þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 76-0506313 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
800 Gessner, Suite 500 Houston, Texas 77024 (Address of principal executive offices, including zip code) | (713) 647-5700 (Registrant’s telephone number, including area code) |
Title of each class | Name of exchange on which registered | |
Common stock, par value $0.01 per share | New York Stock Exchange |
Large accelerated filer | þ | ¨ | Accelerated filer | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | ¨ | Smaller reporting company |
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• | our future operating performance; |
• | our ability to maintain or improve our margins; |
• | operating cash flows and availability of capital; |
• | the completion of future acquisitions; |
• | the future revenues of acquired dealerships; |
• | future stock repurchases, refinancing of debt, and dividends; |
• | future capital expenditures; |
• | changes in sales volumes and availability of credit for customer financing in new and used vehicles and sales volumes in the parts and service markets; |
• | business trends in the retail automotive industry, including the level of manufacturer incentives, new and used vehicle retail sales volume, customer demand, interest rates and changes in industry-wide inventory levels; and |
• | availability of financing for inventory, working capital, real estate and capital expenditures. |
• | sustained growth of our higher margin parts and service business; |
• | capture of additional new and used vehicle retail market share; |
• | promotion of the customer experience and customer satisfaction; |
• | improvement of operating efficiencies through further development of our operating model that promotes commonality of processes, systems and training and further leveraging of our cost base; and |
• | enhancement of our current dealership portfolio by strategic acquisitions and improving or disposing of underperforming dealerships in the U.S., the U.K. and Brazil. |
Region | Geographic Market | Percentage of Our New Vehicle Retail Units Sold During the Year Ended December 31, 2015 | As of December 31, 2015 | ||||||||
Number of Dealerships | Number of Franchises | ||||||||||
East | Massachusetts | 6.0 | % | 7 | 7 | ||||||
Georgia | 4.5 | 7 | 10 | ||||||||
New Jersey | 2.3 | 5 | 5 | ||||||||
Florida | 2.1 | 4 | 4 | ||||||||
New Hampshire | 2.0 | 3 | 3 | ||||||||
Louisiana | 1.6 | 3 | 4 | ||||||||
Mississippi | 1.5 | 3 | 3 | ||||||||
South Carolina | 1.4 | 3 | 3 | ||||||||
Alabama | 0.8 | 2 | 2 | ||||||||
Maryland | 0.5 | 2 | 2 | ||||||||
22.7 | 39 | 43 | |||||||||
West | Texas | 38.7 | 50 | 68 | |||||||
California | 9.7 | 9 | 14 | ||||||||
Oklahoma | 7.6 | 13 | 20 | ||||||||
Kansas | 2.1 | 4 | 4 | ||||||||
Louisiana | 0.7 | 1 | 2 | ||||||||
58.8 | 77 | 108 | |||||||||
International | United Kingdom | 10.7 | 17 | 25 | |||||||
Brazil | 7.8 | 19 | 23 | ||||||||
Total | 100.0 | % | 152 | 199 |
• | manufacturer dealer incentives; |
• | the resale of any used vehicle trade-in purchased by the dealership; |
• | the sale of third-party finance, vehicle service and insurance contracts in connection with the retail sale; |
• | the sale of accessories or after-market products; and |
• | the service and repair of the vehicle both during and after the warranty period. |
New Vehicle Revenues | New Vehicle Unit Sales | % of Total Units Sold | Franchises Owned as of December 31, 2015 | |||||||||
(In thousands) | ||||||||||||
Toyota (1) | $ | 1,069,544 | 38,260 | 21.9 | 16 | |||||||
BMW | 816,123 | 16,062 | 9.2 | 24 | ||||||||
Ford | 673,262 | 19,680 | 11.3 | 16 | ||||||||
Mercedes-Benz | 418,787 | 7,021 | 4.0 | 8 | ||||||||
Honda | 392,017 | 15,964 | 9.1 | 12 | ||||||||
Nissan | 366,186 | 14,570 | 8.3 | 12 | ||||||||
Lexus | 351,563 | 7,528 | 4.3 | 3 | ||||||||
Chevrolet | 342,801 | 8,818 | 5.1 | 6 | ||||||||
Audi | 340,430 | 8,299 | 4.8 | 8 | ||||||||
Hyundai | 158,942 | 6,454 | 3.7 | 6 | ||||||||
Acura | 119,252 | 3,055 | 1.7 | 4 | ||||||||
Jeep | 116,208 | 3,474 | 2.0 | 6 | ||||||||
MINI | 112,453 | 4,221 | 2.4 | 15 | ||||||||
GMC | 108,202 | 2,368 | 1.4 | 5 | ||||||||
Volkswagen | 91,861 | 3,718 | 2.1 | 7 | ||||||||
RAM | 90,265 | 2,125 | 1.2 | 6 | ||||||||
Kia | 86,138 | 3,592 | 2.1 | 4 | ||||||||
Cadillac | 68,398 | 1,278 | 0.7 | 2 | ||||||||
Dodge | 57,754 | 1,808 | 1.0 | 6 | ||||||||
Subaru | 47,511 | 1,747 | 1.0 | 2 | ||||||||
Land Rover | 46,142 | 623 | 0.4 | 2 | ||||||||
Buick | 30,233 | 843 | 0.5 | 5 | ||||||||
Sprinter | 19,077 | 284 | 0.2 | 6 | ||||||||
Chrysler | 18,505 | 555 | 0.3 | 6 | ||||||||
Scion (1) | 14,334 | 665 | 0.4 | N/A | ||||||||
Peugeot | 11,773 | 653 | 0.4 | 2 | ||||||||
Mazda | 10,345 | 414 | 0.2 | 1 | ||||||||
Lincoln | 9,399 | 203 | 0.1 | 3 | ||||||||
Porsche | 7,257 | 89 | 0.1 | 1 | ||||||||
smart | 2,525 | 161 | 0.1 | 2 | ||||||||
Volvo | 2,021 | 51 | 0.0 | 1 | ||||||||
Jaguar | 1,928 | 26 | 0.0 | 2 | ||||||||
Renault (2) | 70 | 5 | 0.0 | — | ||||||||
Total | $ | 6,001,306 | 174,614 | 100.0 | 199 |
(1) | The Scion brand is not considered a separate franchise, but rather is governed by our Toyota franchise agreements. We sell the Scion brand at our Toyota franchised locations. |
(2) | Renault franchises were disposed of in 2014. |
For the Year Ended December 31, | ||||||||||||||||||
2015 | % of Total | 2014 | % of Total | 2013 | % of Total | |||||||||||||
Toyota | 46,157 | 26.4 | % | 44,621 | 26.7 | % | 41,419 | 26.6 | % | |||||||||
BMW | 20,283 | 11.6 | 19,125 | 11.5 | 17,277 | 11.1 | ||||||||||||
Ford | 19,882 | 11.4 | 18,161 | 10.9 | 18,081 | 11.6 | ||||||||||||
Honda | 19,019 | 10.9 | 18,776 | 11.3 | 19,219 | 12.3 | ||||||||||||
Nissan | 14,570 | 8.3 | 15,664 | 9.4 | 15,845 | 10.2 | ||||||||||||
General Motors | 13,307 | 7.6 | 10,691 | 6.4 | 7,520 | 4.8 | ||||||||||||
Volkswagen | 12,106 | 6.9 | 10,243 | 6.1 | 9,802 | 6.3 | ||||||||||||
Hyundai | 10,046 | 5.8 | 9,151 | 5.5 | 7,234 | 4.6 | ||||||||||||
FCA US (formerly Chrysler) | 7,962 | 4.6 | 7,268 | 4.4 | 6,173 | 4.0 | ||||||||||||
Daimler (1) | 7,466 | 4.3 | 7,442 | 4.5 | 7,011 | 4.5 | ||||||||||||
Other | 3,816 | 2.2 | 5,754 | 3.3 | 6,285 | 4.0 | ||||||||||||
Total | 174,614 | 100.0 | % | 166,896 | 100.0 | % | 155,866 | 100.0 | % |
(1) | Daimler includes Mercedes-Benz, smart and Sprinter brands. |
• | Focus on Customer Relationships; Emphasize Preventative Maintenance. Our dealerships seek to retain purchasers of new and used vehicle as customers of our parts and service departments. To accomplish this goal, we use computer systems that track the vehicle owners’ maintenance records and provide advance notice to them when their vehicles are due for periodic service. Our use of computer-based customer relationship management tools increases the reach and effectiveness of our marketing efforts, allowing us to target our promotional offerings to areas in which service capacity is under-utilized or profit margins are greatest. We continue to train our service personnel to establish relationships with their service clients to promote a long-term business relationship. And, we are focused on enhancing access to our service facilities by providing patrons with readily-accessible means to schedule service appointments. We believe our parts and service activities are an integral part of the customer service experience, allowing us to maintain ongoing relationships with our dealerships’ clients thereby deepening customer loyalty to the dealership as a whole. |
• | Sell Vehicle Service Contracts in Conjunction with Vehicle Sales. Our finance and insurance sales departments attempt to connect new and used vehicle customers with vehicle service contracts, and thereby secure repeat customer business for our parts and service departments. |
• | Efficient Management of Parts Inventory. Our dealerships’ parts departments support their sales and service departments, selling factory-approved parts for the vehicle makes and models sold by a particular dealership. Parts are either used in repairs made in the service department, sold at retail to customers, or sold at wholesale to independent repair shops and other franchised dealerships. Our dealerships also frequently share parts with each other. Our dealerships employ parts managers who oversee parts inventories and sales. Software programs are used to monitor parts inventory, maximize sales, avoid obsolete and unused parts, and take advantage of manufacturer return procedures. |
• | Expansion of Collision Center Operations. We plan to continue to grow our collision center operations. Expansion in this segment of the business is not restricted by franchise agreements or manufacturer relationships. We believe that our concentration of dealership operations in certain of the markets in which we operate significantly enhances the profit model. |
• | extended warranties; |
• | maintenance, or vehicle service, products and programs; |
• | guaranteed asset protection insurance, which covers the shortfall between a customer’s contract balance and insurance payoff in the event of a total vehicle loss; and |
• | lease “wear and tear” insurance. |
• | enhancing brand and geographic diversity with a primary focus on import and luxury brands; |
• | creating economies of scale; |
• | delivering an attractive return on investment; and |
• | eliminating underperforming dealerships. |
• | purchased 87 franchises with expected annual revenues, estimated at the time of acquisition, of $3.7 billion; |
• | disposed of or terminated 32 franchises with annual revenues of approximately $1.0 billion; and |
• | were granted five new franchises by vehicle manufacturers with expected annual revenues, estimated at the time of grant, of $118.0 million. |
• | expand into geographic areas we currently do not serve; |
• | expand our brand, product, and service offerings in our existing markets; |
• | capitalize on economies of scale in our existing markets; and/or |
• | increase operating efficiency and cost savings in areas such as used vehicle sourcing, advertising, purchasing, data processing, personnel utilization, and the cost of floorplan financing. |
• | the rate of return on our capital investment over a period of time; |
• | location of the dealership in relation to existing markets and our ability to leverage our cost structure; |
• | potential future capital investment requirements; |
• | the brand; and |
• | existing real estate obligations, coupled with our ability to exit those obligations or identify an alternate use. |
• | $1,150.8 million under the Floorplan Line of our Revolving Credit Facility; |
• | $318.2 million of future commitments under various operating leases; |
• | $541.3 million in carrying value of 5.00% senior notes due 2022 (“5.00% Notes”); |
• | $296.3 million in carrying value of 5.25% senior notes due 2023 (“5.25% Notes”); |
• | $241.8 million of term loans, entered into independently with three of our manufacturer-affiliated finance partners, Toyota Motor Credit Corporation (“TMCC”), BMW Financial Services NA, LLC (“BMWFS”), and FMCC, as well as other third-party financial institutions, primarily to finance the purchase of real estate; |
• | $171.3 million under our FMCC Facility; |
• | $196.4 million under floorplan notes payable to various manufacturer affiliates and third-party financial institutions for foreign and rental vehicles; |
• | $54.7 million under our real estate credit facility (“Real Estate Credit Facility”); |
• | $51.9 million of capital lease obligations related to real estate, as well as $35.6 million of estimated interest; |
• | $72.6 million of various other debt and other capital lease obligations; |
• | $45.8 million of estimated future net obligations from interest rate risk management activities; as of December 31, 2015, the estimated fair value of such obligations was $31.2 million; |
• | $374.4 million of estimated interest payments on floorplan notes payable and other long-term debt obligations; |
• | $41.9 million of letters of credit, to collateralize certain obligations, issued under the Acquisition Line; and |
• | $44.2 million of other short and long-term purchase commitments. |
• | $229.2 million under the Floorplan Line of our Revolving Credit Facility, including $110.8 million of immediately available funds; |
• | $278.2 million under the Acquisition Line of our Revolving Credit Facility, which is limited based upon a borrowing base calculation within certain debt covenants under the Revolving Credit Facility; and |
• | $128.7 million under our FMCC Facility, including $25.5 million of immediately available funds. |
• | inventory levels; |
• | working capital levels; |
• | the sales process; |
• | minimum sales performance requirements; |
• | customer satisfaction standards; |
• | marketing and branding; |
• | facility standards and signage; |
• | personnel; |
• | changes in management; |
• | change in control; and |
• | monthly financial reporting. |
Manufacturer | Percentage of New Vehicle Retail Units Sold during the Year Ended December 31, 2015 |
Toyota | 26.5% |
BMW | 11.6% |
Ford | 11.4% |
Honda | 10.9% |
Nissan | 8.4% |
• | claims by employees, customers or other third parties for personal injury or property damage resulting from our operations; and |
• | fines and civil and criminal penalties resulting from alleged violations of federal and state laws or regulatory requirements. |
• | 1,697 were employed in managerial positions; |
• | 2,902 were employed in non-managerial vehicle sales department positions; |
• | 6,231 were employed in non-managerial parts and service department positions; and |
• | 2,056 were employed in administrative support positions. |
• | Annual Report on Form 10-K; |
• | Quarterly Reports on Form 10-Q; |
• | Current Reports on Form 8-K; |
• | Amendments to the reports filed or furnished electronically with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; |
• | Our Corporate Governance Guidelines; |
• | The charters for our Audit, Compensation, Finance/Risk Management and Nominating/Governance Committees; |
• | Our Code of Conduct for Directors, Officers and Employees; and |
• | Our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller. |
• | incurring significantly higher capital expenditures and operating expenses; |
• | failing to integrate the operations and personnel of the acquired dealerships; |
• | entering new markets with which we are not familiar; |
• | incurring undiscovered liabilities at acquired dealerships, in the case of stock acquisitions; |
• | disrupting our ongoing business; |
• | failing to retain key personnel of the acquired dealerships; |
• | impairing relationships with employees, manufacturers and customers; and |
• | incorrectly valuing acquired entities. |
• | franchised automotive dealerships in our markets that sell the same or similar makes of new and used vehicles that we offer, occasionally at lower prices than we do; |
• | other national or regional affiliated groups of franchised dealerships and/or of used vehicle dealerships; |
• | private market buyers and sellers of used vehicles; |
• | internet-based vehicle brokers that sell vehicles obtained from franchised dealers directly to consumers; |
• | auto parts retailers; |
• | local, regional and national collision centers; |
• | service center chain stores; and |
• | independent service and repair shops. |
• | our ability to obtain additional financing for acquisitions, capital expenditures, working capital or general corporate purposes may be impaired in the future; |
• | a portion of our current cash flow from operations must be dedicated to the payment of principal on our indebtedness, thereby reducing the funds available to us for our operations and other corporate purposes; |
• | some of our borrowings are and will continue to be at variable rates of interest, which exposes us to the risk of increasing interest rates; and |
• | we may be more leveraged than some of our competitors, which may place us at a relative competitive disadvantage and make us more vulnerable to changing market conditions and regulations. |
• | exposure to local economic conditions; |
• | wage inflation in emerging markets; |
• | social plans that prohibit or increase the cost of certain restructuring actions; |
• | increases in working capital requirements related to long supply chains or regional terms of business; |
• | currency exchange controls; |
• | exposure to currency exchange rate fluctuations; |
• | variations in protection of legal rights; |
• | import or export licensing requirements; |
• | the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems; |
• | restrictions on transfer or repatriation of funds and trade protection matters, including antidumping duties, tariffs, embargoes and other laws and regulations creating tax inefficiencies and prohibitions or restrictions on acquisitions or joint ventures; |
• | increased risk of corruption; |
• | changes in laws and regulations, including the laws and policies of the U.S. affecting trade and foreign investment; |
• | more expansive legal rights of foreign labor unions; |
• | the potential for nationalization of enterprises; |
• | exposure to local public health concerns and the resultant impact on economic and political conditions; |
• | transparency issues in general and, more specifically, the U.S. Foreign Corrupt Practices Act of 1974, as amended (the “FCPA”), the U.K. Bribery Act, and other anti-corruption compliance laws and issues; |
• | unsettled social and political conditions, in general, and possible terrorist attacks, drug cartel related violence or acts of war, civil unrest, expansion of hostilities and other political risks; and |
• | lack of franchise protection, which creates greater competition. |
• | the removal of a non-employee director from office only for cause; |
• | any one person or entity, who in the opinion of the manufacturer is unqualified to own its franchised dealership or has interests incompatible with the manufacturer, from acquiring more than a specified percentage of our common stock (ranging from 20% to 50% depending on the particular manufacturer’s restrictions) and this trigger level can fall to as low as 5% if another vehicle manufacturer is the entity acquiring the ownership interest or voting rights; |
• | certain material changes in our business or extraordinary corporate transactions such as a merger or sale of a material amount of our assets; |
• | the removal of a dealership general manager without the consent of the manufacturer; and |
• | a change in control of our Board of Directors or a change in management. |
• | allowing only the Board of Directors to set the number of non-employee directors; |
• | requiring super-majority or class voting to affect certain amendments to our certificate of incorporation and bylaws; |
• | limiting the persons who may call special stockholders’ meetings; |
• | limiting stockholder action by written consent; and |
• | establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at stockholders’ meetings. |
Dealerships | ||||||||
Region | Geographic Location | Owned | Leased | |||||
East | Georgia | 7 | — | |||||
Massachusetts | 5 | 2 | ||||||
New Jersey | 4 | 1 | ||||||
Louisiana | 1 | 2 | ||||||
Mississippi | 3 | — | ||||||
Florida | 3 | 1 | ||||||
South Carolina | 3 | — | ||||||
Maryland | 2 | — | ||||||
Alabama | 1 | 1 | ||||||
New Hampshire | 1 | 2 | ||||||
30 | 9 | |||||||
West | Texas | 18 | 32 | |||||
Kansas | 4 | — | ||||||
Oklahoma | 2 | 11 | ||||||
California | 3 | 6 | ||||||
Louisiana | 1 | — | ||||||
28 | 49 | |||||||
International | United Kingdom | 13 | 4 | |||||
Brazil | — | 19 | ||||||
Total | 71 | 81 |
High | Low | Dividends Declared | ||||||||||
2014: | ||||||||||||
First Quarter | $ | 71.26 | $ | 59.37 | $ | 0.17 | ||||||
Second Quarter | 84.59 | 60.31 | 0.17 | |||||||||
Third Quarter | 87.38 | 71.50 | 0.17 | |||||||||
Fourth Quarter | 93.23 | 65.49 | 0.19 | |||||||||
2015: | ||||||||||||
First Quarter | $ | 90.67 | $ | 74.45 | $ | 0.20 | ||||||
Second Quarter | 92.69 | 77.79 | 0.20 | |||||||||
Third Quarter | 97.34 | 81.10 | 0.21 | |||||||||
Fourth Quarter | 89.64 | 73.83 | 0.22 |
Measurement Date | Group 1 Automotive, Inc. | S&P 500 | Peer Group | |||
December 2010 | $100.00 | $100.00 | $100.00 | |||
December 2011 | 125.46 | 102.11 | 125.06 | |||
December 2012 | 151.76 | 118.45 | 160.11 | |||
December 2013 | 175.59 | 156.82 | 228.29 | |||
December 2014 | 223.56 | 178.28 | 271.44 | |||
December 2015 | 190.71 | 180.75 | 262.90 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||
(In thousands, excluding commissions) | ||||||||||||||
October 1 - October 31, 2015 | 2,900 | $ | 85.12 | 2,900 | $ | 28,065 | ||||||||
November 1 - November 30, 2015 | 323,964 | $ | 80.58 | 323,964 | $ | 78,176 | ||||||||
December 1 - December 31, 2015 | — | $ | — | — | $ | 78,176 | ||||||||
Total | 326,864 | $ | 80.62 | 326,864 |
Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Revenues | $ | 10,632,505 | $ | 9,937,889 | $ | 8,918,581 | $ | 7,476,100 | $ | 6,079,765 | ||||||||||
Cost of sales | 9,098,533 | 8,489,951 | 7,626,035 | 6,358,848 | 5,119,165 | |||||||||||||||
Gross profit | 1,533,972 | 1,447,938 | 1,292,546 | 1,117,252 | 960,600 | |||||||||||||||
Selling, general and administrative expenses | 1,120,833 | 1,061,964 | 976,856 | 848,446 | 735,229 | |||||||||||||||
Depreciation and amortization expense | 47,239 | 42,344 | 35,826 | 31,534 | 27,063 | |||||||||||||||
Asset impairments | 87,562 | 41,520 | 6,542 | 7,276 | 4,805 | |||||||||||||||
Income from operations | 278,338 | 302,110 | 273,322 | 229,996 | 193,503 | |||||||||||||||
Other income and (expense): | ||||||||||||||||||||
Floorplan interest expense | (39,264 | ) | (41,614 | ) | (41,667 | ) | (31,796 | ) | (27,687 | ) | ||||||||||
Other interest expense, net | (56,903 | ) | (49,693 | ) | (38,971 | ) | (37,465 | ) | (33,722 | ) | ||||||||||
Loss on extinguishment of long-term debt | — | (46,403 | ) | — | — | — | ||||||||||||||
Other expense, net | — | — | (789 | ) | — | — | ||||||||||||||
Income from continuing operations before income taxes | 182,171 | 164,400 | 191,895 | 160,735 | 132,094 | |||||||||||||||
Provision for income taxes | (88,172 | ) | (71,396 | ) | (77,903 | ) | (60,526 | ) | (49,700 | ) | ||||||||||
Net income | $ | 93,999 | $ | 93,004 | $ | 113,992 | $ | 100,209 | $ | 82,394 |
Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Net income | $ | 3.91 | $ | 3.82 | $ | 4.72 | $ | 4.39 | $ | 3.50 | ||||||||||
Diluted: | ||||||||||||||||||||
Net income | $ | 3.90 | $ | 3.60 | $ | 4.32 | $ | 4.19 | $ | 3.47 | ||||||||||
Dividends per share | $ | 0.83 | $ | 0.70 | $ | 0.65 | $ | 0.59 | $ | 0.48 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 23,148 | 23,380 | 23,096 | 21,620 | 22,157 | |||||||||||||||
Diluted | 23,152 | 24,885 | 25,314 | 22,688 | 22,409 |
December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Working capital | $ | 163,485 | $ | 113,020 | $ | 102,762 | $ | 170,603 | $ | 130,637 | ||||||||||
Inventories | 1,737,751 | 1,556,705 | 1,542,318 | 1,194,288 | 867,470 | |||||||||||||||
Total assets | 4,414,929 | 4,141,492 | 3,819,478 | 3,023,015 | 2,476,343 | |||||||||||||||
Floorplan notes payable — credit facility and other (1) | 1,154,960 | 1,103,630 | 1,086,906 | 856,698 | 609,738 | |||||||||||||||
Floorplan notes payable — manufacturer affiliates (2) | 363,571 | 285,156 | 346,572 | 211,965 | 155,980 | |||||||||||||||
Real Estate Credit Facility, including current portion | 54,663 | 58,003 | 67,719 | 56,677 | 41,003 | |||||||||||||||
Long-term debt, including current portion (3) | 1,200,996 | 1,023,464 | 631,359 | 521,010 | 456,261 | |||||||||||||||
Temporary Equity (4) | — | — | 29,094 | 32,505 | — | |||||||||||||||
Stockholders’ equity | $ | 918,252 | $ | 978,010 | $ | 1,035,175 | $ | 860,284 | $ | 807,100 | ||||||||||
Long-term debt to capitalization (5) | 58 | % | 53 | % | 40 | % | 39 | % | 38 | % |
• | Asset Impairments: As a result of our determination that the fair value of goodwill in our Brazil reporting units did not exceed its carrying value, we recorded a $55.4 million pretax non-cash asset impairment charge. In addition, as a result of our determination that the fair value of indefinite-lived intangible franchise rights related to certain of our franchises did not exceed their carrying value, we recognized a $30.1 million pretax non-cash impairment charge, of which $18.1 million related to intangible franchise rights in our two U.S. reporting units and $12.0 million related to intangible franchise rights in our Brazil reporting unit. Also, we recognized $2.1 million in pre-tax non-cash asset impairment charges associated with non-operating real estate holdings and other long-lived assets of our existing dealership facilities. In total, we recognized $87.6 million in pretax non-cash impairment charges. |
• | Catastrophic Events: Our results were negatively impacted by several catastrophic events. Insurance deductibles and other related expenses totaling $1.6 million were recognized as SG&A expenses as a result of snow storms and flooding during the year. |
• | Real Estate and Dealership Disposition Transactions: We disposed of two U.S. dealerships and terminated one U.S. dealership franchise. We also terminated two franchises in Brazil. As a result, we recognized a pre-tax net gain on sale of dealerships and real estate transactions of $8.2 million, as a reduction of SG&A expenses. In addition, we disposed of real estate during the year and received cash proceeds of $3.3 million, recognizing a net gain of $0.2 million. |
• | Extinguishment of Long-Term Debt: We extinguished our 2.25% Convertible Senior Notes due 2036 (“2.25% Notes”) and 3.00% Convertible Senior Notes due 2020 (“3.00% Notes”) and recognized an aggregate loss for 2014 of $46.4 million. |
• | Asset Impairments: Primarily related to our determination that the fair value of indefinite-lived intangible franchise rights related to certain of our franchises did not exceed their carrying value and an impairment charge was required, we recorded a $31.0 million pretax non-cash impairment charge. We also recognized a total of $10.5 million in pre-tax non-cash asset impairment charges related to impairment of various real estate holdings and other long-lived assets. |
• | Non-Cash Interest Expense: Our 2014 results were negatively impacted by $7.2 million of non-cash interest expense relative to the amortization of the discount associated with our 2.25% Notes and 3.00% Notes representing the impact of the accounting for convertible debt as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470, Debt (“ASC 470”). |
• | Catastrophic Events: Our results were negatively impacted by several catastrophic events. Insurance deductibles and other related expenses totaling $2.8 million were recognized as SG&A expense as a result of snow storms, windstorms, and hail damage during the year. |
• | Real Estate and Dealership Disposition Transactions: Positively impacting our 2014 results was a pre-tax net gain on sale of dealerships of $13.3 million. |
• | Foreign Deductible Goodwill: We recognized a $3.4 million tax benefit in 2014, as a result of a restructuring in Brazil that created tax deductible goodwill. |
• | Asset Impairments: We determined that the fair value of indefinite-lived intangible franchise rights related to four of our franchises did not exceed their carrying value and an impairment charge was required. Accordingly, we recorded a $5.4 million pretax non-cash impairment charge during the fourth quarter of 2013. We also recognized a total of $1.1 million in pretax non-cash asset impairment charges related to impairment of various long-lived assets. |
• | Non-Cash Interest Expense: Our 2013 results were negatively impacted by $10.8 million of non-cash interest expense relative to the amortization of the discount associated with our 2.25% Notes and 3.00% Notes representing the impact of the accounting for convertible debt as required by FASB ASC 470. |
• | Catastrophic Events: Our results were negatively impacted by several catastrophic events. Insurance deductibles and other related expenses totaling $12.2 million were recognized as SG&A expense as a result of snow storms, windstorms, and hail damage. |
• | Acquisition Costs: Primarily due to our acquisition of UAB Motors in February 2013, we incurred a total of $6.2 million in acquisition costs. |
• | Net Gain on Real Estate and Dealership Disposition Transactions: Positively impacting our 2013 results was a pre-tax net gain on sale of dealerships of $10.4 million. |
For the Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Unit Sales | ||||||||||||
Retail Sales | ||||||||||||
New Vehicle | 174,614 | 166,896 | 155,866 | |||||||||
Used Vehicle | 124,153 | 109,873 | 98,813 | |||||||||
Total Retail Sales | 298,767 | 276,769 | 254,679 | |||||||||
Wholesale Sales | 57,226 | 54,602 | 50,736 | |||||||||
Total Vehicle Sales | 355,993 | 331,371 | 305,415 | |||||||||
Gross Margin | ||||||||||||
New Vehicle Retail Sales | 5.1 | % | 5.4 | % | 5.5 | % | ||||||
Total Used Vehicle Sales | 5.8 | % | 6.5 | % | 6.8 | % | ||||||
Parts and Service Sales | 54.1 | % | 52.8 | % | 52.5 | % | ||||||
Total Gross Margin | 14.4 | % | 14.6 | % | 14.5 | % | ||||||
SG&A as a % of Gross Profit | 73.1 | % | 73.3 | % | 75.6 | % | ||||||
Operating Margin | 2.6 | % | 3.0 | % | 3.1 | % | ||||||
Pretax Margin | 1.7 | % | 1.7 | % | 2.2 | % | ||||||
Finance and Insurance Revenues per Retail Unit Sold | $ | 1,368 | $ | 1,324 | $ | 1,223 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Revenues | |||||||||||||||||||||
New vehicle retail | $ | 5,616,700 | 1.6% | $ | 5,530,067 | $ | 5,237,021 | 4.3% | $ | 5,022,142 | |||||||||||
Used vehicle retail | 2,453,406 | 8.9% | 2,253,681 | 2,113,710 | 7.1% | 1,973,062 | |||||||||||||||
Used vehicle wholesale | 351,649 | (3.0)% | 362,498 | 347,341 | 8.8% | 319,285 | |||||||||||||||
Parts and service | 1,118,994 | 3.7% | 1,078,936 | 1,032,102 | 6.3% | 970,841 | |||||||||||||||
Finance, insurance and other | 387,230 | 7.8% | 359,356 | 339,921 | 12.1% | 303,111 | |||||||||||||||
Total revenues | $ | 9,927,979 | 3.6% | $ | 9,584,538 | $ | 9,070,095 | 5.6% | $ | 8,588,441 | |||||||||||
Cost of Sales | |||||||||||||||||||||
New vehicle retail | $ | 5,334,257 | 2.0% | $ | 5,230,371 | $ | 4,955,323 | 4.5% | $ | 4,741,862 | |||||||||||
Used vehicle retail | 2,285,372 | 9.7% | 2,083,660 | 1,956,353 | 7.7% | 1,816,496 | |||||||||||||||
Used vehicle wholesale | 352,800 | (2.0)% | 360,005 | 344,358 | 8.2% | 318,407 | |||||||||||||||
Parts and service | 514,346 | 1.3% | 507,689 | 487,856 | 5.6% | 462,018 | |||||||||||||||
Total cost of sales | 8,486,775 | 3.7% | 8,181,725 | 7,743,890 | 5.5% | 7,338,783 | |||||||||||||||
Gross profit | $ | 1,441,204 | 2.7% | $ | 1,402,813 | $ | 1,326,205 | 6.1% | $ | 1,249,658 | |||||||||||
Selling, general and administrative expenses | $ | 1,058,157 | 3.1% | $ | 1,026,125 | $ | 977,375 | 3.5% | $ | 943,897 | |||||||||||
Depreciation and amortization expenses | $ | 44,673 | 9.9% | $ | 40,651 | $ | 38,577 | 9.8% | $ | 35,125 | |||||||||||
Floorplan interest expense | $ | 37,223 | (8.4)% | $ | 40,617 | $ | 37,869 | (6.6)% | $ | 40,554 | |||||||||||
Gross margin | |||||||||||||||||||||
New vehicle retail | 5.0 | % | 5.4 | % | 5.4 | % | 5.6 | % | |||||||||||||
Used vehicle | 5.9 | % | 6.6 | % | 6.5 | % | 6.9 | % | |||||||||||||
Parts and service | 54.0 | % | 52.9 | % | 52.7 | % | 52.4 | % | |||||||||||||
Total gross margin | 14.5 | % | 14.6 | % | 14.6 | % | 14.6 | % | |||||||||||||
SG&A as a % of gross profit | 73.4 | % | 73.1 | % | 73.7 | % | 75.5 | % | |||||||||||||
Operating margin | 2.5 | % | 3.2 | % | 3.0 | % | 3.1 | % | |||||||||||||
Finance and insurance revenues per retail unit sold | $ | 1,371 | 2.2% | $ | 1,342 | $ | 1,352 | 9.3% | $ | 1,237 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Retail Unit Sales | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 135,994 | 3.6% | 131,249 | 124,274 | 4.3% | 119,202 | |||||||||||||||
U.K. | 15,974 | 10.8% | 14,412 | 13,996 | 2.2% | 13,699 | |||||||||||||||
Brazil | 13,460 | (11.3)% | 15,180 | 13,847 | (16.6)% | 16,594 | |||||||||||||||
Total Same Stores | 165,428 | 2.9% | 160,841 | 152,117 | 1.8% | 149,495 | |||||||||||||||
Transactions | 9,186 | 6,055 | 14,779 | 6,371 | |||||||||||||||||
Total | 174,614 | 4.6% | 166,896 | 166,896 | 7.1% | 155,866 | |||||||||||||||
Retail Sales Revenues | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 4,722,491 | 4.9% | $ | 4,501,913 | $ | 4,276,808 | 6.2% | $ | 4,027,539 | |||||||||||
U.K. | 534,117 | 5.1% | 508,345 | 500,004 | 13.2% | 441,537 | |||||||||||||||
Brazil | 360,092 | (30.7)% | 519,809 | 460,209 | (16.8)% | 553,066 | |||||||||||||||
Total Same Stores | 5,616,700 | 1.6% | 5,530,067 | 5,237,021 | 4.3% | 5,022,142 | |||||||||||||||
Transactions | 384,606 | 211,552 | 504,598 | 202,779 | |||||||||||||||||
Total | $ | 6,001,306 | 4.5% | $ | 5,741,619 | $ | 5,741,619 | 9.9% | $ | 5,224,921 | |||||||||||
Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 224,561 | (3.6)% | $ | 232,997 | $ | 218,544 | 3.3% | $ | 211,545 | |||||||||||
U.K. | 33,967 | 0.4% | 33,820 | 33,516 | 17.9% | 28,424 | |||||||||||||||
Brazil | 23,915 | (27.3)% | 32,879 | 29,638 | (26.5)% | 40,311 | |||||||||||||||
Total Same Stores | 282,443 | (5.8)% | 299,696 | 281,698 | 0.5% | 280,280 | |||||||||||||||
Transactions | 23,034 | 11,521 | 29,519 | 9,595 | |||||||||||||||||
Total | $ | 305,477 | (1.8)% | $ | 311,217 | $ | 311,217 | 7.4% | $ | 289,875 | |||||||||||
Gross Profit per Retail Unit Sold | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 1,651 | (7.0)% | $ | 1,775 | $ | 1,759 | (0.9)% | $ | 1,775 | |||||||||||
U.K. | $ | 2,126 | (9.4)% | $ | 2,347 | $ | 2,395 | 15.4% | $ | 2,075 | |||||||||||
Brazil | $ | 1,777 | (18.0)% | $ | 2,166 | $ | 2,140 | (11.9)% | $ | 2,429 | |||||||||||
Total Same Stores | $ | 1,707 | (8.4)% | $ | 1,863 | $ | 1,852 | (1.2)% | $ | 1,875 | |||||||||||
Transactions | $ | 2,508 | $ | 1,903 | $ | 1,997 | $ | 1,506 | |||||||||||||
Total | $ | 1,749 | (6.2)% | $ | 1,865 | $ | 1,865 | 0.3% | $ | 1,860 | |||||||||||
Gross Margin | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 4.8 | % | 5.2 | % | 5.1 | % | 5.3 | % | |||||||||||||
U.K. | 6.4 | % | 6.7 | % | 6.7 | % | 6.4 | % | |||||||||||||
Brazil | 6.6 | % | 6.3 | % | 6.4 | % | 7.3 | % | |||||||||||||
Total Same Stores | 5.0 | % | 5.4 | % | 5.4 | % | 5.6 | % | |||||||||||||
Transactions | 6.0 | % | 5.4 | % | 5.9 | % | 4.7 | % | |||||||||||||
Total | 5.1 | % | 5.4 | % | 5.4 | % | 5.5 | % |
For The Year Ended December 31, | |||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||
Toyota/Scion/Lexus | 46,157 | 3.4% | 44,621 | 42,539 | 5.0% | 40,529 | |||||||||||
Ford/Lincoln | 19,797 | 9.2 | 18,132 | 16,275 | (9.1) | 17,907 | |||||||||||
Honda/Acura | 19,019 | 6.4 | 17,870 | 17,136 | (2.3) | 17,538 | |||||||||||
BMW/MINI | 17,556 | (0.6) | 17,664 | 17,285 | 5.0 | 16,461 | |||||||||||
Nissan | 14,570 | (7.0) | 15,664 | 15,217 | 2.6 | 14,830 | |||||||||||
Chevrolet/GMC/Buick/Cadillac | 11,155 | 6.3 | 10,496 | 8,119 | 8.6 | 7,479 | |||||||||||
Volkswagen/Audi/Porsche | 9,990 | 1.1 | 9,886 | 10,217 | 5.0 | 9,729 | |||||||||||
Hyundai/Kia | 9,473 | 5.1 | 9,012 | 7,585 | 10.0 | 6,895 | |||||||||||
Chrysler/Dodge/Jeep/RAM | 7,962 | 9.5 | 7,268 | 7,268 | 17.7 | 6,173 | |||||||||||
Mercedes-Benz/smart/Sprinter | 6,195 | (5.3) | 6,541 | 6,536 | 0.1 | 6,529 | |||||||||||
Other | 3,554 | (3.6) | 3,687 | 3,940 | (27.4) | 5,425 | |||||||||||
Total | 165,428 | 2.9% | 160,841 | 152,117 | 1.8% | 149,495 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Retail Unit Sales | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 100,176 | 9.4% | 91,606 | 85,266 | 3.7% | 82,235 | |||||||||||||||
U.K. | 12,083 | 14.1% | 10,588 | 9,902 | 8.7% | 9,109 | |||||||||||||||
Brazil | 4,844 | 1.0% | 4,798 | 4,135 | (3.1)% | 4,266 | |||||||||||||||
Total Same Stores | 117,103 | 9.5% | 106,992 | 99,303 | 3.9% | 95,610 | |||||||||||||||
Transactions | 7,050 | 2,881 | 10,570 | 3,203 | |||||||||||||||||
Total | 124,153 | 13.0% | 109,873 | 109,873 | 11.2% | 98,813 | |||||||||||||||
Retail Sales Revenues | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 2,075,497 | 11.3% | $ | 1,864,698 | $ | 1,752,151 | 5.4% | $ | 1,662,671 | |||||||||||
U.K. | 295,667 | 6.3% | 278,116 | 266,183 | 20.1% | 221,590 | |||||||||||||||
Brazil | 82,242 | (25.8)% | 110,867 | 95,376 | 7.4% | 88,801 | |||||||||||||||
Total Same Stores | 2,453,406 | 8.9% | 2,253,681 | 2,113,710 | 7.1% | 1,973,062 | |||||||||||||||
Transactions | 185,563 | 71,187 | 211,158 | 66,366 | |||||||||||||||||
Total | $ | 2,638,969 | 13.5% | $ | 2,324,868 | $ | 2,324,868 | 14.0% | $ | 2,039,428 | |||||||||||
Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 149,006 | 1.4% | $ | 147,001 | $ | 136,065 | (1.3)% | $ | 137,811 | |||||||||||
U.K. | 15,546 | (6.6)% | 16,648 | 15,883 | 9.9% | 14,446 | |||||||||||||||
Brazil | 3,482 | (45.4)% | 6,372 | 5,409 | 25.5% | 4,309 | |||||||||||||||
Total Same Stores | 168,034 | (1.2)% | 170,021 | 157,357 | 0.5% | 156,566 | |||||||||||||||
Transactions | 11,436 | 3,501 | 16,165 | 4,313 | |||||||||||||||||
Total | $ | 179,470 | 3.4% | $ | 173,522 | $ | 173,522 | 7.9% | $ | 160,879 | |||||||||||
Gross Profit per Retail | |||||||||||||||||||||
Unit Sold | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 1,487 | (7.4)% | $ | 1,605 | $ | 1,596 | (4.8)% | $ | 1,676 | |||||||||||
U.K. | $ | 1,287 | (18.1)% | $ | 1,572 | $ | 1,604 | 1.1% | $ | 1,586 | |||||||||||
Brazil | $ | 719 | (45.9)% | $ | 1,328 | $ | 1,308 | 29.5% | $ | 1,010 | |||||||||||
Total Same Stores | $ | 1,435 | (9.7)% | $ | 1,589 | $ | 1,585 | (3.2)% | $ | 1,638 | |||||||||||
Transactions | $ | 1,622 | 33.5% | $ | 1,215 | $ | 1,529 | 13.5% | $ | 1,347 | |||||||||||
Total | $ | 1,446 | (8.4)% | $ | 1,579 | $ | 1,579 | (3.0)% | $ | 1,628 | |||||||||||
Gross Margin | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 7.2 | % | 7.9 | % | 7.8 | % | 8.3 | % | |||||||||||||
U.K. | 5.3 | % | 6.0 | % | 6.0 | % | 6.5 | % | |||||||||||||
Brazil | 4.2 | % | 5.7 | % | 5.7 | % | 4.9 | % | |||||||||||||
Total Same Stores | 6.8 | % | 7.5 | % | 7.4 | % | 7.9 | % | |||||||||||||
Transactions | 6.2 | % | 4.9 | % | 7.7 | % | 6.5 | % | |||||||||||||
Total | 6.8 | % | 7.5 | % | 7.5 | % | 7.9 | % |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Wholesale Unit Sales | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 42,065 | (0.1)% | 42,120 | 40,036 | 4.9% | 38,163 | |||||||||||||||
U.K. | 9,379 | 8.8% | 8,618 | 8,181 | 5.8% | 7,735 | |||||||||||||||
Brazil | 1,552 | (22.5)% | 2,002 | 1,904 | (31.4)% | 2,775 | |||||||||||||||
Total Same Stores | 52,996 | 0.5% | 52,740 | 50,121 | 3.0% | 48,673 | |||||||||||||||
Transactions | 4,230 | 1,862 | 4,481 | 2,063 | |||||||||||||||||
Total | 57,226 | 4.8% | 54,602 | 54,602 | 7.6% | 50,736 | |||||||||||||||
Wholesale Sales Revenues | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 266,864 | (0.3)% | $ | 267,799 | $ | 255,504 | 13.7% | $ | 224,686 | |||||||||||
U.K. | 77,846 | (2.6)% | 79,891 | 77,993 | 18.0% | 66,077 | |||||||||||||||
Brazil | 6,939 | (53.1)% | 14,808 | 13,844 | (51.5)% | 28,522 | |||||||||||||||
Total Same Stores | 351,649 | (3.0)% | 362,498 | 347,341 | 8.8% | 319,285 | |||||||||||||||
Transactions | 45,602 | 16,645 | 31,802 | 12,900 | |||||||||||||||||
Total | $ | 397,251 | 4.8% | $ | 379,143 | $ | 379,143 | 14.1% | $ | 332,185 | |||||||||||
Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | (1,016 | ) | (157.2)% | $ | 1,777 | $ | 2,331 | 647.1% | $ | 312 | ||||||||||
U.K. | (632 | ) | (55.7)% | (406 | ) | (446 | ) | 47.9% | (856 | ) | |||||||||||
Brazil | 497 | (55.7)% | 1,122 | 1,098 | (22.8)% | 1,422 | |||||||||||||||
Total Same Stores | (1,151 | ) | (146.2)% | 2,493 | 2,983 | 239.7% | 878 | ||||||||||||||
Transactions | (769 | ) | (174 | ) | (664 | ) | (1,073 | ) | |||||||||||||
Total | $ | (1,920 | ) | (182.8)% | $ | 2,319 | $ | 2,319 | 1,289.2% | $ | (195 | ) | |||||||||
Gross Profit per | |||||||||||||||||||||
Wholesale Unit Sold | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | (24 | ) | (157.1)% | $ | 42 | $ | 58 | 625.0% | $ | 8 | ||||||||||
U.K. | $ | (67 | ) | (42.6)% | $ | (47 | ) | $ | (55 | ) | 50.5% | $ | (111 | ) | |||||||
Brazil | $ | 320 | (42.9)% | $ | 560 | $ | 577 | 12.7% | $ | 512 | |||||||||||
Total Same Stores | $ | (22 | ) | (146.8)% | $ | 47 | $ | 60 | 233.3% | $ | 18 | ||||||||||
Transactions | $ | (182 | ) | (95.7)% | $ | (93 | ) | $ | (148 | ) | 71.5% | $ | (520 | ) | |||||||
Total | $ | (34 | ) | (181.0)% | $ | 42 | $ | 42 | 1,150.0% | $ | (4 | ) | |||||||||
Gross Margin | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | (0.4 | )% | 0.7 | % | 0.9 | % | 0.1 | % | |||||||||||||
U.K. | (0.8 | )% | (0.5 | )% | (0.6 | )% | (1.3 | )% | |||||||||||||
Brazil | 7.2 | % | 7.6 | % | 7.9 | % | 5.0 | % | |||||||||||||
Total Same Stores | (0.3 | )% | 0.7 | % | 0.9 | % | 0.3 | % | |||||||||||||
Transactions | (1.7 | )% | (1.0 | )% | (2.1 | )% | (8.3 | )% | |||||||||||||
Total | (0.5 | )% | 0.6 | % | 0.6 | % | (0.1 | )% |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Used Vehicle Unit Sales | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 142,241 | 6.4% | 133,726 | 125,302 | 4.1% | 120,398 | |||||||||||||||
U.K. | 21,462 | 11.7% | 19,206 | 18,083 | 7.4% | 16,844 | |||||||||||||||
Brazil | 6,396 | (5.9)% | 6,800 | 6,039 | (14.2)% | 7,041 | |||||||||||||||
Total Same Stores | 170,099 | 6.5% | 159,732 | 149,424 | 3.6% | 144,283 | |||||||||||||||
Transactions | 11,280 | 4,743 | 15,051 | 5,266 | |||||||||||||||||
Total | 181,379 | 10.3% | 164,475 | 164,475 | 10.0% | 149,549 | |||||||||||||||
Sales Revenues | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 2,342,361 | 9.8% | $ | 2,132,497 | $ | 2,007,655 | 6.4% | $ | 1,887,357 | |||||||||||
U.K. | 373,513 | 4.3% | 358,007 | 344,176 | 19.6% | 287,667 | |||||||||||||||
Brazil | 89,181 | (29.0)% | 125,675 | 109,220 | (6.9)% | 117,323 | |||||||||||||||
Total Same Stores | 2,805,055 | 7.2% | 2,616,179 | 2,461,051 | 7.4% | 2,292,347 | |||||||||||||||
Transactions | 231,165 | 87,832 | 242,960 | 79,266 | |||||||||||||||||
Total | $ | 3,036,220 | 12.3% | $ | 2,704,011 | $ | 2,704,011 | 14.0% | $ | 2,371,613 | |||||||||||
Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 147,990 | (0.5)% | $ | 148,778 | $ | 138,396 | 0.2% | $ | 138,123 | |||||||||||
U.K. | 14,914 | (8.2)% | 16,242 | 15,437 | 13.6% | 13,590 | |||||||||||||||
Brazil | 3,979 | (46.9)% | 7,494 | 6,507 | 13.5% | 5,731 | |||||||||||||||
Total Same Stores | 166,883 | (3.3)% | 172,514 | 160,340 | 1.8% | 157,444 | |||||||||||||||
Transactions | 10,667 | 3,327 | 15,501 | 3,240 | |||||||||||||||||
Total | $ | 177,550 | 1.0% | $ | 175,841 | $ | 175,841 | 9.4% | $ | 160,684 | |||||||||||
Gross Profit per Used | |||||||||||||||||||||
Vehicle Unit Sold | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 1,040 | (6.6)% | $ | 1,113 | $ | 1,104 | (3.7)% | $ | 1,147 | |||||||||||
U.K. | $ | 695 | (17.8)% | $ | 846 | $ | 854 | 5.8% | $ | 807 | |||||||||||
Brazil | $ | 622 | (43.6)% | $ | 1,102 | $ | 1,077 | 32.3% | $ | 814 | |||||||||||
Total Same Stores | $ | 981 | (9.2)% | $ | 1,080 | $ | 1,073 | (1.6)% | $ | 1,091 | |||||||||||
Transactions | $ | 946 | 35.0% | $ | 701 | $ | 1,030 | 67.5% | $ | 615 | |||||||||||
Total | $ | 979 | (8.4)% | $ | 1,069 | $ | 1,069 | (0.5)% | $ | 1,074 | |||||||||||
Gross Margin | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 6.3 | % | 7.0 | % | 6.9 | % | 7.3 | % | |||||||||||||
U.K. | 4.0 | % | 4.5 | % | 4.5 | % | 4.7 | % | |||||||||||||
Brazil | 4.5 | % | 6.0 | % | 6.0 | % | 4.9 | % | |||||||||||||
Total Same Stores | 5.9 | % | 6.6 | % | 6.5 | % | 6.9 | % | |||||||||||||
Transactions | 4.6 | % | 3.8 | % | 6.4 | % | 4.1 | % | |||||||||||||
Total | 5.8 | % | 6.5 | % | 6.5 | % | 6.8 | % |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Parts and Service Revenues | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 987,762 | 6.1% | $ | 930,597 | $ | 891,099 | 6.0% | $ | 840,398 | |||||||||||
U.K. | 80,625 | (1.8)% | 82,126 | 79,148 | 17.2% | 67,557 | |||||||||||||||
Brazil | 50,607 | (23.6)% | 66,213 | 61,855 | (1.6)% | 62,886 | |||||||||||||||
Total Same Stores | 1,118,994 | 3.7% | 1,078,936 | 1,032,102 | 6.3% | 970,841 | |||||||||||||||
Transactions | 67,199 | 46,758 | 93,592 | 39,844 | |||||||||||||||||
Total | $ | 1,186,193 | 5.4% | $ | 1,125,694 | $ | 1,125,694 | 11.4% | $ | 1,010,685 | |||||||||||
Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 537,701 | 8.1% | $ | 497,265 | $ | 474,505 | 6.6% | $ | 445,077 | |||||||||||
U.K. | 45,652 | 1.5% | 44,990 | 43,641 | 17.5% | 37,147 | |||||||||||||||
Brazil | 21,295 | (26.5)% | 28,992 | 26,100 | (1.9)% | 26,599 | |||||||||||||||
Total Same Stores | 604,648 | 5.8% | 571,247 | 544,246 | 7.0% | 508,823 | |||||||||||||||
Transactions | 37,511 | 23,068 | 50,069 | 21,802 | |||||||||||||||||
Total | $ | 642,159 | 8.1% | $ | 594,315 | $ | 594,315 | 12.0% | $ | 530,625 | |||||||||||
Gross Margin | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 54.4 | % | 53.4 | % | 53.2 | % | 53.0 | % | |||||||||||||
U.K. | 56.6 | % | 54.8 | % | 55.1 | % | 55.0 | % | |||||||||||||
Brazil | 42.1 | % | 43.8 | % | 42.2 | % | 42.3 | % | |||||||||||||
Total Same Stores | 54.0 | % | 52.9 | % | 52.7 | % | 52.4 | % | |||||||||||||
Transactions | 55.8 | % | 49.3 | % | 53.5 | % | 54.7 | % | |||||||||||||
Total | 54.1 | % | 52.8 | % | 52.8 | % | 52.5 | % |
For The Year Ended December 31, | ||||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | |||||||||||||||||
Retail New and Used Unit Sales | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | 236,170 | 6.0% | 222,855 | 209,540 | 4.0% | 201,437 | ||||||||||||||||
U.K. | 28,057 | 12.2% | 25,000 | 23,898 | 4.8% | 22,808 | ||||||||||||||||
Brazil | 18,304 | (8.4)% | 19,978 | 17,982 | (13.8)% | 20,860 | ||||||||||||||||
Total Same Stores | 282,531 | 5.5% | 267,833 | 251,420 | 2.6% | 245,105 | ||||||||||||||||
Transactions | 16,236 | 8,936 | 25,349 | 9,574 | ||||||||||||||||||
Total | 298,767 | 7.9% | 276,769 | 276,769 | 8.7% | 254,679 | ||||||||||||||||
Retail Finance Fees | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | $ | 117,253 | 10.2% | $ | 106,437 | $ | 100,265 | 5.7% | $ | 94,876 | ||||||||||||
U.K. | 12,678 | 11.1% | 11,415 | 11,082 | 36.8% | 8,101 | ||||||||||||||||
Brazil | 1,782 | (26.6)% | 2,427 | 2,203 | (8.8)% | 2,416 | ||||||||||||||||
Total Same Stores | 131,713 | 9.5% | 120,279 | 113,550 | 7.7% | 105,393 | ||||||||||||||||
Transactions | 9,621 | 3,674 | 10,403 | 3,811 | ||||||||||||||||||
Total | $ | 141,334 | 14.0% | $ | 123,953 | $ | 123,953 | 13.5% | $ | 109,204 | ||||||||||||
Vehicle Service Contract Fees | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | $ | 138,903 | 6.2% | $ | 130,771 | $ | 124,043 | 11.1% | $ | 111,628 | ||||||||||||
U.K. | 613 | 73.7% | 353 | 284 | 34.6% | 211 | ||||||||||||||||
Brazil | — | —% | — | — | —% | — | ||||||||||||||||
Total Same Stores | 139,516 | 6.4% | 131,124 | 124,327 | 11.2% | 111,839 | ||||||||||||||||
Transactions | 5,180 | 999 | 7,796 | 2,311 | ||||||||||||||||||
Total | $ | 144,696 | 9.5% | $ | 132,123 | $ | 132,123 | 15.7% | $ | 114,150 | ||||||||||||
Insurance and Other | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | $ | 103,283 | 11.1% | $ | 92,924 | $ | 87,866 | 18.8% | $ | 73,985 | ||||||||||||
U.K. | 7,362 | 6.0% | 6,945 | 6,713 | 17.8% | 5,699 | ||||||||||||||||
Brazil | 5,356 | (33.7)% | 8,084 | 7,465 | 20.5% | 6,195 | ||||||||||||||||
Total Same Stores | 116,001 | 7.5% | 107,953 | 102,044 | 18.8% | 85,879 | ||||||||||||||||
Transactions | 6,755 | 2,536 | 8,445 | 2,129 | ||||||||||||||||||
Total | $ | 122,756 | 11.1% | $ | 110,489 | $ | 110,489 | 25.5% | $ | 88,008 | ||||||||||||
Total Finance and Insurance Revenues | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | $ | 359,439 | 8.9% | $ | 330,132 | $ | 312,174 | 11.3% | $ | 280,489 | ||||||||||||
U.K. | 20,653 | 10.4% | 18,713 | 18,079 | 29.0% | 14,011 | ||||||||||||||||
Brazil | 7,138 | (32.1)% | 10,511 | 9,668 | 12.3% | 8,611 | ||||||||||||||||
Total Same Stores | 387,230 | 7.8% | 359,356 | 339,921 | 12.1% | 303,111 | ||||||||||||||||
Transactions | 21,556 | 7,209 | 26,644 | 8,251 | ||||||||||||||||||
Total | $ | 408,786 | 11.5% | $ | 366,565 | $ | 366,565 | 17.7% | $ | 311,362 |
Finance and Insurance Revenues per Unit Sold | ||||||||||||||||||||||
Same Stores | ||||||||||||||||||||||
U.S. | $ | 1,522 | 2.8% | $ | 1,481 | $ | 1,490 | 7.0% | $ | 1,392 | ||||||||||||
U.K. | $ | 736 | (1.7)% | $ | 749 | $ | 757 | 23.3% | $ | 614 | ||||||||||||
Brazil | $ | 390 | (25.9)% | $ | 526 | $ | 538 | 30.3% | $ | 413 | ||||||||||||
Total Same Stores | $ | 1,371 | 2.2% | $ | 1,342 | $ | 1,352 | 9.3% | $ | 1,237 | ||||||||||||
Transactions | $ | 1,328 | $ | 807 | $ | 1,051 | $ | 862 | ||||||||||||||
Total | $ | 1,368 | 3.3% | $ | 1,324 | $ | 1,324 | 8.3 | % | $ | 1,223 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Personnel | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 585,585 | 7.9% | $ | 542,512 | $ | 514,391 | 4.5% | $ | 492,195 | |||||||||||
U.K. | 53,159 | 0.4% | 52,956 | 51,360 | 17.7% | 43,638 | |||||||||||||||
Brazil | 27,460 | (27.0)% | 37,636 | 34,728 | (10.7)% | 38,872 | |||||||||||||||
Total Same Stores | 666,204 | 5.2% | 633,104 | 600,479 | 4.5% | 574,705 | |||||||||||||||
Transactions | 42,400 | 25,336 | 57,961 | 23,240 | |||||||||||||||||
Total | $ | 708,604 | 7.6% | $ | 658,440 | $ | 658,440 | 10.1% | $ | 597,945 | |||||||||||
Advertising | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 65,300 | (0.8)% | $ | 65,805 | $ | 61,973 | 21.0% | $ | 51,231 | |||||||||||
U.K. | 3,701 | (4.0)% | 3,856 | 3,652 | 23.0% | 2,969 | |||||||||||||||
Brazil | 1,395 | (33.2)% | 2,087 | 1,836 | (14.6)% | 2,150 | |||||||||||||||
Total Same Stores | 70,396 | (1.9)% | 71,748 | 67,461 | 19.7% | 56,350 | |||||||||||||||
Transactions | 4,232 | 2,064 | 6,351 | 2,601 | |||||||||||||||||
Total | $ | 74,628 | 1.1% | $ | 73,812 | $ | 73,812 | 25.2% | $ | 58,951 | |||||||||||
Rent and Facility Costs | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 79,950 | (3.4)% | $ | 82,796 | $ | 81,839 | 1.0% | $ | 81,022 | |||||||||||
U.K. | 8,249 | (4.1)% | 8,598 | 8,345 | 2.3% | 8,161 | |||||||||||||||
Brazil | 10,873 | (19.1)% | 13,433 | 12,813 | (4.0)% | 13,346 | |||||||||||||||
Total Same Stores | 99,072 | (5.5)% | 104,827 | 102,997 | 0.5% | 102,529 | |||||||||||||||
Transactions | 7,364 | 9,028 | 10,858 | 7,930 | |||||||||||||||||
Total | $ | 106,436 | (6.5)% | $ | 113,855 | $ | 113,855 | 3.1% | $ | 110,459 | |||||||||||
Other SG&A | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 187,092 | 5.8% | $ | 176,838 | $ | 168,761 | (3.3)% | $ | 174,535 | |||||||||||
U.K. | 23,658 | 1.7% | 23,260 | 22,512 | 12.5% | 20,011 | |||||||||||||||
Brazil | 11,735 | (28.2)% | 16,348 | 15,165 | (3.8)% | 15,767 | |||||||||||||||
Total Same Stores | 222,485 | 2.8% | 216,446 | 206,438 | (1.8)% | 210,313 | |||||||||||||||
Transactions | 8,680 | (589 | ) | 9,419 | (812 | ) | |||||||||||||||
Total | $ | 231,165 | 7.1% | $ | 215,857 | $ | 215,857 | 3.0% | $ | 209,501 | |||||||||||
Total SG&A | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 917,927 | 5.8% | $ | 867,951 | $ | 826,964 | 3.5% | $ | 798,983 | |||||||||||
U.K. | 88,767 | 0.1% | 88,670 | 85,869 | 14.8% | 74,779 | |||||||||||||||
Brazil | 51,463 | (26.0)% | 69,504 | 64,542 | (8.0)% | 70,135 | |||||||||||||||
Total Same Stores | 1,058,157 | 3.1% | 1,026,125 | 977,375 | 3.5% | 943,897 | |||||||||||||||
Transactions | 62,676 | 35,839 | 84,589 | 32,959 | |||||||||||||||||
Total | $ | 1,120,833 | 5.5% | $ | 1,061,964 | $ | 1,061,964 | 8.7% | $ | 976,856 |
Total Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 1,269,691 | 5.0% | $ | 1,209,172 | $ | 1,143,619 | 6.4% | $ | 1,075,234 | |||||||||||
U.K. | 115,186 | 1.2% | 113,765 | 110,673 | 18.8% | 93,172 | |||||||||||||||
Brazil | 56,327 | (29.5)% | 79,876 | 71,913 | (11.5)% | 81,252 | |||||||||||||||
Total Same Stores | 1,441,204 | 2.7% | 1,402,813 | 1,326,205 | 6.1% | 1,249,658 | |||||||||||||||
Transactions | 92,768 | 45,125 | 121,733 | 42,888 | |||||||||||||||||
Total | $ | 1,533,972 | 5.9% | $ | 1,447,938 | $ | 1,447,938 | 12.0% | $ | 1,292,546 | |||||||||||
SG&A as a % of Gross Profit | |||||||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | 72.3 | % | 71.8 | % | 72.3 | % | 74.3 | % | |||||||||||||
U.K. | 77.1 | % | 77.9 | % | 77.6 | % | 80.3 | % | |||||||||||||
Brazil | 91.4 | % | 87.0 | % | 89.7 | % | 86.3 | % | |||||||||||||
Total Same Stores | 73.4 | % | 73.1 | % | 73.7 | % | 75.5 | % | |||||||||||||
Transactions | 67.6 | % | 79.4 | % | 69.5 | % | 76.8 | % | |||||||||||||
Total | 73.1 | % | 73.3 | % | 73.3 | % | 75.6 | % | |||||||||||||
Employees | 12,900 | 12,000 | 12,000 | 11,500 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 39,819 | 12.1% | $ | 35,536 | $ | 33,783 | 8.9% | $ | 31,015 | |||||||||||
U.K. | 3,176 | (4.0)% | 3,309 | 3,156 | 22.7% | 2,573 | |||||||||||||||
Brazil | 1,678 | (7.1)% | 1,806 | 1,638 | 6.6% | 1,537 | |||||||||||||||
Total Same Stores | 44,673 | 9.9% | 40,651 | 38,577 | 9.8% | 35,125 | |||||||||||||||
Transactions | 2,566 | 1,693 | 3,767 | 701 | |||||||||||||||||
Total | $ | 47,239 | 11.6% | $ | 42,344 | $ | 42,344 | 18.2% | $ | 35,826 |
For The Year Ended December 31, | |||||||||||||||||||||
2015 | % Increase/ (Decrease) | 2014 | 2014 | % Increase/ (Decrease) | 2013 | ||||||||||||||||
Same Stores | |||||||||||||||||||||
U.S. | $ | 34,714 | 4.9% | $ | 33,102 | $ | 31,572 | (3.6)% | $ | 32,760 | |||||||||||
U.K. | 1,544 | (3.8)% | 1,605 | 1,584 | (0.3)% | 1,589 | |||||||||||||||
Brazil | 965 | (83.7)% | 5,910 | 4,713 | (24.0)% | 6,205 | |||||||||||||||
Total Same Stores | 37,223 | (8.4)% | 40,617 | 37,869 | (6.6)% | 40,554 | |||||||||||||||
Transactions | 2,041 | 997 | 3,745 | 1,113 | |||||||||||||||||
Total | $ | 39,264 | (5.6)% | $ | 41,614 | $ | 41,614 | (0.1)% | $ | 41,667 | |||||||||||
Memo: | |||||||||||||||||||||
Manufacturer’s assistance | $ | 50,474 | 11.8% | $ | 45,145 | $ | 45,145 | 17.1% | $ | 38,543 |
For the Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Adjusted net cash provided by operating activities | $ | 244,349 | $ | 207,139 | $ | 202,823 | ||||||
Adjusted net cash used in investing activities | (266,791 | ) | (315,432 | ) | (249,516 | ) | ||||||
Adjusted net cash provided by (used in) financing activities | (4 | ) | 131,180 | 66,404 | ||||||||
Effect of exchange rate changes on cash | (5,492 | ) | (2,127 | ) | (4,146 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | $ | (27,938 | ) | $ | 20,760 | $ | 15,565 |
As of December 31, 2015 | ||
Required | Actual | |
Senior Secured Adjusted Leverage Ratio | < 3.75 | 1.67 |
Total Adjusted Leverage Ratio | < 5.50 | 3.78 |
Fixed Charge Coverage Ratio | > 1.35 | 2.03 |
As of December 31, 2015 | ||||||||||||
U.S. Credit Facilities | Total Commitment | Outstanding | Available | |||||||||
(In thousands) | ||||||||||||
Floorplan Line(1) | $ | 1,380,000 | $ | 1,150,847 | $ | 229,153 | ||||||
Acquisition Line(2) | 320,000 | 41,850 | 278,150 | |||||||||
Total Revolving Credit Facility | 1,700,000 | 1,192,697 | 507,303 | |||||||||
FMCC Facility(3) | 300,000 | 171,307 | 128,693 | |||||||||
Total U.S. Credit Facilities(4) | $ | 2,000,000 | $ | 1,364,004 | $ | 635,996 |
(1) | The available balance as of December 31, 2015 includes $110.8 million of immediately available funds. |
(2) | The outstanding balance of $41.9 million is related to outstanding letters of credit. |
(3) | The available balance as of December 31, 2015 includes $25.5 million of immediately available funds. |
(4) | The outstanding balance excludes $196.4 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and rental vehicle financing not associated with any of our U.S. credit facilities. |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | < 1 Year | 1-3 Years | 3-5 Years | Thereafter | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Floorplan notes payable | $ | 1,518,531 | $ | 1,518,531 | $ | — | $ | — | $ | — | ||||||||||
Estimated interest payments on floor plan notes payable (1) | 17,296 | 9,296 | 6,400 | 1,600 | — | |||||||||||||||
Long-term debt obligations (2) | 1,248,521 | 93,240 | 99,830 | 104,129 | 951,322 | |||||||||||||||
Estimated interest payments on fixed-rate long-term debt obligations (3) | 320,849 | 47,587 | 93,689 | 91,069 | 88,504 | |||||||||||||||
Estimated interest payments on variable-rate long-term debt obligations (4) | 36,288 | 8,644 | 11,540 | 6,811 | 9,293 | |||||||||||||||
Capital lease obligations (5) | 51,958 | 3,803 | 8,562 | 8,716 | 30,877 | |||||||||||||||
Estimated interest on capital lease obligations | 35,619 | 4,857 | 8,727 | 7,267 | 14,768 | |||||||||||||||
Operating lease obligations | 318,158 | 52,646 | 90,228 | 62,460 | 112,824 | |||||||||||||||
Estimated interest payments on interest rate risk management obligations (6) | 45,821 | 11,768 | 23,398 | 10,380 | 275 | |||||||||||||||
Purchase commitments (7) | 44,193 | 10,897 | 19,875 | 13,421 | — | |||||||||||||||
Total | $ | 3,637,234 | $ | 1,761,269 | $ | 362,249 | $ | 305,853 | $ | 1,207,863 |
(1) | Calculated using the Floorplan Line balance and weighted average interest rate at December 31, 2015, and the assumption that these liabilities would be settled within 67 days, which approximates our weighted average inventory days outstanding. In addition, amounts include estimated commitment fees on the unused portion of the Floorplan Line through the term of the Revolving Credit Facility, assuming no additional Floorplan Line borrowings beyond 67 days. |
(2) | Includes $41.9 million of outstanding letters of credit associated with the Acquisition Line of our Revolving Credit Facility due in 2016. |
(3) | Includes our 5.00% Notes, 5.25% Notes and other real estate related debt. |
(4) | Includes interest on letters of credit associated with the Acquisition Line of our Revolving Credit Facility due 2016, commitment fees on the unused portion of the Acquisition Line through the term of the Revolving Credit Facility, and estimated interest on our Foreign Notes and other real estate related debt. |
(5) | Includes $51.9 million related real estate and $0.1 million of other capital leases. |
(6) | Amounts represent the estimated net future settlement of our obligation to pay a fixed interest rate and receive a variable interest rate, based upon a forecasted LIBOR forward curve and the maturity date of each obligation. The estimated fair value of these obligations as of December 31, 2015 was $31.2 million. |
(7) | Includes Information Technology commitments and other. |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net cash provided by (used in) operating activities | $ | 141,047 | $ | 198,288 | $ | 52,372 | ||||||
Change in floorplan notes payable-credit facilities, excluding floorplan offset account and net acquisition and disposition | 100,302 | 5,881 | 165,404 | |||||||||
Change in floorplan notes payable-manufacturer affiliates associated with net acquisition and disposition related activity | 3,000 | 2,970 | (14,953 | ) | ||||||||
Adjusted net cash provided by operating activities | $ | 244,349 | $ | 207,139 | $ | 202,823 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Net cash used in investing activities | $ | (284,502 | ) | $ | (347,051 | ) | $ | (268,654 | ) | |||
Change in cash paid for acquisitions, associated with floorplan notes payable | 32,140 | 92,112 | 64,569 | |||||||||
Change in proceeds from disposition of franchises, property and equipment, associated with floorplan notes payable | (14,429 | ) | (60,493 | ) | (45,431 | ) | ||||||
Adjusted net cash used by investing activities | $ | (266,791 | ) | $ | (315,432 | ) | $ | (249,516 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Net cash provided by operating activities | $ | 121,009 | $ | 171,650 | $ | 235,993 | ||||||
Change in net borrowings and repayments on floorplan notes payable-credit facilities, excluding net activity associated with our floorplan offset account | (121,013 | ) | (40,470 | ) | (169,589 | ) | ||||||
Adjusted net cash provided by (used in) financing activities | $ | (4 | ) | $ | 131,180 | $ | 66,404 |
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||||||||||||
Notional amount in effect at the end of period | $ | 582 | $ | 730 | $ | 578 | $ | 627 | $ | 325 | $ | 74 | $ | 14 | $ | — | ||||||||||||||||
Weighted average interest rate during the period | 2.57 | % | 2.72 | % | 2.59 | % | 2.65 | % | 2.53 | % | 2.62 | % | 2.19 | % | 1.63 | % |
Name | Age | Position | Years with Group 1 | Years of Automotive Experience |
Earl J. Hesterberg | 62 | President and Chief Executive Officer | 11 | 41 |
John C. Rickel | 54 | Senior Vice President and Chief Financial Officer | 10.5 | 32 |
Frank Grese Jr. | 64 | Senior Vice President of Human Resources, Training, and Operations Support | 11 | 41 |
Darryl M. Burman | 57 | Vice President and General Counsel | 9 | 18 |
Peter C. DeLongchamps | 55 | Vice President, Financial Services and Manufacturer Relations | 11.5 | 33 |
J. Brooks O’Hara | 60 | Vice President, Human Resources | 16 | 35 |
Group 1 Automotive, Inc. | |||
By: | /s/ Earl J. Hesterberg | ||
Earl J. Hesterberg | |||
President and Chief Executive Officer |
Signature | Title | |
/s/ Earl J. Hesterberg | President and Chief Executive Officer and Director | |
Earl J. Hesterberg | (Principal Executive Officer) | |
/s/ John C. Rickel | Senior Vice President and Chief Financial Officer | |
John C. Rickel | (Principal Financial and Accounting Officer) | |
/s/ John L. Adams | Chairman and Director | |
John L. Adams | ||
/s/ Doyle L. Arnold | Director | |
Doyle L. Arnold | ||
/s/ Lincoln da Cunha Pereira Filho | Director | |
Lincoln da Cunha Pereira Filho | ||
/s/ Stephen D. Quinn | Director | |
Stephen D. Quinn | ||
/s/ J. Terry Strange | Director | |
J. Terry Strange | ||
/s/ Max P. Watson, Jr. | Director | |
Max P. Watson, Jr. | ||
/s/ MaryAnn Wright | Director | |
MaryAnn Wright |
December 31, 2015 | December 31, 2014 | |||||||
(In thousands, except per share amounts) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 13,037 | $ | 40,975 | ||||
Contracts-in-transit and vehicle receivables, net | 252,438 | 237,448 | ||||||
Accounts and notes receivable, net | 157,768 | 151,330 | ||||||
Inventories, net | 1,737,751 | 1,556,705 | ||||||
Deferred income taxes | 14,109 | 11,062 | ||||||
Prepaid expenses and other current assets | 27,852 | 37,699 | ||||||
Total current assets | 2,202,955 | 2,035,219 | ||||||
PROPERTY AND EQUIPMENT, net | 1,033,981 | 950,388 | ||||||
GOODWILL | 854,915 | 830,377 | ||||||
INTANGIBLE FRANCHISE RIGHTS | 307,588 | 303,947 | ||||||
OTHER ASSETS | 15,490 | 21,561 | ||||||
Total assets | $ | 4,414,929 | $ | 4,141,492 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Floorplan notes payable — credit facility and other | $ | 1,265,719 | $ | 1,143,246 | ||||
Offset account related to floorplan notes payable - credit facility | (110,759 | ) | (39,616 | ) | ||||
Floorplan notes payable — manufacturer affiliates | 389,071 | 307,656 | ||||||
Offset account related to floorplan notes payable - manufacturer affiliates | (25,500 | ) | (22,500 | ) | ||||
Current maturities of long-term debt and short-term financing | 55,193 | 72,630 | ||||||
Accounts payable | 280,423 | 288,320 | ||||||
Accrued expenses | 185,323 | 172,463 | ||||||
Total current liabilities | 2,039,470 | 1,922,199 | ||||||
LONG-TERM DEBT, net of current maturities | 1,203,436 | 1,008,837 | ||||||
DEFERRED INCOME TAXES | 150,753 | 141,239 | ||||||
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | 31,153 | 25,311 | ||||||
OTHER LIABILITIES | 71,865 | 65,896 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 14) | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Preferred stock, $0.01 par value, 1,000 shares authorized; none issued or outstanding | — | — | ||||||
Common stock, $0.01 par value, 50,000 shares authorized; 25,706 and 25,724 issued, respectively | 257 | 257 | ||||||
Additional paid-in capital | 291,092 | 286,854 | ||||||
Retained earnings | 926,169 | 852,057 | ||||||
Accumulated other comprehensive loss | (137,984 | ) | (81,984 | ) | ||||
Treasury stock, at cost; 2,291 and 1,385 shares, respectively | (161,282 | ) | (79,174 | ) | ||||
Total stockholders’ equity | 918,252 | 978,010 | ||||||
Total liabilities and stockholders’ equity | $ | 4,414,929 | $ | 4,141,492 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
REVENUES: | ||||||||||||
New vehicle retail sales | $ | 6,001,306 | $ | 5,741,619 | $ | 5,224,921 | ||||||
Used vehicle retail sales | 2,638,969 | 2,324,868 | 2,039,428 | |||||||||
Used vehicle wholesale sales | 397,251 | 379,143 | 332,185 | |||||||||
Parts and service sales | 1,186,193 | 1,125,694 | 1,010,685 | |||||||||
Finance, insurance and other, net | 408,786 | 366,565 | 311,362 | |||||||||
Total revenues | 10,632,505 | 9,937,889 | 8,918,581 | |||||||||
COST OF SALES: | ||||||||||||
New vehicle retail sales | 5,695,829 | 5,430,402 | 4,935,046 | |||||||||
Used vehicle retail sales | 2,459,499 | 2,151,346 | 1,878,549 | |||||||||
Used vehicle wholesale sales | 399,171 | 376,824 | 332,380 | |||||||||
Parts and service sales | 544,034 | 531,379 | 480,060 | |||||||||
Total cost of sales | 9,098,533 | 8,489,951 | 7,626,035 | |||||||||
GROSS PROFIT | 1,533,972 | 1,447,938 | 1,292,546 | |||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,120,833 | 1,061,964 | 976,856 | |||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | 47,239 | 42,344 | 35,826 | |||||||||
ASSET IMPAIRMENTS | 87,562 | 41,520 | 6,542 | |||||||||
INCOME FROM OPERATIONS | 278,338 | 302,110 | 273,322 | |||||||||
OTHER EXPENSE: | ||||||||||||
Floorplan interest expense | (39,264 | ) | (41,614 | ) | (41,667 | ) | ||||||
Other interest expense, net | (56,903 | ) | (49,693 | ) | (38,971 | ) | ||||||
Other expense, net | — | — | (789 | ) | ||||||||
Loss on extinguishment of long-term debt | — | (46,403 | ) | — | ||||||||
INCOME BEFORE INCOME TAXES | 182,171 | 164,400 | 191,895 | |||||||||
PROVISION FOR INCOME TAXES | (88,172 | ) | (71,396 | ) | (77,903 | ) | ||||||
NET INCOME | $ | 93,999 | $ | 93,004 | $ | 113,992 | ||||||
BASIC EARNINGS PER SHARE | $ | 3.91 | $ | 3.82 | $ | 4.72 | ||||||
Weighted average common shares outstanding | 23,148 | 23,380 | 23,096 | |||||||||
DILUTED EARNINGS PER SHARE | $ | 3.90 | $ | 3.60 | $ | 4.32 | ||||||
Weighted average common shares outstanding | 23,152 | 24,885 | 25,314 | |||||||||
CASH DIVIDENDS PER COMMON SHARE | $ | 0.83 | $ | 0.70 | $ | 0.65 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
NET INCOME | $ | 93,999 | $ | 93,004 | $ | 113,992 | ||||||
OTHER COMPREHENSIVE LOSS: | ||||||||||||
Unrealized loss on foreign currency translation | (54,457 | ) | (27,426 | ) | (31,701 | ) | ||||||
Realized gain on foreign currency translation associated with disposition of foreign subsidiaries | — | 1,178 | — | |||||||||
Net unrealized loss on foreign currency translation | (54,457 | ) | (26,248 | ) | (31,701 | ) | ||||||
Net unrealized gain (loss) on interest rate swaps: | ||||||||||||
Unrealized gain (loss) arising during the period, net of tax benefit (provision) of $5,914, $6,692, and ($3,667), respectively | (9,856 | ) | (11,153 | ) | 6,112 | |||||||
Reclassification adjustment for loss included in interest expense, net of tax provision of $4,987, $4,256 and $4,182 respectively | 8,313 | 7,094 | 6,969 | |||||||||
Net unrealized (loss) gain on interest rate swaps, net of tax | (1,543 | ) | (4,059 | ) | 13,081 | |||||||
OTHER COMPREHENSIVE LOSS, NET OF TAXES | (56,000 | ) | (30,307 | ) | (18,620 | ) | ||||||
COMPREHENSIVE INCOME | $ | 37,999 | $ | 62,697 | $ | 95,372 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
BALANCE, December 31, 2012 | 25,836 | $ | 258 | $ | 332,836 | $ | 677,864 | $ | (33,057 | ) | $ | (117,617 | ) | $ | 860,284 | ||||||||||||
Net income | — | — | — | 113,992 | — | — | 113,992 | ||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | (18,620 | ) | — | (18,620 | ) | ||||||||||||||||||
Purchases of treasury stock | — | — | — | (3,554 | ) | (3,554 | ) | ||||||||||||||||||||
Treasury stock used in acquisition | — | — | 27,689 | — | — | 52,709 | 80,398 | ||||||||||||||||||||
Temporary equity adjustment related to 3.00% convertible notes | — | — | 3,411 | — | — | — | 3,411 | ||||||||||||||||||||
Net issuance of treasury shares to employee stock compensation plans | (90 | ) | (1 | ) | (12,137 | ) | — | — | 10,315 | (1,823 | ) | ||||||||||||||||
Stock-based compensation, including tax effect of $2,993 | — | — | 16,842 | — | — | — | 16,842 | ||||||||||||||||||||
Cash dividends, net of estimated forfeitures relative to participating securities | — | — | — | (15,755 | ) | — | — | (15,755 | ) | ||||||||||||||||||
BALANCE, December 31, 2013 | 25,746 | 257 | 368,641 | 776,101 | (51,677 | ) | (58,147 | ) | 1,035,175 | ||||||||||||||||||
Net income | — | — | — | 93,004 | — | — | 93,004 | ||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | (30,307 | ) | — | (30,307 | ) | ||||||||||||||||||
Purchases of treasury stock | — | — | — | — | — | (36,802 | ) | (36,802 | ) | ||||||||||||||||||
Net temporary equity adjustment related to 3.00% and 2.25% Convertible Notes | — | — | (14,163 | ) | — | — | — | (14,163 | ) | ||||||||||||||||||
Repurchase of equity component of 3.00% Convertible Notes | — | — | (118,044 | ) | — | — | — | (118,044 | ) | ||||||||||||||||||
Call/Warrant equity settlement on 3.00% Convertible Notes repurchase | — | — | 32,641 | — | — | — | 32,641 | ||||||||||||||||||||
Conversion of equity component of 2.25% Convertible Notes | — | — | (20,789 | ) | — | — | 36,860 | 16,071 | |||||||||||||||||||
Call/Warrant equity settlement on 2.25% Convertible Notes conversion | — | — | 33,772 | — | — | (33,772 | ) | — | |||||||||||||||||||
Net issuance of treasury shares to employee stock compensation plans | (22 | ) | — | (13,008 | ) | — | — | 12,687 | (321 | ) | |||||||||||||||||
Stock-based compensation, including tax effect of $1,841 | — | — | 17,804 | — | — | — | 17,804 | ||||||||||||||||||||
Cash dividends, net of estimated forfeitures relative to participating securities | — | — | — | (17,048 | ) | — | — | (17,048 | ) | ||||||||||||||||||
BALANCE, December 31, 2014 | 25,724 | 257 | 286,854 | 852,057 | (81,984 | ) | (79,174 | ) | 978,010 | ||||||||||||||||||
Net income | — | — | — | 93,999 | — | — | 93,999 | ||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | (56,000 | ) | — | (56,000 | ) | ||||||||||||||||||
Purchases of treasury stock | — | — | — | — | — | (99,015 | ) | (99,015 | ) | ||||||||||||||||||
Net issuance of treasury shares to employee stock compensation plans | (18 | ) | — | (16,701 | ) | — | — | 16,907 | 206 | ||||||||||||||||||
Stock-based compensation, including tax effect of $2,142 | — | — | 20,939 | — | — | — | 20,939 | ||||||||||||||||||||
Cash dividends, net of estimated forfeitures relative to participating securities | — | — | — | (19,887 | ) | — | — | (19,887 | ) | ||||||||||||||||||
BALANCE, December 31, 2015 | 25,706 | $ | 257 | $ | 291,092 | $ | 926,169 | $ | (137,984 | ) | $ | (161,282 | ) | $ | 918,252 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 93,999 | $ | 93,004 | $ | 113,992 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 47,239 | 42,344 | 35,826 | |||||||||
Deferred income taxes | 11,884 | 12,319 | 22,412 | |||||||||
Asset impairments | 87,562 | 41,520 | 6,542 | |||||||||
Stock-based compensation | 18,851 | 16,012 | 13,899 | |||||||||
Amortization of debt discount and issue costs | 3,652 | 10,559 | 13,888 | |||||||||
Loss on 3.00% Convertibles Notes repurchase | — | 29,478 | — | |||||||||
Loss on 2.25% Convertible Notes conversion and redemption | — | 16,925 | — | |||||||||
Gain on disposition of assets | (9,719 | ) | (15,994 | ) | (11,043 | ) | ||||||
Tax effect from excess stock-based compensation | (2,142 | ) | (1,841 | ) | (2,993 | ) | ||||||
Other | 3,334 | 4,686 | 3,665 | |||||||||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||||||
Accounts payable and accrued expenses | 25,108 | 37,344 | 41,144 | |||||||||
Accounts and notes receivable | (17,887 | ) | (20,179 | ) | (9,489 | ) | ||||||
Inventories | (186,634 | ) | 27,339 | (241,871 | ) | |||||||
Contracts-in-transit and vehicle receivables | (17,944 | ) | (10,530 | ) | (18,974 | ) | ||||||
Prepaid expenses and other assets | (3,153 | ) | (5,385 | ) | 1,941 | |||||||
Floorplan notes payable — manufacturer affiliates | 87,516 | (78,822 | ) | 83,203 | ||||||||
Deferred revenues | (619 | ) | (491 | ) | 230 | |||||||
Net cash provided by operating activities | 141,047 | 198,288 | 52,372 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash paid in acquisitions, net of cash received | (212,252 | ) | (336,551 | ) | (269,860 | ) | ||||||
Proceeds from disposition of franchises, property and equipment | 41,581 | 144,597 | 102,186 | |||||||||
Purchases of property and equipment, including real estate | (120,252 | ) | (150,392 | ) | (102,858 | ) | ||||||
Other | 6,421 | (4,705 | ) | 1,878 | ||||||||
Net cash used in investing activities | (284,502 | ) | (347,051 | ) | (268,654 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Borrowings on credit facility — floorplan line and other | 7,557,237 | 7,832,014 | 6,379,328 | |||||||||
Repayments on credit facility — floorplan line and other | (7,504,516 | ) | (7,802,719 | ) | (6,153,677 | ) | ||||||
Borrowings on credit facility — acquisition line | 489,548 | 389,368 | 60,000 | |||||||||
Repayments on credit facility — acquisition line | (557,696 | ) | (379,681 | ) | — | |||||||
Borrowings on real estate credit facility | — | 200 | 19,640 | |||||||||
Principal payments on real estate credit facility | (3,340 | ) | (9,917 | ) | (8,597 | ) | ||||||
Net borrowings on 5.00% Senior Unsecured Notes | — | 539,600 | — | |||||||||
Net borrowings on 5.25% Senior Unsecured Notes | 296,250 | — | — | |||||||||
Debt issue costs | (788 | ) | (1,881 | ) | — | |||||||
Repurchase of 3.00% Convertible Notes | — | (260,074 | ) | — | ||||||||
Proceeds from Call/Warrant Unwind related to 3.00% Convertible Notes | — | 32,697 | — | |||||||||
Conversion and redemption of 2.25% Convertible Notes | — | (182,756 | ) | — | ||||||||
Borrowings on other debt | 59,855 | 91,137 | 10,289 | |||||||||
Principal payments on other debt | (63,769 | ) | (85,905 | ) | (71,170 | ) | ||||||
Borrowings on debt related to real estate | 32,026 | 111,979 | 55,345 | |||||||||
Principal payments on debt related to real estate loans | (68,739 | ) | (50,033 | ) | (36,978 | ) | ||||||
Issuance of common stock to benefit plans, net | 214 | (321 | ) | (1,822 | ) | |||||||
Repurchases of common stock, amounts based on settlement date | (97,473 | ) | (36,802 | ) | (3,553 | ) | ||||||
Tax effect from stock-based compensation | 2,142 | 1,841 | 2,993 | |||||||||
Dividends paid | (19,942 | ) | (17,097 | ) | (15,805 | ) | ||||||
Net cash provided by financing activities | 121,009 | 171,650 | 235,993 | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (5,492 | ) | (2,127 | ) | (4,146 | ) | ||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (27,938 | ) | 20,760 | 15,565 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 40,975 | 20,215 | 4,650 | |||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 13,037 | $ | 40,975 | $ | 20,215 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
Purchases of property and equipment, including real estate, accrued in accounts payable and accrued expenses | $ | 32,720 | $ | 21,166 | $ | 11,155 |
December 31, 2015 | December 31, 2014 | |||||
Current assets | $ | 12,849 | $ | 19,049 | ||
Non-current assets | 11,022 | 31,783 | ||||
Total assets | $ | 23,871 | $ | 50,832 | ||
Current liabilities | $ | 8,257 | $ | 16,374 | ||
Non-current liabilities | 17,064 | 15,955 | ||||
Total liabilities | $ | 25,321 | $ | 32,329 |
As of Acquisition Date | |||
(In thousands) | |||
Inventory | $ | 132,180 | |
Other current assets | 6,601 | ||
Property and equipment | 78,562 | ||
Goodwill & intangible franchise rights | 185,307 | ||
Deferred tax asset | 7,063 | ||
Total assets | $ | 409,713 | |
Current liabilities | $ | 59,912 | |
Long-term debt | 13,250 | ||
Total liabilities | $ | 73,162 |
As of Acquisition Date | |||
(In thousands) | |||
Current assets | $ | 26,884 | |
Inventory | 164,655 | ||
Property and equipment | 72,328 | ||
Goodwill & intangible franchise rights | 305,876 | ||
Other assets | 864 | ||
Total assets | $ | 570,607 | |
Current liabilities | $ | 123,025 | |
Deferred income taxes | 28,738 | ||
Long-term debt | 68,639 | ||
Total liabilities | $ | 220,402 |
Amount of Unrealized Gain (Loss), Net of Tax, Recognized in OCI | ||||||||||||
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Derivatives in Cash Flow Hedging Relationship | ||||||||||||
Interest rate swap contracts | $ | (9,856 | ) | $ | (11,153 | ) | $ | 6,112 | ||||
Amount of Loss Reclassified from OCI into Statement of Operations | ||||||||||||
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Location of Loss Reclassified from OCI into Statements of Operations | ||||||||||||
Floorplan interest expense | $ | (11,486 | ) | $ | (9,837 | ) | $ | (9,938 | ) | |||
Other interest expense | (1,814 | ) | (1,513 | ) | (1,213 | ) |
Awards | Weighted Average Grant Date Fair Value | ||||||
Nonvested at December 31, 2014 | 911,350 | $ | 58.86 | ||||
Granted | 298,873 | 83.92 | |||||
Vested | (273,113 | ) | 51.06 | ||||
Forfeited | (43,750 | ) | 67.62 | ||||
Nonvested at December 31, 2015 | 893,360 | $ | 69.16 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Weighted average basic common shares outstanding | 23,148 | 23,380 | 23,096 | |||||||||
Dilutive effect of contingently convertible notes and warrants | — | 1,499 | 2,213 | |||||||||
Dilutive effect of employee stock purchases, net of assumed repurchase of treasury stock | 4 | 6 | 5 | |||||||||
Weighted average dilutive common shares outstanding | 23,152 | 24,885 | 25,314 | |||||||||
Basic: | ||||||||||||
Net income | $ | 93,999 | $ | 93,004 | $ | 113,992 | ||||||
Less: Earnings allocated to participating securities | 3,595 | 3,643 | 4,963 | |||||||||
Earnings available to basic common shares | $ | 90,404 | $ | 89,361 | $ | 109,029 | ||||||
Basic earnings per common share | $ | 3.91 | $ | 3.82 | $ | 4.72 | ||||||
Diluted: | ||||||||||||
Net income | $ | 93,999 | $ | 93,004 | $ | 113,992 | ||||||
Less: Earnings allocated to participating securities | 3,595 | 3,468 | 4,599 | |||||||||
Earnings available to diluted common shares | $ | 90,404 | $ | 89,536 | $ | 109,393 | ||||||
Diluted earnings per common share | $ | 3.90 | $ | 3.60 | $ | 4.32 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Domestic | $ | 231,798 | $ | 174,964 | $ | 176,156 | ||||||
Foreign | (49,627 | ) | (10,564 | ) | 15,739 | |||||||
Total income before income taxes | $ | 182,171 | $ | 164,400 | $ | 191,895 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Federal: | ||||||||||||
Current | $ | 66,973 | $ | 49,590 | $ | 44,785 | ||||||
Deferred | 15,528 | 22,549 | 19,773 | |||||||||
State: | ||||||||||||
Current | 5,165 | 4,849 | 4,231 | |||||||||
Deferred | 1,768 | 727 | 2,026 | |||||||||
Foreign: | ||||||||||||
Current | 4,150 | 4,638 | 6,475 | |||||||||
Deferred | (5,412 | ) | (10,957 | ) | 613 | |||||||
Provision for income taxes | $ | 88,172 | $ | 71,396 | $ | 77,903 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(In thousands) | ||||||||||||
Provision at the U.S. federal statutory rate | $ | 63,760 | $ | 57,540 | $ | 67,163 | ||||||
Increase (decrease) resulting from: | ||||||||||||
State income tax, net of benefit for federal deduction | 4,448 | 5,267 | 4,228 | |||||||||
Foreign income tax rate differential | (2,002 | ) | (3,188 | ) | (538 | ) | ||||||
Employment credits | (407 | ) | (481 | ) | (421 | ) | ||||||
Changes in valuation allowances | 14,667 | 9,507 | 2,713 | |||||||||
Non-deductible goodwill | 4,651 | — | 1,355 | |||||||||
Deductible goodwill | — | (10,209 | ) | — | ||||||||
Non-deductible transaction costs | — | — | 1,064 | |||||||||
Stock-based compensation | 386 | 245 | 282 | |||||||||
Convertible debt redemption | — | 9,727 | — | |||||||||
Other | 2,669 | 2,988 | 2,057 | |||||||||
Provision for income taxes | $ | 88,172 | $ | 71,396 | $ | 77,903 |
December 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Loss reserves and accruals | $ | 53,747 | $ | 50,158 | ||||
Interest rate swaps | 11,671 | 10,745 | ||||||
Goodwill and intangible franchise rights | 7,621 | — | ||||||
U.S. state net operating loss (“NOL”) carryforwards | 17,413 | 16,592 | ||||||
Foreign NOL carryforwards | 20,408 | 21,770 | ||||||
Deferred tax assets | 110,860 | 99,265 | ||||||
Valuation allowance on deferred tax assets | (46,547 | ) | (40,486 | ) | ||||
Net deferred tax assets | $ | 64,313 | $ | 58,779 | ||||
Deferred tax liabilities: | ||||||||
Goodwill and intangible franchise rights | $ | (143,509 | ) | $ | (138,992 | ) | ||
Depreciation expense | (53,619 | ) | (43,070 | ) | ||||
Deferred gain on bond redemption | (1,535 | ) | (2,046 | ) | ||||
Other | (1,060 | ) | (1,936 | ) | ||||
Deferred tax liabilities | (199,723 | ) | (186,044 | ) | ||||
Net deferred tax liability | $ | (135,410 | ) | $ | (127,265 | ) |
December 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Amounts due from manufacturers | $ | 93,206 | $ | 86,062 | ||||
Parts and service receivables | 32,479 | 35,034 | ||||||
Finance and insurance receivables | 22,374 | 20,898 | ||||||
Other | 12,913 | 12,977 | ||||||
Total accounts and notes receivable | 160,972 | 154,971 | ||||||
Less allowance for doubtful accounts | 3,204 | 3,641 | ||||||
Accounts and notes receivable, net | $ | 157,768 | $ | 151,330 |
December 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
New vehicles | $ | 1,262,797 | $ | 1,137,478 | ||||
Used vehicles | 275,508 | 254,939 | ||||||
Rental vehicles | 134,509 | 103,184 | ||||||
Parts, accessories and other | 72,917 | 67,466 | ||||||
Total inventories | 1,745,731 | 1,563,067 | ||||||
Less lower of cost or market reserves | 7,980 | 6,362 | ||||||
Inventories, net | $ | 1,737,751 | $ | 1,556,705 |
Estimated Useful Lives in Years | December 31, | ||||||||||
2015 | 2014 | ||||||||||
(In thousands) | |||||||||||
Land | — | $ | 364,475 | $ | 328,474 | ||||||
Buildings | 30 to 40 | 505,414 | 482,496 | ||||||||
Leasehold improvements | varies | 155,585 | 134,658 | ||||||||
Machinery and equipment | 7 to 20 | 90,993 | 87,728 | ||||||||
Furniture and fixtures | 3 to 10 | 82,688 | 77,581 | ||||||||
Company vehicles | 3 to 5 | 11,603 | 10,706 | ||||||||
Construction in progress | — | 58,361 | 32,115 | ||||||||
Total | 1,269,119 | 1,153,758 | |||||||||
Less accumulated depreciation and amortization | 235,138 | 203,370 | |||||||||
Property and equipment, net | $ | 1,033,981 | $ | 950,388 |
December 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Floorplan notes payable — credit facility and other | ||||||||
New vehicles | $ | 1,094,130 | $ | 970,075 | ||||
Used vehicles | 142,703 | 125,085 | ||||||
Rental vehicles | 24,773 | 42,582 | ||||||
Floorplan offset | (110,759 | ) | (39,616 | ) | ||||
Total floorplan notes payable - credit facility | 1,150,847 | 1,098,126 | ||||||
Other floorplan notes payable | 4,113 | 5,504 | ||||||
Total floorplan notes payable - credit facility and other | $ | 1,154,960 | $ | 1,103,630 | ||||
Floorplan notes payable — manufacturer affiliates | ||||||||
FMCC Facility | $ | 196,807 | $ | 150,183 | ||||
Floorplan offset | (25,500 | ) | (22,500 | ) | ||||
Total FMCC Facility | 171,307 | 127,683 | ||||||
Foreign and rental vehicles | 192,264 | 157,473 | ||||||
Total | $ | 363,571 | $ | 285,156 |
December 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
5.00% Senior Notes (principal of $550,000 at December 31, 2015 and 2014, respectively) | $ | 541,252 | $ | 540,100 | ||||
5.25% Senior Notes (principal of $300,000 at December 31, 2015) | 296,274 | — | ||||||
Real Estate Credit Facility | 54,663 | 58,003 | ||||||
Acquisition Line | — | 69,713 | ||||||
Other real estate related and long-term debt | 311,568 | 358,271 | ||||||
Capital lease obligations related to real estate, maturing in varying amounts through June 2034 with a weighted average interest rate of 9.8% | 51,902 | 55,380 | ||||||
1,255,659 | 1,081,467 | |||||||
Less current maturities of long-term debt | 52,223 | 72,630 | ||||||
$ | 1,203,436 | $ | 1,008,837 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(dollars in thousands) | ||||||||||||
Year-to-date contractual interest expense | $ | — | $ | 1,875 | $ | 4,112 | ||||||
Year-to-date discount amortization(1) | $ | — | $ | 5,366 | $ | 7,530 | ||||||
Effective interest rate of liability component | — | % | 7.7 | % | 7.7 | % |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
(dollars in thousands) | ||||||||||||
Year-to-date contractual interest expense | $ | — | $ | 1,839 | $ | 3,450 | ||||||
Year-to-date discount amortization(1) | $ | — | $ | 1,810 | $ | 3,251 | ||||||
Effective interest rate of liability component | — | % | 8.6 | % | 8.6 | % |
Total | |||
(In thousands) | |||
Year Ended December 31, | |||
2016 | $ | 52,223 | |
2017 | 63,402 | ||
2018 | 44,991 | ||
2019 | 75,669 | ||
2020 | 37,175 | ||
Thereafter | 982,199 | ||
Total | $ | 1,255,659 |
• | Level 1 — unadjusted, quoted prices for identical assets or liabilities in active markets; |
• | Level 2 — quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and |
• | Level 3 — unobservable inputs based upon the reporting entity’s internally developed assumptions that market participants would use in pricing the asset or liability. |
As of December 31, 2015 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Investments | $ | — | $ | 4,235 | $ | 4,235 | ||||||
Demand obligations | — | 131 | 131 | |||||||||
Interest rate derivative financial instruments | — | 31 | 31 | |||||||||
Total | $ | — | $ | 4,397 | $ | 4,397 | ||||||
Liabilities: | ||||||||||||
Interest rate derivative financial instruments | $ | — | $ | 31,153 | $ | 31,153 | ||||||
Total | $ | — | $ | 31,153 | $ | 31,153 |
As of December 31, 2014 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Investments | $ | — | $ | 12,283 | $ | 12,283 | ||||||
Demand obligations | $ | — | $ | 20,304 | $ | 20,304 | ||||||
Total | $ | — | $ | 32,587 | $ | 32,587 | ||||||
Liabilities: | ||||||||||||
Interest rate derivative financial instruments | $ | — | $ | 28,653 | $ | 28,653 | ||||||
Total | $ | — | $ | 28,653 | $ | 28,653 |
• | The Company determined that the carrying value of certain of its intangible franchise rights was greater than the fair value and, as a result, recognized a $30.1 million pre-tax non-cash asset impairment charge. |
• | In addition, the Company determined that the carrying amount of various real estate holdings was no longer recoverable, and recognized $1.3 million in pre-tax non-cash asset impairment charges. |
• | The Company also determined that the carrying value of various other long-term assets was no longer recoverable, and recognized $0.8 million in pre-tax non-cash asset impairment charges. |
• | Primarily related to the Company’s determination that the carrying value of certain of its intangible franchise rights was greater than the fair value, the Company recognized a $31.0 million pre-tax non-cash asset impairment charge. |
• | In addition, the Company determined that the carrying amount of various real estate holdings was no longer recoverable, and recognized $9.2 million in pre-tax non-cash asset impairment charges. |
• | The Company also determined that the carrying value of various other long-term assets was no longer recoverable, and recognized $1.3 million in pre-tax non-cash asset impairment charges. |
• | In the fourth quarter of 2013, the Company determined that the carrying value of certain of its intangible franchise rights was greater than the fair value and as such a non-cash asset impairment was recognized for $5.4 million of pre-tax non-cash asset impairment charges. |
• | The Company also determined that the carrying value of various other long-term assets was no longer recoverable, and recognized $1.1 million in pre-tax non-cash asset impairment charges. |
Intangible Franchise Rights | ||||||||||||||||
U.S. | U.K. | Brazil | Total | |||||||||||||
(In thousands) | ||||||||||||||||
BALANCE, December 31, 2013 | $ | 216,412 | $ | 8,659 | $ | 76,434 | $ | 301,505 | ||||||||
Additions through acquisitions | 60,122 | — | 2,490 | 62,612 | ||||||||||||
Purchase price allocation adjustments | (2,114 | ) | — | (9,061 | ) | (11,175 | ) | |||||||||
Disposals | (12,075 | ) | — | — | (12,075 | ) | ||||||||||
Impairments | (4,843 | ) | — | (24,085 | ) | (28,928 | ) | |||||||||
Currency translation | — | (502 | ) | (7,490 | ) | (7,992 | ) | |||||||||
BALANCE, December 31, 2014 | 257,502 | 8,157 | 38,288 | 303,947 | ||||||||||||
Additions through acquisitions | 49,432 | — | — | 49,432 | ||||||||||||
Disposals | (3,188 | ) | — | — | (3,188 | ) | ||||||||||
Impairments | (18,087 | ) | — | (12,024 | ) | (30,111 | ) | |||||||||
Currency translation | — | (384 | ) | (12,108 | ) | (12,492 | ) | |||||||||
BALANCE, December 31, 2015 | $ | 285,659 | $ | 7,773 | $ | 14,156 | $ | 307,588 |
Goodwill | |||||||||||||||||
U.S. | U.K. | Brazil | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
BALANCE, December 31, 2013 | $ | 612,468 | $ | 19,602 | $ | 105,233 | $ | 737,303 | (1) | ||||||||
Additions through acquisitions | 103,924 | 16,802 | — | 120,726 | |||||||||||||
Purchase price allocation adjustments | 1,459 | — | 4,536 | 5,995 | |||||||||||||
Disposals | (16,828 | ) | — | — | (16,828 | ) | |||||||||||
Impairments | (312 | ) | — | (1,813 | ) | (2,125 | ) | ||||||||||
Currency translation | — | (1,266 | ) | (13,359 | ) | (14,625 | ) | ||||||||||
Tax adjustments | (69 | ) | — | — | (69 | ) | |||||||||||
BALANCE, December 31, 2014 | 700,642 | 35,138 | 94,597 | 830,377 | (1) | ||||||||||||
Additions through acquisitions | 115,317 | — | — | 115,317 | |||||||||||||
Purchase price allocation adjustments | (73 | ) | 1,930 | — | 1,857 | ||||||||||||
Disposals | (6,088 | ) | — | — | (6,088 | ) | |||||||||||
Impairments | — | — | (55,386 | ) | (55,386 | ) | |||||||||||
Currency translation | — | (1,748 | ) | (29,391 | ) | (31,139 | ) | ||||||||||
Tax adjustments | (23 | ) | — | — | (23 | ) | |||||||||||
BALANCE, December 31, 2015 | $ | 809,775 | $ | 35,320 | $ | 9,820 | $ | 854,915 | (2) |
Total | |||
(In thousands) | |||
Year Ended December 31, | |||
2016 | $ | 52,646 | |
2017 | 49,044 | ||
2018 | 41,184 | ||
2019 | 34,726 | ||
2020 | 27,734 | ||
Thereafter | 112,824 | ||
Total (1) | $ | 318,158 |
Accumulated Loss on Foreign Currency Translation | Accumulated Gain (Loss) on Interest Rate Swaps | Accumulated Other Comprehensive Loss | ||||||||||
(In thousands) | ||||||||||||
BALANCE, December 31, 2012 | $ | (6,126 | ) | $ | (26,931 | ) | $ | (33,057 | ) | |||
Other comprehensive income (loss), net of tax | (31,701 | ) | 13,081 | (18,620 | ) | |||||||
BALANCE, December 31, 2013 | (37,827 | ) | (13,850 | ) | (51,677 | ) | ||||||
Other comprehensive loss, net of tax | (26,248 | ) | (4,059 | ) | (30,307 | ) | ||||||
BALANCE, December 31, 2014 | (64,075 | ) | (17,909 | ) | (81,984 | ) | ||||||
Other comprehensive loss, net of tax | (54,457 | ) | (1,543 | ) | (56,000 | ) | ||||||
BALANCE, December 31, 2015 | $ | (118,532 | ) | $ | (19,452 | ) | $ | (137,984 | ) |
Year Ended December 31, 2015 | ||||||||||||||||
U.S. | U.K. | Brazil | Total | |||||||||||||
(In thousands) | ||||||||||||||||
New vehicle retail sales | $ | 4,989,290 | $ | 641,888 | $ | 370,128 | $ | 6,001,306 | ||||||||
Used vehicle retail sales | 2,204,728 | 351,311 | 82,930 | 2,638,969 | ||||||||||||
Used vehicle wholesale sales | 289,580 | 100,706 | 6,965 | 397,251 | ||||||||||||
Parts and service | 1,032,960 | 102,183 | 51,050 | 1,186,193 | ||||||||||||
Finance and insurance | 377,432 | 24,117 | 7,237 | 408,786 | ||||||||||||
Total revenues | 8,893,990 | 1,220,205 | 518,310 | 10,632,505 | ||||||||||||
Gross profit | 1,338,947 | 137,646 | 57,379 | 1,533,972 | ||||||||||||
Selling, general and administrative expense | 958,608 | (1) | 108,719 | 53,506 | 1,120,833 | |||||||||||
Depreciation and amortization expense | 41,220 | 4,307 | 1,712 | 47,239 | ||||||||||||
Asset impairment | 18,983 | 330 | 68,249 | 87,562 | ||||||||||||
Floorplan interest expense | (36,062 | ) | (2,276 | ) | (926 | ) | (39,264 | ) | ||||||||
Other interest expense, net | (52,277 | ) | (3,135 | ) | (1,491 | ) | (56,903 | ) | ||||||||
Income (loss) before income taxes | 231,797 | 18,879 | (68,505 | ) | 182,171 | |||||||||||
(Provision) benefit for income taxes | (89,433 | ) | (3,655 | ) | 4,916 | (88,172 | ) | |||||||||
Net income (loss) | 142,364 | (2) | 15,224 | (63,589 | ) | (3) | 93,999 | |||||||||
Capital expenditures | $ | 97,504 | $ | 9,395 | $ | 333 | $ | 107,232 |
Year Ended December 31, 2014 | ||||||||||||||||
U.S. | U.K. | Brazil | Total | |||||||||||||
(In thousands) | ||||||||||||||||
New vehicle retail sales | $ | 4,669,512 | $ | 519,137 | $ | 552,970 | $ | 5,741,619 | ||||||||
Used vehicle retail sales | 1,923,740 | 283,147 | 117,981 | 2,324,868 | ||||||||||||
Used vehicle wholesale sales | 279,074 | 82,235 | 17,834 | 379,143 | ||||||||||||
Parts and service | 966,672 | 83,747 | 75,275 | 1,125,694 | ||||||||||||
Finance and insurance | 336,243 | 18,986 | 11,336 | 366,565 | ||||||||||||
Total revenues | 8,175,241 | 987,252 | 775,396 | 9,937,889 | ||||||||||||
Gross profit | 1,245,907 | 115,393 | 86,638 | 1,447,938 | ||||||||||||
Selling, general and administrative expense | 891,693 | (1) | 90,427 | 79,844 | 1,061,964 | |||||||||||
Depreciation and amortization expense | 36,701 | 3,403 | 2,240 | 42,344 | ||||||||||||
Asset impairment | 15,570 | — | 25,950 | 41,520 | ||||||||||||
Floorplan interest expense | (34,060 | ) | (1,662 | ) | (5,892 | ) | (41,614 | ) | ||||||||
Other interest expense, net | (46,516 | ) | (2,065 | ) | (1,112 | ) | (49,693 | ) | ||||||||
Loss on extinguishment of long-term debt | (46,403 | ) | — | — | (46,403 | ) | ||||||||||
Income (loss) before income taxes | 174,964 | 17,836 | (28,400 | ) | 164,400 | |||||||||||
(Provision) benefit for income taxes | (77,715 | ) | (3,561 | ) | 9,880 | (2) | (71,396 | ) | ||||||||
Net income (loss) | 97,249 | 14,275 | (18,520 | ) | 93,004 | |||||||||||
Capital expenditures | $ | 88,774 | $ | 3,679 | $ | 5,256 | $ | 97,709 |
Year Ended December 31, 2013 | ||||||||||||||||
U.S. | U.K. | Brazil (1) | Total | |||||||||||||
(In thousands) | ||||||||||||||||
New vehicle retail sales | $ | 4,220,913 | $ | 441,537 | $ | 562,471 | $ | 5,224,921 | ||||||||
Used vehicle retail sales | 1,728,072 | 221,590 | 89,766 | 2,039,428 | ||||||||||||
Used vehicle wholesale sales | 236,995 | 66,077 | 29,113 | 332,185 | ||||||||||||
Parts and service | 878,951 | 67,557 | 64,177 | 1,010,685 | ||||||||||||
Finance and insurance | 288,409 | 14,028 | 8,925 | 311,362 | ||||||||||||
Total revenues | 7,353,340 | 810,789 | 754,452 | 8,918,581 | ||||||||||||
Gross profit | 1,116,415 | 93,221 | 82,910 | 1,292,546 | ||||||||||||
Selling, general and administrative expense | 830,275 | (2) | 74,777 | 71,804 | (3) | 976,856 | ||||||||||
Depreciation and amortization expense | 31,671 | 2,573 | 1,582 | 35,826 | ||||||||||||
Asset impairment | 6,542 | — | — | 6,542 | ||||||||||||
Floorplan interest expense | (33,789 | ) | (1,589 | ) | (6,289 | ) | (41,667 | ) | ||||||||
Other interest (expense) income, net | (37,982 | ) | (1,158 | ) | 169 | (38,971 | ) | |||||||||
Other expense, net | — | — | (789 | ) | (789 | ) | ||||||||||
Income before income taxes | 176,156 | 13,124 | 2,615 | 191,895 | ||||||||||||
Provision for income taxes | 70,815 | 3,064 | 4,024 | 77,903 | ||||||||||||
Net income (loss) | 105,340 | (4) | 10,061 | (1,409 | ) | (5) | 113,992 | |||||||||
Capital expenditures | $ | 64,442 | $ | 1,489 | $ | 3,285 | $ | 69,216 |
As of December 31, 2015 | ||||||||||||||||
U.S. | U.K. | Brazil | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Goodwill and intangible franchise rights | $ | 1,095,434 | $ | 43,093 | $ | 23,976 | $ | 1,162,503 | ||||||||
Total assets | $ | 3,940,926 | $ | 358,476 | $ | 115,527 | $ | 4,414,929 |
As of December 31, 2014 | ||||||||||||||||
U.S. | U.K. | Brazil | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Goodwill and intangible franchise rights | $ | 958,144 | $ | 43,295 | $ | 132,885 | $ | 1,134,324 | ||||||||
Total assets | $ | 3,529,643 | $ | 327,644 | $ | 284,205 | $ | 4,141,492 |
Quarter | ||||||||||||||||||||
First | Second | Third | Fourth | Full Year | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2015 | ||||||||||||||||||||
Total revenues | $ | 2,432,854 | $ | 2,726,480 | $ | 2,800,569 | $ | 2,672,602 | $ | 10,632,505 | ||||||||||
Gross profit | 363,884 | 391,573 | 398,382 | 380,133 | 1,533,972 | |||||||||||||||
Net income | 35,815 | 46,310 | 45,261 | (33,387 | ) | 93,999 | ||||||||||||||
Basic earnings per share (1) | 1.47 | 1.91 | 1.88 | (1.41 | ) | 3.91 | ||||||||||||||
Diluted earnings per share (1) | 1.47 | 1.91 | 1.88 | (1.41 | ) | 3.90 | ||||||||||||||
2014 | ||||||||||||||||||||
Total revenues | $ | 2,260,863 | $ | 2,511,638 | $ | 2,626,448 | $ | 2,538,940 | $ | 9,937,889 | ||||||||||
Gross profit | 338,122 | 369,148 | 374,709 | 365,959 | 1,447,938 | |||||||||||||||
Net income | 31,303 | 16,862 | 26,162 | 18,677 | 93,004 | |||||||||||||||
Basic earnings per share (1) | 1.29 | 0.70 | 1.07 | 0.77 | 3.82 | |||||||||||||||
Diluted earnings per share (1) | 1.19 | 0.62 | 1.03 | 0.77 | 3.60 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elimination | Total Company | |||||||||||||||
(In thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 6,338 | $ | 6,699 | $ | — | $ | 13,037 | |||||||||
Contracts-in-transit and vehicle receivables, net | — | 233,275 | 19,163 | — | 252,438 | ||||||||||||||
Accounts and notes receivable, net | — | 132,078 | 25,690 | — | 157,768 | ||||||||||||||
Intercompany accounts receivable | — | 1,192 | — | (1,192 | ) | — | |||||||||||||
Inventories, net | — | 1,533,166 | 204,585 | — | 1,737,751 | ||||||||||||||
Deferred income taxes | 264 | 13,845 | — | — | 14,109 | ||||||||||||||
Prepaid expenses and other current assets | 5,586 | 9,117 | 13,149 | — | 27,852 | ||||||||||||||
Total current assets | 5,850 | 1,929,011 | 269,286 | (1,192 | ) | 2,202,955 | |||||||||||||
PROPERTY AND EQUIPMENT, net | — | 916,338 | 117,643 | — | 1,033,981 | ||||||||||||||
GOODWILL | — | 809,775 | 45,140 | — | 854,915 | ||||||||||||||
INTANGIBLE FRANCHISE RIGHTS | — | 285,659 | 21,929 | — | 307,588 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 2,388,081 | — | — | (2,388,081 | ) | — | |||||||||||||
OTHER ASSETS | — | 9,321 | 6,169 | — | 15,490 | ||||||||||||||
Total assets | $ | 2,393,931 | $ | 3,950,104 | $ | 460,167 | $ | (2,389,273 | ) | $ | 4,414,929 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Floorplan notes payable — credit facility and other | $ | — | $ | 1,261,606 | $ | 4,113 | $ | — | $ | 1,265,719 | |||||||||
Offset account related to floorplan notes payable - credit facility | — | (110,759 | ) | — | — | (110,759 | ) | ||||||||||||
Floorplan notes payable — manufacturer affiliates | — | 303,810 | 85,261 | — | 389,071 | ||||||||||||||
Offset account related to floorplan notes payable - manufacturer affiliates | — | (25,500 | ) | — | — | (25,500 | ) | ||||||||||||
Current maturities of long-term debt and short-term financing | — | 47,186 | 8,007 | — | 55,193 | ||||||||||||||
Accounts payable | — | 178,544 | 101,879 | — | 280,423 | ||||||||||||||
Intercompany accounts payable | 500,171 | — | 1,192 | (501,363 | ) | — | |||||||||||||
Accrued expenses | — | 167,509 | 17,814 | — | 185,323 | ||||||||||||||
Total current liabilities | 500,171 | 1,822,396 | 218,266 | (501,363 | ) | 2,039,470 | |||||||||||||
LONG-TERM DEBT, net of current maturities | 837,526 | 300,997 | 64,913 | — | 1,203,436 | ||||||||||||||
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | — | 31,153 | — | — | 31,153 | ||||||||||||||
DEFERRED INCOME TAXES AND OTHER LIABILITIES | (1 | ) | 217,669 | 4,950 | — | 222,618 | |||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Group 1 stockholders’ equity | 1,056,235 | 2,078,060 | 172,038 | (2,388,081 | ) | 918,252 | |||||||||||||
Intercompany note receivable | — | (500,171 | ) | — | 500,171 | — | |||||||||||||
Total stockholders’ equity | 1,056,235 | 1,577,889 | 172,038 | (1,887,910 | ) | 918,252 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 2,393,931 | $ | 3,950,104 | $ | 460,167 | $ | (2,389,273 | ) | $ | 4,414,929 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elimination | Total Company | |||||||||||||||
(In thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 25,379 | $ | 15,596 | $ | — | $ | 40,975 | |||||||||
Contracts-in-transit and vehicle receivables, net | — | 218,361 | 19,087 | — | 237,448 | ||||||||||||||
Accounts and notes receivable, net | — | 117,427 | 33,903 | — | 151,330 | ||||||||||||||
Intercompany accounts receivable | — | 276,217 | — | (276,217 | ) | — | |||||||||||||
Inventories, net | — | 1,342,022 | 214,683 | — | 1,556,705 | ||||||||||||||
Deferred income taxes | 196 | 10,866 | — | — | 11,062 | ||||||||||||||
Prepaid expenses and other current assets | 590 | 22,039 | 15,070 | — | 37,699 | ||||||||||||||
Total current assets | 786 | 2,012,311 | 298,339 | (276,217 | ) | 2,035,219 | |||||||||||||
PROPERTY AND EQUIPMENT, net | — | 839,063 | 111,325 | — | 950,388 | ||||||||||||||
GOODWILL | — | 700,642 | 129,735 | — | 830,377 | ||||||||||||||
INTANGIBLE FRANCHISE RIGHTS | — | 257,502 | 46,445 | — | 303,947 | ||||||||||||||
INVESTMENT IN SUBSIDIARIES | 1,964,442 | — | — | (1,964,442 | ) | — | |||||||||||||
OTHER ASSETS | — | 10,120 | 11,441 | — | 21,561 | ||||||||||||||
Total assets | $ | 1,965,228 | $ | 3,819,638 | $ | 597,285 | $ | (2,240,659 | ) | $ | 4,141,492 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Floorplan notes payable — credit facility and other | $ | — | $ | 1,137,743 | $ | 5,503 | $ | — | $ | 1,143,246 | |||||||||
Offset account related to floorplan notes payable - credit facility | — | (39,616 | ) | — | — | (39,616 | ) | ||||||||||||
Floorplan notes payable — manufacturer affiliates | — | 207,329 | 100,327 | — | 307,656 | ||||||||||||||
Offset account related to floorplan notes payable - manufacturer affiliates | — | (22,500 | ) | — | — | (22,500 | ) | ||||||||||||
Current maturities of long-term debt and short-term financing | — | 61,185 | 11,445 | — | 72,630 | ||||||||||||||
Accounts payable | — | 176,143 | 112,177 | — | 288,320 | ||||||||||||||
Intercompany accounts payable | 295,421 | — | 276,217 | (571,638 | ) | — | |||||||||||||
Accrued expenses | — | 149,700 | 22,763 | — | 172,463 | ||||||||||||||
Total current liabilities | 295,421 | 1,669,984 | 528,432 | (571,638 | ) | 1,922,199 | |||||||||||||
LONG-TERM DEBT, net of current maturities | 609,812 | 347,202 | 51,823 | — | 1,008,837 | ||||||||||||||
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | — | 25,311 | — | — | 25,311 | ||||||||||||||
DEFERRED INCOME TAXES AND OTHER LIABILITIES | — | 193,077 | 14,058 | — | 207,135 | ||||||||||||||
STOCKHOLDERS’ EQUITY: | — | ||||||||||||||||||
Group 1 stockholders’ equity | 1,059,995 | 1,879,485 | 2,972 | (1,964,442 | ) | 978,010 | |||||||||||||
Intercompany note receivable | — | (295,421 | ) | — | 295,421 | — | |||||||||||||
Total stockholders’ equity | 1,059,995 | 1,584,064 | 2,972 | (1,669,021 | ) | 978,010 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 1,965,228 | $ | 3,819,638 | $ | 597,285 | $ | (2,240,659 | ) | $ | 4,141,492 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elimination | Total Company | |||||||||||||||
(In thousands) | |||||||||||||||||||
REVENUES: | $ | — | $ | 8,893,990 | $ | 1,738,515 | $ | — | $ | 10,632,505 | |||||||||
COST OF SALES: | — | 7,555,043 | 1,543,490 | — | 9,098,533 | ||||||||||||||
GROSS PROFIT | — | 1,338,947 | 195,025 | — | 1,533,972 | ||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 3,024 | 950,268 | 167,541 | — | 1,120,833 | ||||||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | — | 41,220 | 6,019 | — | 47,239 | ||||||||||||||
ASSET IMPAIRMENTS | — | 18,899 | 68,663 | — | 87,562 | ||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (3,024 | ) | 328,560 | (47,198 | ) | — | 278,338 | ||||||||||||
OTHER EXPENSE: | |||||||||||||||||||
Floorplan interest expense | — | (36,063 | ) | (3,201 | ) | — | (39,264 | ) | |||||||||||
Other interest expense, net | 2,320 | (52,276 | ) | (6,947 | ) | — | (56,903 | ) | |||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES | (704 | ) | 240,221 | (57,346 | ) | — | 182,171 | ||||||||||||
BENEFIT (PROVISION) FOR INCOME TAXES | 264 | (89,698 | ) | 1,262 | — | (88,172 | ) | ||||||||||||
EQUITY IN EARNINGS OF SUBSIDIARIES | 94,439 | — | — | (94,439 | ) | — | |||||||||||||
NET INCOME (LOSS) | $ | 93,999 | $ | 150,523 | $ | (56,084 | ) | $ | (94,439 | ) | $ | 93,999 | |||||||
COMPREHENSIVE LOSS | — | (1,543 | ) | (54,457 | ) | — | (56,000 | ) | |||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT | $ | 93,999 | $ | 148,980 | $ | (110,541 | ) | $ | (94,439 | ) | $ | 37,999 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elimination | Total Company | |||||||||||||||
(In thousands) | |||||||||||||||||||
REVENUES: | $ | — | $ | 8,175,242 | $ | 1,762,647 | $ | — | $ | 9,937,889 | |||||||||
COST OF SALES: | — | 6,929,334 | 1,560,617 | — | 8,489,951 | ||||||||||||||
GROSS PROFIT | — | 1,245,908 | 202,030 | — | 1,447,938 | ||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 2,796 | 883,442 | 175,726 | — | 1,061,964 | ||||||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | — | 36,701 | 5,643 | — | 42,344 | ||||||||||||||
ASSET IMPAIRMENTS | — | 15,571 | 25,949 | — | 41,520 | ||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (2,796 | ) | 310,194 | (5,288 | ) | — | 302,110 | ||||||||||||
OTHER EXPENSE: | |||||||||||||||||||
Floorplan interest expense | — | (34,061 | ) | (7,553 | ) | — | (41,614 | ) | |||||||||||
Other interest expense, net | 2,272 | (46,517 | ) | (5,448 | ) | — | (49,693 | ) | |||||||||||
Loss on extinguishment of long-term debt | — | (46,403 | ) | — | — | (46,403 | ) | ||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES | (524 | ) | 183,213 | (18,289 | ) | — | 164,400 | ||||||||||||
BENEFIT (PROVISION) FOR INCOME TAXES | 196 | (77,911 | ) | 6,319 | — | (71,396 | ) | ||||||||||||
EQUITY IN EARNINGS OF SUBSIDIARIES | 93,332 | — | — | (93,332 | ) | — | |||||||||||||
NET INCOME (LOSS) | $ | 93,004 | $ | 105,302 | $ | (11,970 | ) | $ | (93,332 | ) | 93,004 | ||||||||
COMPREHENSIVE LOSS | — | (4,059 | ) | (26,248 | ) | — | (30,307 | ) | |||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT | $ | 93,004 | $ | 101,243 | $ | (38,218 | ) | $ | (93,332 | ) | 62,697 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elimination | Total Company | |||||||||||||||
(In thousands) | |||||||||||||||||||
REVENUES: | $ | — | $ | 7,353,340 | $ | 1,565,241 | $ | — | $ | 8,918,581 | |||||||||
COST OF SALES: | — | 6,236,925 | 1,389,110 | — | 7,626,035 | ||||||||||||||
GROSS PROFIT | — | 1,116,415 | 176,131 | — | 1,292,546 | ||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 7,922 | 817,907 | 151,027 | — | 976,856 | ||||||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | — | 31,670 | 4,156 | — | 35,826 | ||||||||||||||
ASSET IMPAIRMENTS | — | 6,542 | — | — | 6,542 | ||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (7,922 | ) | 260,296 | 20,948 | — | 273,322 | |||||||||||||
OTHER EXPENSE: | |||||||||||||||||||
Floorplan interest expense | — | (33,789 | ) | (7,878 | ) | — | (41,667 | ) | |||||||||||
Other interest expense, net | 1,846 | (37,982 | ) | (2,835 | ) | — | (38,971 | ) | |||||||||||
Other expense, net | — | — | (789 | ) | — | (789 | ) | ||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES | (6,076 | ) | 188,525 | 9,446 | — | 191,895 | |||||||||||||
BENEFIT (PROVISION) FOR INCOME TAXES | 2,277 | (73,092 | ) | (7,088 | ) | — | (77,903 | ) | |||||||||||
EQUITY IN EARNINGS OF SUBSIDIARIES | 117,791 | — | — | (117,791 | ) | — | |||||||||||||
NET INCOME (LOSS) | $ | 113,992 | $ | 115,433 | $ | 2,358 | $ | (117,791 | ) | 113,992 | |||||||||
COMPREHENSIVE INCOME (LOSS) | — | 13,081 | (31,701 | ) | — | (18,620 | ) | ||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT | $ | 113,992 | $ | 128,514 | $ | (29,343 | ) | $ | (117,791 | ) | $ | 95,372 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Company | ||||||||||||
(In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 93,999 | $ | 49,710 | $ | (2,662 | ) | $ | 141,047 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Cash paid in acquisitions, net of cash received | — | (212,252 | ) | — | (212,252 | ) | |||||||||
Proceeds from disposition of franchises, property and equipment | — | 40,833 | 748 | 41,581 | |||||||||||
Purchases of property and equipment, including real estate | — | (97,009 | ) | (23,243 | ) | (120,252 | ) | ||||||||
Other | — | 6,421 | — | 6,421 | |||||||||||
Net cash used in investing activities | — | (262,007 | ) | (22,495 | ) | (284,502 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Borrowings on credit facility - floorplan line and other | — | 7,557,237 | — | 7,557,237 | |||||||||||
Repayments on credit facility - floorplan line and other | — | (7,504,516 | ) | — | (7,504,516 | ) | |||||||||
Borrowings on credit facility - acquisition line | 489,548 | — | — | 489,548 | |||||||||||
Repayment on credit facility - acquisition line | (557,696 | ) | — | — | (557,696 | ) | |||||||||
Principal payments on real estate credit facility | — | (3,340 | ) | — | (3,340 | ) | |||||||||
Net borrowings on 5.25% Senior Unsecured Notes | 296,250 | — | — | 296,250 | |||||||||||
Debt issue costs | — | (788 | ) | — | (788 | ) | |||||||||
Borrowings on other debt | — | 451 | 59,404 | 59,855 | |||||||||||
Principal payments on other debt | — | (1,386 | ) | (62,383 | ) | (63,769 | ) | ||||||||
Borrowings on debt related to real estate | — | 9,596 | 22,430 | 32,026 | |||||||||||
Principal payments on debt related to real estate loans | — | (64,894 | ) | (3,845 | ) | (68,739 | ) | ||||||||
Issuance of common stock to benefit plans, net | 214 | — | — | 214 | |||||||||||
Repurchases of common stock, amounts based on settlement date | (97,473 | ) | — | — | (97,473 | ) | |||||||||
Tax effect from stock-based compensation | — | 2,142 | — | 2,142 | |||||||||||
Dividends paid | (19,942 | ) | — | — | (19,942 | ) | |||||||||
Borrowings (repayments) with subsidiaries | 220,281 | (211,236 | ) | (9,045 | ) | — | |||||||||
Investment in subsidiaries | (425,181 | ) | 409,990 | 15,191 | — | ||||||||||
Distributions to parent | — | — | — | — | |||||||||||
Net cash (used in) provided by financing activities | (93,999 | ) | 193,256 | 21,752 | 121,009 | ||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | (5,492 | ) | (5,492 | ) | |||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | — | (19,041 | ) | (8,897 | ) | (27,938 | ) | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | 25,379 | 15,596 | 40,975 | |||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | 6,338 | $ | 6,699 | $ | 13,037 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Company | ||||||||||||
(In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (327 | ) | $ | 235,236 | $ | (36,621 | ) | $ | 198,288 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Cash paid in acquisitions, net of cash received | — | (306,364 | ) | (30,187 | ) | (336,551 | ) | ||||||||
Proceeds from disposition of franchises, property and equipment | — | 141,147 | 3,450 | 144,597 | |||||||||||
Purchases of property and equipment, including real estate | — | (140,407 | ) | (9,985 | ) | (150,392 | ) | ||||||||
Other | — | (4,705 | ) | — | (4,705 | ) | |||||||||
Net cash used in investing activities | — | (310,329 | ) | (36,722 | ) | (347,051 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Borrowings on credit facility - floorplan line and other | — | 7,832,014 | — | 7,832,014 | |||||||||||
Repayments on credit facility - floorplan line and other | — | (7,802,719 | ) | — | (7,802,719 | ) | |||||||||
Borrowings on credit facility - acquisition line | 389,368 | — | — | 389,368 | |||||||||||
Repayment on credit facility - acquisition line | (379,681 | ) | — | — | (379,681 | ) | |||||||||
Borrowings on real estate credit facility | — | 200 | — | 200 | |||||||||||
Principal payments on real estate credit facility | — | (9,917 | ) | — | (9,917 | ) | |||||||||
Net borrowings on 5.00% Senior Unsecured Notes | 539,600 | — | — | 539,600 | |||||||||||
Debt issue costs | (1,881 | ) | — | — | (1,881 | ) | |||||||||
Repurchase of 3.00% Convertible Notes | (260,074 | ) | — | — | (260,074 | ) | |||||||||
Proceeds from Call/Warrant Unwind related to 3.00% Convertible Notes | 32,697 | — | — | 32,697 | |||||||||||
Conversion and redemption of 2.25% Convertible Notes | (182,756 | ) | — | — | (182,756 | ) | |||||||||
Borrowings on other debt | — | — | 91,137 | 91,137 | |||||||||||
Principal payments on other debt | — | — | (85,905 | ) | (85,905 | ) | |||||||||
Borrowings on debt related to real estate | — | 86,522 | 25,457 | 111,979 | |||||||||||
Principal payments on debt related to real estate loans | — | (33,143 | ) | (16,890 | ) | (50,033 | ) | ||||||||
Issuance of common stock to benefit plans, net | (321 | ) | — | — | (321 | ) | |||||||||
Repurchases of common stock, amounts based on settlement date | (36,802 | ) | — | — | (36,802 | ) | |||||||||
Tax effect from stock-based compensation | — | 1,841 | — | 1,841 | |||||||||||
Dividends paid | (17,097 | ) | — | — | (17,097 | ) | |||||||||
Borrowings (repayments) with subsidiaries | 78,199 | (141,824 | ) | 63,625 | — | ||||||||||
Investment in subsidiaries | (160,925 | ) | 161,073 | (148 | ) | — | |||||||||
Distributions to parent | — | 2,119 | (2,119 | ) | — | ||||||||||
Net cash provided by financing activities | 327 | 96,166 | 75,157 | 171,650 | |||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | (2,127 | ) | (2,127 | ) | |||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 21,073 | (313 | ) | 20,760 | ||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | 4,306 | 15,909 | 20,215 | |||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | 25,379 | $ | 15,596 | $ | 40,975 |
Group 1 Automotive, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Company | ||||||||||||
(In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (3,797 | ) | $ | 47,525 | $ | 8,644 | $ | 52,372 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Cash paid in acquisitions, net of cash received | — | (131,654 | ) | (138,206 | ) | (269,860 | ) | ||||||||
Proceeds from disposition of franchises, property and equipment | — | 102,069 | 117 | 102,186 | |||||||||||
Purchases of property and equipment, including real estate | — | (73,615 | ) | (29,243 | ) | (102,858 | ) | ||||||||
Other | — | 1,878 | — | 1,878 | |||||||||||
Net cash used in investing activities | — | (101,322 | ) | (167,332 | ) | (268,654 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Borrowings on credit facility - floorplan line and other | — | 6,379,328 | — | 6,379,328 | |||||||||||
Repayments on credit facility - floorplan line and other | — | (6,153,677 | ) | — | (6,153,677 | ) | |||||||||
Borrowings on credit facility - acquisition line | 60,000 | — | — | 60,000 | |||||||||||
Borrowings on real estate credit facility | — | 19,640 | — | 19,640 | |||||||||||
Principal payments on real estate credit facility | — | (8,597 | ) | — | (8,597 | ) | |||||||||
Borrowings of other debt | — | — | 10,289 | 10,289 | |||||||||||
Principal payments of other debt | — | — | (71,170 | ) | (71,170 | ) | |||||||||
Principal payments of long-term debt related to real estate loans | — | (21,038 | ) | (15,940 | ) | (36,978 | ) | ||||||||
Borrowings of debt related to real estate | — | 27,925 | 27,420 | 55,345 | |||||||||||
Issuance of common stock to benefit plans, net | (1,822 | ) | — | — | (1,822 | ) | |||||||||
Repurchases of common stock, amounts based on settlement date | (3,553 | ) | — | — | (3,553 | ) | |||||||||
Tax effect from stock-based compensation | — | 2,993 | — | 2,993 | |||||||||||
Dividends paid | (15,805 | ) | — | — | (15,805 | ) | |||||||||
Borrowings (repayments) with subsidiaries | 50,651 | (278,850 | ) | 228,199 | — | ||||||||||
Investment in subsidiaries | (85,674 | ) | 86,038 | (364 | ) | — | |||||||||
Distributions to parent | — | — | — | — | |||||||||||
Net cash provided by financing activities | 3,797 | 53,762 | 178,434 | 235,993 | |||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | (4,146 | ) | (4,146 | ) | |||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | — | (35 | ) | 15,600 | 15,565 | ||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | 4,341 | 309 | 4,650 | |||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | 4,306 | $ | 15,909 | $ | 20,215 |
Exhibit Number | Description | |||
2.1 | — | Share Purchase Agreement dated as of January 24, 2013, by and among Group 1 Automotive, Inc. and the Shareholders of UAB Motors Participações S.A. named therein and UAB Motors Participações S.A., as Intervening and Consenting Party (Incorporated by reference to Exhibit 2.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed January 30, 2013) | ||
2.2 | — | Amendment dated as of February 27, 2013 to Share Purchase Agreement dated as of January 24, 2013, by and among Group 1 Automotive, Inc. and the Shareholders of UAB Motors Participações S.A. named therein and UAB Motors Participações S.A., as Intervening and Consenting Party (Incorporated by reference to Exhibit 2.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the period ended September 30, 2013) | ||
2.3 | — | Second Amendment dated as of May 29, 2013 to Share Purchase Agreement dated as of January 24, 2013, by and among Group 1 Automotive, Inc. and the Shareholders of UAB Motors Participações S.A. named therein and UAB Motors Participações S.A., as Intervening and Consenting Party (Incorporated by reference to Exhibit 2.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the period ended September 30, 2013) | ||
2.4 | — | Third Amendment dated as of July 26, 2013 to Share Purchase Agreement dated as of January 24, 2013, by and among Group 1 Automotive, Inc. and the Shareholders of UAB Motors Participações S.A. named therein and UAB Motors Participações S.A., as Intervening and Consenting Party (Incorporated by reference to Exhibit 2.3 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the period ended September 30, 2013) | ||
3.1 | — | Amended and Restated Certificate of Incorporation of Group 1 Automotive, Inc. (incorporated by reference to Exhibit 3.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed May 22, 2015) | ||
3.2 | — | Certificate of Designation of Series A Junior Participating Preferred Stock (Incorporated by reference to Exhibit 3.2 of Group 1’s Quarterly Report on Form 10-Q (File No. 001-13461) for the period ended March 31, 2007) | ||
3.3 | — | Seconded Amended and Restated Bylaws of Group 1 Automotive, Inc. (incorporated by reference to Exhibit 3.2 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed May 22, 2015) | ||
4.1 | — | Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 (Registration No. 333-29893)) | ||
4.2 | — | Indenture, dated as of June 2, 2014, by and among Group 1 Automotive, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 2, 2014) | ||
4.3 | — | Form of 5.000% Senior Notes due 2022 (included as Exhibit A to Exhibit 4.2) | ||
4.4 | — | Registration Rights Agreement, dated as of June 2, 2014, by and among Group 1 Automotive, Inc., the guarantors party thereto and J.P. Morgan Securities LLC, as representative of the initial purchasers named therein (incorporated by reference to Exhibit 4.3 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 2, 2014) | ||
4.5 | — | Registration Rights Agreement, dated as of September 9, 2014, by and among Group 1 Automotive, Inc., the guarantors party thereto and J.P. Morgan Securities LLC, as representative of the initial purchasers named therein (incorporated by reference to Exhibit 4.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed September 11, 2014) | ||
4.6 | — | Indenture, dated as of December 8, 2015, by and among Group 1 Automotive, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed December 9, 2015 | ||
4.7 | — | Form of 5.250% Senior Notes due 2023 (incorporated by reference to Exhibit 4.2 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed December 9, 2015) | ||
10.1 | — | Ninth Amended and Restated Revolving Credit Agreement, dated effective as of June 20, 2013, among Group 1 Automotive, Inc., the Subsidiary Borrowers listed therein, the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Comerica Bank, as Floor Plan Agent and Bank of America, N.A., as Syndication Agent (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 26, 2013) |
Exhibit Number | Description | |||
10.2 | — | First Amendment to Ninth Amended and Restated Revolving Credit Agreement, dated effective May 13, 2014, among Group 1 Automotive, Inc., the Subsidiary Borrowers listed therein, the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Comerica Bank, as Floor Plan Agent, Bank of America, N.A., as Syndication Agent, U.S. Bank, N.A. and Wells Fargo Bank, N.A., as Co-Documentation Agents and Capital One National Association and Compass Bank, as Managing Agents (incorporated by reference to Exhibit 10.4 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended June 30, 2014) | ||
10.3 | — | Partial Unwind Agreement between Group 1 Automotive, Inc. and JPMorgan Chase Bank, National Association, dated June 25, 2014 (incorporated by reference to Exhibit 10.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 26, 2014) | ||
10.4 | — | Partial Unwind Agreement between Group 1 Automotive, Inc. and Bank of America, N.A., dated June 25, 2014 (incorporated by reference to Exhibit 10.2 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 26, 2014) | ||
10.5 | — | Unwind Agreement between Group 1 Automotive, Inc. and JPMorgan Chase Bank, National Association, dated July 25, 2014 (incorporated by reference to Exhibit 10.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed July 31, 2014) | ||
10.6 | — | Unwind Agreement between Group 1 Automotive, Inc. and Bank of America, N.A., dated July 25, 2014 (incorporated by reference to Exhibit 10.2 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed July 31, 2014 | ||
10.7 | — | Stockholders Agreement dated as of February 28, 2013, by and among Group 1 Automotive, Inc. and former shareholders of UAB Motors Participações S.A. named therein (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 5, 2013) | ||
10.8 | — | Master Assignment and Acceptance Agreement, dated effective December 11, 2012, between JPMorgan Chase Bank, N.A., Comerica Bank, and Bank of America, N.A., each, an Assignor, and VW Credit, Inc., as Assignee, pursuant to the terms of the Eighth Amended and Restated Revolving Credit Agreement, dated effective as of July 1, 2011, as amended (Incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2012) | ||
10.9 | — | Loan Facility dated as of October 3, 2008 by and between Chandlers Garage Holdings Limited and BMW Financial Services (GB) Limited. (Incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2008) | ||
10.10 | — | Form of Ford Motor Credit Company Automotive Wholesale Plan Application for Wholesale Financing and Security Agreement (Incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended June 30, 2003) | ||
10.11 | — | Supplemental Terms and Conditions dated September 4, 1997 between Ford Motor Company and Group 1 Automotive, Inc. (Incorporated by reference to Exhibit 10.16 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) | ||
10.12 | — | Form of Agreement between Toyota Motor Sales, U.S.A., Inc. and Group 1 Automotive, Inc. (Incorporated by reference to Exhibit 10.12 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) | ||
10.13 | — | Toyota Dealer Agreement effective April 5, 1993 between Gulf States Toyota, Inc. and Southwest Toyota, Inc. (Incorporated by reference to Exhibit 10.17 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) | ||
10.14 | — | Lexus Dealer Agreement effective August 21, 1995 between Lexus, a division of Toyota Motor Sales, U.S.A., Inc. and SMC Luxury Cars, Inc. (Incorporated by reference to Exhibit 10.18 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) | ||
10.15 | — | Form of General Motors Corporation U.S.A. Sales and Service Agreement (Incorporated by reference to Exhibit 10.25 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) | ||
10.16 | — | Form of Ford Motor Company Sales and Service Agreement (Incorporated by reference to Exhibit 10.38 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 1998) | ||
10.17 | — | Form of Supplemental Agreement to General Motors Corporation Dealer Sales and Service Agreement (Incorporated by reference to Exhibit 10.13 of Group 1 Automotive, Inc.’s Registration Statement on Form S-1 Registration No. 333-29893) |
Exhibit Number | Description | |||
10.18 | — | Form of Chrysler Corporation Sales and Service Agreement (Incorporated by reference to Exhibit 10.39 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 1998) | ||
10.19 | — | Form of Nissan Division of Nissan North America, Inc. Dealer Sales and Service Agreement (Incorporated by reference to Exhibit 10.25 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2003) | ||
10.20 | — | Form of Infiniti Division of Nissan North America, Inc. Dealer Sales and Service Agreement (Incorporated by reference to Exhibit 10.26 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2003) | ||
10.21* | — | Policy on Payment or Recoupment of Performance-Based Cash Bonuses and Performance-Based Stock Bonuses in the Event of Certain Restatement (Incorporated by reference to the section titled “Policy on Payment or Recoupment of Performance-Based Cash Bonuses and Performance-Based Stock Bonuses in the Event of Certain Restatement” in Item 5.02 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 13461) filed November 16, 2009) | ||
10.22* | — | Form of Indemnification Agreement of Group 1 Automotive, Inc. (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed November 13, 2007) | ||
10.23* | — | Group 1 Automotive, Inc. Non-Employee Director Compensation Plan, effective January 1, 2012 (Incorporated by reference to Exhibit 10.16 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2011) | ||
10.24* | — | Group 1 Automotive, Inc. 2014 Corporate Incentive Compensation Plan (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed February 28, 2014) | ||
10.25* | — | Group 1 Automotive, Inc. 2015 Short Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 2, 2015) | ||
10.26* | — | Officer’s Terms of Engagement and Guarantees between UAB Motors Participações S.A. and Lincoln da Cunha Pereira Filho dated as of February 28, 2013 (Incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended March 31, 2013) | ||
10.27* | — | Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended and Restated, effective January 1, 2008 (Incorporated by reference to Exhibit 10.28 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2007) | ||
10.28* | — | First Amendment to Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended and Restated, effective January 1, 2008 (Incorporated by reference to Exhibit 10.25 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2008) | ||
10.29* | — | Second Amendment to Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended and Restated, effective January 1, 2008 (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended June 30, 2009) | ||
10.30* | — | Third Amendment to Group 1 Automotive, Inc. Deferred Compensation Plan, as Amended and Restated, effective January 1, 2008 (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed November 15, 2010) | ||
10.31* | — | Group 1 Automotive, Inc. 2007 Long Term Incentive Plan (As Amended and Restated Effective as of March 11, 2010) (Incorporated by reference to Exhibit A to Group 1 Automotive, Inc.’s definitive proxy statement on Schedule 14A filed on April 8, 2010) | ||
10.32* | — | Group 1 Automotive, Inc. 2014 Long Term Incentive Plan (incorporated by reference to Appendix A to Group 1 Automotive, Inc.’s definitive proxy statement on Schedule 14A filed April 10, 2014) | ||
10.33* | — | Form of Restricted Stock Agreement for Employees (Incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 16, 2005) | ||
10.34* | — | Form of Senior Executive Officer Restricted Stock Agreement (Incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed September 9, 2010) | ||
10.35* | — | Form of Restricted Stock Agreement with Qualified Retirement Provisions (Incorporated by reference to Exhibit 10.27 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2011) | ||
10.36* | — | Form of Phantom Stock Agreement for Employees (Incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 16, 2005) |
Exhibit Number | Description | |||
10.37* | — | Form of Phantom Stock Agreement for Non-Employee Directors (Incorporated by reference to Exhibit 10.36 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2009) | ||
10.38* | — | Form of Phantom Stock Agreement for Non-Employee Directors (Incorporated by reference to Exhibit 10.5 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 16, 2005) | ||
10.39* | — | Employment Agreement dated effective May 19, 2015 between Group 1 Automotive, Inc. and Earl J. Hesterberg (incorporated by reference to Exhibit 10.1 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed May 22, 2015) | ||
10.40* | — | Non-Compete Agreement dated effective May 19, 2015 between Group 1 Automotive, Inc. and Earl J. Hesterberg (incorporated by reference to Exhibit 10.2 to Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed May 22, 2015) | ||
10.41†* | — | Transition Agreement dated December 18, 2015 between Group 1 Automotive, Inc. and J. Brooks O’Hara | ||
10.42†* | — | Employment Agreement dated December 18, 2015 between Group 1 Automotive, Inc. and J. Brooks O’Hara | ||
10.43* | — | Employment Agreement dated January 1, 2009 between Group 1 Automotive, Inc. and John C. Rickel (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed March 17, 2009) | ||
10.44* | — | Incentive Compensation and Non-Compete Agreement dated June 2, 2006 between Group 1 Automotive, Inc. and John C. Rickel (Incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed June 7, 2006) | ||
10.45* | — | Employment Agreement dated effective as of December 1, 2009 between Group 1 Automotive, Inc. and Darryl M. Burman (Incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No. 001-13461) filed November 16, 2009) | ||
10.46* | — | Incentive Compensation and Non-Compete Agreement dated December 1, 2006 between Group 1 Automotive, Inc. and Darryl M. Burman (Incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Current Report on Form 8-K/A (File No. 001-13461) filed December 1, 2006) | ||
10.47* | — | Incentive Compensation, Confidentiality, Non-Disclosure and Non-Compete Agreement dated January 1, 2010 between Group 1 Automotive, Inc. and Mark J. Iuppenlatz (Incorporated by reference to Exhibit 10.48 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2009) | ||
10.48* | — | Group 1 Automotive, Inc. Corporate Aircraft Usage Policy (Incorporated by reference to Exhibit 10.49 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No. 001-13461) for the year ended December 31, 2009) | ||
10.49* | — | Description of UAB Motors Participações S.A. Bonus Plan for 2013 (Incorporated by reference to Exhibit 10.4 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended March 31, 2013) | ||
10.50* | — | Form of Senior Executive Restricted Stock Agreement (incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
10.51* | — | Form of Restricted Stock Agreement with Qualified Retirement Provisions (incorporated by reference to Exhibit 10.4 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
10.52* | — | Form of Restricted Stock Agreement for Employees (incorporated by reference to Exhibit 10.5 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
10.53* | — | Form of Restricted Stock Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.6 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
10.54* | — | Form of Phantom Stock Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.7 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
10.55* | — | Form of Performance-Based Restricted Stock Agreement (incorporated by reference to Exhibit 10.8 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No. 001-13461) for the quarter ended September 30, 2014) | ||
11.1 | — | Statement re Computation of Per Share Earnings (Incorporated by reference to Note 6 to the financial statements) |
Exhibit Number | Description | |||
12.1† | — | Statement re Computation of Ratios | ||
21.1† | — | Group 1 Automotive, Inc. Subsidiary List | ||
23.1† | — | Consent of Ernst & Young LLP | ||
31.1† | — | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
31.2† | — | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
32.1** | — | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
32.2** | — | Certification of Chief Financial Officer 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 |
† | Filed herewith |
* | Management contract or compensatory plan or arrangement |
** | Furnished herewith |
1. | On or about December 18, 2015, Group 1 and Employee agreed that so long as he remained employed through such date, Employee would become Director, Special Projects effective April 1, 2016. Between the time that Employee executes this Agreement and April 1, 2016, (such period, the “Transition Period”), unless earlier terminated pursuant to Section 3 below, Employee will continue to serve as the Vice President of Human Resources and perform the duties commensurate with that position. |
1. | Release: In return for the Company’s agreement to enter into this Agreement and, provided that he is still employed by the Company at the end of the Transition Period, to employ Employee as Director, Special Projects under the terms of the Employment Agreement (attached hereto as Exhibit “A”) beginning April 1, 2016 (the “Employment Agreement”), and other promises as outlined herein, Employee agrees to accept the terms of this Agreement and, on April 1, 2016, to execute the Release and Waiver of Claims Agreement (“Release,” attached hereto as Exhibit “B”). |
2. | Role; Compensation & Benefits: Until April 1, 2016, unless earlier terminated pursuant to Section 3 below, Employee shall continue to serve as Vice President of Human Resources for Group 1. Employee will continue to be paid his regular salary and be eligible for any bonuses for which he is currently eligible and shall continue to participate in and receive all health and welfare benefits to which he is entitled as a Group 1 employee, including, but not limited to, those set forth in Section 4 below. |
3. | Term: Both Group 1 and Employee expressly understand and agree that until April 1, 2016, unless terminated pursuant to the following sentence, Employee will remain employed as the Vice President of Human Resources of Group 1. Termination prior to April 1, 2016, by either party, shall occur only in the event or occurrence of one of the following: (1) Employee’s death or “Disability” (as defined in the Employee’s Restricted Stock Agreement(s) (Qualified Retirement)); (2) an uncured material breach by Employee of one or more of the material terms and conditions of this Agreement or the confidentiality, non-competition, and non-solicitation provisions contained in Exhibit A of the Employee’s Restricted Stock Agreement(s) (Qualified Retirement); (3) an act of fraud, embezzlement or other dishonesty by Employee during the Transition Period; or (4) the commission by the Employee of any illegal and/or unethical act in connection with the Employee’s business activities during the Transition Period that would adversely and materially impact on the character, goodwill and public reputation of Group 1. Prior to the termination of employment for any of the events or occurrences (other than (1)), Group 1 shall provide in writing to Employee notice of the event or occurrence warranting termination of employment and, in the case of (2) above, the steps reasonably needed to cure the material breach. Upon receipt of the written notice, Employee shall have ten (10) business days to respond in |
4. | Rights Not Affected: This Agreement will not affect Employee’s rights in the Group 1 Automotive, Inc. Deferred Compensation Plan, the Group 1 Automotive, Inc. Long Term Incentive |
5. | Confidentiality: |
(a) | Group 1 and Employee agree that the terms of this Agreement are a private matter, which shall not be divulged in any form to others. Accordingly, Group 1 and Employee hereby agree that, except as provided by law, they will not disclose, disseminate and/or publicize or cause to be disclosed, disseminated and/or publicized any of the terms of this Agreement or the discussions which have led up to this Agreement to anyone, with the exception of those within Group 1 who have a business need to know the terms and the Employee’s attorney, any financial or tax advisors, and spouse and children, who shall not divulge its contents to any third party. |
(b) | On April 1, 2016 or any such earlier date that Employee’s employment terminates, Employee agrees to execute any documents necessary to effectuate his resignation as Vice President of Human Resources with Group 1 and to cooperate in any filings with the Securities and Exchange Commission related to his resignation. |
(c) | Group 1 and Employee agree to work together to draft a statement that may be communicated by Group 1 or the Employee regarding Employee’s resignation as Vice President of Human Resources and continuing employment as Director, Special Projects. |
6. | Prior Agreements: Except as otherwise specified herein, all other terms of Employee’s agreements with Group 1, remain in full force and effect during and after the Transition Period, subject to the terms of those agreements. |
7. | Severability: In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not be affected thereby. |
8. | Employee Indemnity Not Affected: The releases contained herein shall not affect Group 1’s obligation under law, to the extent applicable, to indemnify Employee as an employee for actions taken within the scope and course of Employee’s employment. |
9. | Jurisdiction and Choice of Law: The Employee and Company agrees to use the Laws of Texas to enforce the terms of this Agreement and the matter shall be heard in Harris County, Texas. Employee agrees to service and personal jurisdiction in Harris County, Texas. |
JAMES BROOKS O’HARA (“EMPLOYEE”) | GROUP 1 AUTOMOTIVE, INC. | |
By: /s/ J. Brooks O’Hara | By: /s/ Darryl M. Burman | |
Dated: 12/18/2015 | Dated: 12/18/2015 |
JAMES BROOKS O’HARA (“EMPLOYEE”) | GROUP 1 AUTOMOTIVE, INC. | |
By: _________________________________ | By: ___________________________ | |
Dated: _______________________________ | Dated: ________________________ |
JAMES BROOKS O’HARA (“EMPLOYEE”) | GROUP 1 AUTOMOTIVE, INC. | |
By: _________________________________ | By: ___________________________ | |
Dated: _______________________________ | Dated: ________________________ |
JAMES BROOKS O’HARA (“EMPLOYEE”) | GROUP 1 AUTOMOTIVE, INC. | |
By: /s/ J. Brooks O’Hara | By: /s/ Darryl M. Burman | |
Dated: 12/18/2015 | Dated: 12/18/2015 |
For the year ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
Earnings: | ||||||||||||||||||||
Pretax income | $ | 182,171 | $ | 164,400 | $ | 191,895 | $ | 160,735 | $ | 132,094 | ||||||||||
Add: | ||||||||||||||||||||
Fixed charges | 108,106 | 105,739 | 97,233 | 84,395 | 78,429 | |||||||||||||||
Less: | ||||||||||||||||||||
Capitalized interest | (741 | ) | (731 | ) | (805 | ) | (689 | ) | (635 | ) | ||||||||||
Total Earnings | $ | 289,536 | $ | 269,408 | $ | 288,323 | $ | 244,441 | $ | 209,888 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expense | $ | 96,167 | $ | 91,306 | $ | 80,639 | $ | 69,261 | $ | 61,409 | ||||||||||
Estimated interest within rent expense | 11,198 | 13,702 | 15,789 | 14,445 | 16,385 | |||||||||||||||
Capitalized interest | 741 | 731 | 805 | 689 | 635 | |||||||||||||||
Total Fixed Charges | $ | 108,106 | $ | 105,739 | $ | 97,233 | $ | 84,395 | $ | 78,429 | ||||||||||
Ratio of Earnings to Fixed Charges | 2.7 | 2.5 | 3.0 | 2.9 | 2.7 |
Consent of Independent Registered Public Accounting Firm |
We consent to the incorporation by reference in the following Registration Statements: | |
(1) | Registration Statement (Form S-3 ASR No. 333-207690) of Group 1 Automotive, Inc., |
(2) | Registration Statement (Form S-8 No. 333-205923) pertaining to the Group 1 Automotive, Inc. Employee Stock Purchase Plan, |
(3) | Registration Statement (Form S-8 No. 333-145034) pertaining to the Group 1 Automotive, Inc. Deferred Compensation Plan; |
(4) | Registration Statement (Form S-8 No. 333-196424) pertaining to the Group 1 Automotive, Inc. 2014 Long Term Incentive Plan; |
of our reports dated February 17, 2016, with respect to the consolidated financial statements of Group 1 Automotive, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Group 1 Automotive, Inc. and subsidiaries included in this Annual Report (Form 10-K) of Group 1 Automotive, Inc. and subsidiaries for the year ended December 31, 2015. | |
/s/ Ernst & Young LLP | |
Houston, Texas February 17, 2016 |
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2015 of Group 1 Automotive, Inc. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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; and |
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/ Earl J. Hesterberg |
Earl J. Hesterberg |
Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2015 of Group 1 Automotive, Inc. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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; and |
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/ John C. Rickel |
John C. Rickel |
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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/ Earl J. Hesterberg |
Earl J. Hesterberg |
Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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/ John C. Rickel |
John C. Rickel |
Chief Financial Officer |
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Document and Entity Information - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Feb. 12, 2016 |
Jun. 30, 2015 |
Dec. 31, 2014 |
|
Document and Entity Information [Abstract] | ||||
Entity Registrant Name | GROUP 1 AUTOMOTIVE INC | |||
Entity Central Index Key | 0001031203 | |||
Document Type | 10-K | |||
Document Period End Date | Dec. 31, 2015 | |||
Amendment Flag | false | |||
Document Fiscal Year Focus | 2015 | |||
Document Fiscal Period Focus | FY | |||
Current Fiscal Year End Date | --12-31 | |||
Entity Well-known Seasoned Issuer | Yes | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Filer Category | Large Accelerated Filer | |||
Entity Public Float | $ 2,067.7 | |||
Entity Common Stock, Shares Outstanding | 23,420,863 | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 25,705,888 | 25,723,878 |
Treasury securities, shares | 2,291,095 | 1,385,286 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
REVENUES: | |||
New vehicle retail sales | $ 6,001,306 | $ 5,741,619 | $ 5,224,921 |
Used vehicle retail sales | 2,638,969 | 2,324,868 | 2,039,428 |
Used vehicle wholesale sales | 397,251 | 379,143 | 332,185 |
Parts and service sales | 1,186,193 | 1,125,694 | 1,010,685 |
Finance, insurance and other, net | 408,786 | 366,565 | 311,362 |
Total revenues | 10,632,505 | 9,937,889 | 8,918,581 |
COST OF SALES: | |||
New vehicle retail sales | 5,695,829 | 5,430,402 | 4,935,046 |
Used vehicle retail sales | 2,459,499 | 2,151,346 | 1,878,549 |
Used vehicle wholesale sales | 399,171 | 376,824 | 332,380 |
Parts and service sales | 544,034 | 531,379 | 480,060 |
Total cost of sales | 9,098,533 | 8,489,951 | 7,626,035 |
GROSS PROFIT | 1,533,972 | 1,447,938 | 1,292,546 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,120,833 | 1,061,964 | 976,856 |
DEPRECIATION AND AMORTIZATION EXPENSE | 47,239 | 42,344 | 35,826 |
ASSET IMPAIRMENTS | 87,562 | 41,520 | 6,542 |
INCOME FROM OPERATIONS | 278,338 | 302,110 | 273,322 |
OTHER INCOME (EXPENSE): | |||
Floorplan interest expense | (39,264) | (41,614) | (41,667) |
Other interest expense, net | (56,903) | (49,693) | (38,971) |
Other expense, net | 0 | 0 | (789) |
Loss on extinguishment of long-term debt | 0 | (46,403) | 0 |
INCOME BEFORE INCOME TAXES | 182,171 | 164,400 | 191,895 |
Provision for income taxes | (88,172) | (71,396) | (77,903) |
NET INCOME | $ 93,999 | $ 93,004 | $ 113,992 |
BASIC EARNINGS PER SHARE | $ 3.91 | $ 3.82 | $ 4.72 |
Weighted average common shares outstanding | 23,148 | 23,380 | 23,096 |
DILUTED EARNINGS PER SHARE | $ 3.90 | $ 3.60 | $ 4.32 |
Weighted average common shares outstanding | 23,152 | 24,885 | 25,314 |
CASH DIVIDENDS PER COMMON SHARE | $ 0.83 | $ 0.70 | $ 0.65 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Tax (benefit) provision on unrealized gain (loss) on marketable securities | $ 0 | $ 0 | $ 0 |
Tax (benefit) provision of unrealized loss on interest rate swap | (5,914) | (6,692) | 3,667 |
Tax (benefit) provision of reclassification adjustment | $ 4,987 | $ 4,256 | $ 4,182 |
Consolidated Statement of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Deferred Income Tax Expense (Benefit) | $ 11,884 | $ 12,319 | $ 22,412 |
Additional Paid-in Capital [Member] | |||
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation | $ 2,993 | $ 1,841 | $ 2,142 |
Annual Financial Information |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ANNUAL FINANCIAL INFORMATION | ANNUAL FINANCIAL INFORMATION Business and Organization Group 1 Automotive, Inc., a Delaware corporation, is a leading operator in the automotive retailing industry with business activities in 14 states in the United States of America (“U.S.”), 15 towns in the United Kingdom (“U.K.”), and three states in Brazil. Group 1 Automotive, Inc. and its subsidiaries are collectively referred to as the “Company” in these Notes to Consolidated Financial Statements. The Company, through its regions, sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. As of December 31, 2015, the Company’s U.S. retail network consisted of the following two regions (with the number of dealerships they comprised): (a) the East (39 dealerships in Alabama, Florida, Georgia, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, and South Carolina), and (b) the West (77 dealerships in California, Kansas, Louisiana, Oklahoma, and Texas). The U.S. regional vice presidents report directly to the Company’s Chief Executive Officer and are responsible for the overall performance of their regions, as well as for overseeing the market directors and dealership general managers that report to them. In addition, as of December 31, 2015, the Company had two international regions: (a) the U.K. region, which consisted of 17 dealerships in the U.K. and (b) the Brazil region, which consisted of 19 dealerships in Brazil. The operations of the Company’s international regions are structured similarly to the U.S. regions, each with a regional vice president reporting directly to the Company’s Chief Executive Officer. |
Summary of Significant Accounting Policies and Estimates |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES Use of Estimates The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances; however, actual results could differ from such estimates. The significant estimates made by management in the accompanying Consolidated Financial Statements relate to inventory market adjustments, reserves for future chargebacks on finance and vehicle service contract fees, self-insured property/casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation. Basis of Presentation All business acquisitions completed during the periods presented have been accounted for using the purchase method of accounting, and their results of operations are included from the effective dates of the closings of the acquisitions. The preliminary allocations of purchase price to the assets acquired and liabilities assumed are assigned and recorded based on estimates of fair value. All intercompany balances and transactions have been eliminated in consolidation. Revenue Recognition Revenues from vehicle sales, parts sales and vehicle service are recognized upon completion of the sale or service and delivery to the customer. Conditions to completing a sale entail having an agreement with the customer, including pricing, and having a reasonable expectation that the sales price will be collected. The Company includes revenues from its collision center operations in parts and services sales. The Company records the profit it receives for arranging vehicle fleet transactions, net, in other finance and insurance revenues. Since all sales of new vehicles must occur through franchised new vehicle dealerships, the dealerships effectively act as agents for the automobile manufacturers in completing sales of vehicles to fleet customers. As these customers typically order the vehicles, the Company has no significant general inventory risk. Additionally, fleet customers generally receive special purchase incentives from the automobile manufacturers and the Company receives only a nominal fee for facilitating the transactions. Taxes collected from customers and remitted to governmental agencies are not included in total revenues. The Company arranges financing for customers through various institutions and receives financing fees based on the difference between the loan rates charged to customers and wholesale financing rates set by the financing institution. In addition, the Company receives fees from the sale of insurance and vehicle service contracts to customers. Further, through agreements with certain vehicle service contract administrators, the Company earns volume incentive rebates and interest income on reserves, as well as participates in the underwriting profits of the products. The Company may be charged back for unearned financing, insurance contract or vehicle service contract fees in the event of early termination of the contracts by customers. Revenues from these fees are recorded at the time of the sale of the vehicles, and a reserve for future amounts estimated to be charged back is recorded based on the Company’s historical chargeback results and the termination provisions of the applicable contracts. While chargeback results vary depending on the type of contract sold, a 10% increase in the historical chargeback results used in determining estimates of future amounts that might be charged back would have increased the reserve at December 31, 2015 by $3.3 million. Cash and Cash Equivalents Cash and cash equivalents include demand deposits and various other short-term investments with original maturities of three months or less at the date of purchase. As of December 31, 2015 and 2014, cash and cash equivalents excluded $136.3 million and $62.1 million, respectively, of immediately available funds used to pay down the Floorplan Line of the Revolving Credit Facility and the FMCC Facility (as defined in Note 11, “Credit Facilities”), which are the Company’s primary vehicles for the short-term investment of excess cash. These amounts are reflected in the Company’s Consolidated Balance Sheets as the offset accounts related to Floorplan Notes Payable - Credit Facility and Floorplan Notes Payable - Manufacturer Affiliates. Contracts-in-Transit and Vehicle Receivables Contracts-in-transit and vehicle receivables consist primarily of amounts due from financing institutions on retail finance contracts from vehicle sales and dealer incentives due from manufacturers. Also included are amounts receivable from vehicle wholesale sales. Inventories New, used and demonstrator vehicle inventories are carried at the lower of specific cost or market and are removed from inventory using the specific identification method in the Consolidated Balance Sheets. Parts and accessories inventories are valued at lower of cost (determined on a first-in, first-out basis) or market in the Consolidated Balance Sheets. Vehicle inventory cost consists of the amount paid to acquire the inventory, plus the cost of reconditioning, cost of equipment added and transportation cost. Additionally, the Company receives interest assistance from some of the automobile manufacturers. This assistance is accounted for as a vehicle purchase price discount and is reflected as a reduction to the inventory cost on the Company’s Consolidated Balance Sheets and as a reduction to cost of sales in its Statements of Operations as the vehicles are sold. At December 31, 2015 and 2014, inventory cost had been reduced by $10.3 million and $8.8 million, respectively, for interest assistance received from manufacturers. New vehicle cost of sales was reduced by $50.5 million, $45.1 million and $38.5 million for interest assistance received related to vehicles sold for the years ended December 31, 2015, 2014 and 2013, respectively. The assistance over the past three years has ranged from approximately 87.3% of the Company’s quarterly floorplan interest expense in the first quarter of 2013 to 139.9% for the third quarter of 2015. As the market value of inventory typically declines over time, the Company establishes new and used vehicle reserves based on its historical loss experience and management’s considerations of current market trends. These reserves are charged to cost of sales and reduce the carrying value of inventory on hand. Used vehicles are complex to value as there is no standardized source for determining exact values and each vehicle and each market in which the Company operates is unique. As a result, the value of each used vehicle taken at trade-in, or purchased at auction, is determined based on industry data, primarily accessed via the Company’s used vehicle management software and the industry expertise of the responsible used vehicle manager. Valuation risk is partially mitigated by the speed at which the Company turns this inventory. At December 31, 2015, the Company’s used vehicle days’ supply was 33 days. The Company incurs shipping costs in connection with selling parts to customers. The cost of shipping these parts is included in cost of sales on the Consolidated Statements of Operations. Property and Equipment Property and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the estimated term of the lease or the estimated useful life of the asset. The amortization of assets recorded under capital leases is included with depreciation and amortization expense in the Consolidated Statement of Operations. Expenditures for major additions or improvements, which extend the useful lives of assets, are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of the assets, are expensed as incurred. Disposals are removed at cost less accumulated depreciation, and any resulting gain or loss is reflected in current operations. The Company reviews long-lived assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). This review consists of comparing the carrying amount of the asset with its expected future undiscounted cash flows without interest costs. If the asset’s carrying amount is greater than such cash flow estimate, then it is required to be written down to its fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. See Note 15, “Asset Impairments,” for additional details regarding the Company’s impairment of long-lived assets. Goodwill The Company is organized into four geographic regions, East and West regions in the U.S., the U.K. region and the Brazil region. The Company has determined that each region represents a reporting unit for the purpose of assessing goodwill for impairment. Goodwill represents the excess, at the date of acquisition, of the purchase price of the business acquired over the fair value of the net tangible and intangible assets acquired. Annually in the fourth quarter, based on the carrying values of the Company’s regions as of October 31st, the Company performs a fair value and potential impairment assessment of its goodwill. An impairment analysis is done more frequently if certain events or circumstances arise that would indicate a change in the fair value of the non-financial asset has occurred (i.e., an impairment indicator). In evaluating its goodwill, the Company compares the carrying value of the net assets of each reporting unit to its respective fair value, which is calculated by using unobservable inputs based upon the Company’s internally developed assumptions. This represents the first step of the impairment test. If the fair value of a reporting unit is less than the carrying value of its net assets, the Company must proceed to step two of the impairment test. Step two involves allocating the calculated fair value to all of the tangible and identifiable intangible assets of the reporting unit as if the calculated fair value were the purchase price in a business combination. The Company then compares the value of the implied goodwill resulting from this second step to the carrying value of the goodwill in the reporting unit. To the extent the carrying value of the goodwill exceeds its implied fair value under step two of the impairment test, a non-cash impairment charge equal to the difference is recorded. The Company uses a combination of the discounted cash flow, or income approach (80% weighted), and the market approach (20% weighted) to determine the fair value of the Company’s reporting units. Included in the discounted cash flow are assumptions regarding revenue growth rates, future gross margins, future selling, general and administrative expenses (“SG&A”) and an estimated weighted average cost of capital (“WACC”). The Company also must estimate residual values at the end of the forecast period and future capital expenditure requirements. Specifically, with regard to the valuation assumptions utilized in the income approach for the U.S. (which represents the Company’s largest two reporting units) as of October 31, 2015, the Company based its analysis on an estimate of industry sales of 17.8 million units in 2016 increasing at 1.0% in 2017 and 2018. For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pretax net income weighted as appropriate by reporting unit. Each of these assumptions requires the Company to use its knowledge of (1) the industry, (2) recent transactions and (3) reasonable performance expectations for its operations. If any one of the above assumptions change or fails to materialize, the resulting decline in the estimated fair value could result in a material, non-cash impairment charge to the goodwill associated with the reporting unit(s). See Note 15, “Asset Impairments,” and Note 16, “Intangible Franchise Rights and Goodwill,” for additional details regarding the Company’s goodwill. Intangible Franchise Rights The Company’s only significant identifiable intangible assets, other than goodwill, are rights under franchise agreements with manufacturers, which are recorded at an individual dealership level. The Company expects these franchise agreements to continue for an indefinite period and, for agreements that do not have indefinite terms, the Company believes that renewal of these agreements can be obtained without substantial cost, based on the history with the manufacturer. As such, the Company believes that its franchise agreements will contribute to cash flows for an indefinite period and, therefore, the carrying amounts of the franchise rights are not amortized. Franchise rights acquired in business acquisitions prior to July 1, 2001, were recorded and amortized as part of goodwill and remain as part of goodwill at December 31, 2015 and 2014 in the accompanying Consolidated Balance Sheets. Since July 1, 2001, intangible franchise rights acquired in business combinations have been recorded as distinctly separate intangible assets. In accordance with guidance primarily codified within Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other, the Company evaluates these franchise rights for impairment annually in the fourth quarter, based on the carrying values of the Company’s individual dealerships as of October 31st, or more frequently if events or circumstances indicate possible impairment has occurred. In performing its impairment assessments, the Company tests the carrying value of each individual franchise right that was recorded by using a direct value method discounted cash flow model, or income approach, specifically the excess earnings method. Included in this analysis are assumptions, at a dealership level, regarding the cash flows directly attributable to the franchise rights, revenue growth rates, future gross margins and future SG&A expenses. Using an estimated WACC, estimated residual values at the end of the forecast period and estimated future capital expenditure requirements, the Company calculates the fair value of each dealership’s franchise rights. See Note 15, “Asset Impairments,” and Note 16, “Intangible Franchise Rights and Goodwill,” for additional details regarding the Company’s intangible franchise rights. Income Taxes Currently, the Company operates in 14 different states in the U.S., in the U.K. and in Brazil, each of which has unique tax rates and payment calculations. As the amount of income generated in each jurisdiction varies from period to period, the Company’s estimated effective tax rate can vary based on the proportion of taxable income generated in each jurisdiction. The Company follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred income taxes are recorded based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the underlying assets are realized or liabilities are settled. A valuation allowance reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has recognized deferred tax assets, net of valuation allowances, that it believes will be realized, based primarily on the assumption of future taxable income. As it relates to state net operating losses, as well as net operating losses and goodwill for certain Brazil subsidiaries, a corresponding valuation allowance has been established to the extent that the Company has determined that net income attributable to certain jurisdictions will not be sufficient to realize the benefit. Fair Value of Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, accounts payable, credit facilities, long-term debt and interest rate swaps. The fair values of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, accounts payable, credit facilities and variable-rate long-term debt approximate their carrying values due to the short-term nature of these instruments or the existence of variable interest rates. However, the carrying value of the Company’s fixed-rate long-term debt differs from fair value. As of December 31, 2015, the Company’s 5.00% Senior Notes had a carrying value of $541.3 million, and a fair value of $545.9 million. The Company’s 5.25% Senior Notes had a carrying value of $296.3 million and a fair value of $297.8 million at December 31, 2015. Of the $311.6 million and $358.3 million of other real estate related and long-term debt as of December 31, 2015 and December 31, 2014, respectively, $100.7 million and $158.1 million represented fixed interest rate borrowings. The fair value of such fixed interest rate borrowings was $102.4 million and $186.4 million as of December 31, 2015 and December 31, 2014, respectively. For discussion on the fair value of the Company’s interest rate swaps, refer to “Derivative Financial Instruments” below. Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of property and equipment and intangible franchise rights, with the remaining amounts attributable to goodwill, if any. The Company utilizes third-party experts to determine the fair values of property and equipment purchased, including real estate, and utilizes its fair value model as discussed under “Intangible Franchise Rights” above, supplemented with assistance from third-party experts, to determine the fair value of intangible franchise rights acquired. Derivative Financial Instruments One of the Company’s primary market risk exposures is increasing interest rates. Interest rate derivatives, designated as cash flow hedges, are used to adjust interest rate exposures when appropriate based on market conditions. The Company follows the requirements of guidance primarily codified within ASC 815, Derivatives and Hedging (“ASC 815”) pertaining to the accounting for derivatives and hedging activities. ASC 815 requires the Company to recognize all cash flow hedges on its balance sheet at fair value. The related gains or losses on these interest rate derivatives are deferred in stockholders’ equity as a component of accumulated other comprehensive loss. However, to the extent that the change in value of a derivative contract does not perfectly offset the change in the value of the items being hedged, that ineffective portion is immediately recognized in other income or expense. Monthly contractual settlements of these swap positions are recognized as floorplan or other interest expense in the Company’s accompanying Consolidated Statements of Operations. All of the Company’s interest rate hedges were designated as cash flow hedges and were deemed to be effective at December 31, 2015, 2014 and 2013. The Company measures its interest rate derivative instruments utilizing an income approach valuation technique, converting future amounts of cash flows to a single present value in order to obtain a transfer exit price within the bid and ask spread that is most representative of the fair value of its derivative instruments. In measuring fair value, the Company utilizes the option-pricing Black-Scholes present value technique for all of its derivative instruments. This option-pricing technique utilizes a one-month London Interbank Offered Rate (“LIBOR”) forward yield curve, obtained from an independent external service provider, matched to the identical maturity term of the instrument being measured. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. The fair value estimate of the interest rate derivative instruments also considers the credit risk of the Company for instruments in a liability position or the counterparty for instruments in an asset position. The credit risk is calculated by using the spread between the one-month LIBOR yield curve and the relevant average 10 and 20-year retail rate according to Standard and Poor’s. The Company has determined the valuation measurement inputs of these derivative instruments to maximize the use of observable inputs that market participants would use in pricing similar or identical instruments and market data obtained from independent sources, which is readily observable or can be corroborated by observable market data for substantially the full term of the derivative instrument. Accordingly, the Company has classified the derivatives within Level 2 of the ASC 820 hierarchy framework in Note 13, “Fair Value Measurements.” The Company validates the outputs of its valuation technique by comparison to valuations from the respective counterparties. See Note 4, “Derivative Instruments and Risk Management Activities,” and Note 13, “Fair Value Measurements,” for further details regarding the Company’s derivative financial instruments and fair value measurements. Foreign Currency Translation The functional currency for the Company’s U.K. subsidiaries is the British pound sterling (£) and of the Company’s Brazil subsidiaries is the Brazilian real. The financial statements of all the Company’s foreign subsidiaries have been translated into U.S. dollars. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates and all revenues and expenses are translated at average rates during the respective period. The difference in the U.S. dollar results that arise from the translation of all assets and liabilities are included in the cumulative currency translation adjustments in accumulated other comprehensive income/loss in stockholders’ equity and in other income/expense, when applicable. Upon disposition of the Company’s investment in a foreign subsidiary, the Company removes the accumulated translation adjustment attributable to that subsidiary from equity and recognizes as a part of the gain or loss on the disposition transaction. Factory Incentives In addition to the interest assistance discussed above, the Company receives various dealer incentive payments from certain of the automobile manufacturers. These incentive payments are typically received on parts purchases from the automobile manufacturers and on new vehicle retail sales. These incentives are reflected as reductions of cost of sales in the statement of operations. Earnings Per Share The Company utilizes the two-class method for the computation of earnings per share (“EPS”). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents. The Company’s restricted stock awards qualify as participating securities as each contain non-forfeitable rights to dividends. Income allocated to these participating securities is excluded from net earnings available to common shares. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period. Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2015, 2014, and 2013, totaled $74.6 million, $73.8 million and $59.0 million, respectively. Additionally, the Company receives advertising assistance from some of the automobile manufacturers that the Company must spend on qualified advertising and is subject to audit and chargeback by the manufacturer. The assistance is accounted for as a reduction of advertising expense, which is included in SG&A expenses in the accompanying Consolidated Statements of Operations, as the assistance is earned. Amounts related to vehicles still in inventory as of the balance sheet date are reflected in accrued expenses. Advertising expense has been reduced by $17.3 million, $16.6 million and $24.1 million for advertising assistance earned related to vehicles sold for the years ended December 31, 2015, 2014, and 2013, respectively. Business and Credit Risk Concentrations The Company owns and operates franchised automotive dealerships in the U.S., the U.K. and Brazil. Automotive dealerships operate pursuant to franchise agreements with vehicle manufacturers. Franchise agreements generally provide the manufacturers or distributors with considerable influence over the operations of the dealership. The success of any franchised automotive dealership is dependent, to a large extent, on the financial condition, management, marketing, production and distribution capabilities of the vehicle manufacturers or distributors of which the Company holds franchises. The Company purchases substantially all of its new vehicles from various manufacturers or distributors at the prevailing prices to all franchised dealers. The Company’s sales volume could be adversely impacted by the manufacturers’ or distributors’ inability to supply the dealerships with an adequate supply of vehicles. For the year ended December 31, 2015, Toyota (including Lexus, Scion and Toyota brands), BMW (including MINI and BMW brands), Ford (including Ford and Lincoln brands), Honda (including Acura and Honda brands), Nissan, General Motors (including Chevrolet, GMC, Buick, and Cadillac brands), Volkswagen (including Audi, Porsche, and Volkswagen brands), Hyundai (including Hyundai and Kia brands), FCA US (formerly Chrysler) (including Chrysler, Dodge, RAM and Jeep brands), and Daimler (including Mercedes-Benz, smart and Sprinter brands), accounted for 26.4%, 11.6%, 11.4%, 10.9%, 8.3%, 7.6%, 6.9%, 5.8%, 4.6%, and 4.3% of the Company’s new vehicle sales volume, respectively. No other manufacturer accounted for more than 2.2% of the Company’s total new vehicle sales volume in 2015. Through the use of an open account, the Company purchases and returns parts and accessories from/to the manufacturers and receives reimbursement for rebates, incentives and other earned credits. As of December 31, 2015, the Company was due $93.2 million from various manufacturers (see Note 8, “Accounts and Notes Receivable”). Receivable balances from General Motors, Toyota, BMW, Daimler, Ford, Volkswagen, Nissan, Hyundai, Honda, and FCA US (formerly Chrysler) represented 16.5%, 16.3%, 14.8%, 13.0%, 10.0%, 8.5%, 6.7%, 4.6%, 4.2%, and 2.5%, respectively, of this total balance due from manufacturers. Statements of Cash Flows With respect to all new vehicle floorplan borrowings, the manufacturers of the vehicles draft the Company’s credit facilities directly with no cash flow to or from the Company. With respect to borrowings for used vehicle financing in the U.S., the Company finances up to 80% of the value of the used vehicle inventory and the funds flow directly to the Company from the lender. In the U.K., the Company chooses which used vehicles to finance and the borrowings flow directly to the Company from the lender. All borrowings from, and repayments to, lenders affiliated with the vehicle manufacturers (excluding the cash flows from or to manufacturer affiliated lenders participating in the Company’s syndicated lending group) are presented within Cash Flows from Operating Activities on the Consolidated Statements of Cash Flows. In addition, all borrowings from, and repayments to, the syndicated lending group under the Revolving Credit Facility (as defined in Note 11, “Credit Facilities”) (including the cash flows from or to manufacturer affiliated lenders participating in the facility) and borrowing from, and repayments to, the Company’s other credit facilities are presented within Cash Flows from Financing Activities. Cash paid for interest, including the monthly settlement of the Company’s interest rate derivatives, was $92.0 million, $80.2 million and $66.2 million in 2015, 2014 and 2013, respectively. Cash paid for taxes, net of refunds, was $74.8 million, $62.3 million and $49.0 million in 2015, 2014 and 2013, respectively. Stock-Based Compensation Stock-based compensation represents the expense related to stock-based awards granted to employees and non-employee directors. The Company measures stock-based compensation expense at grant date based on the estimated fair value of the award and recognizes the cost on a straight-line basis, net of estimated forfeitures, over the employee requisite service period. The Company estimates the fair value of its employee stock purchase rights issued pursuant to the Employee Stock Purchase Plan using a Black-Scholes valuation model. The expense for stock-based awards is recognized as an SG&A expense in the accompanying Consolidated Statement of Operations. Business Segment Information The Company, through its regions, conducts business in the automotive retailing industry, including selling new and used cars and light trucks, arranging related vehicle financing, selling service and insurance contracts, providing automotive maintenance and repair services and selling vehicle parts. The Company has three reportable segments: the U.S., which includes the activities of the Company’s corporate office, the U.K., and Brazil. The reportable segments are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by its chief operating decision maker to allocate resources and assess performance. The Company’s chief operating decision maker is its Chief Executive Officer. See Note 20, “Segment Information,” for additional details regarding the Company’s reportable segments. Self-Insured Medical, Property and Casualty Reserves The Company purchases insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks consisting of large deductibles and/or self-insured retentions. At least annually, the Company engages a third-party actuary to conduct a study of the exposures under the self-insured portion of its worker’s compensation and general liability insurance programs in the U.S. for all open policy years. In the interim, the Company reviews the estimates within the study and monitors actual experience for unusual variances. The appropriate adjustments are made to the accrual, based upon these procedures. Actuarial estimates for the portion of claims not covered by insurance are based on historical claims experience adjusted for loss trending and loss development factors. Changes in the frequency or severity of claims from historical levels could influence the Company’s reserve for claims and its financial position, results of operations and cash flows. A 10% increase in the actuarially determined estimate of aggregate future losses would have increased the reserve for these losses at December 31, 2015, by $2.1 million. The Company’s U.S. auto physical damage insurance coverage is limited and contains two layers of coverage. The first layer is composed of a $10.0 million per occurrence company deductible with an annual maximum aggregate deductible of $30.0 million with no maximum payout. The secondary policy provides for an additional $10.0 million, maximum, in annual loss coverage after the Company has either incurred $20.0 million in company-paid deductibles related to hail loss, or incurred $5.0 million in company-paid deductibles related to any weather event other than hail. For policy years ended prior to October 31, 2005, the Company’s U.S. workers’ compensation and general liability insurance coverage included aggregate retention (stop loss) limits in addition to a per claim deductible limit (“Stop Loss Plans”). Due to historical experience in both claims frequency and severity, the likelihood of breaching the aggregate retention limits described above was deemed remote, and as such, the Company elected not to purchase this stop loss coverage for the policy year beginning November 1, 2005 and for each subsequent year (“No Stop Loss Plans”). The Company’s exposure per claim under the No Stop Loss Plans is limited to $1.0 million per occurrence, with unlimited exposure on the number of claims up to $1.0 million that may be incurred. As of December 31, 2015, the Company has accrued $0.3 million and $20.3 million for its Stop Loss and No Stop Loss plans, respectively. The Company’s maximum potential exposure under its worker’s compensation and general liability Stop Loss Plans totaled $34.9 million at December 31, 2015, before consideration of amounts previously paid or accruals recorded related to the Company’s loss projections. After consideration of the amounts paid or accrued, the remaining potential loss exposure under the Stop Loss Plans totaled $13.9 million at December 31, 2015. Variable Interest Entity In 2013, the Company entered into arrangements to provide a related-party entity, which owns and operates retail automotive dealerships, a fixed-interest-rate working capital loan and various administrative services for a variable fee, both of which constitute variable interests in the entity. The Company’s exposure to loss as a result of its involvement in the entity includes the balance outstanding under the loan arrangement. The Company holds an 8% equity ownership interest in the entity. The Company has determined that the entity meets the criteria of a variable interest entity (“VIE”). The terms of the loan and services agreements provide the Company with the right to control the activities of the VIE that most significantly impact the VIE’s economic performance, the obligation to absorb potentially significant losses of the VIE and the right to receive potentially significant benefits from the VIE. Accordingly, the Company qualifies as the VIE’s primary beneficiary and consolidated the assets and liabilities of the VIE as of December 31, 2015 and 2014, as well as the results of operations of the VIE beginning on the effective date of the variable interests arrangements to December 31, 2013. The floorplan notes payable liability of the VIE is securitized by the new and used vehicle inventory of the VIE. The carrying amounts and classification of assets (which can only be used to settle the liabilities of the VIE) and liabilities (for which creditors do not have recourse to the general credit of the Company) included in the Company’s consolidated statements of financial position for the consolidated VIE is as follows (in thousands):
Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), that amends the accounting guidance on revenue recognition. The amendments in this ASU are intended to provide a framework for addressing revenue issues, improve comparability of revenue recognition practices, and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the method of adoption and the impact the provisions of the ASU will have on its consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis, that amends existing requirements applicable to reporting entities that are required to evaluate whether certain legal entities should be consolidated. The ASU is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may choose to adopt the standard using either a full retrospective approach or a modified retrospective approach. At this time, the Company does not expect the adoption of this ASU to impact its financial statements. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs. The amendments in the accounting standard require debt issuance costs to be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability. The amendments in this ASU are to be applied retrospectively and are effective for interim and annual periods beginning after December 15, 2015. Adoption of this ASU will not materially impact the Company’s financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) Simplifying the Measurement of Inventory. The amendments in the accounting standard replace the lower of cost or market test with a lower of cost and net realizable value test. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption to materially impact its financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. The amendments in the accounting standard eliminate the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. The amendments also require that the acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The amendments in this ASU are to be applied prospectively to adjustments to provisional amounts that occur after the effective date and are effective for interim and annual periods beginning after December 15, 2015. The Company does not expect the adoption to materially impact its financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes that clarifies that in a classified statement of financial position, an entity shall classify deferred tax liabilities and assets as non-current amounts. The new guidance supersedes ASC 740-10-45-5 which required the valuation allowance for a particular tax jurisdiction be allocated between current and non-current deferred tax assets for that tax jurisdiction on a pro rata basis. The new standard will become effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the timing of adoption, however the adoption of this update is not expected to have a material impact on its financial statements. |
Acquisitions and Dispositions |
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Acquisitions and Dispositions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | ACQUISITIONS AND DISPOSITIONS During the twelve months ended December 31, 2015, the Company acquired three U.S. dealerships, sold two U.S. dealerships and terminated one U.S. dealership franchise. The Company also terminated two franchises in Brazil. As a result of these dispositions, a net pre-tax gain of $8.2 million was recognized for the twelve months ended December 31, 2015. During 2014, the Company acquired seven dealerships and was granted two franchises in the U.S. and also acquired one dealership and opened one dealership for an awarded franchise in Brazil. In addition, the Company acquired three dealerships in the U.K. (collectively, the “2014 Acquisitions”). Aggregate consideration paid for these acquisitions totaled $336.6 million, including associated real estate and new vehicle inventory. The U.S. vehicle inventory associated with the acquisitions was subsequently financed through borrowings under the Company's FMCC Facility and the Floorplan Line (each as defined in Note 11, “Credit Facilities”), and the Brazil vehicle inventory associated with the acquisitions was subsequently financed through individual manufacturer captive finance companies. The purchase prices for the 2014 Acquisitions have been allocated as set forth below based upon the consideration paid and the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Goodwill associated with the acquisitions was assigned to the U.S., U.K. and Brazil reportable segments in the amounts of $103.8 million, $18.7 million and zero, respectively.
The intangible franchise rights are expected to continue for an indefinite period, therefore these rights are not amortized. These intangible assets will be evaluated on an annual basis in accordance with Accounting Standards Codification (“ASC”) 350. Goodwill represents the excess of consideration paid compared to the fair value of net assets received in the acquisitions. The goodwill associated with the 2014 Acquisitions relative to the U.S. reportable segment is deductible for tax purposes; however, the goodwill associated with the 2014 Acquisitions relative to the U.K. reportable segment is not currently deductible for tax purposes. During the year ended December 31, 2014, the Company disposed of seven dealerships and one franchise in the U.S. and three dealerships in Brazil. As a result of these dispositions including the associated real estate, a pre-tax net gain of $13.3 million was recognized for the year ended December 31, 2014. Aggregate consideration received for these dealerships totaled $144.6 million. In February 2013, the Company purchased all of the outstanding stock of UAB Motors. At the time of acquisition, UAB Motors consisted of 18 dealerships and 22 franchises in Brazil, as well as five collision centers. In conjunction with the acquisition, the Company incurred $6.5 million of costs, primarily related to professional services associated with the Brazil transaction. The Company included these costs in SG&A in the Consolidated Statement of Operations for the year ended December 31, 2013. As discussed in Note 2, “Summary of Significant Accounting Policies and Estimates,” in connection with this acquisition, the Company entered into arrangements that are variable interests in a VIE. The Company qualifies as the primary beneficiary of the VIE. The consolidation of the VIE into the financial statements of the Company was accounted for as a business combination. In addition, during 2013, the Company acquired certain assets of four dealerships in the U.K. and nine dealerships in the U.S. (collectively, the “2013 Acquisitions”). Aggregate consideration paid for the 2013 Acquisitions totaled $350.2 million, including $269.9 million of cash and 1.39 million shares of the Company’s common stock. The consideration included amounts paid for vehicle inventory, parts inventory, equipment, and furniture and fixtures, as well as the purchase of some of the associated real estate. The vehicle inventory acquired in the U.K. acquisitions was subsequently financed through borrowings under the Company’s credit facility with Volkswagen Finance and the vehicle inventory acquired in the U.S. acquisitions was subsequently financed through borrowings under the Company’s FMCC Facility and the Floorplan Line, (each as defined in Note 11, “Credit Facilities”). The Company assumed, in conjunction with the Brazil acquisitions, the arrangements through individual manufacturer captive finance companies used to finance vehicle inventory and also assumed debt in conjunction with certain of the acquisitions, of which $65.1 million was contemporaneously extinguished. In conjunction with the debt extinguishment, the Company recognized a loss of $0.8 million that is included in other expense, net on the Consolidated Statement of Operations for the year ended December 31, 2013. The purchase prices for the 2013 Acquisitions have been allocated as set forth below based upon the consideration paid and the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Goodwill associated with the acquisitions was assigned to the U.S., U.K. and Brazil reportable segments in the amounts of $56.2 million, $1.5 million and $129.4 million, respectively.
The Company sold six dealerships and one franchise in the U.S. during the year ended December 31, 2013. Gross consideration received for these dispositions was $97.5 million. As a result of the dispositions, a pre-tax net gain of $10.2 million was recognized for the year ended December 31, 2013. |
Derivative Instruments and Risk Management Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT ACTIVITIES | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT ACTIVITIES The periodic interest rates of the Revolving Credit Facility (as defined in Note 11, “Credit Facilities”), the Real Estate Credit Facility (as defined in Note 12, “Long-term Debt”), and certain variable-rate real estate related borrowings are indexed to the one-month LIBOR plus an associated company credit risk rate. In order to minimize the earnings variability related to fluctuations in these rates, the Company employs an interest rate hedging strategy, whereby it enters into arrangements with various financial institutional counterparties with investment grade credit ratings, swapping its variable interest rate exposure for a fixed interest rate over terms not to exceed the related variable-rate debt. As of December 31, 2015 and December 31, 2014, the Company held interest rate swaps in effect of $581.7 million and $563.0 million, respectively, in notional value that fixed its underlying one-month LIBOR at a weighted average rate of 2.7% and 2.5%, respectively. Of the $581.7 million in notional value of swaps in effect as of December 31, 2015, $244.6 million became effective during the year ended December 31, 2015. These interest rate swaps expire as follows: $151.6 million in 2016, $251.6 million in 2017, $151.6 million in 2018, $1.6 million in 2019, $1.6 million in 2020, $9.9 million in 2021 and $13.7 million in 2022. For the years ended December 31, 2015, 2014 and 2013, respectively, the impact of the Company’s interest rate hedges in effect increased floorplan interest expense by $11.5 million, $9.8 million, and $9.9 million. Total floorplan interest expense was $39.3 million, $41.6 million, and $41.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. In addition to the $581.7 million of swaps in effect as of December 31, 2015, the Company held 13 additional interest rate swaps with forward start dates between December 2016 and January 2019 and expiration dates between December 2019 and December 2021. As of December 31, 2015, the aggregate notional value of these 13 forward-starting swaps was $650.0 million, and the weighted average interest rate was 2.6%. Of the $650.0 million in notional value of forward-starting swaps, $100.0 million was added in the year ended December 31, 2015. The combination of the interest rate swaps currently in effect and these forward-starting swaps is structured such that the notional value in effect at any given time through October 2022 does not exceed $779.7 million, which is less than the Company’s expectation for variable rate debt outstanding during such period. As of December 31, 2015 and December 31, 2014, the Company reflected liabilities from interest rate risk management activities of $31.2 million and $28.7 million, respectively, in its Consolidated Balance Sheets. Included in Accumulated Other Comprehensive Loss at December 31, 2015, 2014 and 2013, were accumulated unrealized losses, net of income taxes, totaling $19.5 million, $17.9 million, and $13.9 million, respectively, related to these interest rate swaps. As of December 31, 2015 and 2014, all of the Company’s derivative contracts that were in effect were determined to be effective. The Company had no gains or losses related to ineffectiveness or amounts excluded from effectiveness testing recognized in the Consolidated Statements of Operations for the years ended December 31, 2015, 2014, or 2013, respectively. The following table presents the impact during the current and comparative prior year periods for the Company’s derivative financial instruments on its Consolidated Statements of Operations and Consolidated Balance Sheets.
The amount expected to be reclassified out of other comprehensive income (loss) into earnings as additional floorplan interest expense or other interest expense in the next twelve months is $11.8 million. |
Stock-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS The Company provides stock-based compensation benefits to employees and non-employee directors pursuant to its 2014 Long Term Incentive Plan (the "Incentive Plan"), as well as to employees pursuant to its Employee Stock Purchase Plan, as amended (the "Purchase Plan", formerly named the 1998 Employee Stock Purchase Plan). Long Term Incentive Plan The Incentive Plan provides for the grant of options (including options qualified as incentive stock options under the Internal Revenue Code of 1986 and options that are non-qualified), restricted stock, performance awards, bonus stock, and phantom stock to the Company's employees, consultants, non-employee directors and officers. The Incentive Plan expires on May 21, 2024. The terms of the awards (including vesting schedules) are established by the Compensation Committee of the Company’s Board of Directors. As of December 31, 2015, there were 1,454,675 shares available for issuance under the Incentive Plan. Restricted Stock Awards Under the Incentive Plan, the Company grants to non-employee directors and certain employees restricted stock awards or, at their election, restricted stock units at no cost to the recipient. Restricted stock awards qualify as participating securities as each award contains non-forfeitable rights to dividends. As such, the two-class method is required for the computation of earnings per share. See Note 6, “Earnings Per Share,” for further details. Restricted stock awards are considered outstanding at the date of grant but are subject to vesting periods upon issuance up to five years. Restricted stock units are considered vested at the time of issuance, however, since they cannot vote, they are not considered outstanding when issued. Restricted stock units settle in cash upon the termination of the grantees’ employment or directorship. In the event an employee or non-employee director terminates his or her employment or directorship with the Company prior to the lapse of the restrictions, the shares, in most cases, will be forfeited to the Company. The Company issues new shares or treasury shares, if available, when restricted stock vests. Compensation expense for restricted stock awards is calculated based on the market price of the Company’s common stock at the date of grant and recognized over the requisite service period. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate is adjusted annually based on the extent to which actual or expected forfeitures differ from the previous estimate. A summary of the restricted stock awards as of December 31, 2015, along with the changes during the year then ended, is as follows:
The total fair value of restricted stock awards which vested during the years ended December 31, 2015, 2014 and 2013, was $13.9 million, $12.1 million and $9.8 million, respectively. Employee Stock Purchase Plan During the twelve months ended December 31, 2015, our shareholders and the Board of Directors approved an additional 1.0 million shares of common stock for issuance under the Purchase Plan. As a result, the Purchase Plan authorizes the issuance of up to 4.5 million shares of common stock and provides that no options to purchase shares may be granted under the Purchase Plan after May 19, 2025. The Purchase Plan is available to all employees of the Company and its participating subsidiaries and is a qualified plan as defined by Section 423 of the Internal Revenue Code. At the end of each fiscal quarter (the “Option Period”) during the term of the Purchase Plan, employees can acquire shares of common stock from the Company at 85% of the fair market value of the common stock on the first or the last day of the Option Period, whichever is lower. As of December 31, 2015, there were 1,414,681 shares available for issuance under the Purchase Plan. During the years ended December 31, 2015, 2014 and 2013, the Company issued 102,029, 103,254, and 104,295 shares, respectively, of common stock to employees participating in the Purchase Plan. With respect to shares issued under the Purchase Plan, the Company’s Board of Directors has authorized specific share repurchases to fund the shares issuable under the Purchase Plan. The weighted average fair value of employee stock purchase rights issued pursuant to the Purchase Plan was $18.56, $15.15, and $14.37 during the years ended December 31, 2015, 2014 and 2013, respectively. The fair value of stock purchase rights is calculated using the grant date stock price, the value of the embedded call option and the value of the embedded put option. Stock-Based Compensation Total stock-based compensation cost was $18.9 million, $16.0 million, and $13.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Total income tax benefit recognized for stock-based compensation arrangements was $5.3 million, $4.4 million, and $3.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, there was $46.8 million of total unrecognized compensation cost related to stock-based compensation arrangements which is expected to be recognized over a weighted-average period of 3.4 years. Cash received from Purchase Plan purchases was $7.2 million, $6.0 million and $5.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. The tax benefit realized for the tax deductions from options exercised and vesting of restricted shares totaled $2.1 million, $1.8 million and $3.0 million and increased additional paid in capital for the years ended December 31, 2015, 2014 and 2013, respectively. Tax benefits relating to excess stock-based compensation deductions are presented as a financing cash inflow, so the Company classified $2.1 million, $1.8 million and $3.0 million of excess tax benefits as an increase in financing activities and a corresponding decrease in operating activities in the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, respectively. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The two-class method is utilized for the computation of EPS. The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, including the Company’s restricted stock awards. Income allocated to these participating securities is excluded from net earnings available to common shares, as shown in the table below. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period. The following table sets forth the calculation of EPS for the years ended December 31, 2015, 2014, and 2013:
As discussed in Note 12, “Long-Term Debt,” the Company was required to include the dilutive effect, if applicable, of the net shares issuable under the 2.25% and 3.00% Notes, as well as the 2.25% and 3.00% Warrants (as defined in Note 12) sold in connection with the respective notes, in its diluted common shares outstanding for the diluted earnings calculation, during the period in which each was outstanding. As a result, the number of shares included in the Company’s diluted shares outstanding each period varied based upon the Company’s average adjusted closing common stock price during the applicable period. Although the 2.25% and 3.00% Purchased Options (as defined in Note 12) had the economic benefit of decreasing the dilutive effect of the 2.25% and 3.00% Notes, the Company did not factor this benefit into the diluted common shares outstanding for the diluted earnings calculation since the impact would have been anti-dilutive. The average adjusted closing price of the Company's common stock for the first three quarters of 2014 and each quarter of 2013 was more than the respective conversion prices then in effect at the end of the periods for both the 2.25% and 3.00% Notes. Therefore, the dilutive effect of the 2.25% and 3.00% Notes was included in the computation of diluted EPS for such periods. In addition, the dilutive effect of the 2.25% and 3.00% Warrants was also included in the computation of diluted EPS for the first three quarters of 2014 and each quarter of 2013. The 2.25% Notes and 2.25% Warrants were converted or redeemed and settled, respectively, during the three months ended September 30, 2014. The 3.00% Notes and 3.00% Warrants were repurchased during the second and third quarters of 2014. As a result, the dilution is calculated based on the weighted average length of time the 2.25% and 3.00% Notes, as well as the 2.25% and 3.00% Warrants were outstanding during the twelve months ended December 31, 2014. Refer to Note 12, "Long-Term Debt," for a description of the conversion of the 2.25% Notes and Warrants that occurred during the three months ended September 30, 2014, as well as the repurchase of the 3.00% Notes and Warrants that occurred during 2014. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Income before income taxes by geographic area was as follows:
Federal, state and foreign income taxes were as follows:
Actual income tax expense differed from income tax expense computed by applying the U.S. federal statutory corporate tax rate of 35% to income before income taxes in 2015, 2014 and 2013 as follows:
During 2015, the Company recorded a tax provision of $88.2 million. Certain expenses for stock-based compensation recorded in 2015 in accordance with FASB guidance were non-deductible for income tax purposes. The Company provided additional valuation allowances with respect to goodwill and net operating losses of certain Brazil subsidiaries, as well as state net operating losses in the U.S., based on expectations concerning their realizability. In addition, no substantial deferred tax benefit relative to the impairment of goodwill in the Brazil reporting unit was recognized for U.S. GAAP reporting purposes. As a result of these items, and the impact of the 2014 items discussed below, the effective tax rate for the year ended December 31, 2015 increased to 48.4%, as compared to 43.4% for the year ended December 31, 2014. During 2014, the Company recorded a tax provision of $71.4 million. Certain expenses for stock-based compensation recorded in 2014 in accordance with FASB guidance were non-deductible for income tax purposes. The Company also had non-deductible goodwill from the dispositions of certain domestic dealerships, as well as non-deductible transaction costs related to foreign acquisitions. The Company provided valuation allowances with respect to certain foreign company deferred tax assets, as well as state net operating losses in the U.S., based on expectations concerning their realizability. As a result of these items, and the impact of the items occurring in 2013 discussed below, the effective tax rate for the year ended December 31, 2014 increased to 43.4%, as compared to 40.6% for the year ended December 31, 2013. During 2013, the Company recorded a tax provision of $77.9 million. Certain expenses for stock-based compensation recorded in 2013 in accordance with FASB guidance were non-deductible for income tax purposes. The Company provided valuation allowances with respect to certain state net operating losses in the U.S. based on expectations concerning their realizability. As a result of these items, and the impact of certain items occurring in 2012, the effective tax rate for the year ended December 31, 2013 increased to 40.6%, as compared to 37.7% for the year ended December 31, 2012. Deferred income tax provisions resulted from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following:
As of December 31, 2015, the Company had state NOL carryforwards in the U.S. of $258.0 million that will expire between 2016 and 2035, and foreign NOL carryforwards of $62.4 million that may be carried forward indefinitely. To the extent that the Company expects that net income will not be sufficient to realize these NOLs in certain jurisdictions, a valuation allowance has been established. The Company had gross long-term deferred tax liabilities of $215.3 million and $202.1 million, including $2.1 million and $9.6 million related to long-term foreign deferred tax liabilities, as of December 31, 2015 and 2014, respectively. The Company had gross long-term deferred tax assets of $65.8 million and $63.7 million as of December 31, 2015 and 2014, respectively. The Company believes it is more likely than not, that its deferred tax assets, net of valuation allowances provided, will be realized, based primarily on our expectation of future taxable income, considering future reversals of existing taxable temporary differences, as well as the availability of taxable income in prior years to carry back losses to recover taxes previously paid. As of December 31, 2015, the Company has not provided for U.S. deferred taxes on $31.7 million of undistributed earnings and associated withholding taxes of its foreign subsidiaries, as the Company has taken the position that its foreign earnings will be permanently reinvested outside the U.S. If a distribution of those earnings were to be made, the Company may be subject to both foreign withholding taxes and U.S. income taxes, net of any allowable foreign tax credits or deductions, of up to approximately $7.7 million. The Company is subject to income tax in U.S. federal and numerous state jurisdictions, as well as in the U.K. and Brazil. Based on applicable statutes of limitations, the Company is generally no longer subject to examinations by U.S. tax authorities in years prior to 2011, by U.K. tax authorities in years prior to 2011 and by Brazil tax authorities in years prior to 2010. The Company had no unrecognized tax benefits as of December 31, 2015 and 2014. The Company did not incur any interest and penalties nor accrue any interest for the years ended December 31, 2015 and 2014. When applicable, consistent with prior practices, the Company recognizes interest and penalties related to uncertain tax positions in income tax expense. |
Accounts and Notes Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS AND NOTES RECEIVABLE | ACCOUNTS AND NOTES RECEIVABLE The Company’s accounts and notes receivable consisted of the following:
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES The Company’s inventories consisted of the following:
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | . PROPERTY AND EQUIPMENT The Company’s property and equipment consisted of the following:
During 2015, the Company acquired $9.8 million of property and equipment associated with dealership acquisitions, including $8.5 million for land. In addition to these acquisitions, the Company incurred $107.2 million of capital expenditures for the purchase of furniture, fixtures, and equipment and construction or renovation of facilities, excluding $21.2 million of capital expenditures accrued as of December 31, 2014. During the year ended December 31, 2015, the Company accrued $32.7 million of capital expenditures. The Company also purchased real estate (including land and buildings) associated with existing dealership operations totaling $24.6 million. As of December 31, 2015, the Company determined that certain real estate qualified as held-for-sale. As a result, the Company classified the carrying value of the real estate, totaling $1.4 million, in prepaid and other current assets in its Consolidated Balance Sheets. During 2014, the Company acquired $80.5 million of property and equipment associated with dealership acquisitions, including $34.2 million for land and $41.0 million for buildings. In addition to these acquisitions, the Company incurred $97.7 million of capital expenditures for the purchase of furniture, fixtures, and equipment and construction or renovation of facilities, excluding $11.2 million of capital expenditures accrued as of December 31, 2013. During the year ended December 31, 2014, the Company accrued $21.2 million of capital expenditures. The Company also purchased real estate (including land and buildings) associated with existing dealership operations totaling $62.7 million. As of December 31, 2014, the Company determined that certain real estate qualified as held-for-sale. As a result, the Company classified the carrying value of the real estate, totaling $4.0 million, in prepaid and other current assets in its Consolidated Balance Sheets. Depreciation and amortization expense, including amortization of capital leases, totaled $47.2 million, $42.3 million, and $35.8 million for the years ended December 31, 2015, 2014, and 2013, respectively. As of December 31, 2015 and 2014, $69.6 million, and $67.5 million of buildings under capital leases were recorded as property and equipment, before accumulated depreciation, respectively. |
Credit Facilities |
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Line of Credit Facility [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CREDIT FACILITIES | CREDIT FACILITIES In the U.S., the Company has a $1.7 billion revolving syndicated credit arrangement that expires on June 20, 2018 and is comprised of 24 financial institutions, including six manufacturer-affiliated finance companies (“Revolving Credit Facility”). The Company also has a $300.0 million floorplan financing arrangement (“FMCC Facility”) with Ford Motor Credit Company (“FMCC”) for financing of new Ford vehicles in the U.S. and other floorplan financing arrangements with several other automobile manufacturers for financing of a portion of its U.S. rental vehicle inventory. In the U.K., the Company has financing arrangements with BMW Financial Services, Volkswagen Finance and FMCC for financing of its new and used vehicles. In Brazil, the Company has financing arrangements for new, used, and rental vehicles with several financial institutions, most of which are manufacturer affiliated. Within the Company’s Consolidated Balance Sheets, Floorplan notes payable - credit facility and other primarily reflects amounts payable for the purchase of specific new, used and rental vehicle inventory (with the exception of new and rental vehicle purchases financed through lenders affiliated with the respective manufacturer) whereby financing is provided by the Revolving Credit Facility. Floorplan notes payable - manufacturer affiliates reflects amounts related to the purchase of vehicles whereby financing is provided by the FMCC Facility, the financing of rental vehicles in the U.S., as well as the financing of new, used, and rental vehicles in both the U.K. and Brazil. Payments on the floorplan notes payable are generally due as the vehicles are sold. As a result, these obligations are reflected in the accompanying Consolidated Balance Sheets as current liabilities. The outstanding balances under these financing arrangements were as follows:
Revolving Credit Facility The Revolving Credit Facility consists of two tranches, providing a maximum of $1.6 billion for U.S. vehicle inventory floorplan financing (“Floorplan Line”), as well as a maximum of $320.0 million and a minimum of $100.0 million for working capital and general corporate purposes, including acquisitions (“Acquisition Line”). The capacity under these two tranches can be re-designated within the overall $1.7 billion commitment, subject to the aforementioned limits. Up to $125.0 million of the Acquisition Line can be borrowed in either euros or British pound sterling. The Revolving Credit Facility can be expanded to a maximum commitment of $1.95 billion, subject to participating lender approval. The Floorplan Line bears interest at rates equal to the LIBOR plus 125 basis points for new vehicle inventory and the LIBOR plus 150 basis points for used vehicle inventory. The Acquisition Line bears interest at the LIBOR plus 150 basis points plus a margin that ranges from zero to 100 basis points, depending on the Company’s total adjusted leverage ratio, for borrowings in U.S. dollars and a LIBOR equivalent plus 150 to 250 basis points, depending on the Company’s total adjusted leverage ratio, on borrowings in euros or British pound sterling. The Floorplan Line requires a commitment fee of 0.20% per annum on the unused portion. Amounts borrowed by the Company under the Floorplan Line for specific vehicle inventory are to be repaid upon the sale of the vehicle financed, and in no case is a borrowing for a vehicle to remain outstanding for greater than one year. The Acquisition Line also requires a commitment fee ranging from 0.25% to 0.45% per annum, depending on the Company’s total adjusted leverage ratio, based on a minimum commitment of $100.0 million less outstanding borrowings. In conjunction with the Revolving Credit Facility, the Company has $3.7 million of related unamortized costs as of December 31, 2015, which are included in Prepaid expenses and other current assets and Other Assets on the accompanying Consolidated Balance Sheets and amortized over the term of the facility. After considering the outstanding balance of $1,150.8 million at December 31, 2015, the Company had $229.2 million of available floorplan borrowing capacity under the Floorplan Line. Included in the $229.2 million available borrowings under the Floorplan Line was $110.8 million of immediately available funds. The weighted average interest rate on the Floorplan Line was 1.7% and 1.4% as of December 31, 2015 and 2014, respectively, excluding the impact of the Company’s interest rate swaps. With regards to the Acquisition Line, there were no borrowings outstanding as of December 31, 2015. After considering $41.9 million of outstanding letters of credit and other factors included in the Company’s available borrowing base calculation, there was $278.2 million of available borrowing capacity under the Acquisition Line as of December 31, 2015. The amount of available borrowing capacity under the Acquisition Line is limited from time to time based upon certain debt covenants. All of the U.S. dealership-owning subsidiaries are co-borrowers under the Revolving Credit Facility. The Company’s obligations under the Revolving Credit Facility are secured by essentially all of the Company’s U.S. personal property (other than equity interests in dealership-owning subsidiaries), including all motor vehicle inventory and proceeds from the disposition of dealership-owning subsidiaries, excluding inventory financed directly with manufacturer-affiliates and other third-party financing institutions. The Revolving Credit Facility contains a number of significant covenants that, among other things, restrict the Company’s ability to make disbursements outside of the ordinary course of business, dispose of assets, incur additional indebtedness, create liens on assets, make investments and engage in mergers or consolidations. The Company is also required to comply with specified financial tests and ratios defined in the Revolving Credit Facility, such as the fixed charge coverage, total adjusted leverage, and senior secured adjusted leverage ratios. Further, the Revolving Credit Facility restricts the Company’s ability to make certain payments, such as dividends or other distributions of assets, properties, cash, rights, obligations or securities (“Restricted Payments”). The Restricted Payments cannot exceed the sum of $125.0 million plus (or minus if negative) (a) one-half of the aggregate consolidated net income for the period beginning on January 1, 2013 and ending on the date of determination and (b) the amount of net cash proceeds received from the sale of capital stock on or after January 1, 2013 and ending on the date of determination less (c) cash dividends and share repurchases (“Restricted Payment Basket”). For purposes of the calculation of the Restricted Payment Basket, net income represents such amounts per the consolidated financial statements adjusted to exclude the Company’s foreign operations, non-cash interest expense, non-cash asset impairment charges, and non-cash stock-based compensation. As of December 31, 2015, the Restricted Payment Basket totaled $144.7 million. As of December 31, 2015 and 2014, the Company was in compliance with all applicable covenants and ratios under the Revolving Credit Facility. Ford Motor Credit Company Facility The FMCC Facility provides for the financing of, and is collateralized by, the Company’s Ford new vehicle inventory in the U.S., including affiliated brands. This arrangement provides for $300.0 million of floorplan financing and is an evergreen arrangement that may be canceled with 30 days’ notice by either party. As of December 31, 2015, the Company had an outstanding balance of $171.3 million under the FMCC Facility with an available floorplan borrowing capacity of $128.7 million. Included in the $128.7 million available borrowings under the FMCC Facility was $25.5 million of immediately available funds. This facility bears interest at a rate of Prime plus 150 basis points minus certain incentives. The interest rate on the FMCC Facility was 4.75% before considering the applicable incentives as of December 31, 2015 and 2014. Other Credit Facilities The Company has credit facilities with BMW Financial Services, Volkswagen Finance and FMCC for the financing of new, used and rental vehicle inventories related to its U.K. operations. These facilities are denominated in British pound sterling and are evergreen arrangements that may be canceled with notice by either party and bear interest at a base rate, plus a surcharge that varies based upon the type of vehicle being financed. The annual interest rates charged on borrowings outstanding under these facilities ranged from 1.15% to 3.95% as of December 31, 2015. The Company has credit facilities with financial institutions in Brazil, most of which are affiliated with the manufacturers, for the financing of new, used and rental vehicle inventories related to its Brazil operations. These facilities are denominated in Brazilian real and have renewal terms ranging from one month to twelve months. They may be canceled with notice by either party and bear interest at a benchmark rate, plus a surcharge that varies based upon the type of vehicle being financed. As of December 31, 2015, the annual interest rates charged on borrowings outstanding under these facilities ranged from 16.77% to 25.19%. Excluding rental vehicles financed through the Revolving Credit Facility, financing for U.S. rental vehicles is typically obtained directly from the automobile manufacturers. These financing arrangements generally require small monthly payments and mature in varying amounts over a period of two years. As of December 31, 2015, the interest rate charged on borrowings related to the Company’s rental vehicle fleet varied up to 5.00%. Rental vehicles are typically transferred to used vehicle inventory when they are removed from service and repayment of the borrowing is required at that time. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT The Company carries its long-term debt at face value, net of applicable discounts. Long-term debt consisted of the following:
Included in current maturities of long-term debt and short-term financing in the Company’s Consolidated Balance Sheets for the years ended December 31, 2015 and 2014 was $3.0 million and zero, respectively, of short-term financing that was due within one year. 5.00% Senior Notes On June 2, 2014, the Company issued $350.0 million aggregate principal amount of its 5.00% Senior Notes due 2022 (“5.00% Notes”). Subsequently, on September 9, 2014, the Company issued an additional $200.0 million of 5.00% Notes at a discount of 1.5% from face value. The 5.00% Notes will mature on June 1, 2022 and pay interest semiannually, in arrears, in cash on each June 1 and December 1, beginning December 1, 2014. Using proceeds of certain equity offerings, the Company may redeem up to 35.0% of the 5.00% Notes prior to June 1, 2017, subject to certain conditions, at a redemption price equal to 105% of principal amount of the 5.00% Notes plus accrued and unpaid interest. Otherwise, the Company may redeem some or all of the 5.00% Notes prior to June 1, 2017 at a redemption price equal to 100% of the principal amount of the 5.00% Notes redeemed, plus an applicable premium, and plus accrued and unpaid interest. On or after June 1, 2017, the Company may redeem some or all of the 5.00% Notes at specified prices, plus accrued and unpaid interest. The Company may be required to purchase the 5.00% Notes if it sells certain assets or triggers the change in control provisions defined in the 5.00% Notes indenture. The 5.00% Notes are senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of its future subordinated debt. The 5.00% Notes are guaranteed by substantially all of the Company’s U.S. subsidiaries. The U.S. subsidiary guarantees rank equally in the right of payment to all of the Company’s U.S. subsidiary guarantor’s existing and future subordinated debt. In addition, the 5.00% Notes are structurally subordinated to the liabilities of its non-guarantor subsidiaries and are subject to customary covenants, including a restricted payment basket and debt limitations. The restricted payment basket under the terms of the 5.00% Notes is less restrictive than the Restricted Payment Basket. In connection with the issuance of the 5.00% Notes, the Company entered into registration rights agreements (the “Registration Rights Agreements”) with the initial purchasers. Pursuant to the Registration Rights Agreements, the Company agreed to file a registration statement with the Securities and Exchange Commission, so that holders of the 5.00% Notes could exchange the 5.00% Notes for registered 5.00% Notes that have substantially identical terms as the 5.00% Notes. The Company also agreed to use commercially reasonable efforts to cause the exchange to be completed by June 2, 2015, or be required to pay additional interest. In June 2015, the Company completed the exchange. Underwriters’ fees and the discount relative to the $550.0 million totaled $10.4 million, which were recorded as a reduction of the 5.00% Notes principal balance and are being amortized over a period of eight years. The 5.00% Notes are presented net of unamortized underwriter fees and discount of $8.7 million as of December 31, 2015. In connection with the issuance of the 5.00% Notes, the Company capitalized $2.6 million of debt issuance costs, which are included in Other Assets on the accompanying Consolidated Balance Sheets and amortized over a period of eight years. Unamortized debt issuance costs as of December 31, 2015 totaled $2.0 million. 5.25% Senior Notes On December 8, 2015, the Company issued 5.25% senior unsecured notes with a face amount of $300.0 million due to mature on December 15, 2023 (“5.25% Notes”). The 5.25% Notes pay interest semiannually, in arrears, in cash on each June 15 and December 15, beginning June 15, 2016. Using proceeds of certain equity offerings, the Company may redeem up to 35.0% of the 5.25% Notes prior to December 15, 2018, subject to certain conditions, at a redemption price equal to 105.25% of principal amount of the 5.25% Notes plus accrued and unpaid interest. Otherwise, the Company may redeem some or all of the 5.25% Notes prior to December 15, 2018 at a redemption price equal to 100% of the principal amount of the 5.25% Notes redeemed, plus an applicable make-whole premium, and plus accrued and unpaid interest. On or after December 15, 2018, the Company may redeem some or all of the 5.25% Notes at specified prices, plus accrued and unpaid interest. The Company may be required to purchase the 5.25% Notes if it sells certain assets or triggers the change in control provisions defined in the 5.25% Notes indenture. The 5.25% Notes are senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of its future subordinated debt. The 5.25% Notes are guaranteed by substantially all of the Company’s U.S. subsidiaries. The U.S. subsidiary guarantees rank equally in the right of payment to all of the Company’s U.S. subsidiary guarantor’s existing and future subordinated debt. In addition, the 5.25% Notes are structurally subordinated to the liabilities of its non-guarantor subsidiaries and are subject to customary covenants, including a restricted payment basket and debt limitations. The restricted payment basket under the terms of the 5.25% Notes is less restrictive than the Restricted Payment Basket. Underwriters' fees relative to the 5.25% Notes issuance totaled $3.8 million, which were recorded as a reduction of the 5.25% Notes principal balance and are being amortized over a period of eight years. The 5.25% Notes are presented net of unamortized underwriter fees of $3.7 million as of December 31, 2015. At the time of issuance of the 5.25% Notes, the Company capitalized $1.1 million of debt issuance costs, which are included in Other Assets on the accompanying Consolidated Balance Sheets and amortized over a period of eight years. Unamortized debt issuance costs as of December 31, 2015 totaled $1.1 million. Real Estate Credit Facility Group 1 Realty, Inc., a wholly-owned subsidiary of the Company, is party to a real estate credit facility with Bank of America, N.A. and Comerica Bank (the “Real Estate Credit Facility”) providing the right for term loans to finance real estate purchases. As of December 31, 2015, $25.0 million of term loan borrowings remained available. The term loans can be expanded provided that (a) no default or event of default exists under the Real Estate Credit Facility; (b) the Company obtains commitments from the lenders who would qualify as assignees for such increased amounts; and (c) certain other agreed upon terms and conditions have been satisfied. The Real Estate Credit Facility is guaranteed by the Company and substantially all of the existing and future domestic subsidiaries of the Company and is secured by the real property owned by the Company that is mortgaged under the Real Estate Credit Facility. The Company capitalized $1.1 million of debt issuance costs related to the Real Estate Credit Facility which are included in Prepaid expenses and other current assets and Other Assets on the accompanying Consolidated Balance Sheets and are being amortized over the term of the facility, $0.1 million of which remained unamortized as of December 31, 2015. The interest rate on the Real Estate Credit Facility is equal to (a) the per annum rate equal to one-month LIBOR plus 2.00% per annum, determined on the first day of each month; or (b) 0.95% per annum in excess of the higher of (i) the Bank of America prime rate (adjusted daily on the day specified in the public announcement of such price rate), (ii) the Federal Funds Rate adjusted daily, plus 0.50% or (iii) the per annum rate equal to the one-month LIBOR plus 1.05% per annum. The Federal Funds Rate is the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the business day succeeding such day. The Company is required to make quarterly principal payments equal to 1.25% of the principal amount outstanding and is required to repay the aggregate amount outstanding on the maturity dates of the individual property borrowings, ranging from March 31, 2016 through December 8, 2018. During the year ended December 31, 2015, the Company made no additional borrowings and made principal payments of $3.3 million on outstanding borrowings from the Real Estate Credit Facility. As of December 31, 2015, borrowings outstanding under the Real Estate Credit Facility totaled $54.7 million, with $29.1 million recorded as a current maturity of long-term debt in the accompanying Consolidated Balance Sheets. The Real Estate Credit Facility also contains usual and customary provisions limiting the Company’s ability to engage in certain transactions, including limitations on the Company’s ability to incur additional debt, additional liens, make investments, and pay distributions to its stockholders. In addition, the Real Estate Credit Facility requires certain financial covenants that are identical to those contained in the Company’s Revolving Credit Facility. As of December 31, 2015, the Company was in compliance with all applicable covenants and ratios under the Real Estate Credit Facility. Acquisition Line The Revolving Credit Facility has the total borrowing capacity of $1.7 billion and expires on June 20, 2018. This arrangement provides a maximum of $320.0 million and a minimum of $100.0 million for working capital and general corporate purposes, including acquisitions. See Note 11, “Credit Facilities,” for further discussion on the Company’s Revolving Credit Facility and Acquisition Line. Other Real Estate Related and Long-Term Debt The Company, as well as certain of its wholly-owned subsidiaries, has entered into separate term mortgage loans in the U.S. with four of its manufacturer-affiliated finance partners - Toyota Motor Credit Corporation (“TMCC”), Mercedes-Benz Financial Services USA, LLC (“MBFS”), BMW Financial Services NA, LLC (“BMWFS”) and FMCC, as well as several third-party financial institutions (collectively, “Real Estate Notes”). The Real Estate Notes are on specific buildings and/or properties and are guaranteed by the Company. Each loan was made in connection with, and is secured by mortgage liens on, the real property owned by the Company that is mortgaged under the Real Estate Notes. The Real Estate Notes bear interest at fixed rates between 3.00% and 4.69%, and at variable indexed rates plus a spread between 1.50% and 2.55% per annum. The Company capitalized $1.3 million of related debt issuance costs related to the Real Estate Notes which are included in Prepaid expenses and other current assets and Other Assets on the accompanying Consolidated Balance Sheets and are being amortized over the terms of the notes, $0.3 million of which remained unamortized as of December 31, 2015. The loan agreements with TMCC consist of seven term loans. As of December 31, 2015, $35.7 million was outstanding under the TMCC term loans with $1.5 million classified as a current maturity of long-term debt as compared to $49.9 million outstanding with $5.1 million classified as current as of December 31, 2014. During 2015, the Company made no additional borrowings and made principal payments of $14.3 million. These loans will mature by August 2022 and provide for monthly payments based on a 20-year amortization schedule. These seven loans are cross-collateralized and cross-defaulted with each other and are cross-defaulted with the Revolving Credit Facility. The loan agreements with MBFS consisted of two term loans that were paid in full as of December 31, 2015. During 2015, the Company made principal payments of $27.4 million. As of December 31, 2014, $27.4 million was outstanding under the MBFS term loans with $7.6 million classified as a current maturity of long-term debt. The loan agreements with BMWFS consist of 12 term loans. As of December 31, 2015, $55.7 million was outstanding under the BMWFS term loans with $4.3 million classified as a current maturity of long-term debt as compared to $66.0 million outstanding with $4.5 million classified as current as of December 31, 2014. During 2015, the Company made no additional borrowings and made principal payments of $10.2 million. The agreements provide for monthly payments based on a 15-year amortization schedule and will mature by October 2021. In the case of three properties owned by subsidiaries, the applicable loan is also guaranteed by the subsidiary real property owner. These 12 loans are cross-collateralized with each other. In addition, they are cross-defaulted with each other, the Revolving Credit Facility, and certain dealership franchising agreements with BMW of North America, LLC. The loan agreements with FMCC consist of four term loans. As of December 31, 2015, $33.6 million was outstanding under the FMCC term loans, with $1.5 million classified as a current maturity of long-term debt as compared to $35.1 million outstanding with $1.4 million classified as current as of December 31, 2014. During 2015, the Company made no additional borrowings and made principal payments of $1.4 million. The agreements provide for monthly payments based on a 20-year amortization schedule that will mature by December 2024. These four loans are cross-defaulted with the Revolving Credit Facility. In addition, agreements with third-party financial institutions consist of 18 term loans for an aggregate principal amount of $124.5 million, to finance real estate associated with the Company’s dealerships. The loans are being repaid in monthly installments that will mature by November 2022. As of December 31, 2015, borrowings under these notes totaled $116.8 million, with $6.4 million classified as a current maturity of long-term debt in the accompanying Consolidated Balance Sheets, as compared to $115.2 million outstanding with $6.5 million classified as current as of December 31, 2014. During 2015, the Company made additional borrowings and principal payments of $9.6 million and $8.0 million, respectively. These 18 loans are cross-defaulted with the Revolving Credit Facility. The Company has entered into eight separate term mortgage loans in the U.K. with other third-party financial institutions, which are secured by the Company’s U.K. properties. These mortgage loans (collectively, “U.K. Notes”) are being repaid in monthly installments and will mature by September 2034. As of December 31, 2015, borrowings under the U.K. Notes totaled $57.1 million, with $4.5 million classified as a current maturity of long-term debt in the accompanying Consolidated Balance Sheets, as compared to $45.3 million outstanding with $5.0 million classified as current as of December 31, 2014. During 2015, the Company made additional borrowings and principal payments of $17.4 million and $3.7 million, respectively. The Company has entered into a separate term mortgage loan in Brazil with a third-party financial institution to finance the purchase and construction of dealership properties (the “Brazil Note”). The Brazil Note is secured by the Company’s Brazilian properties as purchased and/or constructed, as well as a guarantee from the Company. The Brazil Note will be repaid in monthly installments that will mature by April 2025. As of December 31, 2015, borrowings under the Brazil Note totaled $3.8 million, with $0.4 million classified as a current maturity of long-term debt in the accompanying Consolidated Balance Sheets. The Company also has working capital loan agreements with third-party financial institutions in Brazil. The Company paid one of these loan agreements in full as of December 31, 2015, with principal payments of $8.6 million. The principal balance on the remaining loans is due February 2017 with interest only payments being made until the due date. As of December 31, 2015, borrowings under the Brazilian third-party loans totaled $5.6 million classified as long-term debt in the accompanying Consolidated Balance Sheets. During 2015, the Company made no additional borrowings under the working capital loan agreements. Fair Value of Long-Term Debt The Company’s outstanding 5.00% Notes had a fair value of $545.9 million as of December 31, 2015. The Company’s outstanding 5.25% Notes had a fair value of $297.8 million as of December 31, 2015. The Company’s fixed interest rate borrowings included in other real estate related and long-term debt totaled $100.7 million and $158.1 million as of December 31, 2015 and December 31, 2014, respectively. The fair value of such fixed interest rate borrowings was $102.4 million and $186.4 million as of December 31, 2015 and December 31, 2014, respectively. The fair value estimates are based on Level 2 inputs of the fair value hierarchy available as of December 31, 2015 and December 31, 2014. The Company determined the estimated fair value of its long-term debt using available market information and commonly accepted valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, these estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. The use of different assumptions and/or estimation methodologies could have a material effect on estimated fair values. The carrying value of the Company’s variable rate debt approximates fair value due to the short-term nature of the interest rates. 2.25% Convertible Senior Notes On September 2, 2014, holders of $182.5 million in aggregate amount of the Company’s then outstanding 2.25% Convertible Senior Notes due 2036 (“2.25% Notes”) elected to convert their 2.25% Notes. The Company redeemed the remaining outstanding 2.25% Notes. The settlement for the conversion and the redemption of the 2.25% Notes occurred on September 4, 2014. Consideration paid for the conversion and redemption of the 2.25% Notes was $237.5 million, including $182.8 million in cash and 701,795 shares of the Company’s common stock, which was recognized as a decrease to treasury stock. In conjunction with the conversion and redemption of the 2.25% Notes, the Company received 421,309 shares of its common stock in net settlement of the purchased ten-year call options on its common stock (“2.25% Purchased Options”) and 2.25% Warrants sold in connection with the 2.25% Notes (“2.25% Warrants”), which was recognized as an increase to treasury stock. As a result of the conversion and redemption of the 2.25% Notes, the Company recognized a loss of $16.9 million based on the difference in the carrying value and the fair value of the liability component immediately prior to the conversion and redemption. For the years ended December 31, 2015, 2014, and 2013, the contractual interest expense and the discount amortization relative to the 2.25% Notes, which is recorded as other interest expense in the accompanying Consolidated Statements of Operations, were as follows:
The Company determined the discount using the estimated effective interest rate for similar debt with no convertible features. The original effective interest rate of 7.50% was estimated by comparing debt issuances from companies with similar credit ratings during the same annual period as the Company. The effective interest rate differs from the 7.50% due to the impact of underwriter fees associated with this issuance that were capitalized as an additional discount and were being amortized to interest expense through 2016. These costs were written off as part of the conversion and redemption of the 2.25% Notes. 3.00% Convertible Senior Notes On June 25, 2014, the Company repurchased $92.5 million of the $115.0 million principal outstanding of its 3.00% Convertible Senior Notes due 2020 (“3.00% Notes”) in a tender offer, leaving an outstanding balance of $22.6 million as of June 30, 2014. Consideration paid for this repurchase was $210.4 million. In conjunction with the repurchase, the Company recognized a loss of $23.6 million, based on the difference in the carrying value and the fair value of the liability component immediately prior to the purchase. Subsequent to June 30, 2014, the Company settled the purchased ten-year call options on its common stock (“3.00% Purchased Options”) and 3.00% Warrants in the same proportion as the 3.00% Notes repurchased on June 25, 2014 and received $26.4 million in cash as a result, which was recognized as an increase to additional paid in capital. In September 2014, the Company repurchased the remaining outstanding $22.6 million of the 3.00% Notes. Total consideration paid for the repurchase was $49.5 million in cash. In conjunction with the repurchase, the Company recognized a loss of $5.9 million, based on the difference in the carrying value and the fair value of the liability component immediately prior to the repurchase. Also, in September 2014, the Company settled the remaining 3.00% Purchased Options and 3.00% Warrants in conjunction with the repurchase and received $6.2 million in cash, which was recognized as an increase to additional paid in capital. For the years ended December 31, 2015, 2014 and 2013, the contractual interest expense and the discount amortization, which is recorded as interest expense in the accompanying Consolidated Statements of Operations, were as follows:
The Company determined the discount using the estimated effective interest rate for similar debt with no convertible features. The original effective interest rate of 8.25% was estimated by receiving a range of quotes from the underwriters for the estimated rate that the Company could reasonably expect to issue non-convertible debt for the same tenure. The effective interest rate differs from the 8.25% due to the impact of underwriter fees associated with this issuance that were capitalized as an additional discount and were being amortized to interest expense through 2020. These costs were written off as part of the extinguishment of the 3.00% Notes. All Long-Term Debt Total interest expense on the 3.00% Notes, 2.25% Notes, 5.00% Notes, and 5.25% Notes for the years ended December 31, 2015, 2014 and 2013 was $28.5 million, $17.0 million and $7.6 million, excluding amortization of discounts and capitalized cost of $1.5 million, $8.0 million, and $11.1 million, respectively. Total interest expense on the Real Estate Credit Facility, real estate related debt, and Acquisition Line for the years ended December 31, 2015, 2014 and 2013, was $17.6 million, $15.3 million and $13.1 million, excluding amortization of capitalized cost of $0.0 million, $0.3 million and $0.5 million, respectively. Also excluded is the impact of the interest rate derivative instruments related to the Real Estate Credit Facility of $1.8 million, $1.5 million, and $1.2 million for the years ended December 31, 2015, 2014, and 2013 respectively. In addition, the Company incurred $7.6 million, $7.5 million and $5.5 million of total interest expense related to capital leases and various other notes payable, net of interest income, for the years ended December 31, 2015, 2014, and 2013, respectively. The Company capitalized $0.7 million, $0.7 million, and $0.8 million of interest on construction projects in 2015, 2014 and 2013, respectively. The aggregate annual maturities of long-term debt for the next five years are as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC 820 defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; requires disclosure of the extent to which fair value is used to measure financial and non-financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date; and establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date:
The Company’s financial instruments consist primarily of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, investments in debt and equity securities, accounts payable, credit facilities, long-term debt and interest rate swaps. The fair values of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, accounts payable, and credit facilities approximate their carrying values due to the short-term nature of these instruments or the existence of variable interest rates. The Company evaluated its assets and liabilities for those that met the criteria of the disclosure requirements and fair value framework of ASC 820 and identified demand obligations, interest rate derivative instruments, and investment balances in certain financial institutions as having met such criteria. The Company periodically invests in unsecured, corporate demand obligations with manufacturer-affiliated finance companies, which bear interest at a variable rate and are redeemable on demand by the Company. Therefore, the Company has classified these demand obligations as cash and cash equivalents in the accompanying Consolidated Balance Sheets. The Company determined that the valuation measurement inputs of these instruments include inputs other than quoted market prices, that are observable or that can be corroborated by observable data by correlation. Accordingly, the Company has classified these instruments within Level 2 of the hierarchy framework. In addition, the Company maintains an investment balance with certain of the financial institutions in Brazil that provide credit facilities for the financing of new, used and rental vehicle inventories. The investment balances bear interest at a variable rate and are redeemable by the Company in the future under certain conditions. The Company has classified these investment balances as other current and long-term assets in the accompanying Consolidated Balance Sheets. The Company determined that the valuation measurement inputs of these instruments include inputs other than quoted market prices, that are observable or that can be corroborated by observable data by correlation. Accordingly, the Company has classified these instruments within Level 2 of the hierarchy framework. Refer to Note 2 of the Consolidated Financial Statements, “Summary of Significant Accounting Policies and Estimates,” for more information on fair value measurements of interest rate derivative instruments. Asset and liabilities recorded at fair value in the accompanying balance sheets as of December 31, 2015 and 2014, respectively, were as follows:
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Commitments and Contingencies |
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Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, the Company’s dealerships are named in various types of litigation involving customer claims, employment matters, class action claims, purported class action claims, as well as claims involving the manufacturer of automobiles, contractual disputes and other matters arising in the ordinary course of business. Due to the nature of the automotive retailing business, the Company may be involved in legal proceedings or suffer losses that could have a material adverse effect on the Company’s business. In the normal course of business, the Company is required to respond to customer, employee and other third-party complaints. Amounts that have been accrued or paid related to the settlement of litigation are included in SG&A expenses in the Company’s Consolidated Statements of Operations. In addition, the manufacturers of the vehicles that the Company sells and services have audit rights allowing them to review the validity of amounts claimed for incentive, rebate or warranty-related items and charge the Company back for amounts determined to be invalid payments under the manufacturers’ programs, subject to the Company’s right to appeal any such decision. Amounts that have been accrued or paid related to the settlement of manufacturer chargebacks of recognized incentives and rebates are included in cost of sales in the Company’s Consolidated Statements of Operations, while such amounts for manufacturer chargebacks of recognized warranty-related items are included as a reduction of revenues in the Company’s Consolidated Statements of Operations. Legal Proceedings Currently, the Company is not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition, or cash flows, including class action lawsuits. However, the results of current, or future, matters cannot be predicted with certainty, and an unfavorable resolution of one or more of such matters could have a material adverse effect on the Company’s results of operations, financial condition, or cash flows. Other Matters The Company, acting through its subsidiaries, is the lessee under many real estate leases that provide for the use by the Company’s subsidiaries of their respective dealership premises. Pursuant to these leases, the Company’s subsidiaries generally agree to indemnify the lessor and other parties from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities, or a breach of the lease by the lessee. Additionally, from time to time, the Company enters into agreements in connection with the sale of assets or businesses in which it agrees to indemnify the purchaser, or other parties, from certain liabilities or costs arising in connection with the assets or business. Also, in the ordinary course of business in connection with purchases or sales of goods and services, the Company enters into agreements that may contain indemnification provisions. In the event that an indemnification claim is asserted, liability would be limited by the terms of the applicable agreement. From time to time, primarily in connection with dealership dispositions, the Company’s subsidiaries sublet to the dealership purchaser the subsidiaries’ interests in any real property leases associated with such dealerships and continue to be primarily obligated on the lease. In these situations, the Company’s subsidiaries retain primary responsibility for the performance of certain obligations under such leases. To the extent that the Company remains primarily responsible under such leases, a quantification of such lease obligations is included in the Company’s disclosure of future minimum lease payments for non-cancelable operating leases in Note 18, “Operating Leases”. In certain instances, also in connection with dealership dispositions, the Company’s subsidiaries assign to the dealership purchaser the subsidiaries’ interests in any real property leases associated with such dealerships. The Company’s subsidiaries may retain secondary responsibility for the performance of certain obligations under such leases to the extent that the assignee does not perform, if such performance is required following the assignment of the lease. Additionally, the Company and its subsidiaries may remain subject to the terms of a guaranty made by the Company and its subsidiaries in connection with such leases. In these circumstances, the Company generally has indemnification rights against the assignee in the event of non-performance under these leases, as well as certain defenses. The Company and its subsidiaries also may be called on to perform other obligations under these leases, such as environmental remediation of the leased premises or repair of the leased premises upon termination of the lease. However, potential environmental liabilities are generally known at the time of the sale of the dealership if not previously remediated. The Company does not have any known material environmental commitments or contingencies and presently has no reason to believe that it or its subsidiaries will be called on to so perform. Although not estimated to be material, the Company’s exposure under these leases is difficult to estimate and there can be no assurance that any performance of the Company or its subsidiaries required under these leases would not have a material adverse effect on the Company’s business, financial condition, or cash flows. |
Asset Impairments |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
ASSET IMPAIRMENTS | ASSET IMPAIRMENTS During the fourth quarters of 2015, 2014, and 2013, the Company performed its annual impairment assessment of the carrying value of its goodwill. In the 2015 assessment, the fair value of Company’s two U.S. reporting units, as well as the U.K. reporting unit, exceeded the carrying value of its net assets (i.e., step one of the goodwill impairment test) by more than 100% for the two U.S. reporting units and by more than 15% for the U.K. reporting unit. As a result, the Company was not required to conduct the second step of the impairment test for goodwill relating to its two U.S. and U.K. reporting units. The Brazil reporting unit’s fair value did not exceed the carrying value of its net assets. As a result, the Company performed a step two analysis for this reporting unit, measured the estimated fair value of the reporting unit’s assets and liabilities as of the test date using level 3 inputs and compared the resulting implied fair value of the reporting unit’s goodwill to its carrying value. As a result of the carrying value of goodwill exceeding the implied fair value, a $55.4 million impairment was recorded. Brazil is experiencing a recession, coupled with higher interest rates and the expiration of the government sponsored auto purchase tax incentive at the end of 2014. As a result, industry sales declined 25.6% for the twelve months ended December 31, 2015, as compared to the same period a year ago. In the 2014 and 2013 assessment, the fair value of each of the Company’s reporting units exceeded the carrying value of its net assets (step one of the goodwill impairment test). As a result, the Company was not required to conduct the second step of the impairment test for goodwill in either year. During 2015, the Company also completed other applicable impairment assessments and recorded the following non-cash impairment charges, all of which are reflected in asset impairments in the accompanying Consolidated Statement of Operations:
If in future periods, the Company determines that the carrying amount of its net assets exceeds the respective fair value as a result of step one of its goodwill impairment test for any or all of its reporting units, the application of the second step of the impairment test could result in a material non-cash impairment charge to the goodwill associated with the reporting unit(s). If any of the Company’s assumptions change, or fail to materialize, the resulting decline in its estimated fair market value of intangible franchise rights could result in a material non-cash impairment charge. For example, if the Company’s assumptions regarding the risk-free rate and cost of debt differed such that the estimated WACC used in its 2015 assessment increased by 200 basis points, and all other assumptions remained constant, an additional $15.9 million of non-cash franchise rights impairment charges, would have resulted, excluding franchises acquired since the previous annual test. The Company’s U.S. and U.K. reporting units would not have failed the step one impairment test for goodwill in this scenario. Further, if the Company forecasted no new vehicle sales growth beyond 2017 in the 2015 impairment assessment and all other assumptions remained constant in its 2015 assessment, an additional $2.6 million of non-cash franchise rights impairment charges would have resulted, excluding the franchises acquired since the previous annual test. Again, neither the Company’s U.S. or U.K. reporting units would have failed the step one impairment test for goodwill. During 2014, the Company completed applicable impairment assessments and recorded the following non-cash impairment charges, all of which are reflected in asset impairments in the accompanying Consolidated Statement of Operations:
During 2013, the Company completed applicable impairment assessments and recorded the following non-cash impairment charges, all of which are reflected in asset impairments in the accompanying Consolidated Statement of Operations:
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Intangible Franchise Rights and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE FRANCHISE RIGHTS AND GOODWILL | INTANGIBLE FRANCHISE RIGHTS AND GOODWILL The following is a roll-forward of the Company’s intangible franchise rights and goodwill accounts by reportable segment:
(1) Net of accumulated impairment of $42.4 million (2) Net of accumulated impairment of $97.8 million The increase in the Company’s goodwill in 2015 was primarily related to the goodwill associated with the purchase of three dealerships in the U.S., substantially offset by a non-cash impairment recognized in Brazil, as well as foreign currency translation adjustments for the U.K. and Brazil. The increase in the Company’s goodwill in 2014 was primarily related to the goodwill associated with the purchase of seven dealerships in the U.S. and three dealerships in the U.K. The increase in the Company’s intangible franchise rights in 2015 and 2014 was primarily related to the acquisitions in the U.S. described above, substantially offset by non-cash impairments recognized in the U.S. and Brazil. The allocation of the purchase price for the 2015 acquisitions, including the valuation of intangible franchise rights and goodwill, is preliminary and based on estimates and assumptions that are subject to change within the purchase price allocation period. |
Employee Savings Plans |
12 Months Ended |
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Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE SAVINGS PLANS | EMPLOYEE SAVINGS PLANS The Company has a deferred compensation plan to provide select employees and non-employee members of the Company’s Board of Directors with the opportunity to accumulate additional savings for retirement on a tax-deferred basis (“Deferred Compensation Plan”). Participants in the Deferred Compensation Plan are allowed to defer receipt of a portion of their salary and/or bonus compensation, or in the case of the Company’s non-employee directors, annual retainer and meeting fees earned. The participants can choose from various defined investment options to determine their earnings crediting rate. However, the Company has complete discretion over how the funds are utilized. Participants in the Deferred Compensation Plan are unsecured creditors of the Company. The balances due to participants of the Deferred Compensation Plan as of December 31, 2015 and 2014 were $40.6 million and $34.0 million, respectively, and are included in other liabilities in the accompanying Consolidated Balance Sheets. The Company offers a 401(k) plan to all of its employees and provides a matching contribution to employees that participate in the plan. For the years ended December 31, 2015 and 2014, the matching contributions paid by the Company totaled $5.3 million and $4.6 million, respectively. |
Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING LEASES | OPERATING LEASES The Company leases various facilities and equipment under long-term operating lease agreements. Generally, our real estate and facility leases have 30-year total terms with initial terms of 15 years and three additional five-year terms, at our option. Future minimum lease payments for non-cancelable operating leases as of December 31, 2015, are as follows:
Total rent expense under all operating leases was $51.5 million, $58.9 million, and $59.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Accumulated Other Comprehensive Income |
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ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in the balances of each component of accumulated other comprehensive income for the years ended December 31, 2015, 2014 and 2013 are as follows:
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Segment Information Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | 20. SEGMENT INFORMATION As of December 31, 2015, the Company had three reportable segments: (1) the U.S., (2) the U.K., and (3) Brazil. Each of the reportable segments is comprised of retail automotive franchises, which sell new vehicles, used vehicles, parts and automotive services, finance and insurance products, and collision restoration services. The vast majority of the Company’s corporate office activities are associated with the operations of the U.S. operating segments and therefore the corporate office’s financial results are included within the U.S. reportable segment. Reportable segment revenue, gross profit, SG&A, depreciation and amortization expense, asset impairment, floorplan interest expense, other interest expense, benefit (provision) for income taxes, net income (loss) and capital expenditures were as follows for the years ended December 31, 2015, 2014 and 2013:
(1) Includes the following, pre-tax: loss due to catastrophic events of $1.6 million, a net gain on real estate and dealership transactions of $8.9 million, and legal items of $1.0 million. (2) Includes the following, after tax: loss due to catastrophic events of $1.0 million, net gain on real estate and dealership transactions of $5.5 million, and non-cash asset impairment charges of $12.0 million. (3) Includes after-tax non-cash asset impairment charges of $62.4 million.
(1) Includes the following, pre-tax: loss due to catastrophic events of $2.8 million and a gain on real estate and dealership transactions of $13.8 million. (2) Includes the tax impact on deductible goodwill for $3.4 million.
(1) Includes financial data from the date of acquisition in February 2013 through December 31, 2013. (2) Includes the following, pre-tax: loss due to catastrophic events of $12.2 million, a net gain on real estate and dealership transactions of $10.2 million and acquisition costs of $5.2 million. (3) Includes pre-tax acquisition costs of $1.2 million. (4) Includes the following, after tax: loss due to catastrophic events of $7.4 million, net gain on real estate and dealership transactions of $5.4 million, non-cash asset impairment charges of $4.0 million and acquisition costs of $3.2 million, as well as the income tax effect of non-deductible acquisition costs of $1.7 million. (5) Includes the following, after tax: income tax effect of reserve for certain deferred tax assets of $3.5 million and acquisition costs of $1.3 million. Goodwill and intangible franchise rights and total assets by reportable segment were as follows:
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Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Text Block] | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
During the second, third and fourth quarters of 2015, the Company incurred charges of $1.0 million, $0.9 million, and $85.7 million related to the impairment of assets. In addition, during 2015, the Company sold two dealerships in the U.S. and recognized a net gain of $9.4 million. During the second, third and fourth quarters of 2014, the Company incurred charges of $1.7 million, $9.4 million, and $30.4 million related to the impairment of assets. Included in these charges, for the third and fourth quarters of 2014, were impairments of the Company’s intangible assets of $5.5 million and $25.6 million, respectively. During the third quarter of 2014, the Company sold five dealerships in the U.S. and recognized a net gain of $16.6 million and also realized a $3.4 million tax benefit relative to deductible goodwill in the Brazil segment. In addition, the Company had a loss of $23.6 million and $22.8 million on the extinguishment of debt for the second and third quarters of 2014, respectively. For more information on non-cash impairment charges, refer to Note 15, “Asset Impairments.” |
Condensed Consolidated Financial Information Condensed Consolidated Financial Information |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Statements [Text Block] | 22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION The following tables include condensed consolidating financial information as of December 31, 2015 and 2014, and for each of the years in the three-year period ended December 31, 2015, for Group 1 Automotive, Inc.’s (as issuer of the 5.00% Notes), guarantor subsidiaries and non-guarantor subsidiaries (representing foreign entities). The condensed consolidating financial information includes certain allocations of balance sheet, statement of operations and cash flows items that are not necessarily indicative of the financial position, results of operations or cash flows of these entities had they operated on a stand-alone basis. CONDENSED CONSOLIDATED BALANCE SHEET December 31, 2015
CONDENSED CONSOLIDATED BALANCE SHEET December 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2013
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2015
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2014
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2013
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Summary of Significant Accounting Policies and Estimates (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances; however, actual results could differ from such estimates. The significant estimates made by management in the accompanying Consolidated Financial Statements relate to inventory market adjustments, reserves for future chargebacks on finance and vehicle service contract fees, self-insured property/casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation. |
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Basis of Presentation | Basis of Presentation All business acquisitions completed during the periods presented have been accounted for using the purchase method of accounting, and their results of operations are included from the effective dates of the closings of the acquisitions. The preliminary allocations of purchase price to the assets acquired and liabilities assumed are assigned and recorded based on estimates of fair value. All intercompany balances and transactions have been eliminated in consolidation. |
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Revenue Recognition | Revenue Recognition Revenues from vehicle sales, parts sales and vehicle service are recognized upon completion of the sale or service and delivery to the customer. Conditions to completing a sale entail having an agreement with the customer, including pricing, and having a reasonable expectation that the sales price will be collected. The Company includes revenues from its collision center operations in parts and services sales. The Company records the profit it receives for arranging vehicle fleet transactions, net, in other finance and insurance revenues. Since all sales of new vehicles must occur through franchised new vehicle dealerships, the dealerships effectively act as agents for the automobile manufacturers in completing sales of vehicles to fleet customers. As these customers typically order the vehicles, the Company has no significant general inventory risk. Additionally, fleet customers generally receive special purchase incentives from the automobile manufacturers and the Company receives only a nominal fee for facilitating the transactions. Taxes collected from customers and remitted to governmental agencies are not included in total revenues. The Company arranges financing for customers through various institutions and receives financing fees based on the difference between the loan rates charged to customers and wholesale financing rates set by the financing institution. In addition, the Company receives fees from the sale of insurance and vehicle service contracts to customers. Further, through agreements with certain vehicle service contract administrators, the Company earns volume incentive rebates and interest income on reserves, as well as participates in the underwriting profits of the products. The Company may be charged back for unearned financing, insurance contract or vehicle service contract fees in the event of early termination of the contracts by customers. Revenues from these fees are recorded at the time of the sale of the vehicles, and a reserve for future amounts estimated to be charged back is recorded based on the Company’s historical chargeback results and the termination provisions of the applicable contracts. While chargeback results vary depending on the type of contract sold, a 10% increase in the historical chargeback results used in determining estimates of future amounts that might be charged back would have increased the reserve at December 31, 2015 by $3.3 million. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include demand deposits and various other short-term investments with original maturities of three months or less at the date of purchase. As of December 31, 2015 and 2014, cash and cash equivalents excluded $136.3 million and $62.1 million, respectively, of immediately available funds used to pay down the Floorplan Line of the Revolving Credit Facility and the FMCC Facility (as defined in Note 11, “Credit Facilities”), which are the Company’s primary vehicles for the short-term investment of excess cash. These amounts are reflected in the Company’s Consolidated Balance Sheets as the offset accounts related to Floorplan Notes Payable - Credit Facility and Floorplan Notes Payable - Manufacturer Affiliates. |
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Contracts-in-Transit and Vehicle Receivables | Contracts-in-Transit and Vehicle Receivables Contracts-in-transit and vehicle receivables consist primarily of amounts due from financing institutions on retail finance contracts from vehicle sales and dealer incentives due from manufacturers. Also included are amounts receivable from vehicle wholesale sales. |
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Inventories | Inventories New, used and demonstrator vehicle inventories are carried at the lower of specific cost or market and are removed from inventory using the specific identification method in the Consolidated Balance Sheets. Parts and accessories inventories are valued at lower of cost (determined on a first-in, first-out basis) or market in the Consolidated Balance Sheets. Vehicle inventory cost consists of the amount paid to acquire the inventory, plus the cost of reconditioning, cost of equipment added and transportation cost. Additionally, the Company receives interest assistance from some of the automobile manufacturers. This assistance is accounted for as a vehicle purchase price discount and is reflected as a reduction to the inventory cost on the Company’s Consolidated Balance Sheets and as a reduction to cost of sales in its Statements of Operations as the vehicles are sold. At December 31, 2015 and 2014, inventory cost had been reduced by $10.3 million and $8.8 million, respectively, for interest assistance received from manufacturers. New vehicle cost of sales was reduced by $50.5 million, $45.1 million and $38.5 million for interest assistance received related to vehicles sold for the years ended December 31, 2015, 2014 and 2013, respectively. The assistance over the past three years has ranged from approximately 87.3% of the Company’s quarterly floorplan interest expense in the first quarter of 2013 to 139.9% for the third quarter of 2015. As the market value of inventory typically declines over time, the Company establishes new and used vehicle reserves based on its historical loss experience and management’s considerations of current market trends. These reserves are charged to cost of sales and reduce the carrying value of inventory on hand. Used vehicles are complex to value as there is no standardized source for determining exact values and each vehicle and each market in which the Company operates is unique. As a result, the value of each used vehicle taken at trade-in, or purchased at auction, is determined based on industry data, primarily accessed via the Company’s used vehicle management software and the industry expertise of the responsible used vehicle manager. Valuation risk is partially mitigated by the speed at which the Company turns this inventory. At December 31, 2015, the Company’s used vehicle days’ supply was 33 days. The Company incurs shipping costs in connection with selling parts to customers. The cost of shipping these parts is included in cost of sales on the Consolidated Statements of Operations. |
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the estimated term of the lease or the estimated useful life of the asset. The amortization of assets recorded under capital leases is included with depreciation and amortization expense in the Consolidated Statement of Operations. Expenditures for major additions or improvements, which extend the useful lives of assets, are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of the assets, are expensed as incurred. Disposals are removed at cost less accumulated depreciation, and any resulting gain or loss is reflected in current operations. The Company reviews long-lived assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). This review consists of comparing the carrying amount of the asset with its expected future undiscounted cash flows without interest costs. If the asset’s carrying amount is greater than such cash flow estimate, then it is required to be written down to its fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. See Note 15, “Asset Impairments,” for additional details regarding the Company’s impairment of long-lived assets. |
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Goodwill | Goodwill The Company is organized into four geographic regions, East and West regions in the U.S., the U.K. region and the Brazil region. The Company has determined that each region represents a reporting unit for the purpose of assessing goodwill for impairment. Goodwill represents the excess, at the date of acquisition, of the purchase price of the business acquired over the fair value of the net tangible and intangible assets acquired. Annually in the fourth quarter, based on the carrying values of the Company’s regions as of October 31st, the Company performs a fair value and potential impairment assessment of its goodwill. An impairment analysis is done more frequently if certain events or circumstances arise that would indicate a change in the fair value of the non-financial asset has occurred (i.e., an impairment indicator). In evaluating its goodwill, the Company compares the carrying value of the net assets of each reporting unit to its respective fair value, which is calculated by using unobservable inputs based upon the Company’s internally developed assumptions. This represents the first step of the impairment test. If the fair value of a reporting unit is less than the carrying value of its net assets, the Company must proceed to step two of the impairment test. Step two involves allocating the calculated fair value to all of the tangible and identifiable intangible assets of the reporting unit as if the calculated fair value were the purchase price in a business combination. The Company then compares the value of the implied goodwill resulting from this second step to the carrying value of the goodwill in the reporting unit. To the extent the carrying value of the goodwill exceeds its implied fair value under step two of the impairment test, a non-cash impairment charge equal to the difference is recorded. The Company uses a combination of the discounted cash flow, or income approach (80% weighted), and the market approach (20% weighted) to determine the fair value of the Company’s reporting units. Included in the discounted cash flow are assumptions regarding revenue growth rates, future gross margins, future selling, general and administrative expenses (“SG&A”) and an estimated weighted average cost of capital (“WACC”). The Company also must estimate residual values at the end of the forecast period and future capital expenditure requirements. Specifically, with regard to the valuation assumptions utilized in the income approach for the U.S. (which represents the Company’s largest two reporting units) as of October 31, 2015, the Company based its analysis on an estimate of industry sales of 17.8 million units in 2016 increasing at 1.0% in 2017 and 2018. For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pretax net income weighted as appropriate by reporting unit. Each of these assumptions requires the Company to use its knowledge of (1) the industry, (2) recent transactions and (3) reasonable performance expectations for its operations. If any one of the above assumptions change or fails to materialize, the resulting decline in the estimated fair value could result in a material, non-cash impairment charge to the goodwill associated with the reporting unit(s). See Note 15, “Asset Impairments,” and Note 16, “Intangible Franchise Rights and Goodwill,” for additional details regarding the Company’s goodwill. |
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Intangible Franchise Rights | Intangible Franchise Rights The Company’s only significant identifiable intangible assets, other than goodwill, are rights under franchise agreements with manufacturers, which are recorded at an individual dealership level. The Company expects these franchise agreements to continue for an indefinite period and, for agreements that do not have indefinite terms, the Company believes that renewal of these agreements can be obtained without substantial cost, based on the history with the manufacturer. As such, the Company believes that its franchise agreements will contribute to cash flows for an indefinite period and, therefore, the carrying amounts of the franchise rights are not amortized. Franchise rights acquired in business acquisitions prior to July 1, 2001, were recorded and amortized as part of goodwill and remain as part of goodwill at December 31, 2015 and 2014 in the accompanying Consolidated Balance Sheets. Since July 1, 2001, intangible franchise rights acquired in business combinations have been recorded as distinctly separate intangible assets. In accordance with guidance primarily codified within Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other, the Company evaluates these franchise rights for impairment annually in the fourth quarter, based on the carrying values of the Company’s individual dealerships as of October 31st, or more frequently if events or circumstances indicate possible impairment has occurred. In performing its impairment assessments, the Company tests the carrying value of each individual franchise right that was recorded by using a direct value method discounted cash flow model, or income approach, specifically the excess earnings method. Included in this analysis are assumptions, at a dealership level, regarding the cash flows directly attributable to the franchise rights, revenue growth rates, future gross margins and future SG&A expenses. Using an estimated WACC, estimated residual values at the end of the forecast period and estimated future capital expenditure requirements, the Company calculates the fair value of each dealership’s franchise rights. See Note 15, “Asset Impairments,” and Note 16, “Intangible Franchise Rights and Goodwill,” for additional details regarding the Company’s intangible franchise rights. |
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Income Taxes | Income Taxes Currently, the Company operates in 14 different states in the U.S., in the U.K. and in Brazil, each of which has unique tax rates and payment calculations. As the amount of income generated in each jurisdiction varies from period to period, the Company’s estimated effective tax rate can vary based on the proportion of taxable income generated in each jurisdiction. The Company follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred income taxes are recorded based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the underlying assets are realized or liabilities are settled. A valuation allowance reduces deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has recognized deferred tax assets, net of valuation allowances, that it believes will be realized, based primarily on the assumption of future taxable income. As it relates to state net operating losses, as well as net operating losses and goodwill for certain Brazil subsidiaries, a corresponding valuation allowance has been established to the extent that the Company has determined that net income attributable to certain jurisdictions will not be sufficient to realize the benefit. |
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Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, accounts payable, credit facilities, long-term debt and interest rate swaps. The fair values of cash and cash equivalents, contracts-in-transit and vehicle receivables, accounts and notes receivable, accounts payable, credit facilities and variable-rate long-term debt approximate their carrying values due to the short-term nature of these instruments or the existence of variable interest rates. However, the carrying value of the Company’s fixed-rate long-term debt differs from fair value. As of December 31, 2015, the Company’s 5.00% Senior Notes had a carrying value of $541.3 million, and a fair value of $545.9 million. The Company’s 5.25% Senior Notes had a carrying value of $296.3 million and a fair value of $297.8 million at December 31, 2015. Of the $311.6 million and $358.3 million of other real estate related and long-term debt as of December 31, 2015 and December 31, 2014, respectively, $100.7 million and $158.1 million represented fixed interest rate borrowings. The fair value of such fixed interest rate borrowings was $102.4 million and $186.4 million as of December 31, 2015 and December 31, 2014, respectively. For discussion on the fair value of the Company’s interest rate swaps, refer to “Derivative Financial Instruments” below. |
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Fair Value of Assets Acquired and Liabilities Assumed | Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of property and equipment and intangible franchise rights, with the remaining amounts attributable to goodwill, if any. The Company utilizes third-party experts to determine the fair values of property and equipment purchased, including real estate, and utilizes its fair value model as discussed under “Intangible Franchise Rights” above, supplemented with assistance from third-party experts, to determine the fair value of intangible franchise rights acquired. |
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Foreign Currency Translation | Foreign Currency Translation The functional currency for the Company’s U.K. subsidiaries is the British pound sterling (£) and of the Company’s Brazil subsidiaries is the Brazilian real. The financial statements of all the Company’s foreign subsidiaries have been translated into U.S. dollars. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates and all revenues and expenses are translated at average rates during the respective period. The difference in the U.S. dollar results that arise from the translation of all assets and liabilities are included in the cumulative currency translation adjustments in accumulated other comprehensive income/loss in stockholders’ equity and in other income/expense, when applicable. Upon disposition of the Company’s investment in a foreign subsidiary, the Company removes the accumulated translation adjustment attributable to that subsidiary from equity and recognizes as a part of the gain or loss on the disposition transaction. |
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Derivative Financial Instruments | Derivative Financial Instruments One of the Company’s primary market risk exposures is increasing interest rates. Interest rate derivatives, designated as cash flow hedges, are used to adjust interest rate exposures when appropriate based on market conditions. The Company follows the requirements of guidance primarily codified within ASC 815, Derivatives and Hedging (“ASC 815”) pertaining to the accounting for derivatives and hedging activities. ASC 815 requires the Company to recognize all cash flow hedges on its balance sheet at fair value. The related gains or losses on these interest rate derivatives are deferred in stockholders’ equity as a component of accumulated other comprehensive loss. However, to the extent that the change in value of a derivative contract does not perfectly offset the change in the value of the items being hedged, that ineffective portion is immediately recognized in other income or expense. Monthly contractual settlements of these swap positions are recognized as floorplan or other interest expense in the Company’s accompanying Consolidated Statements of Operations. All of the Company’s interest rate hedges were designated as cash flow hedges and were deemed to be effective at December 31, 2015, 2014 and 2013. The Company measures its interest rate derivative instruments utilizing an income approach valuation technique, converting future amounts of cash flows to a single present value in order to obtain a transfer exit price within the bid and ask spread that is most representative of the fair value of its derivative instruments. In measuring fair value, the Company utilizes the option-pricing Black-Scholes present value technique for all of its derivative instruments. This option-pricing technique utilizes a one-month London Interbank Offered Rate (“LIBOR”) forward yield curve, obtained from an independent external service provider, matched to the identical maturity term of the instrument being measured. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. The fair value estimate of the interest rate derivative instruments also considers the credit risk of the Company for instruments in a liability position or the counterparty for instruments in an asset position. The credit risk is calculated by using the spread between the one-month LIBOR yield curve and the relevant average 10 and 20-year retail rate according to Standard and Poor’s. The Company has determined the valuation measurement inputs of these derivative instruments to maximize the use of observable inputs that market participants would use in pricing similar or identical instruments and market data obtained from independent sources, which is readily observable or can be corroborated by observable market data for substantially the full term of the derivative instrument. Accordingly, the Company has classified the derivatives within Level 2 of the ASC 820 hierarchy framework in Note 13, “Fair Value Measurements.” The Company validates the outputs of its valuation technique by comparison to valuations from the respective counterparties. See Note 4, “Derivative Instruments and Risk Management Activities,” and Note 13, “Fair Value Measurements,” for further details regarding the Company’s derivative financial instruments and fair value measurements. |
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Factory Incentives | Factory Incentives In addition to the interest assistance discussed above, the Company receives various dealer incentive payments from certain of the automobile manufacturers. These incentive payments are typically received on parts purchases from the automobile manufacturers and on new vehicle retail sales. These incentives are reflected as reductions of cost of sales in the statement of operations. |
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Earnings Per Share | Earnings Per Share The Company utilizes the two-class method for the computation of earnings per share (“EPS”). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents. The Company’s restricted stock awards qualify as participating securities as each contain non-forfeitable rights to dividends. Income allocated to these participating securities is excluded from net earnings available to common shares. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period. |
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Advertising | Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2015, 2014, and 2013, totaled $74.6 million, $73.8 million and $59.0 million, respectively. Additionally, the Company receives advertising assistance from some of the automobile manufacturers that the Company must spend on qualified advertising and is subject to audit and chargeback by the manufacturer. The assistance is accounted for as a reduction of advertising expense, which is included in SG&A expenses in the accompanying Consolidated Statements of Operations, as the assistance is earned. Amounts related to vehicles still in inventory as of the balance sheet date are reflected in accrued expenses. Advertising expense has been reduced by $17.3 million, $16.6 million and $24.1 million for advertising assistance earned related to vehicles sold for the years ended December 31, 2015, 2014, and 2013, respectively. |
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Business and Credit Risk Concentrations | Business and Credit Risk Concentrations The Company owns and operates franchised automotive dealerships in the U.S., the U.K. and Brazil. Automotive dealerships operate pursuant to franchise agreements with vehicle manufacturers. Franchise agreements generally provide the manufacturers or distributors with considerable influence over the operations of the dealership. The success of any franchised automotive dealership is dependent, to a large extent, on the financial condition, management, marketing, production and distribution capabilities of the vehicle manufacturers or distributors of which the Company holds franchises. The Company purchases substantially all of its new vehicles from various manufacturers or distributors at the prevailing prices to all franchised dealers. The Company’s sales volume could be adversely impacted by the manufacturers’ or distributors’ inability to supply the dealerships with an adequate supply of vehicles. For the year ended December 31, 2015, Toyota (including Lexus, Scion and Toyota brands), BMW (including MINI and BMW brands), Ford (including Ford and Lincoln brands), Honda (including Acura and Honda brands), Nissan, General Motors (including Chevrolet, GMC, Buick, and Cadillac brands), Volkswagen (including Audi, Porsche, and Volkswagen brands), Hyundai (including Hyundai and Kia brands), FCA US (formerly Chrysler) (including Chrysler, Dodge, RAM and Jeep brands), and Daimler (including Mercedes-Benz, smart and Sprinter brands), accounted for 26.4%, 11.6%, 11.4%, 10.9%, 8.3%, 7.6%, 6.9%, 5.8%, 4.6%, and 4.3% of the Company’s new vehicle sales volume, respectively. No other manufacturer accounted for more than 2.2% of the Company’s total new vehicle sales volume in 2015. Through the use of an open account, the Company purchases and returns parts and accessories from/to the manufacturers and receives reimbursement for rebates, incentives and other earned credits. As of December 31, 2015, the Company was due $93.2 million from various manufacturers (see Note 8, “Accounts and Notes Receivable”). Receivable balances from General Motors, Toyota, BMW, Daimler, Ford, Volkswagen, Nissan, Hyundai, Honda, and FCA US (formerly Chrysler) represented 16.5%, 16.3%, 14.8%, 13.0%, 10.0%, 8.5%, 6.7%, 4.6%, 4.2%, and 2.5%, respectively, of this total balance due from manufacturers. |
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Statements of Cash Flows | Statements of Cash Flows With respect to all new vehicle floorplan borrowings, the manufacturers of the vehicles draft the Company’s credit facilities directly with no cash flow to or from the Company. With respect to borrowings for used vehicle financing in the U.S., the Company finances up to 80% of the value of the used vehicle inventory and the funds flow directly to the Company from the lender. In the U.K., the Company chooses which used vehicles to finance and the borrowings flow directly to the Company from the lender. All borrowings from, and repayments to, lenders affiliated with the vehicle manufacturers (excluding the cash flows from or to manufacturer affiliated lenders participating in the Company’s syndicated lending group) are presented within Cash Flows from Operating Activities on the Consolidated Statements of Cash Flows. In addition, all borrowings from, and repayments to, the syndicated lending group under the Revolving Credit Facility (as defined in Note 11, “Credit Facilities”) (including the cash flows from or to manufacturer affiliated lenders participating in the facility) and borrowing from, and repayments to, the Company’s other credit facilities are presented within Cash Flows from Financing Activities. Cash paid for interest, including the monthly settlement of the Company’s interest rate derivatives, was $92.0 million, $80.2 million and $66.2 million in 2015, 2014 and 2013, respectively. Cash paid for taxes, net of refunds, was $74.8 million, $62.3 million and $49.0 million in 2015, 2014 and 2013, respectively. |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation represents the expense related to stock-based awards granted to employees and non-employee directors. The Company measures stock-based compensation expense at grant date based on the estimated fair value of the award and recognizes the cost on a straight-line basis, net of estimated forfeitures, over the employee requisite service period. The Company estimates the fair value of its employee stock purchase rights issued pursuant to the Employee Stock Purchase Plan using a Black-Scholes valuation model. The expense for stock-based awards is recognized as an SG&A expense in the accompanying Consolidated Statement of Operations. |
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Business Segment Information | Business Segment Information The Company, through its regions, conducts business in the automotive retailing industry, including selling new and used cars and light trucks, arranging related vehicle financing, selling service and insurance contracts, providing automotive maintenance and repair services and selling vehicle parts. The Company has three reportable segments: the U.S., which includes the activities of the Company’s corporate office, the U.K., and Brazil. The reportable segments are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by its chief operating decision maker to allocate resources and assess performance. The Company’s chief operating decision maker is its Chief Executive Officer. See Note 20, “Segment Information,” for additional details regarding the Company’s reportable segments. |
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Self-Insured Medical, Property and Casualty Reserves | Self-Insured Medical, Property and Casualty Reserves The Company purchases insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks consisting of large deductibles and/or self-insured retentions. At least annually, the Company engages a third-party actuary to conduct a study of the exposures under the self-insured portion of its worker’s compensation and general liability insurance programs in the U.S. for all open policy years. In the interim, the Company reviews the estimates within the study and monitors actual experience for unusual variances. The appropriate adjustments are made to the accrual, based upon these procedures. Actuarial estimates for the portion of claims not covered by insurance are based on historical claims experience adjusted for loss trending and loss development factors. Changes in the frequency or severity of claims from historical levels could influence the Company’s reserve for claims and its financial position, results of operations and cash flows. A 10% increase in the actuarially determined estimate of aggregate future losses would have increased the reserve for these losses at December 31, 2015, by $2.1 million. The Company’s U.S. auto physical damage insurance coverage is limited and contains two layers of coverage. The first layer is composed of a $10.0 million per occurrence company deductible with an annual maximum aggregate deductible of $30.0 million with no maximum payout. The secondary policy provides for an additional $10.0 million, maximum, in annual loss coverage after the Company has either incurred $20.0 million in company-paid deductibles related to hail loss, or incurred $5.0 million in company-paid deductibles related to any weather event other than hail. For policy years ended prior to October 31, 2005, the Company’s U.S. workers’ compensation and general liability insurance coverage included aggregate retention (stop loss) limits in addition to a per claim deductible limit (“Stop Loss Plans”). Due to historical experience in both claims frequency and severity, the likelihood of breaching the aggregate retention limits described above was deemed remote, and as such, the Company elected not to purchase this stop loss coverage for the policy year beginning November 1, 2005 and for each subsequent year (“No Stop Loss Plans”). The Company’s exposure per claim under the No Stop Loss Plans is limited to $1.0 million per occurrence, with unlimited exposure on the number of claims up to $1.0 million that may be incurred. As of December 31, 2015, the Company has accrued $0.3 million and $20.3 million for its Stop Loss and No Stop Loss plans, respectively. The Company’s maximum potential exposure under its worker’s compensation and general liability Stop Loss Plans totaled $34.9 million at December 31, 2015, before consideration of amounts previously paid or accruals recorded related to the Company’s loss projections. After consideration of the amounts paid or accrued, the remaining potential loss exposure under the Stop Loss Plans totaled $13.9 million at December 31, 2015. |
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Consolidation, Variable Interest Entity, Policy | Variable Interest Entity In 2013, the Company entered into arrangements to provide a related-party entity, which owns and operates retail automotive dealerships, a fixed-interest-rate working capital loan and various administrative services for a variable fee, both of which constitute variable interests in the entity. The Company’s exposure to loss as a result of its involvement in the entity includes the balance outstanding under the loan arrangement. The Company holds an 8% equity ownership interest in the entity. The Company has determined that the entity meets the criteria of a variable interest entity (“VIE”). The terms of the loan and services agreements provide the Company with the right to control the activities of the VIE that most significantly impact the VIE’s economic performance, the obligation to absorb potentially significant losses of the VIE and the right to receive potentially significant benefits from the VIE. Accordingly, the Company qualifies as the VIE’s primary beneficiary and consolidated the assets and liabilities of the VIE as of December 31, 2015 and 2014, as well as the results of operations of the VIE beginning on the effective date of the variable interests arrangements to December 31, 2013. The floorplan notes payable liability of the VIE is securitized by the new and used vehicle inventory of the VIE. The carrying amounts and classification of assets (which can only be used to settle the liabilities of the VIE) and liabilities (for which creditors do not have recourse to the general credit of the Company) included in the Company’s consolidated statements of financial position for the consolidated VIE is as follows (in thousands):
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New Accounting Pronouncements, Policy | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), that amends the accounting guidance on revenue recognition. The amendments in this ASU are intended to provide a framework for addressing revenue issues, improve comparability of revenue recognition practices, and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the method of adoption and the impact the provisions of the ASU will have on its consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis, that amends existing requirements applicable to reporting entities that are required to evaluate whether certain legal entities should be consolidated. The ASU is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may choose to adopt the standard using either a full retrospective approach or a modified retrospective approach. At this time, the Company does not expect the adoption of this ASU to impact its financial statements. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs. The amendments in the accounting standard require debt issuance costs to be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability. The amendments in this ASU are to be applied retrospectively and are effective for interim and annual periods beginning after December 15, 2015. Adoption of this ASU will not materially impact the Company’s financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) Simplifying the Measurement of Inventory. The amendments in the accounting standard replace the lower of cost or market test with a lower of cost and net realizable value test. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption to materially impact its financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. The amendments in the accounting standard eliminate the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. The amendments also require that the acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The amendments in this ASU are to be applied prospectively to adjustments to provisional amounts that occur after the effective date and are effective for interim and annual periods beginning after December 15, 2015. The Company does not expect the adoption to materially impact its financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes that clarifies that in a classified statement of financial position, an entity shall classify deferred tax liabilities and assets as non-current amounts. The new guidance supersedes ASC 740-10-45-5 which required the valuation allowance for a particular tax jurisdiction be allocated between current and non-current deferred tax assets for that tax jurisdiction on a pro rata basis. The new standard will become effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the timing of adoption, however the adoption of this update is not expected to have a material impact on its financial statements. |
Summary of Significant Accounting Policies and Estimates Variable Interest Entity Policy (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities [Table Text Block] | The carrying amounts and classification of assets (which can only be used to settle the liabilities of the VIE) and liabilities (for which creditors do not have recourse to the general credit of the Company) included in the Company’s consolidated statements of financial position for the consolidated VIE is as follows (in thousands):
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Acquisitions and Dispositions Acquisitions and Dispositions (Tables) |
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Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | Goodwill associated with the acquisitions was assigned to the U.S., U.K. and Brazil reportable segments in the amounts of $56.2 million, $1.5 million and $129.4 million, respectively.
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Derivative Instruments and Risk Management Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of Unrealized Gain, Net of Tax, Recognized in Other Comprehensive Income |
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Stock-Based Compensation Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Awards |
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Earnings per share | The following table sets forth the calculation of EPS for the years ended December 31, 2015, 2014, and 2013:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes by geographic area | Income before income taxes by geographic area was as follows:
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Federal, state and foreign income taxes | Federal, state and foreign income taxes were as follows:
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Difference between the income tax computation by the company and the statutory body | Actual income tax expense differed from income tax expense computed by applying the U.S. federal statutory corporate tax rate of 35% to income before income taxes in 2015, 2014 and 2013 as follows:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following:
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Accounts and Notes Receivable (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts and notes receivable | The Company’s accounts and notes receivable consisted of the following:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of inventories | The Company’s inventories consisted of the following:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment | The Company’s property and equipment consisted of the following:
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Credit Facilities (Tables) |
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Line of Credit Facility [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding balances under financing arrangements | he outstanding balances under these financing arrangements were as follows:
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Long-Term Debt (Tables) |
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Summary of long-term debt | The Company carries its long-term debt at face value, net of applicable discounts. Long-term debt consisted of the following:
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Schedule of Maturities of Long-term Debt [Table Text Block] | The aggregate annual maturities of long-term debt for the next five years are as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset and liabilities recorded at fair value | Asset and liabilities recorded at fair value in the accompanying balance sheets as of December 31, 2015 and 2014, respectively, were as follows:
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Intangible Franchise Rights and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll-forward of intangible franchise rights and goodwill accounts | The following is a roll-forward of the Company’s intangible franchise rights and goodwill accounts by reportable segment:
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Operating Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments for non-cancelable operating leases as of December 31, 2015, are as follows:
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Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the balances of each component of accumulated other comprehensive income | Changes in the balances of each component of accumulated other comprehensive income for the years ended December 31, 2015, 2014 and 2013 are as follows:
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Segment Information Segment Information (Tables) |
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Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Reportable segment revenue, gross profit, SG&A, depreciation and amortization expense, asset impairment, floorplan interest expense, other interest expense, benefit (provision) for income taxes, net income (loss) and capital expenditures were as follows for the years ended December 31, 2015, 2014 and 2013:
(1) Includes the following, pre-tax: loss due to catastrophic events of $1.6 million, a net gain on real estate and dealership transactions of $8.9 million, and legal items of $1.0 million. (2) Includes the following, after tax: loss due to catastrophic events of $1.0 million, net gain on real estate and dealership transactions of $5.5 million, and non-cash asset impairment charges of $12.0 million. (3) Includes after-tax non-cash asset impairment charges of $62.4 million.
(1) Includes the following, pre-tax: loss due to catastrophic events of $2.8 million and a gain on real estate and dealership transactions of $13.8 million. (2) Includes the tax impact on deductible goodwill for $3.4 million.
(1) Includes financial data from the date of acquisition in February 2013 through December 31, 2013. (2) Includes the following, pre-tax: loss due to catastrophic events of $12.2 million, a net gain on real estate and dealership transactions of $10.2 million and acquisition costs of $5.2 million. (3) Includes pre-tax acquisition costs of $1.2 million. (4) Includes the following, after tax: loss due to catastrophic events of $7.4 million, net gain on real estate and dealership transactions of $5.4 million, non-cash asset impairment charges of $4.0 million and acquisition costs of $3.2 million, as well as the income tax effect of non-deductible acquisition costs of $1.7 million. (5) Includes the following, after tax: income tax effect of reserve for certain deferred tax assets of $3.5 million and acquisition costs of $1.3 million. |
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Schedule of Segment Reporting, by Segment, Goodwill and Intangible Assets [Table Text Block] | oodwill and intangible franchise rights and total assets by reportable segment were as follows:
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Selected Quarterly Financial Data (Unaudited) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] |
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Condensed Consolidated Financial Information Condensed Consolidated Financial Information (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet [Table Text Block] | CONDENSED CONSOLIDATED BALANCE SHEET December 31, 2015
CONDENSED CONSOLIDATED BALANCE SHEET December 31, 2014
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Condensed Income Statement [Table Text Block] | CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2013
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Condensed Cash Flow Statement [Table Text Block] | CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2015
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2014
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 2013
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Summary of Significant Accounting Policies and Estimates (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Summary of Significant Accounting Policies and Estimates [Line Items] | ||
Assets, Current | $ 2,202,955 | $ 2,035,219 |
Total assets | 4,414,929 | 4,141,492 |
Liabilities, Current | 2,039,470 | 1,922,199 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Summary of Significant Accounting Policies and Estimates [Line Items] | ||
Assets, Current | 12,849 | 19,049 |
Long-Lived Assets | 11,022 | 31,783 |
Total assets | 23,871 | 50,832 |
Liabilities, Current | 8,257 | 16,374 |
Liabilities, Noncurrent | 17,064 | 15,955 |
Liabilities | $ 25,321 | $ 32,329 |
Acquisitions and Dispositions Acquisitions and Dispositions (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Allocation of purchase price [Line Items] | |||
Assets, Current | $ 2,202,955 | $ 2,035,219 | |
Inventory, Net | 1,737,751 | 1,556,705 | |
Property, Plant and Equipment, Net | 1,033,981 | 950,388 | |
Deferred Tax Assets, Gross | 110,860 | 99,265 | |
Total assets | 4,414,929 | 4,141,492 | |
Liabilities, Current | 2,039,470 | 1,922,199 | |
Deferred Tax Liabilities, Gross | $ 199,723 | 186,044 | |
Businesses acquired [Member] | |||
Allocation of purchase price [Line Items] | |||
Assets, Current | $ 26,884 | ||
Inventory, Net | 132,180 | 164,655 | |
Other Assets, Current | 6,601 | ||
Property, Plant and Equipment, Net | 78,562 | 72,328 | |
Goodwill and intangible franchise rights | 185,307 | 305,876 | |
Other Assets | 864 | ||
Deferred Tax Assets, Gross | 7,063 | ||
Total assets | 409,713 | 570,607 | |
Liabilities, Current | 59,912 | 123,025 | |
Deferred Tax Liabilities, Gross | 28,738 | ||
Long-term Debt | 13,250 | 68,639 | |
Liabilities | $ 73,162 | $ 220,402 |
Derivative Instruments and Risk Management Activities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Derivatives in cash flow hedging relationship | |||
Interest rate swap contracts | $ (9,856) | $ (11,153) | $ 6,112 |
Location of Loss Reclassified from OCI into Statements of Operations | |||
Income (Loss) Reclassified from OCI into Statements of Operations | 8,313 | 7,094 | 6,969 |
Floorplan Interest Expense [Member] | |||
Location of Loss Reclassified from OCI into Statements of Operations | |||
Income (Loss) Reclassified from OCI into Statements of Operations | (11,486) | (9,837) | (9,938) |
Other Interest Expense [Member] | |||
Location of Loss Reclassified from OCI into Statements of Operations | |||
Income (Loss) Reclassified from OCI into Statements of Operations | $ (1,814) | $ (1,513) | $ (1,213) |
Stock-Based Compensation Plans (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
shares
| |
Restricted Stock Awards | |
Awards, Nonvested at December 31, 2014 | shares | 911,350 |
Awards, Granted | shares | 298,873 |
Awards, Vested | shares | (273,113) |
Awards, Forfeited | shares | (43,750) |
Awards, Nonvested at December 31, 2015 | shares | 893,360 |
Weighted Average Grant Date Fair Value, Nonvested, December 31, 2014 | $ / shares | $ 58.86 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 83.92 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 51.06 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 67.62 |
Weighted Average Grant Date Fair Value, Nonvested, December 31, 2015 | $ / shares | $ 69.16 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Earnings Per Share [Abstract] | |||||||||||
Undistributed Earnings (Loss) Allocated to Participating Securities, Diluted | $ 3,595 | $ 3,468 | $ 4,599 | ||||||||
Basic and Diluted Earnings per share | |||||||||||
Weighted average basic common shares outstanding | 23,148 | 23,380 | 23,096 | ||||||||
Dilutive effect of contingently convertible notes and warrants | 0 | 1,499 | 2,213 | ||||||||
Dilutive effect of employee stock purchases, net of assumed repurchase of treasury stock | 4 | 6 | 5 | ||||||||
Weighted average dilutive common shares outstanding | 23,152 | 24,885 | 25,314 | ||||||||
Basic: | |||||||||||
Net income | $ 93,999 | $ 93,004 | $ 113,992 | ||||||||
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 3,595 | 3,643 | 4,963 | ||||||||
Earnings available to basic common shares | $ 90,404 | $ 89,361 | $ 109,029 | ||||||||
Basic earnings per common share | $ (1.41) | $ 1.88 | $ 1.91 | $ 1.47 | $ 0.77 | $ 1.07 | $ 0.70 | $ 1.29 | $ 3.91 | $ 3.82 | $ 4.72 |
Diluted: | |||||||||||
Net income | $ 93,999 | $ 93,004 | $ 113,992 | ||||||||
Earnings available to diluted common shares | $ 90,404 | $ 89,536 | $ 109,393 | ||||||||
Diluted earnings per common share | $ (1.41) | $ 1.88 | $ 1.91 | $ 1.47 | $ 0.77 | $ 1.03 | $ 0.62 | $ 1.19 | $ 3.90 | $ 3.60 | $ 4.32 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income before income taxes by geographic area | |||
Domestic | $ 231,798 | $ 174,964 | $ 176,156 |
Foreign | (49,627) | (10,564) | 15,739 |
INCOME BEFORE INCOME TAXES | $ 182,171 | $ 164,400 | $ 191,895 |
Income Taxes (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Federal: | |||
Current | $ 66,973 | $ 49,590 | $ 44,785 |
Deferred | 15,528 | 22,549 | 19,773 |
State: | |||
Current | 5,165 | 4,849 | 4,231 |
Deferred | 1,768 | 727 | 2,026 |
Foreign: | |||
Current | 4,150 | 4,638 | 6,475 |
Deferred | (5,412) | (10,957) | 613 |
Provision for income taxes | $ 88,172 | $ 71,396 | $ 77,903 |
Income Taxes (Details 2) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Difference between the income tax computation by the company and the statutory body | |||
Provision at the U.S. federal statutory rate | $ 63,760 | $ 57,540 | $ 67,163 |
Increase (decrease) resulting from: | |||
State income tax, net of benefit for federal deduction | 4,448 | 5,267 | 4,228 |
Foreign income tax rate differential | (2,002) | (3,188) | (538) |
Employment credits | (407) | (481) | (421) |
Changes in valuation allowances | 14,667 | 9,507 | 2,713 |
Nondeductible Goodwill | 4,651 | 0 | 1,355 |
Income Tax Reconciliation Goodwill created from Restructuring | 0 | (10,209) | 0 |
Nondeductible Transaction Costs | 0 | 0 | 1,064 |
Stock-based compensation | 386 | 245 | 282 |
Income tax reconciliation convertible debt redemption | 0 | 9,727 | 0 |
Other | 2,669 | 2,988 | 2,057 |
Provision for income taxes | $ 88,172 | $ 71,396 | $ 77,903 |
Income Taxes (Details 3) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Net deferred tax liabilities comprised | ||
Loss reserves and accruals | $ 53,747 | $ 50,158 |
Interest rate swaps | 11,671 | 10,745 |
Deferred Tax Assets, Goodwill and Intangible Assets | 7,621 | 0 |
State net operating loss ("NOL") carryforwards | 17,413 | 16,592 |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 20,408 | 21,770 |
Deferred Tax Assets, Gross | 110,860 | 99,265 |
Valuation allowance on state NOL | (46,547) | (40,486) |
Deferred Tax Assets, Net of Valuation Allowance | 64,313 | 58,779 |
Goodwill and intangible franchise rights | (143,509) | (138,992) |
Depreciation expense | (53,619) | (43,070) |
Deferred tax liabilities deferred gain on bond redemption | (1,535) | (2,046) |
Other | (1,060) | (1,936) |
Deferred Tax Liabilities, Gross | (199,723) | (186,044) |
Deferred Tax Liabilities, Net | $ (135,410) | $ (127,265) |
Accounts and Notes Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accounts and notes receivable | ||
Total accounts and notes receivable | $ 160,972 | $ 154,971 |
Less allowance for doubtful accounts | 3,204 | 3,641 |
Accounts and notes receivable, net | 157,768 | 151,330 |
Amounts due from manufacturers [Member] | ||
Accounts and notes receivable | ||
Total accounts and notes receivable | 93,206 | 86,062 |
Parts and service receivables [Member] | ||
Accounts and notes receivable | ||
Total accounts and notes receivable | 32,479 | 35,034 |
Finance and insurance receivables, net [Member] | ||
Accounts and notes receivable | ||
Total accounts and notes receivable | 22,374 | 20,898 |
Other [Member] | ||
Accounts and notes receivable | ||
Total accounts and notes receivable | $ 12,913 | $ 12,977 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventory [Line Items] | ||
Inventory, Gross | $ 1,745,731 | $ 1,563,067 |
Summary of inventories | ||
Lower of cost or market reserves | (7,980) | (6,362) |
New vehicles [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 1,262,797 | 1,137,478 |
Used vehicles [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 275,508 | 254,939 |
Rental vehicles [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 134,509 | 103,184 |
Parts, accessories and other [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | $ 72,917 | $ 67,466 |
Long-Term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Instrument [Line Items] | ||
Capital Lease Obligations, Noncurrent | $ 69,600 | $ 67,500 |
Total Debt | 1,255,659 | 1,081,467 |
Long Term Debt And Capital Lease Obligations Excluding Short Term Financing Current | 52,223 | 72,630 |
Long-term Debt and Capital Lease Obligations | 1,203,436 | 1,008,837 |
5.00% Senior Note [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured Long-term Debt, Noncurrent | 541,252 | 540,100 |
5.25% Senior Note [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured Long-term Debt, Noncurrent | 296,274 | 0 |
Real Estate Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Other Long-term Debt | 54,663 | 58,003 |
Other Real Estate Related and Long-Term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Other Long-term Debt | 311,568 | 358,271 |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Capital Lease Obligations, Noncurrent | $ 51,902 | 55,380 |
Acquisition Line [Member] | ||
Debt Instrument [Line Items] | ||
Acquisition Line | $ 69,713 |
Long-Term Debt (Details 2) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
3.00% Convertible Notes [Member] | |||
Contractual interest expense and the discount amortization | |||
Year-to-date contractual interest expense | $ 0 | $ 1,839 | $ 3,450 |
Year-to-date discount amortization | $ 0 | $ 1,810 | $ 3,251 |
Effective interest rate of liability component | 0.00% | 8.60% | 8.60% |
2.25% Convertible Notes [Member] | |||
Contractual interest expense and the discount amortization | |||
Year-to-date contractual interest expense | $ 0 | $ 1,875 | $ 4,112 |
Year-to-date discount amortization | $ 0 | $ 5,366 | $ 7,530 |
Effective interest rate of liability component | 0.00% | 7.70% | 7.70% |
3.00% Convertible Notes due 2020 | |||
Contractual interest expense and the discount amortization | |||
Effective interest rate of liability component | 8.25% |
Long-Term Debt (Details 3) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Aggregate annual maturities of long-term debt | ||
2016 | $ 52,223 | |
2017 | 63,402 | |
2018 | 44,991 | |
2019 | 75,669 | |
2020 | 37,175 | |
Thereafter | 982,199 | |
Total Debt | $ 1,255,659 | $ 1,081,467 |
Asset Impairments (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2014 |
Sep. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Assets Impairments (Textual) [Abstract] | |||||
Goodwill, Impairment Loss | $ 55,386 | $ 2,125 | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 25,600 | $ 5,500 | 30,100 | 31,000 | $ 5,400 |
Other Asset Impairment Charges | 1,300 | 9,200 | |||
Pre-tax impairment charges of real estate | $ 800 | ||||
Increase in assumed risk free rate to estimate WACC | 2.00% | ||||
Pre tax impairment charges of other long lived assets | 1,300 | $ 1,100 | |||
No new vehicle sales growth [Member] | |||||
Assets Impairments (Textual) [Abstract] | |||||
Additional franchise rights impairment charge | $ 2,600 | ||||
WACC increased 200 bps [Member] | |||||
Assets Impairments (Textual) [Abstract] | |||||
Additional franchise rights impairment charge | 15,900 | ||||
Brazil [Member] | |||||
Assets Impairments (Textual) [Abstract] | |||||
Goodwill, Impairment Loss | $ 55,386 | $ 1,813 |
Intangible Franchise Rights and Goodwill (Details Textual) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013 |
|
Intangible Franchise Rights and Goodwill (Textual) [Abstract] | |||
Accumulated Impairments | $ 97.8 | $ 42.4 | |
U.S. [Member] | |||
Intangible Franchise Rights and Goodwill (Textual) [Abstract] | |||
Number Of Dealerships Acquired | 3 | 7 | 9 |
U.K. [Member] | |||
Intangible Franchise Rights and Goodwill (Textual) [Abstract] | |||
Number Of Dealerships Acquired | 3 | 4 | |
Brazil [Member] | |||
Intangible Franchise Rights and Goodwill (Textual) [Abstract] | |||
Number Of Dealerships Acquired | 18 |
Employee Savings Plans (Details Textual) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Employee Savings Plans (Textual) [Abstract] | ||
Deferred compensation plan related to participants | $ 40.6 | $ 34.0 |
Matching contribution paid | $ 5.3 | $ 4.6 |
Operating Leases (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Leases [Abstract] | |
2016 | $ 52,646 |
2017 | 49,044 |
2018 | 41,184 |
2019 | 34,726 |
2020 | 27,734 |
Thereafter | 112,824 |
Total | $ 318,158 |
Operating Leases (Details Textual) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Operating Leases (Textual) [Abstract] | |||
Total term of lease facility | 30 years | ||
Initial term of lease facilities | 15 years | ||
Number of additional extensions on lease facility | 3 | ||
Extended period of lease under option | 5 years | ||
Future, non-cancelable sublease payments | $ 2.1 | ||
Total rent expense under all operating leases | $ 51.5 | $ 58.9 | $ 59.7 |
Segment Information Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting Information [Line Items] | |||||||||||
New vehicle retail sales | $ 6,001,306 | $ 5,741,619 | $ 5,224,921 | ||||||||
Used vehicle retail sales | 2,638,969 | 2,324,868 | 2,039,428 | ||||||||
Used vehicle wholesale sales | 397,251 | 379,143 | 332,185 | ||||||||
Parts and service | 1,186,193 | 1,125,694 | 1,010,685 | ||||||||
Finance and insurance | 408,786 | 366,565 | 311,362 | ||||||||
Total revenues | $ 2,672,602 | $ 2,800,569 | $ 2,726,480 | $ 2,432,854 | $ 2,538,940 | $ 2,626,448 | $ 2,511,638 | $ 2,260,863 | 10,632,505 | 9,937,889 | 8,918,581 |
Gross profit | 380,133 | 398,382 | 391,573 | $ 363,884 | 365,959 | 374,709 | 369,148 | $ 338,122 | 1,533,972 | 1,447,938 | 1,292,546 |
Selling, general and administrative expense | 1,120,833 | 1,061,964 | 976,856 | ||||||||
Depreciation and amortization | 47,239 | 42,344 | 35,826 | ||||||||
ASSET IMPAIRMENTS | 85,700 | $ 900 | $ 1,000 | 30,400 | 9,400 | 1,700 | 87,562 | 41,520 | 6,542 | ||
Floorplan interest expense | (39,264) | (41,614) | (41,667) | ||||||||
Other interest expense, net | (56,903) | (49,693) | (38,971) | ||||||||
Other Expenses | 0 | 0 | (789) | ||||||||
Gains (Losses) on Extinguishment of Debt | 0 | (46,403) | 0 | ||||||||
Income before income taxes | 182,171 | 164,400 | 191,895 | ||||||||
Provision for income taxes | (88,172) | (71,396) | (77,903) | ||||||||
Net income | 93,999 | 93,004 | 113,992 | ||||||||
Capital expenditures | 107,232 | 97,709 | 69,216 | ||||||||
Total assets | 4,414,929 | 4,141,492 | 4,414,929 | 4,141,492 | |||||||
U.S. [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
New vehicle retail sales | 4,989,290 | 4,669,512 | 4,220,913 | ||||||||
Used vehicle retail sales | 2,204,728 | 1,923,740 | 1,728,072 | ||||||||
Used vehicle wholesale sales | 289,580 | 279,074 | 236,995 | ||||||||
Parts and service | 1,032,960 | 966,672 | 878,951 | ||||||||
Finance and insurance | 377,432 | 336,243 | 288,409 | ||||||||
Total revenues | 8,893,990 | 8,175,241 | 7,353,340 | ||||||||
Gross profit | 1,338,947 | 1,245,907 | 1,116,415 | ||||||||
Selling, general and administrative expense | 958,608 | 891,693 | 830,275 | ||||||||
Depreciation and amortization | 41,220 | 36,701 | 31,671 | ||||||||
ASSET IMPAIRMENTS | 18,983 | 15,570 | 6,542 | ||||||||
Floorplan interest expense | (36,062) | (34,060) | (33,789) | ||||||||
Other interest expense, net | (52,277) | (46,516) | (37,982) | ||||||||
Other Expenses | 0 | ||||||||||
Gains (Losses) on Extinguishment of Debt | $ 22,800 | $ 23,600 | (46,403) | ||||||||
Income before income taxes | 231,797 | 174,964 | 176,156 | ||||||||
Provision for income taxes | (89,433) | (77,715) | (70,815) | ||||||||
Net income | 142,364 | 97,249 | 105,340 | ||||||||
Capital expenditures | 97,504 | 88,774 | 64,442 | ||||||||
Goodwill and intangible franchise rights | 1,095,434 | 958,144 | 1,095,434 | 958,144 | |||||||
Total assets | 3,940,926 | 3,529,643 | 3,940,926 | 3,529,643 | |||||||
U.K. [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
New vehicle retail sales | 641,888 | 519,137 | 441,537 | ||||||||
Used vehicle retail sales | 351,311 | 283,147 | 221,590 | ||||||||
Used vehicle wholesale sales | 100,706 | 82,235 | 66,077 | ||||||||
Parts and service | 102,183 | 83,747 | 67,557 | ||||||||
Finance and insurance | 24,117 | 18,986 | 14,028 | ||||||||
Total revenues | 1,220,205 | 987,252 | 810,789 | ||||||||
Gross profit | 137,646 | 115,393 | 93,221 | ||||||||
Selling, general and administrative expense | 108,719 | 90,427 | 74,777 | ||||||||
Depreciation and amortization | 4,307 | 3,403 | 2,573 | ||||||||
ASSET IMPAIRMENTS | 330 | 0 | 0 | ||||||||
Floorplan interest expense | (2,276) | (1,662) | (1,589) | ||||||||
Other interest expense, net | (3,135) | (2,065) | (1,158) | ||||||||
Other Expenses | 0 | ||||||||||
Gains (Losses) on Extinguishment of Debt | 0 | ||||||||||
Income before income taxes | 18,879 | 17,836 | 13,124 | ||||||||
Provision for income taxes | (3,655) | (3,561) | (3,064) | ||||||||
Net income | 15,224 | 14,275 | 10,061 | ||||||||
Capital expenditures | 9,395 | 3,679 | 1,489 | ||||||||
Goodwill and intangible franchise rights | 43,093 | 43,295 | 43,093 | 43,295 | |||||||
Total assets | 358,476 | 327,644 | 358,476 | 327,644 | |||||||
Brazil [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill and intangible franchise rights | 132,885 | 132,885 | |||||||||
Total assets | 284,205 | 284,205 | |||||||||
Brazil [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
New vehicle retail sales | 370,128 | 552,970 | 562,471 | ||||||||
Used vehicle retail sales | 82,930 | 117,981 | 89,766 | ||||||||
Used vehicle wholesale sales | 6,965 | 17,834 | 29,113 | ||||||||
Parts and service | 51,050 | 75,275 | 64,177 | ||||||||
Finance and insurance | 7,237 | 11,336 | 8,925 | ||||||||
Total revenues | 518,310 | 775,396 | 754,452 | ||||||||
Gross profit | 57,379 | 86,638 | 82,910 | ||||||||
Selling, general and administrative expense | 53,506 | 79,844 | 71,804 | ||||||||
Depreciation and amortization | 1,712 | 2,240 | 1,582 | ||||||||
ASSET IMPAIRMENTS | 68,249 | 25,950 | 0 | ||||||||
Floorplan interest expense | (926) | (5,892) | (6,289) | ||||||||
Other interest expense, net | (1,491) | (1,112) | 169 | ||||||||
Other Expenses | (789) | ||||||||||
Gains (Losses) on Extinguishment of Debt | 0 | ||||||||||
Income before income taxes | (68,505) | (28,400) | 2,615 | ||||||||
Provision for income taxes | 4,916 | 9,880 | (4,024) | ||||||||
Net income | (63,589) | (18,520) | (1,409) | ||||||||
Capital expenditures | 333 | 5,256 | 3,285 | ||||||||
Goodwill and intangible franchise rights | 23,976 | 23,976 | |||||||||
Total assets | 115,527 | 115,527 | |||||||||
Consolidated Entities [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill and intangible franchise rights | 1,162,503 | 1,134,324 | 1,162,503 | 1,134,324 | |||||||
Total assets | $ 4,414,929 | $ 4,141,492 | 4,414,929 | $ 4,141,492 | |||||||
Net of taxes [Member] | U.S. [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
ASSET IMPAIRMENTS | 12,000 | $ 4,000 | |||||||||
Net of taxes [Member] | Brazil [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
ASSET IMPAIRMENTS | $ 62,400 |
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 2,672,602 | $ 2,800,569 | $ 2,726,480 | $ 2,432,854 | $ 2,538,940 | $ 2,626,448 | $ 2,511,638 | $ 2,260,863 | $ 10,632,505 | $ 9,937,889 | $ 8,918,581 |
Gross profit | 380,133 | 398,382 | 391,573 | 363,884 | 365,959 | 374,709 | 369,148 | 338,122 | 1,533,972 | 1,447,938 | $ 1,292,546 |
Net income | $ (33,387) | $ 45,261 | $ 46,310 | $ 35,815 | $ 18,677 | $ 26,162 | $ 16,862 | $ 31,303 | $ 93,999 | $ 93,004 | |
Basic earnings per common share | $ (1.41) | $ 1.88 | $ 1.91 | $ 1.47 | $ 0.77 | $ 1.07 | $ 0.70 | $ 1.29 | $ 3.91 | $ 3.82 | $ 4.72 |
Diluted earnings per common share | $ (1.41) | $ 1.88 | $ 1.91 | $ 1.47 | $ 0.77 | $ 1.03 | $ 0.62 | $ 1.19 | $ 3.90 | $ 3.60 | $ 4.32 |
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