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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Asbury Automotive Group Inc | NYSE:ABG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 208.45 | 2 | 13:39:04 |
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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01-0609375
|
|
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
|
|
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|
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2905 Premiere Parkway NW, Suite 300
Duluth, Georgia
|
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30097
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|
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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x
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Accelerated Filer
|
o
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Non-Accelerated Filer
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o
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(Do not check if a smaller reporting company)
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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—Financial Information
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PART II—Other Information
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September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6.8
|
|
|
$
|
4.7
|
|
Contracts-in-transit
|
138.0
|
|
|
193.3
|
|
||
Accounts receivable, net
|
114.1
|
|
|
128.5
|
|
||
Inventories
|
962.8
|
|
|
826.0
|
|
||
Assets held for sale
|
28.3
|
|
|
30.3
|
|
||
Other current assets
|
125.5
|
|
|
119.3
|
|
||
Total current assets
|
1,375.5
|
|
|
1,302.1
|
|
||
PROPERTY AND EQUIPMENT, net
|
877.6
|
|
|
834.2
|
|
||
GOODWILL
|
181.2
|
|
|
160.8
|
|
||
INTANGIBLE FRANCHISE RIGHTS
|
69.5
|
|
|
49.6
|
|
||
OTHER LONG-TERM ASSETS
|
12.5
|
|
|
10.0
|
|
||
Total assets
|
$
|
2,516.3
|
|
|
$
|
2,356.7
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Floor plan notes payable—trade, net
|
$
|
102.2
|
|
|
$
|
104.2
|
|
Floor plan notes payable—non-trade, net
|
728.9
|
|
|
627.9
|
|
||
Current maturities of long-term debt
|
13.1
|
|
|
12.9
|
|
||
Accounts payable and accrued liabilities
|
291.3
|
|
|
313.2
|
|
||
Total current liabilities
|
1,135.5
|
|
|
1,058.2
|
|
||
LONG-TERM DEBT
|
852.1
|
|
|
862.6
|
|
||
DEFERRED INCOME TAXES
|
17.4
|
|
|
12.5
|
|
||
OTHER LONG-TERM LIABILITIES
|
30.3
|
|
|
29.2
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 11)
|
|
|
|
||||
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; 41,159,319 and 40,969,987 shares issued, including shares held in treasury, respectively
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
571.7
|
|
|
563.5
|
|
||
Retained earnings
|
887.1
|
|
|
750.3
|
|
||
Treasury stock, at cost; 21,052,038 and 20,156,962 shares, respectively
|
(980.9
|
)
|
|
(919.1
|
)
|
||
Accumulated other comprehensive income (loss)
|
2.7
|
|
|
(0.9
|
)
|
||
Total shareholders' equity
|
481.0
|
|
|
394.2
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,516.3
|
|
|
$
|
2,356.7
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
New vehicle
|
$
|
980.5
|
|
|
$
|
881.6
|
|
|
$
|
2,766.3
|
|
|
$
|
2,597.0
|
|
Used vehicle
|
497.5
|
|
|
455.6
|
|
|
1,499.0
|
|
|
1,396.6
|
|
||||
Parts and service
|
206.1
|
|
|
197.2
|
|
|
609.9
|
|
|
589.5
|
|
||||
Finance and insurance, net
|
73.3
|
|
|
67.7
|
|
|
215.0
|
|
|
202.5
|
|
||||
TOTAL REVENUE
|
1,757.4
|
|
|
1,602.1
|
|
|
5,090.2
|
|
|
4,785.6
|
|
||||
COST OF SALES:
|
|
|
|
|
|
|
|
||||||||
New vehicle
|
938.4
|
|
|
840.6
|
|
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2,645.0
|
|
|
2,474.6
|
|
||||
Used vehicle
|
464.7
|
|
|
426.8
|
|
|
1,398.6
|
|
|
1,301.2
|
|
||||
Parts and service
|
76.3
|
|
|
74.4
|
|
|
225.4
|
|
|
222.3
|
|
||||
TOTAL COST OF SALES
|
1,479.4
|
|
|
1,341.8
|
|
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4,269.0
|
|
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3,998.1
|
|
||||
GROSS PROFIT
|
278.0
|
|
|
260.3
|
|
|
821.2
|
|
|
787.5
|
|
||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative
|
188.8
|
|
|
182.5
|
|
|
563.6
|
|
|
549.2
|
|
||||
Depreciation and amortization
|
8.5
|
|
|
8.1
|
|
|
25.2
|
|
|
24.0
|
|
||||
Other operating (income) expenses, net
|
(0.1
|
)
|
|
—
|
|
|
(1.2
|
)
|
|
0.7
|
|
||||
INCOME FROM OPERATIONS
|
80.8
|
|
|
69.7
|
|
|
233.6
|
|
|
213.6
|
|
||||
OTHER EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Floor plan interest expense
|
8.4
|
|
|
5.8
|
|
|
23.0
|
|
|
17.1
|
|
||||
Other interest expense, net
|
13.2
|
|
|
13.4
|
|
|
39.4
|
|
|
40.2
|
|
||||
Swap interest expense
|
0.1
|
|
|
0.4
|
|
|
0.5
|
|
|
1.6
|
|
||||
Total other expenses, net
|
21.7
|
|
|
19.6
|
|
|
62.9
|
|
|
58.9
|
|
||||
INCOME BEFORE INCOME TAXES
|
59.1
|
|
|
50.1
|
|
|
170.7
|
|
|
154.7
|
|
||||
Income tax expense
|
14.8
|
|
|
19.4
|
|
|
43.1
|
|
|
58.1
|
|
||||
NET INCOME
|
$
|
44.3
|
|
|
$
|
30.7
|
|
|
$
|
127.6
|
|
|
$
|
96.6
|
|
EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic—
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2.22
|
|
|
$
|
1.49
|
|
|
$
|
6.29
|
|
|
$
|
4.64
|
|
Diluted—
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2.18
|
|
|
$
|
1.48
|
|
|
$
|
6.22
|
|
|
$
|
4.60
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
||||||||
Basic
|
20.0
|
|
|
20.6
|
|
|
20.3
|
|
|
20.8
|
|
||||
Restricted stock
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Performance share units
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Diluted
|
20.3
|
|
|
20.8
|
|
|
20.5
|
|
|
21.0
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
44.3
|
|
|
$
|
30.7
|
|
|
$
|
127.6
|
|
|
$
|
96.6
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Change in fair value of cash flow swaps
|
0.9
|
|
|
0.3
|
|
|
4.9
|
|
|
0.5
|
|
||||
Income tax expense associated with cash flow swaps
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|
(0.2
|
)
|
||||
Comprehensive income
|
$
|
45.0
|
|
|
$
|
30.9
|
|
|
$
|
131.2
|
|
|
$
|
96.9
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOW FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
127.6
|
|
|
$
|
96.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities—
|
|
|
|
||||
Depreciation and amortization
|
25.2
|
|
|
24.0
|
|
||
Stock-based compensation
|
8.2
|
|
|
10.0
|
|
||
Deferred income taxes
|
0.6
|
|
|
0.1
|
|
||
Loaner vehicle amortization
|
16.7
|
|
|
16.8
|
|
||
Other adjustments, net
|
1.9
|
|
|
2.3
|
|
||
Changes in operating assets and liabilities, net of acquisitions and divestitures—
|
|
|
|
||||
Contracts-in-transit
|
55.3
|
|
|
50.8
|
|
||
Accounts receivable
|
14.8
|
|
|
30.0
|
|
||
Inventories
|
26.4
|
|
|
189.5
|
|
||
Other current assets
|
(144.5
|
)
|
|
(145.6
|
)
|
||
Floor plan notes payable—trade, net
|
(2.0
|
)
|
|
1.4
|
|
||
Accounts payable and accrued liabilities
|
(25.6
|
)
|
|
(34.3
|
)
|
||
Other long-term assets and liabilities, net
|
1.8
|
|
|
1.6
|
|
||
Net cash provided by operating activities
|
106.4
|
|
|
243.2
|
|
||
CASH FLOW FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures—excluding real estate
|
(21.5
|
)
|
|
(21.4
|
)
|
||
Capital expenditures—real estate
|
(17.6
|
)
|
|
(0.3
|
)
|
||
Purchases of previously leased real estate
|
(4.4
|
)
|
|
—
|
|
||
Acquisitions
|
(91.3
|
)
|
|
(80.1
|
)
|
||
Proceeds from the sale of assets
|
2.0
|
|
|
3.8
|
|
||
Net cash used in investing activities
|
(132.8
|
)
|
|
(98.0
|
)
|
||
CASH FLOW FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Floor plan borrowings—non-trade
|
3,309.7
|
|
|
2,818.1
|
|
||
Floor plan borrowings—acquisitions
|
22.7
|
|
|
25.1
|
|
||
Floor plan repayments—non-trade
|
(3,231.4
|
)
|
|
(2,938.1
|
)
|
||
Repayments of borrowings
|
(10.7
|
)
|
|
(11.5
|
)
|
||
Repurchases of common stock, including shares associated with net share settlement of employee share-based awards
|
(61.8
|
)
|
|
(39.4
|
)
|
||
Net cash provided by (used in) financing activities
|
28.5
|
|
|
(145.8
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
2.1
|
|
|
(0.6
|
)
|
||
CASH AND CASH EQUIVALENTS, beginning of period
|
4.7
|
|
|
3.4
|
|
||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
6.8
|
|
|
$
|
2.8
|
|
•
|
Coggin dealerships operating primarily in Jacksonville, Fort Pierce and Orlando, Florida;
|
•
|
Courtesy dealerships operating in Tampa, Florida;
|
•
|
Crown dealerships operating in North Carolina, South Carolina and Virginia;
|
•
|
Gray-Daniels dealerships operating in the Jackson, Mississippi area;
|
•
|
Hare dealerships operating in the Indianapolis, Indiana area;
|
•
|
McDavid dealerships operating in metropolitan Austin, Dallas and Houston, Texas;
|
•
|
Nalley dealerships operating in metropolitan Atlanta, Georgia; and
|
•
|
Plaza dealerships operating in metropolitan St. Louis, Missouri.
|
|
For the Three Months Ended September 30, 2018
|
|
For the Nine Months Ended September 30, 2018
|
||||
|
(In millions)
|
||||||
Revenue:
|
|
|
|
||||
New vehicle
|
$
|
980.5
|
|
|
$
|
2,766.3
|
|
Used vehicle retail
|
448.7
|
|
|
1,355.4
|
|
||
Used vehicle wholesale
|
48.8
|
|
|
143.6
|
|
||
New and used vehicle
|
1,478.0
|
|
|
4,265.3
|
|
||
Sale of vehicle parts and accessories
|
34.3
|
|
|
102.4
|
|
||
Vehicle repair and maintenance services
|
171.8
|
|
|
507.5
|
|
||
Parts and services
|
206.1
|
|
|
609.9
|
|
||
Finance and insurance, net
|
73.3
|
|
|
215.0
|
|
||
Total revenue
|
$
|
1,757.4
|
|
|
$
|
5,090.2
|
|
|
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 September 30, 2018
|
||||||||||
|
As Reported
|
|
Amounts Under ASC 605
|
|
Effect of Change Increase/(Decrease)
|
||||||
|
(In millions)
|
||||||||||
Balance Sheet:
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
114.1
|
|
|
$
|
123.6
|
|
|
$
|
(9.5
|
)
|
Inventories
|
962.8
|
|
|
965.5
|
|
|
(2.7
|
)
|
|||
Other current assets
|
125.5
|
|
|
112.2
|
|
|
13.3
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
$
|
291.3
|
|
|
$
|
291.7
|
|
|
$
|
(0.4
|
)
|
Deferred income taxes
|
17.4
|
|
|
14.3
|
|
|
3.1
|
|
|||
Equity:
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
887.1
|
|
|
$
|
888.7
|
|
|
$
|
(1.6
|
)
|
|
For the Three Months Ended September 30, 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
|
$
|
206.1
|
|
|
$
|
205.8
|
|
|
$
|
0.3
|
|
Finance and insurance, net
|
73.3
|
|
|
73.2
|
|
|
0.1
|
|
|||
Cost of Sales:
|
|
|
|
|
|
||||||
Parts and service
|
76.3
|
|
|
76.1
|
|
|
0.2
|
|
|||
Income before income taxes
|
59.1
|
|
|
58.9
|
|
|
0.2
|
|
|||
Income tax expense
|
14.8
|
|
|
14.8
|
|
|
—
|
|
|||
Net income
|
$
|
44.3
|
|
|
$
|
44.1
|
|
|
$
|
0.2
|
|
Earnings Per Common Share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.22
|
|
|
$
|
2.21
|
|
|
$
|
0.01
|
|
Diluted
|
$
|
2.18
|
|
|
$
|
2.17
|
|
|
$
|
0.01
|
|
|
For the Nine Months Ended September 30, 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
|
$
|
609.9
|
|
|
$
|
612.0
|
|
|
$
|
(2.1
|
)
|
Finance and insurance, net
|
215.0
|
|
|
216.0
|
|
|
(1.0
|
)
|
|||
Cost of Sales:
|
|
|
|
|
|
||||||
Parts and service
|
225.4
|
|
|
226.8
|
|
|
(1.4
|
)
|
|||
Income before income taxes
|
170.7
|
|
|
172.4
|
|
|
(1.7
|
)
|
|||
Income tax expense
|
43.1
|
|
|
43.5
|
|
|
(0.4
|
)
|
|||
Net income
|
$
|
127.6
|
|
|
$
|
128.9
|
|
|
$
|
(1.3
|
)
|
Earnings Per Common Share:
|
|
|
|
|
|
||||||
Basic
|
$
|
6.29
|
|
|
$
|
6.35
|
|
|
$
|
(0.06
|
)
|
Diluted
|
$
|
6.22
|
|
|
$
|
6.29
|
|
|
$
|
(0.07
|
)
|
•
|
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. During the
three
months ended
September 30, 2018
, gross profit increased $
0.1 million
due to differences in open repair orders as of
September 30, 2018
compared to open repair orders as of June 30, 2018. During the
nine months ended September 30, 2018
, gross profit decreased $
0.7 million
due to differences in open repair orders as of
September 30, 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. During the
three
months ended
September 30, 2018
, net revenue increased
$0.1 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. During the
nine months ended September 30, 2018
, net revenue decreased
$1.0 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
|
|
|
As of
|
||
|
September 30, 2018
|
||
|
(In millions)
|
||
Inventory
|
$
|
27.3
|
|
Real estate
|
23.5
|
|
|
Property and equipment
|
0.6
|
|
|
Goodwill
|
20.4
|
|
|
Manufacturer franchise rights
|
19.9
|
|
|
Loaner vehicles
|
1.7
|
|
|
Liabilities assumed
|
(0.2
|
)
|
|
Total purchase price
|
$
|
93.2
|
|
|
As of
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Vehicle receivables
|
$
|
42.1
|
|
|
$
|
48.3
|
|
Manufacturer receivables
|
43.6
|
|
|
47.0
|
|
||
Other receivables
|
29.6
|
|
|
34.8
|
|
||
Total accounts receivable
|
115.3
|
|
|
130.1
|
|
||
Less—Allowance for doubtful accounts
|
(1.2
|
)
|
|
(1.6
|
)
|
||
Accounts receivable, net
|
$
|
114.1
|
|
|
$
|
128.5
|
|
|
As of
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
New vehicles
|
$
|
772.6
|
|
|
$
|
646.5
|
|
Used vehicles
|
149.9
|
|
|
135.9
|
|
||
Parts and accessories
|
40.3
|
|
|
43.6
|
|
||
Total inventories
|
$
|
962.8
|
|
|
$
|
826.0
|
|
|
As of
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Floor plan notes payable—trade
|
$
|
113.6
|
|
|
$
|
114.8
|
|
Floor plan notes payable offset account
|
(11.4
|
)
|
|
(10.6
|
)
|
||
Floor plan notes payable—trade, net
|
$
|
102.2
|
|
|
$
|
104.2
|
|
|
|
|
|
||||
Floor plan notes payable—non-trade
|
$
|
760.4
|
|
|
$
|
666.6
|
|
Floor plan notes payable offset account
|
(31.5
|
)
|
|
(38.7
|
)
|
||
Floor plan notes payable—non-trade, net
|
$
|
728.9
|
|
|
$
|
627.9
|
|
|
As of
|
||||||
September 30, 2018
|
|
December 31, 2017
|
|||||
(In millions)
|
|||||||
6.0% Senior Subordinated Notes due 2024
|
$
|
600.0
|
|
|
$
|
600.0
|
|
Mortgage notes payable bearing interest at fixed rates
|
134.6
|
|
|
139.1
|
|
||
Real estate credit agreement
|
46.2
|
|
|
48.5
|
|
||
Restated master loan agreement
|
84.6
|
|
|
88.5
|
|
||
Capital lease obligations
|
3.2
|
|
|
3.2
|
|
||
Total debt outstanding
|
868.6
|
|
|
879.3
|
|
||
Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024
|
6.2
|
|
|
6.8
|
|
||
Less—debt issuance costs
|
(9.6
|
)
|
|
(10.6
|
)
|
||
Long-term debt, including current portion
|
865.2
|
|
|
875.5
|
|
||
Less—current portion, net of current portion of debt issuance costs
|
(13.1
|
)
|
|
(12.9
|
)
|
||
Long-term debt
|
$
|
852.1
|
|
|
$
|
862.6
|
|
|
As of
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Carrying Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
606.2
|
|
|
$
|
606.8
|
|
Mortgage notes payable
|
265.4
|
|
|
276.1
|
|
||
Total carrying value
|
$
|
871.6
|
|
|
$
|
882.9
|
|
|
|
|
|
||||
Fair Value:
|
|
|
|
||||
6.0% Senior Subordinated Notes due 2024
|
$
|
603.0
|
|
|
$
|
625.5
|
|
Mortgage notes payable
|
256.5
|
|
|
275.3
|
|
||
Total fair value
|
$
|
859.5
|
|
|
$
|
900.8
|
|
|
As of
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Other current assets
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
Accounts payable and accrued liabilities
|
—
|
|
|
1.0
|
|
||
Other long-term (assets) liabilities
|
(2.9
|
)
|
|
0.7
|
|
||
Total fair value
|
$
|
(3.2
|
)
|
|
$
|
1.7
|
|
For the Three Months Ended September 30,
|
|
Results Recognized in Accumulated Other Comprehensive Income/(Loss)
(Effective Portion) |
|
Location of Results Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings
|
|
Results Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings
|
||||
2018
|
|
$
|
0.8
|
|
|
Swap interest expense
|
|
$
|
(0.1
|
)
|
2017
|
|
$
|
(0.1
|
)
|
|
Swap interest expense
|
|
$
|
(0.4
|
)
|
For the Nine Months Ended September 30,
|
|
Results Recognized in Accumulated Other Comprehensive Income/(Loss)
(Effective Portion)
|
|
Location of Results Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
|
|
Amount Reclassified from Accumulated Other Comprehensive Income/(Loss)
to Earnings
|
||||
2018
|
|
$
|
4.4
|
|
|
Swap interest expense
|
|
$
|
(0.5
|
)
|
2017
|
|
$
|
(1.1
|
)
|
|
Swap interest expense
|
|
$
|
(1.6
|
)
|
•
|
our ability to execute our business strategy;
|
•
|
the seasonally adjusted annual rate ("SAAR") of new vehicle sales in the U.S.;
|
•
|
our ability to further improve our operating cash flows, and the availability of capital and liquidity;
|
•
|
our estimated future capital expenditures;
|
•
|
general economic conditions and its impact on our revenues and expenses;
|
•
|
our parts and service revenue due to, among other things, improvements in manufacturing quality;
|
•
|
the variable nature of significant components of our cost structure;
|
•
|
our ability to limit our exposure to regional economic downturns due to our geographic diversity and brand mix;
|
•
|
manufacturers' willingness to continue to use incentive programs to drive demand for their product offerings;
|
•
|
our ability to leverage our common systems, infrastructure and processes in a cost-efficient manner;
|
•
|
our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;
|
•
|
the continued availability of financing, including floor plan financing for inventory;
|
•
|
the ability of consumers to secure vehicle financing at favorable rates;
|
•
|
the growth of import and luxury brands over the long-term;
|
•
|
our ability to mitigate any future negative trends in new vehicle sales; and
|
•
|
our ability to increase our cash flow and net income as a result of the foregoing and other factors.
|
•
|
changes in general economic and business conditions, including changes in employment levels, consumer demand, preferences and confidence levels, the availability and cost of credit in a rising interest rate environment, fuel prices, levels of discretionary personal income and interest rates;
|
•
|
our ability to execute our balanced automotive retailing and service business strategy;
|
•
|
adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver, and market their vehicles successfully;
|
•
|
changes in the mix, and total number, of vehicles we are able to sell;
|
•
|
our outstanding indebtedness and our continued ability to comply with applicable covenants in our various financing and lease agreements, or to obtain waivers of these covenants as necessary;
|
•
|
high levels of competition in our industry, which may create pricing and margin pressures on our products and services;
|
•
|
our relationships with manufacturers of the vehicles we sell and our ability to renew, and enter into new framework and dealer agreements with vehicle manufacturers whose brands we sell, on terms acceptable to us;
|
•
|
the availability of manufacturer incentive programs and our ability to earn these incentives;
|
•
|
failure of our management information systems or any security breaches;
|
•
|
changes in laws and regulations governing the operation of automobile franchises, including consumer protections, accounting standards, taxation requirements, and environmental laws;
|
•
|
changes in, or the imposition of, new tariffs or trade restrictions on imported vehicles or parts;
|
•
|
adverse results from litigation or other similar proceedings involving us;
|
•
|
our ability to generate sufficient cash flows, maintain our liquidity and obtain any necessary additional funds for working capital, capital expenditures, acquisitions, stock repurchases and/or dividends, debt maturity payments, and other corporate purposes;
|
•
|
any disruptions in the financial markets, which may impact our ability to access capital;
|
•
|
our relationships with, and the financial stability of, our lenders and lessors;
|
•
|
significant disruptions in the production and delivery of vehicles and parts for any reason, including natural disasters, product recalls, work stoppages, significant property loss or other occurrences that are outside of our control;
|
•
|
our ability to execute our initiatives and other strategies; and
|
•
|
our ability to leverage gains from our dealership portfolio.
|
•
|
Coggin dealerships operating primarily in Jacksonville, Fort Pierce and Orlando, Florida;
|
•
|
Courtesy dealerships operating in Tampa, Florida;
|
•
|
Crown dealerships operating in North Carolina, South Carolina and Virginia;
|
•
|
Gray-Daniels dealerships operating in the Jackson, Mississippi area;
|
•
|
Hare dealerships operating in the Indianapolis, Indiana area;
|
•
|
McDavid dealerships operating in metropolitan Austin, Dallas and Houston, Texas;
|
•
|
Nalley dealerships operating in metropolitan Atlanta, Georgia; and
|
•
|
Plaza dealerships operating in metropolitan St. Louis, Missouri.
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
980.5
|
|
|
$
|
881.6
|
|
|
$
|
98.9
|
|
|
11
|
%
|
Used vehicle
|
497.5
|
|
|
455.6
|
|
|
41.9
|
|
|
9
|
%
|
|||
Parts and service
|
206.1
|
|
|
197.2
|
|
|
8.9
|
|
|
5
|
%
|
|||
Finance and insurance, net
|
73.3
|
|
|
67.7
|
|
|
5.6
|
|
|
8
|
%
|
|||
TOTAL REVENUE
|
1,757.4
|
|
|
1,602.1
|
|
|
155.3
|
|
|
10
|
%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
42.1
|
|
|
41.0
|
|
|
1.1
|
|
|
3
|
%
|
|||
Used vehicle
|
32.8
|
|
|
28.8
|
|
|
4.0
|
|
|
14
|
%
|
|||
Parts and service
|
129.8
|
|
|
122.8
|
|
|
7.0
|
|
|
6
|
%
|
|||
Finance and insurance, net
|
73.3
|
|
|
67.7
|
|
|
5.6
|
|
|
8
|
%
|
|||
TOTAL GROSS PROFIT
|
278.0
|
|
|
260.3
|
|
|
17.7
|
|
|
7
|
%
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
188.8
|
|
|
182.5
|
|
|
6.3
|
|
|
3
|
%
|
|||
Depreciation and amortization
|
8.5
|
|
|
8.1
|
|
|
0.4
|
|
|
5
|
%
|
|||
Other operating (income) expenses, net
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
%
|
|||
INCOME FROM OPERATIONS
|
80.8
|
|
|
69.7
|
|
|
11.1
|
|
|
16
|
%
|
|||
OTHER EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
8.4
|
|
|
5.8
|
|
|
2.6
|
|
|
45
|
%
|
|||
Other interest expense, net
|
13.2
|
|
|
13.4
|
|
|
(0.2
|
)
|
|
(1
|
)%
|
|||
Swap interest expense
|
0.1
|
|
|
0.4
|
|
|
(0.3
|
)
|
|
(75
|
)%
|
|||
Total other expenses, net
|
21.7
|
|
|
19.6
|
|
|
2.1
|
|
|
11
|
%
|
|||
INCOME BEFORE INCOME TAXES
|
59.1
|
|
|
50.1
|
|
|
9.0
|
|
|
18
|
%
|
|||
Income tax expense
|
14.8
|
|
|
19.4
|
|
|
(4.6
|
)
|
|
(24
|
)%
|
|||
NET INCOME
|
$
|
44.3
|
|
|
$
|
30.7
|
|
|
$
|
13.6
|
|
|
44
|
%
|
Net income per common share—Diluted
|
$
|
2.18
|
|
|
$
|
1.48
|
|
|
$
|
0.70
|
|
|
47
|
%
|
|
For the Three Months Ended September 30,
|
||||
|
2018
|
|
2017
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
55.8
|
%
|
|
55.0
|
%
|
Used vehicle retail
|
25.5
|
%
|
|
25.0
|
%
|
Used vehicle wholesale
|
2.8
|
%
|
|
3.5
|
%
|
Parts and service
|
11.7
|
%
|
|
12.3
|
%
|
Finance and insurance, net
|
4.2
|
%
|
|
4.2
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
15.1
|
%
|
|
15.8
|
%
|
Used vehicle retail
|
11.8
|
%
|
|
11.0
|
%
|
Used vehicle wholesale
|
—
|
%
|
|
—
|
%
|
Parts and service
|
46.7
|
%
|
|
47.2
|
%
|
Finance and insurance, net
|
26.4
|
%
|
|
26.0
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
15.8
|
%
|
|
16.2
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
67.9
|
%
|
|
70.1
|
%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
297.8
|
|
|
$
|
288.3
|
|
|
$
|
9.5
|
|
|
3
|
%
|
Import
|
485.2
|
|
|
414.2
|
|
|
71.0
|
|
|
17
|
%
|
|||
Domestic
|
197.5
|
|
|
179.1
|
|
|
18.4
|
|
|
10
|
%
|
|||
Total new vehicle revenue
|
$
|
980.5
|
|
|
$
|
881.6
|
|
|
$
|
98.9
|
|
|
11
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
18.6
|
|
|
$
|
18.5
|
|
|
$
|
0.1
|
|
|
1
|
%
|
Import
|
15.4
|
|
|
14.4
|
|
|
1.0
|
|
|
7
|
%
|
|||
Domestic
|
8.1
|
|
|
8.1
|
|
|
—
|
|
|
—
|
%
|
|||
Total new vehicle gross profit
|
$
|
42.1
|
|
|
$
|
41.0
|
|
|
$
|
1.1
|
|
|
3
|
%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
5,685
|
|
|
5,499
|
|
|
186
|
|
|
3
|
%
|
|||
Import
|
17,046
|
|
|
14,997
|
|
|
2,049
|
|
|
14
|
%
|
|||
Domestic
|
5,019
|
|
|
4,691
|
|
|
328
|
|
|
7
|
%
|
|||
Total new vehicle units
|
27,750
|
|
|
25,187
|
|
|
2,563
|
|
|
10
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
297.8
|
|
|
$
|
288.3
|
|
|
$
|
9.5
|
|
|
3
|
%
|
Import
|
458.4
|
|
|
414.2
|
|
|
44.2
|
|
|
11
|
%
|
|||
Domestic
|
191.3
|
|
|
179.1
|
|
|
12.2
|
|
|
7
|
%
|
|||
Total new vehicle revenue
|
$
|
947.5
|
|
|
$
|
881.6
|
|
|
$
|
65.9
|
|
|
7
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
18.7
|
|
|
$
|
18.5
|
|
|
$
|
0.2
|
|
|
1
|
%
|
Import
|
14.3
|
|
|
14.4
|
|
|
(0.1
|
)
|
|
(1
|
)%
|
|||
Domestic
|
7.9
|
|
|
8.1
|
|
|
(0.2
|
)
|
|
(2
|
)%
|
|||
Total new vehicle gross profit
|
$
|
40.9
|
|
|
$
|
41.0
|
|
|
$
|
(0.1
|
)
|
|
—
|
%
|
New vehicle units
|
|
|
|
|
|
|
|
|||||||
Luxury
|
5,685
|
|
|
5,499
|
|
|
186
|
|
|
3
|
%
|
|||
Import
|
16,114
|
|
|
14,997
|
|
|
1,117
|
|
|
7
|
%
|
|||
Domestic
|
4,829
|
|
|
4,691
|
|
|
138
|
|
|
3
|
%
|
|||
Total new vehicle units
|
26,628
|
|
|
25,187
|
|
|
1,441
|
|
|
6
|
%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,333
|
|
|
$
|
35,002
|
|
|
$
|
331
|
|
|
1
|
%
|
Gross profit per new vehicle sold
|
$
|
1,517
|
|
|
$
|
1,628
|
|
|
$
|
(111
|
)
|
|
(7
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.7
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,272
|
|
|
$
|
3,364
|
|
|
$
|
(92
|
)
|
|
(3
|
)%
|
New vehicle gross margin
|
6.2
|
%
|
|
6.4
|
%
|
|
(0.2
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
903
|
|
|
$
|
960
|
|
|
$
|
(57
|
)
|
|
(6
|
)%
|
New vehicle gross margin
|
3.2
|
%
|
|
3.5
|
%
|
|
(0.3
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,614
|
|
|
$
|
1,727
|
|
|
$
|
(113
|
)
|
|
(7
|
)%
|
New vehicle gross margin
|
4.1
|
%
|
|
4.5
|
%
|
|
(0.4
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,583
|
|
|
$
|
35,002
|
|
|
$
|
581
|
|
|
2
|
%
|
Gross profit per new vehicle sold
|
$
|
1,536
|
|
|
$
|
1,628
|
|
|
$
|
(92
|
)
|
|
(6
|
)%
|
New vehicle gross margin
|
4.3
|
%
|
|
4.7
|
%
|
|
(0.4
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,289
|
|
|
$
|
3,364
|
|
|
$
|
(75
|
)
|
|
(2
|
)%
|
New vehicle gross margin
|
6.3
|
%
|
|
6.4
|
%
|
|
(0.1
|
)%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
887
|
|
|
$
|
960
|
|
|
$
|
(73
|
)
|
|
(8
|
)%
|
New vehicle gross margin
|
3.1
|
%
|
|
3.5
|
%
|
|
(0.4
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,636
|
|
|
$
|
1,727
|
|
|
$
|
(91
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
4.1
|
%
|
|
4.5
|
%
|
|
(0.4
|
)%
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
448.7
|
|
|
$
|
400.1
|
|
|
$
|
48.6
|
|
|
12
|
%
|
Used vehicle wholesale revenue
|
48.8
|
|
|
55.5
|
|
|
(6.7
|
)
|
|
(12
|
)%
|
|||
Used vehicle revenue
|
$
|
497.5
|
|
|
$
|
455.6
|
|
|
$
|
41.9
|
|
|
9
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
32.7
|
|
|
$
|
28.9
|
|
|
$
|
3.8
|
|
|
13
|
%
|
Used vehicle wholesale gross profit
|
0.1
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
NM
|
|
|||
Used vehicle gross profit
|
$
|
32.8
|
|
|
$
|
28.8
|
|
|
$
|
4.0
|
|
|
14
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
20,824
|
|
|
18,777
|
|
|
2,047
|
|
|
11
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
436.0
|
|
|
$
|
399.0
|
|
|
$
|
37.0
|
|
|
9
|
%
|
Used vehicle wholesale revenue
|
48.1
|
|
|
55.2
|
|
|
(7.1
|
)
|
|
(13
|
)%
|
|||
Used vehicle revenue
|
$
|
484.1
|
|
|
$
|
454.2
|
|
|
$
|
29.9
|
|
|
7
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
31.7
|
|
|
$
|
28.8
|
|
|
$
|
2.9
|
|
|
10
|
%
|
Used vehicle wholesale gross profit
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
%
|
|||
Used vehicle gross profit
|
$
|
32.0
|
|
|
$
|
28.8
|
|
|
$
|
3.2
|
|
|
11
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
20,098
|
|
|
18,695
|
|
|
1,403
|
|
|
8
|
%
|
|
For the Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,547
|
|
|
$
|
21,308
|
|
|
$
|
239
|
|
|
1
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,570
|
|
|
$
|
1,539
|
|
|
$
|
31
|
|
|
2
|
%
|
Used vehicle retail gross margin
|
7.3
|
%
|
|
7.2
|
%
|
|
0.1
|
%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,694
|
|
|
$
|
21,343
|
|
|
$
|
351
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,577
|
|
|
$
|
1,541
|
|
|
$
|
36
|
|
|
2
|
%
|
Used vehicle retail gross margin
|
7.3
|
%
|
|
7.2
|
%
|
|
0.1
|
%
|
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
206.1
|
|
|
$
|
197.2
|
|
|
$
|
8.9
|
|
|
5
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
73.0
|
|
|
68.1
|
|
|
4.9
|
|
|
7
|
%
|
|||
Warranty
|
19.2
|
|
|
20.6
|
|
|
(1.4
|
)
|
|
(7
|
)%
|
|||
Wholesale parts
|
5.6
|
|
|
5.3
|
|
|
0.3
|
|
|
6
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
97.8
|
|
|
$
|
94.0
|
|
|
$
|
3.8
|
|
|
4
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.5
|
%
|
|
47.7
|
%
|
|
(0.2
|
)%
|
|
|
||||
Reconditioning and preparation
|
$
|
32.0
|
|
|
$
|
28.8
|
|
|
$
|
3.2
|
|
|
11
|
%
|
Total parts and service gross profit
|
$
|
129.8
|
|
|
$
|
122.8
|
|
|
$
|
7.0
|
|
|
6
|
%
|
Total parts and service gross margin
|
63.0
|
%
|
|
62.3
|
%
|
|
0.7
|
%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
201.4
|
|
|
$
|
197.2
|
|
|
$
|
4.2
|
|
|
2
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
71.4
|
|
|
68.1
|
|
|
3.3
|
|
|
5
|
%
|
|||
Warranty
|
18.9
|
|
|
20.6
|
|
|
(1.7
|
)
|
|
(8
|
)%
|
|||
Wholesale parts
|
5.4
|
|
|
5.3
|
|
|
0.1
|
|
|
2
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
95.7
|
|
|
$
|
94.0
|
|
|
$
|
1.7
|
|
|
2
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.5
|
%
|
|
47.7
|
%
|
|
(0.2
|
)%
|
|
|
||||
Reconditioning and preparation
|
$
|
31.3
|
|
|
$
|
28.8
|
|
|
$
|
2.5
|
|
|
9
|
%
|
Total parts and service gross profit
|
$
|
127.0
|
|
|
$
|
122.8
|
|
|
$
|
4.2
|
|
|
3
|
%
|
Total parts and service gross margin
|
63.1
|
%
|
|
62.3
|
%
|
|
0.8
|
%
|
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
73.3
|
|
|
$
|
67.7
|
|
|
$
|
5.6
|
|
|
8
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,509
|
|
|
$
|
1,540
|
|
|
$
|
(31
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
71.2
|
|
|
$
|
67.6
|
|
|
$
|
3.6
|
|
|
5
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,524
|
|
|
$
|
1,540
|
|
|
$
|
(16
|
)
|
|
(1
|
)%
|
|
For the Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
% of Gross
Profit Increase (Decrease)
|
|||||||||||||||
|
2018
|
|
% of Gross
Profit
|
|
2017
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
90.8
|
|
|
32.7
|
%
|
|
$
|
87.4
|
|
|
33.6
|
%
|
|
$
|
3.4
|
|
|
(0.9
|
)%
|
Sales compensation
|
29.4
|
|
|
10.6
|
%
|
|
27.4
|
|
|
10.5
|
%
|
|
2.0
|
|
|
0.1
|
%
|
|||
Share-based compensation
|
2.5
|
|
|
0.9
|
%
|
|
3.6
|
|
|
1.4
|
%
|
|
(1.1
|
)
|
|
(0.5
|
)%
|
|||
Outside services
|
21.1
|
|
|
7.6
|
%
|
|
19.9
|
|
|
7.6
|
%
|
|
1.2
|
|
|
—
|
%
|
|||
Advertising
|
7.5
|
|
|
2.7
|
%
|
|
6.6
|
|
|
2.5
|
%
|
|
0.9
|
|
|
0.2
|
%
|
|||
Rent
|
6.4
|
|
|
2.3
|
%
|
|
6.5
|
|
|
2.5
|
%
|
|
(0.1
|
)
|
|
(0.2
|
)%
|
|||
Utilities
|
4.4
|
|
|
1.6
|
%
|
|
4.1
|
|
|
1.6
|
%
|
|
0.3
|
|
|
—
|
%
|
|||
Insurance
|
2.4
|
|
|
0.9
|
%
|
|
4.5
|
|
|
1.7
|
%
|
|
(2.1
|
)
|
|
(0.8
|
)%
|
|||
Other
|
24.3
|
|
|
8.6
|
%
|
|
22.5
|
|
|
8.7
|
%
|
|
1.8
|
|
|
(0.1
|
)%
|
|||
Selling, general, and administrative expense
|
$
|
188.8
|
|
|
67.9
|
%
|
|
$
|
182.5
|
|
|
70.1
|
%
|
|
$
|
6.3
|
|
|
(2.2
|
)%
|
Gross profit
|
$
|
278.0
|
|
|
|
|
$
|
260.3
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
88.4
|
|
|
32.6
|
%
|
|
$
|
87.2
|
|
|
33.5
|
%
|
|
$
|
1.2
|
|
|
(0.9
|
)%
|
Sales compensation
|
28.4
|
|
|
10.5
|
%
|
|
27.4
|
|
|
10.5
|
%
|
|
1.0
|
|
|
—
|
%
|
|||
Share-based compensation
|
2.5
|
|
|
0.9
|
%
|
|
3.6
|
|
|
1.4
|
%
|
|
(1.1
|
)
|
|
(0.5
|
)%
|
|||
Outside services
|
20.5
|
|
|
7.6
|
%
|
|
19.8
|
|
|
7.6
|
%
|
|
0.7
|
|
|
—
|
%
|
|||
Advertising
|
7.0
|
|
|
2.6
|
%
|
|
6.6
|
|
|
2.5
|
%
|
|
0.4
|
|
|
0.1
|
%
|
|||
Rent
|
6.4
|
|
|
2.4
|
%
|
|
6.5
|
|
|
2.5
|
%
|
|
(0.1
|
)
|
|
(0.1
|
)%
|
|||
Utilities
|
4.2
|
|
|
1.5
|
%
|
|
4.1
|
|
|
1.6
|
%
|
|
0.1
|
|
|
(0.1
|
)%
|
|||
Insurance
|
2.2
|
|
|
0.8
|
%
|
|
4.5
|
|
|
1.7
|
%
|
|
(2.3
|
)
|
|
(0.9
|
)%
|
|||
Other
|
24.1
|
|
|
8.9
|
%
|
|
22.3
|
|
|
8.6
|
%
|
|
1.8
|
|
|
0.3
|
%
|
|||
Selling, general, and administrative expense
|
$
|
183.7
|
|
|
67.8
|
%
|
|
$
|
182.0
|
|
|
69.9
|
%
|
|
$
|
1.7
|
|
|
(2.1
|
)%
|
Gross profit
|
$
|
271.1
|
|
|
|
|
$
|
260.2
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except per share data)
|
|||||||||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
$
|
2,766.3
|
|
|
$
|
2,597.0
|
|
|
$
|
169.3
|
|
|
7
|
%
|
Used vehicle
|
1,499.0
|
|
|
1,396.6
|
|
|
102.4
|
|
|
7
|
%
|
|||
Parts and service
|
609.9
|
|
|
589.5
|
|
|
20.4
|
|
|
3
|
%
|
|||
Finance and insurance, net
|
215.0
|
|
|
202.5
|
|
|
12.5
|
|
|
6
|
%
|
|||
TOTAL REVENUE
|
5,090.2
|
|
|
4,785.6
|
|
|
304.6
|
|
|
6
|
%
|
|||
GROSS PROFIT:
|
|
|
|
|
|
|
|
|||||||
New vehicle
|
121.3
|
|
|
122.4
|
|
|
(1.1
|
)
|
|
(1
|
)%
|
|||
Used vehicle
|
100.4
|
|
|
95.4
|
|
|
5.0
|
|
|
5
|
%
|
|||
Parts and service
|
384.5
|
|
|
367.2
|
|
|
17.3
|
|
|
5
|
%
|
|||
Finance and insurance, net
|
215.0
|
|
|
202.5
|
|
|
12.5
|
|
|
6
|
%
|
|||
TOTAL GROSS PROFIT
|
821.2
|
|
|
787.5
|
|
|
33.7
|
|
|
4
|
%
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
563.6
|
|
|
549.2
|
|
|
14.4
|
|
|
3
|
%
|
|||
Depreciation and amortization
|
25.2
|
|
|
24.0
|
|
|
1.2
|
|
|
5
|
%
|
|||
Other operating (income) expenses, net
|
(1.2
|
)
|
|
0.7
|
|
|
(1.9
|
)
|
|
NM
|
|
|||
INCOME FROM OPERATIONS
|
233.6
|
|
|
213.6
|
|
|
20.0
|
|
|
9
|
%
|
|||
OTHER EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Floor plan interest expense
|
23.0
|
|
|
17.1
|
|
|
5.9
|
|
|
35
|
%
|
|||
Other interest expense, net
|
39.4
|
|
|
40.2
|
|
|
(0.8
|
)
|
|
(2
|
)%
|
|||
Swap interest expense
|
0.5
|
|
|
1.6
|
|
|
(1.1
|
)
|
|
(69
|
)%
|
|||
Total other expenses, net
|
62.9
|
|
|
58.9
|
|
|
4.0
|
|
|
7
|
%
|
|||
INCOME BEFORE INCOME TAXES
|
170.7
|
|
|
154.7
|
|
|
16.0
|
|
|
10
|
%
|
|||
Income tax expense
|
43.1
|
|
|
58.1
|
|
|
(15.0
|
)
|
|
(26
|
)%
|
|||
NET INCOME
|
$
|
127.6
|
|
|
$
|
96.6
|
|
|
$
|
31.0
|
|
|
32
|
%
|
Net income per common share—Diluted
|
$
|
6.22
|
|
|
$
|
4.60
|
|
|
$
|
1.6
|
|
|
35
|
%
|
|
For the Nine Months Ended September 30,
|
||||
|
2018
|
|
2017
|
||
REVENUE MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
54.3
|
%
|
|
54.3
|
%
|
Used vehicle retail
|
26.7
|
%
|
|
26.0
|
%
|
Used vehicle wholesale
|
2.8
|
%
|
|
3.2
|
%
|
Parts and service
|
12.0
|
%
|
|
12.3
|
%
|
Finance and insurance, net
|
4.2
|
%
|
|
4.2
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MIX PERCENTAGES:
|
|
|
|
||
New vehicle
|
14.8
|
%
|
|
15.5
|
%
|
Used vehicle retail
|
12.0
|
%
|
|
12.1
|
%
|
Used vehicle wholesale
|
0.2
|
%
|
|
0.1
|
%
|
Parts and service
|
46.8
|
%
|
|
46.6
|
%
|
Finance and insurance, net
|
26.2
|
%
|
|
25.7
|
%
|
Total gross profit
|
100.0
|
%
|
|
100.0
|
%
|
GROSS PROFIT MARGIN
|
16.1
|
%
|
|
16.5
|
%
|
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
|
68.6
|
%
|
|
69.7
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
883.8
|
|
|
$
|
852.3
|
|
|
$
|
31.5
|
|
|
4
|
%
|
Import
|
1,319.3
|
|
|
1,205.7
|
|
|
113.6
|
|
|
9
|
%
|
|||
Domestic
|
563.2
|
|
|
539.0
|
|
|
24.2
|
|
|
4
|
%
|
|||
Total new vehicle revenue
|
$
|
2,766.3
|
|
|
$
|
2,597.0
|
|
|
$
|
169.3
|
|
|
7
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
57.5
|
|
|
$
|
54.7
|
|
|
$
|
2.8
|
|
|
5
|
%
|
Import
|
39.1
|
|
|
42.8
|
|
|
(3.7
|
)
|
|
(9
|
)%
|
|||
Domestic
|
24.7
|
|
|
24.9
|
|
|
(0.2
|
)
|
|
(1
|
)%
|
|||
Total new vehicle gross profit
|
$
|
121.3
|
|
|
$
|
122.4
|
|
|
$
|
(1.1
|
)
|
|
(1
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
16,527
|
|
|
16,117
|
|
|
410
|
|
|
3
|
%
|
|||
Import
|
46,545
|
|
|
43,504
|
|
|
3,041
|
|
|
7
|
%
|
|||
Domestic
|
14,406
|
|
|
14,163
|
|
|
243
|
|
|
2
|
%
|
|||
Total new vehicle units
|
77,478
|
|
|
73,784
|
|
|
3,694
|
|
|
5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
883.8
|
|
|
$
|
852.3
|
|
|
$
|
31.5
|
|
|
4
|
%
|
Import
|
1,259.3
|
|
|
1,204.7
|
|
|
54.6
|
|
|
5
|
%
|
|||
Domestic
|
546.7
|
|
|
537.6
|
|
|
9.1
|
|
|
2
|
%
|
|||
Total new vehicle revenue
|
$
|
2,689.8
|
|
|
$
|
2,594.6
|
|
|
$
|
95.2
|
|
|
4
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
$
|
57.6
|
|
|
$
|
54.7
|
|
|
$
|
2.9
|
|
|
5
|
%
|
Import
|
36.7
|
|
|
42.8
|
|
|
(6.1
|
)
|
|
(14
|
)%
|
|||
Domestic
|
24.0
|
|
|
24.8
|
|
|
(0.8
|
)
|
|
(3
|
)%
|
|||
Total new vehicle gross profit
|
$
|
118.3
|
|
|
$
|
122.3
|
|
|
$
|
(4.0
|
)
|
|
(3
|
)%
|
New vehicle units:
|
|
|
|
|
|
|
|
|||||||
Luxury
|
16,527
|
|
|
16,117
|
|
|
410
|
|
|
3
|
%
|
|||
Import
|
44,438
|
|
|
43,467
|
|
|
971
|
|
|
2
|
%
|
|||
Domestic
|
13,923
|
|
|
14,125
|
|
|
(202
|
)
|
|
(1
|
)%
|
|||
Total new vehicle units
|
74,888
|
|
|
73,709
|
|
|
1,179
|
|
|
2
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,704
|
|
|
$
|
35,197
|
|
|
$
|
507
|
|
|
1
|
%
|
Gross profit per new vehicle sold
|
$
|
1,566
|
|
|
$
|
1,659
|
|
|
$
|
(93
|
)
|
|
(6
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,479
|
|
|
$
|
3,394
|
|
|
$
|
85
|
|
|
3
|
%
|
New vehicle gross margin
|
6.5
|
%
|
|
6.4
|
%
|
|
0.1
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
840
|
|
|
$
|
984
|
|
|
$
|
(144
|
)
|
|
(15
|
)%
|
New vehicle gross margin
|
3.0
|
%
|
|
3.5
|
%
|
|
(0.5
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,715
|
|
|
$
|
1,758
|
|
|
$
|
(43
|
)
|
|
(2
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.6
|
%
|
|
(0.2
|
)%
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per new vehicle sold
|
$
|
35,918
|
|
|
$
|
35,201
|
|
|
$
|
717
|
|
|
2
|
%
|
Gross profit per new vehicle sold
|
$
|
1,580
|
|
|
$
|
1,659
|
|
|
$
|
(79
|
)
|
|
(5
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.7
|
%
|
|
(0.3
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Luxury:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
3,485
|
|
|
$
|
3,394
|
|
|
$
|
91
|
|
|
3
|
%
|
New vehicle gross margin
|
6.5
|
%
|
|
6.4
|
%
|
|
0.1
|
%
|
|
|
||||
Import:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
826
|
|
|
$
|
985
|
|
|
$
|
(159
|
)
|
|
(16
|
)%
|
New vehicle gross margin
|
2.9
|
%
|
|
3.6
|
%
|
|
(0.7
|
)%
|
|
|
||||
Domestic:
|
|
|
|
|
|
|
|
|||||||
Gross profit per new vehicle sold
|
$
|
1,724
|
|
|
$
|
1,756
|
|
|
$
|
(32
|
)
|
|
(2
|
)%
|
New vehicle gross margin
|
4.4
|
%
|
|
4.6
|
%
|
|
(0.2
|
)%
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
1,355.4
|
|
|
$
|
1,245.7
|
|
|
$
|
109.7
|
|
|
9
|
%
|
Used vehicle wholesale revenue
|
143.6
|
|
|
150.9
|
|
|
(7.3
|
)
|
|
(5
|
)%
|
|||
Used vehicle revenue
|
$
|
1,499.0
|
|
|
$
|
1,396.6
|
|
|
$
|
102.4
|
|
|
7
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
98.5
|
|
|
$
|
94.4
|
|
|
$
|
4.1
|
|
|
4
|
%
|
Used vehicle wholesale gross profit
|
1.9
|
|
|
1.0
|
|
|
0.9
|
|
|
90
|
%
|
|||
Used vehicle gross profit
|
$
|
100.4
|
|
|
$
|
95.4
|
|
|
$
|
5.0
|
|
|
5
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
63,079
|
|
|
59,107
|
|
|
3,972
|
|
|
7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail revenue
|
$
|
1,321.4
|
|
|
$
|
1,235.4
|
|
|
$
|
86.0
|
|
|
7
|
%
|
Used vehicle wholesale revenue
|
141.0
|
|
|
149.8
|
|
|
(8.8
|
)
|
|
(6
|
)%
|
|||
Used vehicle revenue
|
$
|
1,462.4
|
|
|
$
|
1,385.2
|
|
|
$
|
77.2
|
|
|
6
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail gross profit
|
$
|
95.8
|
|
|
$
|
93.7
|
|
|
$
|
2.1
|
|
|
2
|
%
|
Used vehicle wholesale gross profit
|
2.1
|
|
|
1.3
|
|
|
0.8
|
|
|
62
|
%
|
|||
Used vehicle gross profit
|
$
|
97.9
|
|
|
$
|
95.0
|
|
|
$
|
2.9
|
|
|
3
|
%
|
Used vehicle retail units:
|
|
|
|
|
|
|
|
|||||||
Used vehicle retail units
|
61,165
|
|
|
58,463
|
|
|
2,702
|
|
|
5
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase (Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,487
|
|
|
$
|
21,075
|
|
|
$
|
412
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,562
|
|
|
$
|
1,597
|
|
|
$
|
(35
|
)
|
|
(2
|
)%
|
Used vehicle retail gross margin
|
7.3
|
%
|
|
7.6
|
%
|
|
(0.3
|
)%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Revenue per used vehicle retailed
|
$
|
21,604
|
|
|
$
|
21,131
|
|
|
$
|
473
|
|
|
2
|
%
|
Gross profit per used vehicle retailed
|
$
|
1,566
|
|
|
$
|
1,603
|
|
|
$
|
(37
|
)
|
|
(2
|
)%
|
Used vehicle retail gross margin
|
7.2
|
%
|
|
7.6
|
%
|
|
(0.4
|
)%
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
609.9
|
|
|
$
|
589.5
|
|
|
$
|
20.4
|
|
|
3
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
217.8
|
|
|
203.8
|
|
|
14.0
|
|
|
7
|
%
|
|||
Warranty
|
56.5
|
|
|
61.7
|
|
|
(5.2
|
)
|
|
(8
|
)%
|
|||
Wholesale parts
|
16.8
|
|
|
15.7
|
|
|
1.1
|
|
|
7
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
291.1
|
|
|
$
|
281.2
|
|
|
$
|
9.9
|
|
|
4
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.7
|
%
|
|
47.7
|
%
|
|
—
|
%
|
|
|
|
|||
Reconditioning and preparation
|
$
|
93.4
|
|
|
$
|
86.0
|
|
|
$
|
7.4
|
|
|
9
|
%
|
Total parts and service gross profit
|
$
|
384.5
|
|
|
$
|
367.2
|
|
|
$
|
17.3
|
|
|
5
|
%
|
Total parts and service gross margin
|
63.0
|
%
|
|
62.3
|
%
|
|
0.7
|
%
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Parts and service revenue
|
$
|
598.2
|
|
|
$
|
589.0
|
|
|
$
|
9.2
|
|
|
2
|
%
|
Parts and service gross profit:
|
|
|
|
|
|
|
|
|||||||
Customer pay
|
213.8
|
|
|
203.5
|
|
|
10.3
|
|
|
5
|
%
|
|||
Warranty
|
55.6
|
|
|
61.7
|
|
|
(6.1
|
)
|
|
(10
|
)%
|
|||
Wholesale parts
|
16.5
|
|
|
15.7
|
|
|
0.8
|
|
|
5
|
%
|
|||
Parts and service gross profit, excluding reconditioning and preparation
|
$
|
285.9
|
|
|
$
|
280.9
|
|
|
$
|
5.0
|
|
|
2
|
%
|
Parts and service gross margin, excluding reconditioning and preparation
|
47.8
|
%
|
|
47.7
|
%
|
|
0.1
|
%
|
|
|
|
|||
Reconditioning and preparation
|
$
|
91.0
|
|
|
$
|
85.7
|
|
|
$
|
5.3
|
|
|
6
|
%
|
Total parts and service gross profit
|
$
|
376.9
|
|
|
$
|
366.6
|
|
|
$
|
10.3
|
|
|
3
|
%
|
Total parts and service gross margin
|
63.0
|
%
|
|
62.2
|
%
|
|
0.8
|
%
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
%
Change
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(Dollars in millions, except for per vehicle data)
|
|||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
215.0
|
|
|
$
|
202.5
|
|
|
$
|
12.5
|
|
|
6
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,530
|
|
|
$
|
1,524
|
|
|
$
|
6
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Store:
|
|
|
|
|
|
|
|
|||||||
Finance and insurance, net
|
$
|
210.1
|
|
|
$
|
201.5
|
|
|
$
|
8.6
|
|
|
4
|
%
|
Finance and insurance, net per vehicle sold
|
$
|
1,544
|
|
|
$
|
1,525
|
|
|
$
|
19
|
|
|
1
|
%
|
|
For the Nine Months Ended September 30,
|
|
Increase
(Decrease)
|
|
% of Gross
Profit Increase (Decrease)
|
|||||||||||||||
|
2018
|
|
% of Gross
Profit
|
|
2017
|
|
% of Gross
Profit
|
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
270.1
|
|
|
32.9
|
%
|
|
$
|
261.1
|
|
|
33.2
|
%
|
|
$
|
9.0
|
|
|
(0.3
|
)%
|
Sales compensation
|
86.3
|
|
|
10.5
|
%
|
|
83.5
|
|
|
10.6
|
%
|
|
2.8
|
|
|
(0.1
|
)%
|
|||
Share-based compensation
|
8.2
|
|
|
1.0
|
%
|
|
10.0
|
|
|
1.3
|
%
|
|
(1.8
|
)
|
|
(0.3
|
)%
|
|||
Outside services
|
61.4
|
|
|
7.5
|
%
|
|
60.7
|
|
|
7.7
|
%
|
|
0.7
|
|
|
(0.2
|
)%
|
|||
Advertising
|
23.5
|
|
|
2.9
|
%
|
|
22.7
|
|
|
2.9
|
%
|
|
0.8
|
|
|
—
|
%
|
|||
Rent
|
19.0
|
|
|
2.3
|
%
|
|
20.2
|
|
|
2.6
|
%
|
|
(1.2
|
)
|
|
(0.3
|
)%
|
|||
Utilities
|
12.3
|
|
|
1.5
|
%
|
|
11.8
|
|
|
1.5
|
%
|
|
0.5
|
|
|
—
|
%
|
|||
Insurance
|
10.6
|
|
|
1.3
|
%
|
|
11.4
|
|
|
1.4
|
%
|
|
(0.8
|
)
|
|
(0.1
|
)%
|
|||
Other
|
72.2
|
|
|
8.7
|
%
|
|
67.8
|
|
|
8.5
|
%
|
|
4.4
|
|
|
0.2
|
%
|
|||
Selling, general, and administrative expense
|
$
|
563.6
|
|
|
68.6
|
%
|
|
$
|
549.2
|
|
|
69.7
|
%
|
|
$
|
14.4
|
|
|
(1.1
|
)%
|
Gross profit
|
$
|
821.2
|
|
|
|
|
$
|
787.5
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Same Store:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel costs
|
$
|
263.8
|
|
|
32.8
|
%
|
|
$
|
259.8
|
|
|
33.1
|
%
|
|
$
|
4.0
|
|
|
(0.3
|
)%
|
Sales compensation
|
84.0
|
|
|
10.5
|
%
|
|
83.1
|
|
|
10.6
|
%
|
|
0.9
|
|
|
(0.1
|
)%
|
|||
Share-based compensation
|
8.2
|
|
|
1.0
|
%
|
|
10.0
|
|
|
1.3
|
%
|
|
(1.8
|
)
|
|
(0.3
|
)%
|
|||
Outside services
|
60.1
|
|
|
7.5
|
%
|
|
60.1
|
|
|
7.7
|
%
|
|
—
|
|
|
(0.2
|
)%
|
|||
Advertising
|
22.5
|
|
|
2.8
|
%
|
|
22.3
|
|
|
2.8
|
%
|
|
0.2
|
|
|
—
|
%
|
|||
Rent
|
19.0
|
|
|
2.4
|
%
|
|
20.2
|
|
|
2.6
|
%
|
|
(1.2
|
)
|
|
(0.2
|
)%
|
|||
Utilities
|
12.0
|
|
|
1.5
|
%
|
|
11.6
|
|
|
1.5
|
%
|
|
0.4
|
|
|
—
|
%
|
|||
Insurance
|
10.2
|
|
|
1.3
|
%
|
|
11.3
|
|
|
1.4
|
%
|
|
(1.1
|
)
|
|
(0.1
|
)%
|
|||
Other
|
$
|
70.9
|
|
|
8.8
|
%
|
|
$
|
67.7
|
|
|
8.5
|
%
|
|
3.2
|
|
|
0.3
|
%
|
|
Selling, general, and administrative expense
|
$
|
550.7
|
|
|
68.6
|
%
|
|
$
|
546.1
|
|
|
69.5
|
%
|
|
$
|
4.6
|
|
|
(0.9
|
)%
|
Gross profit
|
$
|
803.2
|
|
|
|
|
$
|
785.4
|
|
|
|
|
|
|
|
•
|
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.
|
•
|
Manufacturer affiliated new vehicle floor plan and other financing facilities
—
we have a floor plan facility with the Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory, which matures on December 5, 2019. We also have established a floor plan offset account with Ford Credit, which operates in a similar manner to our floor plan offset account with Bank of America. As of
September 30, 2018
, we had
$102.2 million
, net of
$11.4 million
in our floor plan offset account, outstanding under our floor plan facility. Additionally, we
|
•
|
6.0% Senior Subordinated Notes due 2024
—
as of
September 30, 2018
we had $600.0 million in aggregate principal amount 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
September 30, 2018
, we had
$134.6 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 (the "Restated Master Loan Agreement"). 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
September 30, 2018
, the outstanding balance under the Restated Master Loan Agreement was
$84.6 million
. There is no further borrowing availability under this agreement.
|
•
|
Real Estate Credit Agreement
—
a real estate term loan credit agreement with borrowings collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder (the "Real Estate Credit Agreement"). As of
September 30, 2018
, we had
$46.2 million
of mortgage note obligations outstanding under the Real Estate Credit Agreement. There is no further borrowing availability under this agreement.
|
|
For the Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Reconciliation of Cash provided by operating activities to Cash provided by operating activities, as adjusted
|
|
|
|
||||
Cash provided by operating activities, as reported
|
$
|
106.4
|
|
|
$
|
243.2
|
|
New vehicle floor plan borrowings (repayments)
—
non-trade, net
|
78.3
|
|
|
(120.0
|
)
|
||
Cash provided by operating activities, as adjusted
|
$
|
184.7
|
|
|
$
|
123.2
|
|
•
|
$31.8 million increase related to the change in floor plan notes payable, net of inventory;
|
•
|
$30.4 million related to an increase in non-cash adjustments to net income;
|
•
|
$8.7 million increase related to the change in accounts payable and accrued liabilities; and
|
•
|
$1.3 million increase related to the change in other current and non-current assets and liabilities
|
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)
|
||||||
07/01/2018 - 07/31/2018
|
|
77,155
|
|
|
$
|
68.28
|
|
|
75,489
|
|
|
$
|
54.6
|
|
08/01/2018 - 08/31/2018
|
|
15,406
|
|
|
$
|
70.35
|
|
|
15,406
|
|
|
$
|
53.5
|
|
09/01/2018 - 09/30/2018
|
|
149,294
|
|
|
$
|
71.87
|
|
|
148,873
|
|
|
$
|
42.8
|
|
Total
|
|
241,855
|
|
|
|
|
239,768
|
|
|
|
Exhibit
Number |
|
Description of Documents
|
|
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
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Asbury Automotive Group, Inc.
|
||
|
|
|
|
|
Date:
|
October 24, 2018
|
By:
|
|
/s/ David W. Hult
|
|
|
Name:
|
|
David W. Hult
|
|
|
Title:
|
|
Chief Executive Officer and President
|
|
|
Asbury Automotive Group, Inc.
|
||
|
|
|
|
|
Date:
|
October 24, 2018
|
By:
|
|
/s/ Sean D. Goodman
|
|
|
Name:
|
|
Sean D. Goodman
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer
|
Exhibit
Number |
|
Description of Documents
|
31.1
|
|
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
|
31.2
|
|
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
|
32.1
|
|
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
|
32.2
|
|
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
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1 Year Asbury Automotive Chart |
1 Month Asbury Automotive Chart |
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