
|
6.2
|
|
|
Impairments
|
(5.1
|
)
|
|
Balance as of December 31, 2017
|
$
|
49.6
|
|
Acquisitions
|
$
|
19.9
|
|
Impairments
|
$
|
(3.7
|
)
|
Balance as of December 31, 2018
|
$
|
65.8
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Floor plan notes payable—trade
|
$
|
125.3
|
|
|
$
|
114.8
|
|
Floor plan notes payable offset account
|
(11.3
|
)
|
|
(10.6
|
)
|
||
Total floor plan notes payable—trade, net
|
$
|
114.0
|
|
|
$
|
104.2
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Floor plan notes payable—new non-trade
|
$
|
843.0
|
|
|
$
|
666.6
|
|
Floor plan notes payable—used non-trade
|
30.0
|
|
|
—
|
|
||
Floor plan notes payable offset account
|
(20.9
|
)
|
|
(38.7
|
)
|
||
Total floor plan notes payable—non-trade, net
|
$
|
852.1
|
|
|
$
|
627.9
|
|
•
|
a
$250.0 million
revolving credit facility (the "Revolving Credit Facility") with a
$50.0 million
sublimit for letters of credit;
|
•
|
a
$900.0 million
new vehicle revolving floor plan facility (the "New Vehicle Floor Plan Facility"); and
|
•
|
a
$150.0 million
used vehicle revolving floor plan facility (the "Used Vehicle Floor Plan Facility").
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Accounts payable
|
$
|
81.9
|
|
|
$
|
92.4
|
|
Loaner vehicle notes payable
|
87.5
|
|
|
86.8
|
|
||
Accrued compensation
|
27.6
|
|
|
24.9
|
|
||
Accrued finance and insurance chargebacks
|
23.0
|
|
|
23.3
|
|
||
Accrued insurance
|
20.9
|
|
|
20.4
|
|
||
Taxes payable
|
23.7
|
|
|
26.6
|
|
||
Accrued advertising
|
3.9
|
|
|
6.5
|
|
||
Accrued interest
|
6.6
|
|
|
5.1
|
|
||
Other
|
23.3
|
|
|
27.2
|
|
||
Accounts payable and accrued liabilities
|
$
|
298.4
|
|
|
$
|
313.2
|
|
|
As of December 31,
|
||||||
2018
|
|
2017
|
|||||
(In millions)
|
|||||||
6.0% Senior Subordinated Notes due 2024
|
$
|
600.0
|
|
|
$
|
600.0
|
|
Mortgage notes payable bearing interest at fixed rates (the weighted average interest rates were 5.2% and 5.4% for the years ended December 31, 2018 and 2017, respectively)
|
132.2
|
|
|
139.1
|
|
||
2018 Bank of America Facility
|
25.7
|
|
|
—
|
|
||
2018 Wells Fargo Master Loan Facility
|
25.0
|
|
|
—
|
|
||
Prior real estate credit agreement
|
40.8
|
|
|
48.5
|
|
||
Restated master loan agreement
|
83.3
|
|
|
88.5
|
|
||
Capital lease obligations
|
3.1
|
|
|
3.2
|
|
||
Total debt outstanding
|
910.1
|
|
|
879.3
|
|
||
Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024
|
6.0
|
|
|
6.8
|
|
||
Less—debt issuance costs
|
(10.8
|
)
|
|
(10.6
|
)
|
||
Long-term debt, including current portion
|
905.3
|
|
|
875.5
|
|
||
Less—current portion, net of current portion of debt issuance costs
|
(38.8
|
)
|
|
(12.9
|
)
|
||
Long-term debt
|
$
|
866.5
|
|
|
$
|
862.6
|
|
2019
|
$
|
40.8
|
|
2020
|
33.9
|
|
|
2021
|
17.2
|
|
|
2022
|
32.0
|
|
|
2023
|
53.9
|
|
|
Thereafter
|
732.3
|
|
|
Total maturities of long-term debt
|
$
|
910.1
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||
Mortgage Agreement
|
|
Aggregate Principal Outstanding
|
|
Carrying Value of Collateralized Related Real Estate
|
|
Maturity Dates
|
|
Aggregate Principal Outstanding
|
|
Carrying Value of Collateralized Related Real Estate
|
|
Maturity Dates
|
||||||||
Captive mortgages
|
|
$
|
111.6
|
|
|
$
|
185.5
|
|
|
2019-2024
|
|
$
|
116.8
|
|
|
$
|
179.3
|
|
|
2018-2024
|
Other mortgage debt
|
|
20.6
|
|
|
43.3
|
|
|
2020-2022
|
|
22.3
|
|
|
45.3
|
|
|
2018-2022
|
||||
2018 Bank of America Facility
|
|
25.7
|
|
|
137.2
|
|
|
2025
|
|
—
|
|
|
—
|
|
|
|
||||
2018 Wells Fargo Master Loan Facility
|
|
25.0
|
|
|
114.3
|
|
|
2028
|
|
—
|
|
|
—
|
|
|
|
||||
Prior real estate credit agreement
|
|
40.8
|
|
|
82.2
|
|
|
2023
|
|
48.5
|
|
|
89.8
|
|
|
2023
|
||||
Restated master loan agreement
|
|
83.3
|
|
|
130.2
|
|
|
2025
|
|
88.5
|
|
|
132.7
|
|
|
2025
|
||||
Total mortgage debt
|
|
$
|
307.0
|
|
|
$
|
692.7
|
|
|
|
|
$
|
276.1
|
|
|
$
|
447.1
|
|
|
|
•
|
Restricted payments in an aggregate amount not to exceed
$20.0 million
in any fiscal year;
|
•
|
General restricted payments allowance of
$150.0 million
; and
|
•
|
Subject to our continued compliance with a minimum consolidated current ratio, a consolidated fixed charge coverage ratio and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Indenture, restricted payments capacity additions (or subtractions if negative) equal to (i)
50%
of our net income (as defined in the 2016 Senior Credit Facility and the Indenture) beginning on October 1, 2014 and ending on the date of the most recently completed fiscal quarter (the "Measurement Period"), plus (ii)
100%
of any cash proceeds we receive from the sale of equity interests during the Measurement Period, minus (iii) the dollar amount of share repurchases made and dividends paid on or after December 4, 2014.
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Carrying Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
606.0
|
|
|
$
|
606.8
|
|
Mortgage notes payable
|
307.0
|
|
|
276.1
|
|
||
Total carrying value
|
$
|
913.0
|
|
|
$
|
882.9
|
|
|
|
|
|
||||
Fair Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
570.0
|
|
|
$
|
625.5
|
|
Mortgage notes payable
|
306.7
|
|
|
275.3
|
|
||
Total fair value
|
$
|
876.7
|
|
|
$
|
900.8
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Other current assets
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
Accounts payable and accrued liabilities
|
—
|
|
|
1.0
|
|
||
Other long-term (assets) liabilities
|
(0.4
|
)
|
|
0.7
|
|
||
Total fair value
|
$
|
(0.6
|
)
|
|
$
|
1.7
|
|
For the Year Ended December 31,
|
|
Results Recognized in Accumulated Other Comprehensive Loss
(Effective Portion)
|
|
Location of Results Reclassified from Accumulated Other Comprehensive Loss
to Earnings
|
|
Results Reclassified from Accumulated Other Comprehensive Loss
to Earnings
|
||||
2018
|
|
$
|
1.8
|
|
|
Swap interest expense
|
|
$
|
(0.5
|
)
|
2017
|
|
$
|
(0.1
|
)
|
|
Swap interest expense
|
|
$
|
(2.0
|
)
|
2016
|
|
$
|
(0.8
|
)
|
|
Swap interest expense
|
|
$
|
(3.1
|
)
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
43.8
|
|
|
$
|
59.1
|
|
|
$
|
83.8
|
|
State
|
7.1
|
|
|
8.3
|
|
|
10.7
|
|
|||
Total current income tax expense
|
50.9
|
|
|
67.4
|
|
|
94.5
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
3.9
|
|
|
1.2
|
|
|
4.9
|
|
|||
State
|
2.0
|
|
|
1.4
|
|
|
1.2
|
|
|||
Total deferred income tax expense
|
5.9
|
|
|
2.6
|
|
|
6.1
|
|
|||
Total income tax expense
|
$
|
56.8
|
|
|
$
|
70.0
|
|
|
$
|
100.6
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2018
|
|
%
|
|
2017
|
|
%
|
|
2016
|
|
%
|
||||||||
Income tax provision at the statutory rate
|
$
|
47.2
|
|
|
21.0
|
|
$
|
73.2
|
|
|
35.0
|
|
|
$
|
93.7
|
|
|
35.0
|
|
State income tax expense, net of federal benefit
|
8.7
|
|
|
3.9
|
|
6.4
|
|
|
3.0
|
|
|
7.8
|
|
|
2.9
|
|
|||
Non-deductible / non-tax items
|
0.4
|
|
|
0.2
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.1
|
|
|||
Effect of enactment of tax reform
|
0.6
|
|
|
0.2
|
|
(7.9
|
)
|
|
(3.8
|
)
|
|
—
|
|
|
—
|
|
|||
Adjustments and settlements
|
—
|
|
|
—
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|||
Other, net
|
(0.1
|
)
|
|
—
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|||
Income tax expense
|
$
|
56.8
|
|
|
25.3
|
|
$
|
70.0
|
|
|
33.5
|
|
|
$
|
100.6
|
|
|
37.6
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Deferred income tax assets:
|
|
|
|
||||
F&I chargeback liabilities
|
$
|
11.0
|
|
|
$
|
11.1
|
|
Other accrued liabilities
|
3.2
|
|
|
3.4
|
|
||
Stock-based compensation
|
2.4
|
|
|
3.9
|
|
||
Other, net
|
3.9
|
|
|
5.5
|
|
||
Total deferred income tax assets
|
20.5
|
|
|
23.9
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible asset amortization
|
(12.5
|
)
|
|
(8.4
|
)
|
||
Depreciation
|
(26.4
|
)
|
|
(27.1
|
)
|
||
Other, net
|
(3.3
|
)
|
|
(0.9
|
)
|
||
Total deferred income tax liabilities
|
(42.2
|
)
|
|
(36.4
|
)
|
||
Net deferred income tax liabilities
|
$
|
(21.7
|
)
|
|
$
|
(12.5
|
)
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Accrued finance and insurance chargebacks
|
$
|
21.2
|
|
|
$
|
20.4
|
|
Deferred rent
|
4.5
|
|
|
5.0
|
|
||
Swap fair value
|
—
|
|
|
0.7
|
|
||
Unclaimed property
|
3.3
|
|
|
3.0
|
|
||
Other
|
1.7
|
|
|
0.1
|
|
||
Other long-term liabilities
|
$
|
30.7
|
|
|
$
|
29.2
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Amortization of debt issuance costs
|
$
|
2.5
|
|
|
$
|
3.2
|
|
|
$
|
2.6
|
|
Loss on disposal of fixed assets
|
0.9
|
|
|
2.1
|
|
|
0.4
|
|
|||
Other individually immaterial items
|
(0.3
|
)
|
|
(1.0
|
)
|
|
1.1
|
|
|||
Other adjustments, net
|
$
|
3.1
|
|
|
$
|
4.3
|
|
|
$
|
4.1
|
|
|
Capital
|
|
Operating
|
||||
|
(In millions)
|
||||||
2019
|
$
|
0.4
|
|
|
$
|
22.5
|
|
2020
|
0.4
|
|
|
22.2
|
|
||
2021
|
0.4
|
|
|
19.2
|
|
||
2022
|
0.4
|
|
|
14.0
|
|
||
2023
|
0.4
|
|
|
6.0
|
|
||
Thereafter
|
2.8
|
|
|
25.5
|
|
||
Total minimum lease payments
|
4.8
|
|
|
109.4
|
|
||
Less: Amounts representing interest
|
(1.7
|
)
|
|
N/A
|
|
||
|
$
|
3.1
|
|
|
$
|
109.4
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted average grant-date fair value of performance share units granted
|
$
|
68.50
|
|
|
$
|
65.65
|
|
|
$
|
46.70
|
|
Total fair value of performance share units vested (in millions)
|
$
|
6.4
|
|
|
$
|
6.5
|
|
|
$
|
6.0
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted average grant-date fair value of restricted stock granted
|
$
|
71.18
|
|
|
$
|
63.64
|
|
|
$
|
47.07
|
|
Total fair value of restricted stock awards vested (in millions)
|
$
|
5.5
|
|
|
$
|
5.3
|
|
|
$
|
3.7
|
|
|
For the Three Months Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
2017:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,551.7
|
|
|
$
|
1,631.8
|
|
|
$
|
1,602.1
|
|
|
$
|
1,670.9
|
|
Gross profit
|
$
|
260.1
|
|
|
$
|
267.1
|
|
|
$
|
260.3
|
|
|
$
|
268.4
|
|
Net income (2)(3)(4)
|
$
|
34.0
|
|
|
$
|
31.9
|
|
|
$
|
30.7
|
|
|
$
|
42.5
|
|
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic (1)(2)(3)(4)
|
$
|
1.62
|
|
|
$
|
1.53
|
|
|
$
|
1.49
|
|
|
$
|
2.06
|
|
Diluted (1)(2)(3)(4)
|
$
|
1.61
|
|
|
$
|
1.52
|
|
|
$
|
1.48
|
|
|
$
|
2.03
|
|
2018:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,609.2
|
|
|
$
|
1,723.6
|
|
|
$
|
1,757.4
|
|
|
$
|
1,784.2
|
|
Gross profit
|
$
|
265.4
|
|
|
$
|
277.8
|
|
|
$
|
278.0
|
|
|
$
|
281.8
|
|
Net income (5)(6)(7)
|
$
|
40.1
|
|
|
$
|
43.2
|
|
|
$
|
44.3
|
|
|
$
|
40.4
|
|
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic (1)(5)(6)(7)
|
$
|
1.95
|
|
|
$
|
2.13
|
|
|
$
|
2.22
|
|
|
$
|
2.09
|
|
Diluted (1)(5)(6)(7)
|
$
|
1.93
|
|
|
$
|
2.11
|
|
|
$
|
2.18
|
|
|
$
|
2.06
|
|
(1)
|
The sum of income per common share for the four quarters does not equal total income per common share due to changes in the average number of shares outstanding during the respective periods.
|
(2)
|
Results for the three months ended March 31, 2017 were increased by
$0.6 million
as a result of gains from legal settlements, net of tax, or
$0.03
per basic and diluted share.
|
(3)
|
Results for the three months ended June 30, 2017 were increased by $
0.5 million
from investment income, partially offset by a
$1.8 million
loss on real estate-related charges, all previous items were net of tax, or
$0.06
per basic and diluted share.
|
(4)
|
Results for the three months ended December 31, 2017 were increased by a
$7.9 million
income tax benefit, partially offset by
$3.2 million
of franchise rights impairment, net of tax, or
$0.22
per basic and diluted share, respectively, in the aggregate.
|
(5)
|
Results for the three months ended June 30, 2018 were increased by
$0.5 million
as a result of gains from legal settlements, net of tax, or
$0.03
per basic and diluted share.
|
(6)
|
Results for the three months ended June 30, 2018 were decreased by
$0.6 million
as a result of an adjustment to the deferred tax asset related to certain components of share-based compensation, net of tax, or
$0.03
per basic and diluted share.
|
(7)
|
Results for the three months ended December 31, 2018 were decreased by a
$2.8 million
franchise rights impairment, net of tax, or
$0.14
per basic and diluted share, respectively, in the aggregate.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of our assets that could have a material effect on the financial statements.
|
(a)
|
The following documents are filed as a part of this annual report on Form 10-K:
|
(1)
|
Financial Statements: See index to Consolidated Financial Statements.
|
(2)
|
Financial Statement Schedules: None required.
|
(3)
|
Exhibits required to be filed by Item 601 of Regulation S-K:
|
Exhibit
Number |
|
Description of Documents
|
|
Amended and Restated Certificate of Incorporation of Asbury Automotive Group, Inc. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on April 25, 2016)*
|
|
|
Bylaws of Asbury Automotive Group, Inc. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on April 21, 2014)*
|
|
|
Indenture, dated as of December 4, 2014, among Asbury Automotive Group, Inc., each of the Guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on December 4, 2014)*
|
|
|
Form of 6.0% Senior Subordinated Note due 2024 (included as Exhibit A in Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on December 4, 2014)*
|
|
|
First Supplemental Indenture, dated as of July 29, 2015, by and among Asbury Automotive Group, Inc., Asbury Jax Ford, LLC and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015)*
|
|
|
Second Supplemental Indenture, dated as of October 28, 2015, among Asbury Automotive Group, Inc., each of the guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on October 28, 2015)*
|
|
|
Third Supplemental Indenture, dated as of July 20, 2016, among Asbury Automotive Group, Inc., each of the guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016)*
|
|
|
Fourth Supplemental Indenture, dated as of February 17, 2017, among Asbury Automotive Group, Inc., Asbury IN Chev, LLC, and U.S.Bank National Association, as Trustee (filed as Exhibit 4.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
|
|
Fifth Supplemental Indenture, dated as of February 5, 2018, among Asbury Automotive Group, Inc., Asbury IN Chev, LLC, and U.S.Bank National Association, as Trustee (filed as Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
|
|
Sixth Supplemental Indenture, dated as of May 30, 2018, among Asbury Automotive Group, Inc., Asbury Atlanta CHEV, LLC, Asbury Georgia TOY, LLC, and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018)*
|
|
|
Amended and Restated 2002 Equity Incentive Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 14, 2012)*
|
|
|
2012 Equity Incentive Plan (filed as Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed with the SEC on March 16, 2012)*
|
|
|
First Amendment to 2012 Equity Incentive Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 27, 2017)*
|
|
|
Amended and Restated Key Executive Incentive Compensation Plan (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on May 4, 2009)*
|
|
|
Amendment No. 1 to Amended and Restated Key Executive Incentive Compensation Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018)*
|
|
Form of Officer/Director Indemnification Agreement (filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010)*
|
|
|
Employment Agreement between Asbury Automotive Group, Inc. and David W. Hult, dated as of October 23, 2014 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 23, 2014)*
|
|
|
First Amendment to Employment Agreement between Asbury Automotive Group, Inc. and David W. Hult, dated as of August 21, 2017 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on August 22, 2017)*
|
|
|
Termination and Separation Agreement between Asbury Automotive Group, Inc. and Craig T. Monaghan, dated as of August 21, 2017 (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on August 22, 2017)*
|
|
|
Letter Agreement between Asbury Automotive Group, Inc. and Sean Goodman, dated as of May 3, 2017 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 5, 2017)*
|
|
|
Severance Pay Agreement for key employees between Asbury Automotive Group, Inc. and Sean Goodman, dated as of July 7, 2017 (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017)*
|
|
|
Amended and Restated Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and George A. Villasana, dated as of February 21, 2017 (filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and Jed M. Milstein, dated as of February 21, 2017 (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and William F. Stax, dated as of February 21, 2017 (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and John Hartman dated January 4, 2018 (filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and George C. Karolis dated July 18, 2005 (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
|
|
Form of Equity Award Agreement under the 2012 Equity Incentive Plan (filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)*
|
|
|
Asbury Automotive Group, Inc. Deferred Compensation Plan (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 23, 2017)*
|
|
|
Ford Sales and Service Agreement (filed as Exhibit 10.13 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
|
General Motors Dealer Sales and Service Agreement (filed as Exhibit 10.14 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
|
Honda Automobile Dealer Sales and Service Agreement (filed as Exhibit 10.15 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
|
Mercedes-Benz Passenger Car Dealer Agreement (filed as Exhibit 10.16 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
|
Nissan Dealer Sales and Service Agreement (filed as Exhibit 10.17 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
Toyota Dealer Agreement (filed as Exhibit 10.18 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
|
|
Credit Agreement, dated as of September 26, 2013, among Asbury Automotive Group, Inc., certain of subsidiaries of Asbury Automotive Group, Inc. and Bank of America, N.A. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8‑K filed with the SEC on September 30, 2013)*
|
|
|
Second Amended and Restated Credit Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc., as a Borrower, and certain of its Subsidiaries, as Vehicle Borrowers, Bank of America, N.A., as Administrative Agent, Revolving Swing Line Lender, New Vehicle Floorplan Swing Line Lender, Used Vehicle Floorplan Swing Line Lender and an L/C Issuer, and the other Lenders party thereto, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as Co-Syndication Agents, Toyota Motor Credit Corporation and Mercedes-Benz Financial Services USA LLC, as Co-Documentation agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Sole Lead Arranger and Sole Bookrunner (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10‑Q for the quarter ended June 30, 2016)*
|
|
|
Second Amended and Restated Company Guaranty Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc. and Bank of America, N.A., as Administrative Agent (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)*
|
|
|
Second Amended and Restated Subsidiary Guaranty Agreement, dated as of July 25, 2016, by and among certain subsidiaries of Asbury Automotive Group, Inc. and Bank of America, N.A., as Administrative Agent (filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)*
|
|
|
Second Amended and Restated Security Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc., certain of its subsidiaries and Bank of America, N.A., as Administrative Agent (filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)*
|
|
|
Second Amended and Restated Escrow & Security Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc., certain of its subsidiaries and Bank of America, N.A., a national banking association, as Administrative Agent (filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)*
|
|
|
Amended and Restated Master Loan Agreement, dated as of February 3, 2015, by and among certain subsidiaries of Asbury Automotive Group, Inc. and Wells Fargo Bank, National Association (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 4, 2015)*
|
|
|
Second Amended and Restated Unconditional Guaranty, dated as of February 3, 2015, by and between Asbury Automotive Group, Inc. and Wells Fargo Bank, National Association (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on February 4, 2015)*
|
|
|
Credit Agreement, dated as of November 13, 2018, among Asbury Automotive Group, Inc., certain subsidiaries of Asbury Automotive Group, Inc. and Bank of America, N.A.
|
|
|
Master Loan Agreement, dated as of November 16, 2018, by and among certain subsidiaries of Asbury Automotive Group, Inc. and Wells Fargo Bank, National Association
|
|
|
Unconditional Guaranty, dated as of November 16, 2018, between Asbury Automotive Group, Inc. and Wells Fargo Bank, National Association
|
|
|
Subsidiaries of the Company
|
|
|
Consent of Ernst & Young LLP
|
|
|
Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
Asbury Automotive Group, Inc.
|
||
|
|
|
|
|
Date:
|
February 28, 2019
|
By:
|
|
/s/ David W. Hult
|
|
|
Name:
|
|
David W. Hult
|
|
|
Title:
|
|
Chief Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David W. Hult
|
|
Chief Executive Officer, President and Director
|
|
February 28, 2019
|
(David W. Hult)
|
|
|
|
|
|
|
|
|
|
/s/ Sean D. Goodman
|
|
Senior Vice President and Chief Financial Officer
|
|
February 28, 2019
|
(Sean D. Goodman)
|
|
|
|
|
|
|
|
|
|
/s/ William F. Stax
|
|
Vice President, Controller and
|
|
February 28, 2019
|
(William F. Stax)
|
|
Chief Accounting Officer
|
|
|
|
|
|
|
|
/s/ Thomas C. DeLoach, Jr.
|
|
Director
|
|
February 28, 2019
|
(Thomas C. DeLoach, Jr.)
|
|
Non-Executive Chairman of the Board
|
|
|
|
|
|
|
|
/s/ Joel Alsfine
|
|
Director
|
|
February 28, 2019
|
(Joel Alsfine)
|
|
|
|
|
|
|
|
|
|
/s/ Dennis E. Clements
|
|
Director
|
|
February 28, 2019
|
(Dennis E. Clements)
|
|
|
|
|
|
|
|
|
|
/s/ Juanita T. James
|
|
Director
|
|
February 28, 2019
|
(Juanita T. James)
|
|
|
|
|
|
|
|
|
|
/s/ Eugene S. Katz
|
|
Director
|
|
February 28, 2019
|
(Eugene S. Katz)
|
|
|
|
|
|
|
|
|
|
/s/ Philip F. Maritz
|
|
Director
|
|
February 28, 2019
|
(Philip F. Maritz)
|
|
|
|
|
|
|
|
|
|
/s/ Maureen F. Morrison
|
|
Director
|
|
February 28, 2019
|
(Maureen F. Morrison)
|
|
|
|
|
|
|
|
|
|
/s/ Bridget R. Berman
|
|
Director
|
|
February 28, 2019
|
(Bridget R. Berman)
|
|
|
|
|
|
|
|
|
|
/s/ Thomas J. Reddin
|
|
Director
|
|
February 28, 2019
|
(Thomas J. Reddin)
|
|
|
|
|
Exhibit
Number |
|
Description of Documents
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Asbury Automotive Group, Inc. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on April 25, 2016)*
|
3.2
|
|
Bylaws of Asbury Automotive Group, Inc. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on April 21, 2014)*
|
4.1
|
|
Indenture, dated as of December 4, 2014, among Asbury Automotive Group, Inc., each of the Guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on December 4, 2014)*
|
4.2
|
|
Form of 6.0% Senior Subordinated Note due 2024 (included as Exhibit A in Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on December 4, 2014)*
|
4.3
|
|
First Supplemental Indenture, dated as of July 29, 2015, by and among Asbury Automotive Group, Inc., Asbury Jax Ford, LLC and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015)*
|
4.4
|
|
Second Supplemental Indenture, dated as of October 28, 2015, among Asbury Automotive Group, Inc., each of the guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on October 28, 2015)*
|
4.5
|
|
Third Supplemental Indenture, dated as of July 20, 2016, among Asbury Automotive Group, Inc., each of the guarantors named therein and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016)*
|
4.6
|
|
Fourth Supplemental Indenture, dated as of February 17, 2017, among Asbury Automotive Group, Inc., Asbury IN Chev, LLC, and U.S.Bank National Association, as Trustee (filed as Exhibit 4.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
4.7
|
|
Fifth Supplemental Indenture, dated as of February 5, 2018, among Asbury Automotive Group, Inc., Asbury IN Chev, LLC, and U.S.Bank National Association, as Trustee (filed as Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
4.8
|
|
Sixth Supplemental Indenture, dated as of May 30, 2018, among Asbury Automotive Group, Inc., Asbury Atlanta CHEV, LLC, Asbury Georgia TOY, LLC, and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018)*
|
10.1**
|
|
Amended and Restated 2002 Equity Incentive Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 14, 2012)*
|
10.2**
|
|
2012 Equity Incentive Plan (filed as Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed with the SEC on March 16, 2012)*
|
10.3**
|
|
First Amendment to 2012 Equity Incentive Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 27, 2017)*
|
10.4**
|
|
Amended and Restated Key Executive Incentive Compensation Plan (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on May 4, 2009)*
|
10.5**
|
|
Amendment No. 1 to Amended and Restated Key Executive Incentive Compensation Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018)*
|
10.6**
|
|
Form of Officer/Director Indemnification Agreement (filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010)*
|
10.7**
|
|
Employment Agreement between Asbury Automotive Group, Inc. and David W. Hult, dated as of October 23, 2014 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 23, 2014)*
|
10.8**
|
|
First Amendment to Employment Agreement between Asbury Automotive Group, Inc. and David W. Hult, dated as of August 21, 2017 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on August 22, 2017)*
|
10.9**
|
|
Termination and Separation Agreement between Asbury Automotive Group, Inc. and Craig T. Monaghan, dated as of August 21, 2017 (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on August 22, 2017)*
|
10.10**
|
|
Letter Agreement between Asbury Automotive Group, Inc. and Sean Goodman, dated as of May 3, 2017 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 5, 2017)*
|
10.11**
|
|
Severance Pay Agreement for key employees between Asbury Automotive Group, Inc. and Sean Goodman, dated as of July 7, 2017 (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017)*
|
10.12**
|
|
Amended and Restated Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and George A. Villasana, dated as of February 21, 2017 (filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
10.13**
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and Jed M. Milstein, dated as of February 21, 2017 (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
10.14**
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and William F. Stax, dated as of February 21, 2017 (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016)*
|
10.15**
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and John Hartman dated January 4, 2018 (filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
10.16**
|
|
Severance Pay Agreement for Key Employee between Asbury Automotive Group, Inc. and George C. Karolis dated July 18, 2005 (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017)*
|
10.17**
|
|
Form of Equity Award Agreement under the 2012 Equity Incentive Plan (filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)*
|
10.18
|
|
Asbury Automotive Group, Inc. Deferred Compensation Plan (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 23, 2017)*
|
10.19
|
|
Ford Sales and Service Agreement (filed as Exhibit 10.13 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.20
|
|
General Motors Dealer Sales and Service Agreement (filed as Exhibit 10.14 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.21
|
|
Honda Automobile Dealer Sales and Service Agreement (filed as Exhibit 10.15 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.22
|
|
Mercedes-Benz Passenger Car Dealer Agreement (filed as Exhibit 10.16 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.23
|
|
Nissan Dealer Sales and Service Agreement (filed as Exhibit 10.17 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.24
|
|
Toyota Dealer Agreement (filed as Exhibit 10.18 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File No. 333-65998, filed with the SEC on October 12, 2001)*
|
10.25
|
|
Credit Agreement, dated as of September 26, 2013, among Asbury Automotive Group, Inc., certain of subsidiaries of Asbury Automotive Group, Inc. and Bank of America, N.A. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8‑K filed with the SEC on September 30, 2013)*
|
10.26
|
|
Second Amended and Restated Credit Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc., as a Borrower, and certain of its Subsidiaries, as Vehicle Borrowers, Bank of America, N.A., as Administrative Agent, Revolving Swing Line Lender, New Vehicle Floorplan Swing Line Lender, Used Vehicle Floorplan Swing Line Lender and an L/C Issuer, and the other Lenders party thereto, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as Co-Syndication Agents, Toyota Motor Credit Corporation and Mercedes-Benz Financial Services USA LLC, as Co-Documentation agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Sole Lead Arranger and Sole Bookrunner (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10‑Q for the quarter ended June 30, 2016)*
|
10.27
|
|
Second Amended and Restated Company Guaranty Agreement, dated as of July 25, 2016, by and among Asbury Automotive Group, Inc. and Bank of America, N.A., as Administrative Agent (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)*
|
CREDIT AGREEMENT
|
|
Dated as of November 13, 2018
|
|
among
|
|
ASBURY AUTOMOTIVE GROUP, INC.,
|
as the Company,
|
|
CERTAIN OF ITS SUBSIDIARIES,
|
as Borrowers,
|
|
and
|
|
BANK OF AMERICA, N.A.,
|
as Lender
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
Page
|
|
ARTICLE I.
|
|
DEFINITIONS AND ACCOUNTING TERMS
|
|
6
|
|
1.01
|
|
|
Defined Terms
|
|
6
|
1.02
|
|
|
Other Interpretive Provisions
|
|
25
|
1.03
|
|
|
Accounting Terms.
|
|
26
|
1.04
|
|
|
Times of Day
|
|
27
|
1.05
|
|
|
References to Defined Terms in the Syndicated Credit Agreement
|
|
27
|
ARTICLE II.
|
|
THE COMMITMENTS AND LOANS
|
|
28
|
|
2.01
|
|
|
Loans
|
|
28
|
2.02
|
|
|
Borrowings, Conversions and Continuations of Loans.
|
|
29
|
2.03
|
|
|
Prepayments; Termination or Reduction of Commitment.
|
|
29
|
2.04
|
|
|
Repayment of Loans.
|
|
30
|
2.05
|
|
|
Interest.
|
|
30
|
2.06
|
|
|
Automatic Debit Authorization
|
|
31
|
2.07
|
|
|
Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate
|
|
32
|
2.08
|
|
|
Evidence of Debt
|
|
32
|
2.09
|
|
|
Payments Generally.
|
|
32
|
2.10
|
|
|
Borrowers.
|
|
32
|
2.11
|
|
|
[Reserved].
|
|
34
|
2.12
|
|
|
Amendments to 2013 Real Estate Credit Agreement
|
|
34
|
ARTICLE III.
|
|
TAXES, YIELD PROTECTION AND ILLEGALITY
|
|
34
|
|
3.01
|
|
|
Taxes
|
|
34
|
3.02
|
|
|
Illegality
|
|
38
|
3.03
|
|
|
Inability to Determine Rates
|
|
39
|
3.04
|
|
|
Increased Costs.
|
|
41
|
3.05
|
|
|
Designation of a Different Lender’s Office
|
|
42
|
3.06
|
|
|
Survival
|
|
43
|
ARTICLE IV.
|
|
CONDITIONS PRECEDENT TO LOANS
|
|
43
|
|
4.01
|
|
|
Conditions of Initial Loans
|
|
43
|
4.02
|
|
|
Conditions to all Borrowings
|
|
45
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
Page
|
|
ARTICLE V.
|
|
REPRESENTATIONS AND WARRANTIES
|
|
48
|
|
5.01
|
|
|
Existence, Qualification and Power
|
|
48
|
5.02
|
|
|
Authorization; No Contravention
|
|
48
|
5.03
|
|
|
Governmental Authorization; Other Consents
|
|
48
|
5.04
|
|
|
Binding Effect
|
|
49
|
5.05
|
|
|
Financial Statements; No Material Adverse Effect.
|
|
49
|
5.06
|
|
|
Litigation
|
|
49
|
5.07
|
|
|
No Default
|
|
49
|
5.08
|
|
|
Ownership of Property; Liens
|
|
49
|
5.09
|
|
|
Environmental Compliance
|
|
50
|
5.10
|
|
|
Insurance
|
|
50
|
5.11
|
|
|
Taxes
|
|
50
|
5.12
|
|
|
ERISA Compliance.
|
|
50
|
5.13
|
|
|
Loan Party Information; Subsidiaries; Addresses; Equity Interests
|
|
51
|
5.14
|
|
|
Margin Regulations; Investment Company Act.
|
|
52
|
5.15
|
|
|
Disclosure
|
|
52
|
5.16
|
|
|
Compliance with Laws
|
|
52
|
5.17
|
|
|
Intellectual Property; Licenses, Etc
|
|
52
|
5.18
|
|
|
Books and Records
|
|
52
|
5.19
|
|
|
Franchise Agreements and Framework Agreements
|
|
53
|
5.20
|
|
|
Engaged in Business of Vehicle Sales and Related Businesses
|
|
53
|
5.21
|
|
|
Collateral
|
|
53
|
5.22
|
|
|
Solvency
|
|
53
|
5.23
|
|
|
Labor Matters
|
|
53
|
5.24
|
|
|
Taxpayer Identification Number
|
|
53
|
5.25
|
|
|
OFAC
|
|
53
|
5.26
|
|
|
Anti-Corruption Laws
|
|
54
|
5.27
|
|
|
Leases
|
|
54
|
5.28
|
|
|
Beneficial Ownership
|
|
54
|
ARTICLE VI.
|
|
AFFIRMATIVE COVENANTS
|
|
54
|
|
6.01
|
|
|
Notices
|
|
55
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
Page
|
|
6.02
|
|
|
Maintenance of Insurance.
|
|
55
|
6.03
|
|
|
Inspection Rights
|
|
57
|
6.04
|
|
|
Use of Proceeds
|
|
58
|
6.05
|
|
|
Additional Subsidiaries
|
|
58
|
6.06
|
|
|
Preservation of Existence, Etc.
|
|
58
|
6.07
|
|
|
Further Assurances
|
|
59
|
6.08
|
|
|
Leases
|
|
59
|
6.09
|
|
|
Syndicated Credit Agreement
|
|
59
|
6.10
|
|
|
Anti-Corruption Laws
|
|
59
|
6.11
|
|
|
Patriot Act and Beneficial Ownership Regulation
|
|
59
|
6.12
|
|
|
Use of Financed Properties as Vehicle Dealerships
|
|
59
|
ARTICLE VII.
|
|
NEGATIVE COVENANTS
|
|
60
|
|
7.01
|
|
|
Use of Proceeds
|
|
60
|
7.02
|
|
|
Amendments of Certain Indebtedness
|
|
60
|
7.03
|
|
|
Dispositions
|
|
61
|
7.04
|
|
|
Amendments of Organizational Documents
|
|
61
|
7.05
|
|
|
Sanctions
|
|
61
|
7.06
|
|
|
Leases
|
|
61
|
7.07
|
|
|
Collateral
|
|
61
|
7.08
|
|
|
Anti-Corruption Laws
|
|
61
|
7.09
|
|
|
Use of Financed Properties
|
|
61
|
ARTICLE VIII.
|
|
EVENTS OF DEFAULT AND REMEDIES
|
|
61
|
|
8.01
|
|
|
Events of Default
|
|
61
|
8.02
|
|
|
Remedies Upon Event of Default
|
|
64
|
8.03
|
|
|
Application of Funds
|
|
64
|
ARTICLE IX.
|
|
MISCELLANEOUS
|
|
65
|
|
9.01
|
|
|
Amendments, Etc
|
|
65
|
9.02
|
|
|
Notices; Effectiveness; Electronic Communication.
|
|
65
|
9.03
|
|
|
No Waiver; Cumulative Remedies; Enforcement
|
|
66
|
9.04
|
|
|
Expenses; Indemnity; Damage Waiver.
|
|
66
|
9.05
|
|
|
Payments Set Aside
|
|
68
|
|
|
TABLE OF CONTENTS
|
|
|
||
|
|
|
|
Page
|
||
9.06
|
|
|
Successors and Assigns
|
|
68
|
|
9.07
|
|
|
Treatment of Certain Information; Confidentiality
|
|
69
|
|
9.08
|
|
|
Right of Setoff
|
|
69
|
|
9.09
|
|
|
Interest Rate Limitation
|
|
70
|
|
9.10
|
|
|
Counterparts; Integration; Effectiveness
|
|
70
|
|
9.11
|
|
|
Survival of Representations and Warranties
|
|
70
|
|
9.12
|
|
|
Severability
|
|
70
|
|
9.13
|
|
|
Governing Law; Jurisdiction; Etc.
|
|
71
|
|
9.14
|
|
|
Waiver of Jury Trial
|
|
72
|
|
9.15
|
|
|
Electronic Execution of Assignments and Certain Other Documents
|
|
72
|
|
9.16
|
|
|
USA PATRIOT Act
|
|
72
|
|
9.17
|
|
|
Designated Senior Debt
|
|
72
|
|
9.18
|
|
|
Keepwell
|
|
72
|
|
9.19
|
|
|
Releases
|
|
73
|
|
Lender:
|
Wells Fargo Bank, N.A.
|
|
Commercial Lending Services
|
|
MAC – D1644-018
|
|
1451 Thomas Langston Road
|
|
Winterville, NC 28590
|
|
Attn: Loan Administration Manager (LDCMR)
|
|
|
|
|
with copies to:
|
Wells Fargo Dealer Services
|
|
100 North Main Street (MAC D4001-08A)
|
|
Winston-Salem, NC 27101
|
|
Attn.: National Accounts Director
|
|
|
|
-and-
|
|
|
|
Sherman Wells Sylvester & Stamelman LLP
|
|
210 Park Avenue, 2nd Floor
|
|
Florham Park, NJ 07932
|
|
Attn.: Jane L. Brody, Esq.
|
|
|
Borrower:
|
c/o Asbury Automotive Group, Inc.
|
|
Sugarloaf Business Park
|
|
2905 Premiere Parkway NW, Suite 300
|
|
Duluth, GA 30097
|
|
Attn: Senior Vice President – General Counsel
|
|
|
with copies to:
|
Asbury Automotive Group, Inc.
|
|
Sugarloaf Business Park
|
|
2905 Premiere Parkway NW, Suite 300
|
|
Duluth, GA 30097
|
|
Attn: Vice President - Corporate Development & Real Estate
|
|
|
|
-and-
|
|
|
|
JONES DAY® - One Firm Worldwide℠
|
|
1420 Peachtree Street, N.E.
|
|
Suite 800
|
|
Atlanta, GA 30309
|
|
Attn: Todd Roach, Esq.
|
|
|
|
|
Properties 1, 2, 3, 4, 10, 11 and 12
|
ATLANTA REAL ESTATE HOLDINGS L.L.C., a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 5
|
ASBURY JAX FORD, LLC, a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 6
|
COGGIN CARS L.L.C., a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 13
|
WTY MOTORS, L.P., a Delaware limited partnership
By: Asbury Tampa Management L.L.C., its general partner
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 14
|
Q AUTOMOTIVE BRANDON FL, LLC, a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 7
|
ASBURY ST. LOUIS M L.L.C., a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
|
|
Property 9
|
ASBURY ATLANTA CHEV, LLC, a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
|
Property 8
|
ASBURY GEORGIA TOY, LLC, a Delaware limited liability company
By:
/s/ Matthew Pettoni
Name: Matthew Pettoni
Title: Treasurer
Accepted in Winston-Salem, North Carolina:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
/s/ Chad McNeill
Name: Chad McNeill
Title: Senior Vice President
|
Name of Borrower
|
Property
|
Property No.
|
DEALERSHIP PROPERTIES
|
||
Atlanta Real Estate Holdings L.L.C.
|
7909 Mall Parkway, Lithonia, DeKalb County, Georgia
|
1
|
Atlanta Real Estate Holdings L.L.C.
|
7969 Mall Parkway, Lithonia, DeKalb County, Georgia
|
2
|
Atlanta Real Estate Holdings L.L.C.
|
11130 Alpharetta Highway, Roswell, Fulton County, Georgia
|
3
|
Atlanta Real Estate Holdings L.L.C.
|
4197, 4193 Jonesboro Road, Union City, Fulton County, Georgia
|
4
|
Asbury Jax Ford, LLC
|
9650 Atlantic Boulevard, Jacksonville, Duval County, Florida
|
5
|
Coggin Cars L.L.C.
|
11340 Phillips Highway, Jacksonville, Duval County, Florida
|
6
|
Asbury St. Louis M L.L.C.
|
951 Technology Drive, O’Fallon, St. Charles County, Missouri
|
7
|
Asbury Georgia TOY, LLC
|
4115 Jonesboro Road, Union City, Fulton County, Georgia
|
8
|
Asbury Atlanta CHEV, LLC
|
4200 Jonesboro Road, Union City, Fulton County, Georgia
|
9
|
NON-DEALERSHIP PROPERTIES
|
||
Atlanta Real Estate Holdings L.L.C.
|
7947 Mall Parkway, Lithonia, DeKalb County, Georgia
|
10
|
Atlanta Real Estate Holdings L.L.C.
|
7919 Mall Parkway, Lithonia, DeKalb County, Georgia
|
11
|
Atlanta Real Estate Holdings L.L.C.
|
545 Sun Valley Drive, Roswell, Fulton County, Georgia
|
12
|
WTY Motors, L.P.
|
305 Crater Lane (f/k/a 413 Crater Lane), Tampa, Hillsborough County, Florida
|
13
|
Q Automotive Brandon FL, LLC
|
1207 East Brandon Boulevard, Brandon, Hillsborough County, Florida
|
14
|
Property
|
Property No. and Affiliation
|
Appraised Value
|
Loan Allocation Amount
|
DEALERSHIP PROPERTIES
|
|
||
7909 Mall Parkway, Lithonia, DeKalb County, Georgia
|
1
(affiliated with Property 10)
|
$3,690,000.00
|
$2,952,000.00
|
7969 Mall Parkway, Lithonia, DeKalb County, Georgia
|
2
|
$12,240,000.00
|
$9,792,000.00
|
11130 Alpharetta Highway, Roswell, Fulton County, Georgia
|
3
(affiliated with Property 12)
|
$18,340,000.00
|
$14,672,000.00
|
4197, 4193 Jonesboro Road, Union City, Fulton County, Georgia
|
4
|
$7,250,000.00
|
$5,800,000.00
|
9650 Atlantic Boulevard, Jacksonville, Duval County, Florida
|
5
|
$13,850,000.00
|
$11,080,000.00
|
11340 Phillips Highway, Jacksonville, Duval County, Florida
|
6
|
$18,000,000.00
|
$14,400,000.00
|
951 Technology Drive, O’Fallon, St. Charles County, Missouri
|
7
|
$9,600,000.00
|
$7,680,000.00
|
4115 Jonesboro Road, Union City, Fulton County, Georgia
|
8
|
9.100,000.00
|
$7,280,000.00
|
4200 Jonesboro Road, Union City, Fulton County, Georgia
|
9
|
$7,850,000.00
|
$6,280,000.00
|
NON-DEALERSHIP PROPERTIES
|
|
||
7947 Mall Parkway, Lithonia, DeKalb County, Georgia
|
10
(affiliated with Property 1)
|
$4,690,000.00
|
$3,752,000.00
|
7919 Mall Parkway, Lithonia, DeKalb County, Georgia
|
11
|
$2,420,000.00
|
$1,936,000.00
|
545 Sun Valley Drive, Roswell, Fulton County, Georgia
|
12
(affiliated with Property 3)
|
$910,000.00
|
$728,000.00
|
305 Crater Lane (f/k/a 413 Crater Lane), Tampa, Hillsborough County, Florida
|
13
|
$3,550,000.00
|
$2,840,000.00
|
1207 East Brandon Boulevard, Brandon, Hillsborough County, Florida
|
14
|
$8,700,000.00
|
$5,220,000.00
|
Borrower
|
Address of Property
|
Title Company Name
Loan Proforma
|
Atlanta Real Estate Holdings L.L.C.
|
7909 Mall Parkway, Lithonia, DeKalb County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-7
|
Atlanta Real Estate Holdings L.L.C.
|
7969 Mall Parkway, Lithonia, DeKalb County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-6
|
Atlanta Real Estate Holdings L.L.C.
|
11130 Alpharetta Highway, Roswell, Fulton County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-9
|
Atlanta Real Estate Holdings L.L.C.
|
4197, 4193 Jonesboro Road, Union City, Fulton County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-10
|
Asbury Jax Ford, LLC
|
9650 Atlantic Boulevard, Jacksonville, Duval County, Florida
|
Old Republic National Title Insurance Company
18042573
|
Coggin Cars L.L.C.
|
11340 Phillips Highway, Jacksonville, Duval County, Florida
|
Old Republic National Title Insurance Company
18042566
|
Asbury St. Louis M L.L.C.
|
951 Technology Drive, O’Fallon, St. Charles County, Missouri
|
Old Republic National Title Insurance Company
302157NCT-11
|
Asbury Georgia TOY, LLC
|
4115 Jonesboro Road, Union City, Fulton County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-13
|
Asbury Atlanta CHEV, LLC
|
4200 Jonesboro Road, Union City, Fulton County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-12
|
Borrower
|
Address of Property
|
Title Company Name
Loan Proforma
|
Atlanta Real Estate Holdings L.L.C.
|
7947 Mall Parkway, Lithonia, DeKalb County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-7
|
Atlanta Real Estate Holdings L.L.C.
|
7919 Mall Parkway, Lithonia, DeKalb County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-8
|
Atlanta Real Estate Holdings L.L.C.
|
545 Sun Valley Drive, Roswell, Fulton County, Georgia
|
Old Republic National Title Insurance Company
302157NCT-9
|
WTY Motors, L.P.
|
305 Crater Lane (f/k/a 413 Crater Lane), Tampa, Hillsborough County, Florida
|
Old Republic National Title Insurance Company
18042579
|
Q Automotive Brandon FL, LLC
|
1207 East Brandon Boulevard, Brandon, Hillsborough County, Florida
|
Old Republic National Title Insurance Company
18042589
|
Property
|
Property No. and Affiliation
|
Environmental Reports
|
DEALERSHIP PROPERTIES
|
||
7909 Mall Parkway, Lithonia, DeKalb County, Georgia
|
1
(affiliated with Property 10)
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
7969 Mall Parkway, Lithonia, DeKalb County, Georgia
|
2
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
11130 Alpharetta Highway, Roswell, Fulton County, Georgia
|
3
(affiliated with Property 12)
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
4197, 4193 Jonesboro Road, Union City, Fulton County, Georgia
|
4
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
9650 Atlantic Boulevard, Jacksonville, Duval County, Florida
|
5
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
11340 Phillips Highway, Jacksonville, Duval County, Florida
|
6
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
951 Technology Drive, O’Fallon, St. Charles County, Missouri
|
7
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
4115 Jonesboro Road, Union City, Fulton County, Georgia
|
8
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated March 12, 2018 and March 28, 2018
|
|
4200 Jonesboro Road, Union City, Fulton County, Georgia
|
9
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated March 12, 2018 and March 28, 2018
|
|
NON-DEALERSHIP PROPERTIES
|
|||
7947 Mall Parkway, Lithonia, DeKalb County, Georgia
|
10 (affiliated with Property 1)
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
|
7919 Mall Parkway, Lithonia, DeKalb County, Georgia
|
11
|
No Report Required
|
|
545 Sun Valley Drive, Roswell, Fulton County, Georgia
|
12
(affiliated with Property 3)
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
|
305 Crater Lane (f/k/a 413 Crater Lane), Tampa, Hillsborough County, Florida
|
13
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
|
1207 East Brandon Boulevard, Brandon, Hillsborough County, Florida
|
14
|
|
Phase I Environmental Site Assessment by Trammco Environmental Solutions, LLC dated April 20, 2018
|
Landlord
|
Tenant
|
Address of Property
|
Lease Agreement
|
Atlanta Real Estate Holdings L.L.C.
|
Asbury Atlanta Toy 2 L.L.C.
|
7969 Mall Parkway
Lithonia, Georgia
|
Lease Agreement dated
July 22, 2013
|
Atlanta Real Estate Holdings L.L.C.
|
Asbury Atlanta Hund L.L.C.
|
7909 & 7947 Mall Parkway
Lithonia, Georgia
|
Lease Agreement dated
June 1, 2015
|
Atlanta Real Estate Holdings L.L.C.
|
Asbury Atlanta Toy L.L.C.
|
11130 Alpharetta Highway
545 Sun Valley Drive
Roswell, Georgia
|
Lease Agreement dated
March 3, 2008
|
Atlanta Real Estate Holdings L.L.C.
|
Asbury Atlanta Hon L.L.C.
|
4197 & 4193 Jonesboro Road
Union City, Georgia
|
Lease Agreement dated
May 31, 2016
|
Entity Name
|
|
Domestic State
|
|
Foreign Qualification
|
AF Motors, L.L.C.
|
|
DE
|
|
FL
|
ANL, L.P.
|
|
DE
|
|
FL
|
Arkansas Automotive Services, L.L.C.
|
|
DE
|
|
AR
|
Asbury AR Niss L.L.C.
|
|
DE
|
|
AR
|
Asbury Atlanta AC L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta AU L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta BM L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta CHEV, LLC
|
|
DE
|
|
GA
|
Asbury Atlanta Chevrolet L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Ford, LLC
|
|
DE
|
|
GA
|
Asbury Atlanta Hon L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Hund L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Inf L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Infiniti L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Jaguar L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta K L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Lex L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Nis II, LLC
|
|
DE
|
|
GA
|
Asbury Atlanta Nis L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Toy 2 L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta Toy L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta VB L.L.C.
|
|
DE
|
|
GA
|
Asbury Atlanta VL L.L.C.
|
|
DE
|
|
GA
|
Asbury Automotive Arkansas Dealership Holdings L.L.C.
|
|
DE
|
|
AR,MS
|
Asbury Automotive Arkansas L.L.C.
|
|
DE
|
|
AR,MS
|
Asbury Automotive Atlanta II L.L.C.
|
|
DE
|
|
GA
|
Asbury Automotive Atlanta L.L.C.
|
|
DE
|
|
GA
|
Asbury Automotive Brandon, L.P.
|
|
DE
|
|
FL
|
Asbury Automotive Central Florida, L.L.C.
|
|
DE
|
|
FL
|
Asbury Automotive Deland, L.L.C.
|
|
DE
|
|
FL
|
Asbury Automotive Fresno L.L.C.
|
|
DE
|
|
|
Asbury Automotive Group L.L.C.
|
|
DE
|
|
CT
|
Asbury Automotive Jacksonville GP L.L.C.
|
|
DE
|
|
FL
|
Asbury Automotive Jacksonville, L.P.
|
|
DE
|
|
FL
|
Asbury Automotive Management L.L.C.
|
|
DE
|
|
GA
|
Asbury Automotive Mississippi L.L.C.
|
|
DE
|
|
MS
|
Asbury Automotive North Carolina Dealership Holdings L.L.C.
|
|
DE
|
|
NC
|
Asbury Automotive North Carolina L.L.C.
|
|
DE
|
|
NC,SC,VA
|
Asbury Automotive North Carolina Management L.L.C.
|
|
DE
|
|
NC
|
Asbury Automotive North Carolina Real Estate Holdings L.L.C.
|
|
DE
|
|
NC,SC,VA
|
Asbury Automotive Oregon L.L.C.
|
|
DE
|
|
|
Asbury Automotive Southern California L.L.C.
|
|
DE
|
|
|
Asbury Automotive St. Louis II L.L.C.
|
|
DE
|
|
MO
|
Asbury Automotive St. Louis, L.L.C.
|
|
DE
|
|
MO
|
Asbury Automotive Tampa GP L.L.C.
|
|
DE
|
|
FL
|
Asbury Automotive Tampa, L.P.
|
|
DE
|
|
FL
|
Asbury Automotive Texas L.L.C.
|
|
DE
|
|
TX
|
Asbury Automotive Texas Real Estate Holdings L.L.C.
|
|
DE
|
|
TX
|
Asbury CH MOTORS L.L.C.
|
|
DE
|
|
FL
|
Asbury Deland Hund, LLC
|
|
DE
|
|
FL
|
Asbury Deland Imports 2, L.L.C.
|
|
DE
|
|
FL
|
Asbury Fresno Imports L.L.C.
|
|
DE
|
|
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Asbury Ft. Worth Ford, LLC
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|
DE
|
|
TX
|
Asbury Georgia TOY, LLC
|
|
DE
|
|
GA
|
Asbury IN CBG, LLC
|
|
DE
|
|
IN
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Asbury IN CDJ, LLC
|
|
DE
|
|
IN
|
Asbury In Chev, LLC
|
|
DE
|
|
IN
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Asbury In Ford, LLC
|
|
DE
|
|
IN
|
Asbury In Hon, LLC
|
|
DE
|
|
IN
|
Asbury Indy Chev, LLC
|
|
DE
|
|
IN
|
Asbury Jax AC, LLC
|
|
DE
|
|
FL
|
Asbury Jax Ford, LLC
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|
DE
|
|
FL
|
Asbury Jax Holdings, L.P.
|
|
DE
|
|
FL
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Asbury Jax Hon L.L.C.
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|
DE
|
|
FL
|
Asbury Jax K L.L.C.
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|
DE
|
|
FL
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Asbury Jax Management L.L.C.
|
|
DE
|
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FL
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Asbury Jax VW L.L.C.
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DE
|
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FL
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Asbury Management Services, LLC
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|
DE
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AR,AZ,FL,GA,MO,MS,NC,OH,PA,SC,TN,TX,VA
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Asbury MS CHEV L.L.C.
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DE
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IN,MS
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Asbury MS Gray-Daniels L.L.C.
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DE
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MS
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Asbury No Cal Niss L.L.C.
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DE
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Asbury Sacramento Imports L.L.C.
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DE
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Asbury SC JPV L.L.C.
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DE
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SC
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Asbury SC Lex L.L.C.
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DE
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SC
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Asbury SC Toy L.L.C.
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|
DE
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SC
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Asbury So Cal DC L.L.C.
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DE
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|
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Asbury So Cal Hon L.L.C.
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DE
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|
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Asbury So Cal Niss L.L.C.
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|
DE
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|
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Asbury South Carolina Real Estate Holdings L.L.C.
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|
DE
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SC
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Asbury St. Louis Cadillac L.L.C.
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DE
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MO
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Asbury St. Louis FSKR, L.L.C.
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|
DE
|
|
MO
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Asbury St. Louis Lex L.L.C.
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|
DE
|
|
MO
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Asbury St. Louis LR L.L.C.
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|
DE
|
|
MO
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Asbury St. Louis M L.L.C.
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|
DE
|
|
MO
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Asbury Tampa Management L.L.C.
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|
DE
|
|
FL
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Asbury Texas D FSKR, L.L.C.
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|
DE
|
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TX
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Asbury Texas H FSKR, L.L.C.
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|
DE
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TX
|
Asbury-Deland Imports, L.L.C.
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|
DE
|
|
FL
|
Atlanta Real Estate Holdings L.L.C.
|
|
DE
|
|
GA
|
Avenues Motors, Ltd.
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|
FL
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|
|
Bayway Financial Services, L.P.
|
|
DE
|
|
FL
|
BFP Motors L.L.C.
|
|
DE
|
|
FL
|
C & O Properties, Ltd.
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|
FL
|
|
|
Camco Finance II L.L.C.
|
|
DE
|
|
NC,SC,VA
|
CFP Motors L.L.C.
|
|
DE
|
|
FL
|
CH Motors L.L.C.
|
|
DE
|
|
FL
|
CHO Partnership, Ltd.
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|
FL
|
|
|
CK Chevrolet L.L.C.
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|
DE
|
|
FL
|
CK Motors LLC
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|
DE
|
|
FL
|
CN Motors L.L.C.
|
|
DE
|
|
FL
|
Coggin Automotive Corp.
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|
FL
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|
|
Coggin Cars L.L.C.
|
|
DE
|
|
FL
|
Coggin Chevrolet L.L.C.
|
|
DE
|
|
FL
|
Coggin Management, L.P.
|
|
DE
|
|
FL
|
CP-GMC Motors L.L.C.
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|
DE
|
|
FL
|
Crown Acura/Nissan, LLC
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|
NC
|
|
|
Crown CHH L.L.C.
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|
DE
|
|
NC
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Crown CHO L.L.C.
|
|
DE
|
|
NC
|
Crown CHV L.L.C.
|
|
DE
|
|
NC
|
Crown FDO L.L.C.
|
|
DE
|
|
NC
|
Crown FFO Holdings L.L.C.
|
|
DE
|
|
NC
|
Crown FFO L.L.C.
|
|
DE
|
|
NC
|
Crown GAC L.L.C.
|
|
DE
|
|
NC
|
Crown GBM L.L.C.
|
|
DE
|
|
NC
|
Crown GCA L.L.C.
|
|
DE
|
|
NC
|
Crown GDO L.L.C.
|
|
DE
|
|
NC
|
Crown GHO L.L.C.
|
|
DE
|
|
NC
|
Crown GNI L.L.C.
|
|
DE
|
|
NC
|
Crown GPG L.L.C.
|
|
DE
|
|
NC
|
Crown GVO L.L.C.
|
|
DE
|
|
NC
|
Crown Honda, LLC
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|
NC
|
|
|
Crown Motorcar Company L.L.C.
|
|
DE
|
|
VA
|
Crown PBM L.L.C.
|
|
DE
|
|
|
Crown RIA L.L.C.
|
|
DE
|
|
VA
|
Crown RIB L.L.C.
|
|
DE
|
|
VA
|
Crown SJC L.L.C.
|
|
DE
|
|
SC
|
Crown SNI L.L.C.
|
|
DE
|
|
SC
|
CSA Imports L.L.C.
|
|
DE
|
|
FL
|
Escude-NN L.L.C.
|
|
DE
|
|
MS
|
Escude-NS L.L.C.
|
|
DE
|
|
MS
|
Escude-T L.L.C.
|
|
DE
|
|
MS
|
Florida Automotive Services L.L.C.
|
|
DE
|
|
FL
|
HFP Motors L.L.C.
|
|
DE
|
|
FL
|
JC Dealer Systems, LLC
|
|
DE
|
|
FL
|
KP Motors L.L.C.
|
|
DE
|
|
FL
|
McDavid Austin-Acra L.L.C.
|
|
DE
|
|
TX
|
McDavid Frisco-Hon L.L.C.
|
|
DE
|
|
TX
|
McDavid Grande L.L.C.
|
|
DE
|
|
TX
|
McDavid Houston-Hon, L.L.C.
|
|
DE
|
|
TX
|
McDavid Houston-Niss, L.L.C.
|
|
DE
|
|
TX
|
McDavid Irving-Hon, L.L.C.
|
|
DE
|
|
TX
|
McDavid Outfitters, L.L.C.
|
|
DE
|
|
TX
|
McDavid Plano-Acra, L.L.C.
|
|
DE
|
|
TX
|
Mid-Atlantic Automotive Services, L.L.C.
|
|
DE
|
|
NC,SC,VA
|
Mississippi Automotive Services, L.L.C.
|
|
DE
|
|
MS
|
Missouri Automotive Services, L.L.C.
|
|
DE
|
|
MO
|
NP FLM L.L.C.
|
|
DE
|
|
AR
|
NP MZD L.L.C.
|
|
DE
|
|
AR
|
NP VKW L.L.C.
|
|
DE
|
|
AR
|
Plano Lincoln-Mercury, Inc.
|
|
DE
|
|
TX
|
Precision Computer Services, Inc.
|
|
FL
|
|
|
Precision Enterprises Tampa, Inc.
|
|
FL
|
|
|
Precision Infiniti, Inc.
|
|
FL
|
|
|
Precision Motorcars, Inc.
|
|
FL
|
|
|
Precision Nissan, Inc.
|
|
FL
|
|
|
Premier NSN L.L.C.
|
|
DE
|
|
AR
|
Premier Pon L.L.C.
|
|
DE
|
|
AR
|
Prestige Bay L.L.C.
|
|
DE
|
|
AR
|
Prestige Toy L.L.C.
|
|
DE
|
|
AR
|
Q Automotive Brandon FL, LLC
|
|
DE
|
|
FL
|
Q Automotive Cumming GA, LLC
|
|
DE
|
|
GA
|
Q Automotive Ft. Myers FL, LLC
|
|
DE
|
|
FL
|
Q Automotive Group L.L.C.
|
|
DE
|
|
FL
|
Q Automotive Holiday FL, LLC
|
|
DE
|
|
FL
|
Q Automotive Jacksonville FL, LLC
|
|
DE
|
|
FL
|
Q Automotive Kennesaw GA, LLC
|
|
DE
|
|
GA
|
Q Automotive Orlando FL, LLC
|
|
DE
|
|
FL
|
Q Automotive Tampa FL, LLC
|
|
DE
|
|
FL
|
Southern Atlantic Automotive Services, L.L.C.
|
|
DE
|
|
GA,SC
|
Tampa Hund, L.P.
|
|
DE
|
|
FL
|
Tampa Kia, L.P.
|
|
DE
|
|
FL
|
Tampa LM, L.P.
|
|
DE
|
|
|
Tampa Mit, L.P.
|
|
DE
|
|
|
Texas Automotive Services, L.L.C.
|
|
DE
|
|
TX
|
Thomason Auto Credit Northwest, Inc.
|
|
OR
|
|
|
Thomason Dam L.L.C.
|
|
DE
|
|
|
Thomason Frd L.L.C.
|
|
DE
|
|
|
Thomason Hund L.L.C.
|
|
DE
|
|
|
Thomason Pontiac-GMC L.L.C.
|
|
DE
|
|
|
WMZ Motors, L.P.
|
|
DE
|
|
|
WTY Motors, L.P.
|
|
DE
|
|
FL
|
1)
|
Registration Statement (Form S-8 No. 333-221146) of Asbury Automotive Group, Inc.,
|
2)
|
Registration Statement (Form S-8 No. 333-180980) of Asbury Automotive Group, Inc.,
|
3)
|
Registration Statement (Form S-8 No. 333-165136) of Asbury Automotive Group, Inc.,
|
4)
|
Registration Statement (Form S-8 No. 333-105450) of Asbury Automotive Group, Inc.,
|
5)
|
Registration Statement (Form S-8 No. 333-84646) of Asbury Automotive Group, Inc., and
|
6)
|
Registration Statement (Form S-3 No. 333-123505) of Asbury Automotive Group, Inc.;
|
1.
|
I have reviewed this Annual Report on Form 10-K 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/ David W. Hult
|
|
David W. Hult
Chief Executive Officer
February 28, 2019
|
|
1.
|
I have reviewed this Annual Report on Form 10-K 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/ Sean D. Goodman
|
|
Sean D. Goodman
Chief Financial Officer February 28, 2019 |
|
(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/ David W. Hult
|
|
David W. Hult
Chief Executive Officer
February 28, 2019
|
|
(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/ Sean D. Goodman
|
|
Sean D. Goodman
Chief Financial Officer
February 28, 2019
|
|