Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-14733 | |
Entity Incorporation, State or Country Code | OR | |
Entity Tax Identification Number | 93-0572810 | |
Entity Address, Address Line One | 150 N. Bartlett Street | |
Entity Address, City or Town | Medford | |
Entity Address, State or Province | OR | |
Entity Address, Postal Zip Code | 97501 | |
City Area Code | 541 | |
Local Phone Number | 776-6401 | |
Title of 12(b) Security | Class A common stock without par value | |
Trading Symbol | LAD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Registrant Name | LITHIA MOTORS INC | |
Entity Central Index Key | 0001023128 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 26,124,291 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 400,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 57.1 | $ 84 |
Accounts receivable, net of allowance for doubtful accounts of $6.3 and $7.3 | 511.7 | 505 |
Inventories, net | 2,128.7 | 2,433.7 |
Other current assets | 52.9 | 47.8 |
Total Current Assets | 2,750.4 | 3,070.5 |
Property and equipment, net of accumulated depreciation of $326.1 and $284.3 | 1,798.3 | 1,611.7 |
Operating lease right-of-use assets | 266.5 | 251.9 |
Goodwill | 592.2 | 454.6 |
Franchise value | 355.5 | 306.7 |
Other non-current assets | 632.8 | 388.5 |
Total Assets | 6,395.7 | 6,083.9 |
Current Liabilities: | ||
Floor plan notes payable | 310.3 | 425.2 |
Floor plan notes payable: non-trade | 1,293.2 | 1,642.4 |
Current maturities of long-term debt | 56.5 | 39.3 |
Trade payables | 150.2 | 125.3 |
Accrued liabilities | 402.2 | 336.9 |
Total Current Liabilities | 2,212.4 | 2,569.1 |
Long-term debt, less current maturities | 1,799 | 1,430.6 |
Deferred revenue | 150.7 | 137.9 |
Deferred income taxes | 135.7 | 131.1 |
Non-current operating lease liabilities | 250.7 | 238.5 |
Other long-term liabilities | 152.8 | 109 |
Total Liabilities | 4,701.3 | 4,616.2 |
Stockholders’ Equity: | ||
Preferred stock - no par value; authorized 15.0 shares; none outstanding | 0 | 0 |
Additional paid-in capital | 36.4 | 46 |
Accumulated other comprehensive loss | (6.8) | (0.7) |
Retained earnings | 1,658.8 | 1,401.8 |
Total Stockholders’ Equity | 1,694.4 | 1,467.7 |
Total Liabilities and Stockholders’ Equity | 6,395.7 | 6,083.9 |
Class A common stock | ||
Stockholders’ Equity: | ||
Common stock - Class A and Class B | 5.9 | 20.5 |
Class B common stock | ||
Stockholders’ Equity: | ||
Common stock - Class A and Class B | $ 0.1 | $ 0.1 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 6.3 | $ 7.3 |
Accumulated depreciation | $ 326.1 | $ 284.3 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A common stock | ||
Common stock A and B, par value (in dollars per share) | $ 0 | $ 0 |
Common stock A and B, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock A and B, shares issued (in shares) | 22,400,000 | 22,600,000 |
Common stock A and B, shares outstanding (in shares) | 22,400,000 | 22,600,000 |
Class B common stock | ||
Common stock A and B, par value (in dollars per share) | $ 0 | $ 0 |
Common stock A and B, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock A and B, shares issued (in shares) | 400,000 | 600,000 |
Common stock A and B, shares outstanding (in shares) | 400,000 | 600,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Total revenues | $ 3,620.2 | $ 3,332.4 | $ 9,182.5 | $ 9,403.8 |
Cost of sales: | ||||
Total cost of sales | 2,968.6 | 2,821.5 | 7,605.6 | 7,948.6 |
Gross profit | 651.6 | 510.9 | 1,576.9 | 1,455.2 |
Asset impairments | 0 | 0 | 7.9 | 0.5 |
Selling, general and administrative | 389.1 | 343.2 | 1,039.6 | 1,021.5 |
Depreciation and amortization | 22.9 | 20.9 | 67.3 | 60.9 |
Operating income | 239.6 | 146.8 | 462.1 | 372.3 |
Floor plan interest expense | (6.1) | (17.9) | (28.3) | (55.5) |
Other interest expense, net | (16.6) | (14.8) | (50.4) | (45) |
Other income, net | 2.2 | 3.3 | 8.2 | 8.9 |
Income before income taxes | 219.1 | 117.4 | 391.6 | 280.7 |
Income tax provision | (60.3) | (32.2) | (108.9) | (77.2) |
Net income | $ 158.8 | $ 85.2 | $ 282.7 | $ 203.5 |
Basic net income per share (in dollars per share) | $ 6.95 | $ 3.67 | $ 12.30 | $ 8.77 |
Shares used in basic per share calculations (in shares) | 22.9 | 23.2 | 23 | 23.2 |
Diluted net income per share (in dollars per share) | $ 6.86 | $ 3.64 | $ 12.18 | $ 8.72 |
Shares used in diluted per share calculations (in shares) | 23.1 | 23.4 | 23.2 | 23.3 |
Cash dividends paid per Class A and Class B share (in dollars per share) | $ 0.31 | $ 0.30 | $ 0.91 | $ 0.89 |
New vehicle retail | ||||
Revenues: | ||||
Total revenues | $ 1,883.3 | $ 1,824.8 | $ 4,624.6 | $ 4,993.3 |
Cost of sales: | ||||
Total cost of sales | 1,743.2 | 1,724.8 | 4,314.2 | 4,711.9 |
Used vehicle retail | ||||
Revenues: | ||||
Total revenues | 1,093.2 | 916.3 | 2,889.7 | 2,632.4 |
Cost of sales: | ||||
Total cost of sales | 948.4 | 816.6 | 2,556.8 | 2,355 |
Used vehicle wholesale | ||||
Revenues: | ||||
Total revenues | 98.8 | 74.4 | 216.8 | 233.5 |
Cost of sales: | ||||
Total cost of sales | 91.2 | 73.3 | 206.5 | 229.7 |
Finance and insurance | ||||
Revenues: | ||||
Total revenues | 160.5 | 136.3 | 407.2 | 382.7 |
Service, body and parts | ||||
Revenues: | ||||
Total revenues | 359.5 | 340.5 | 964.9 | 993.3 |
Cost of sales: | ||||
Total cost of sales | 163.6 | 169 | 456.5 | 492.2 |
Fleet and other | ||||
Revenues: | ||||
Total revenues | 24.9 | 40.1 | 79.3 | 168.6 |
Cost of sales: | ||||
Total cost of sales | $ 22.2 | $ 37.8 | $ 71.6 | $ 159.8 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 158.8 | $ 85.2 | $ 282.7 | $ 203.5 |
Other comprehensive loss, net of tax: | ||||
Gain (loss) on cash flow hedges, net of tax (expense) benefit of ($0.1), $0.4, $2.2, and $0.7, respectively | 0.4 | (1) | (6.1) | (1.9) |
Comprehensive income | $ 159.2 | $ 84.2 | $ 276.6 | $ 201.6 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | |||||||
Gain (Loss) on cash flow hedges, tax benefit (expense) | $ (0.1) | $ 0.5 | $ 1.8 | $ 0.4 | $ 0.3 | $ 2.2 | $ 0.7 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common StockClass A | Common StockClass B | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings |
Balance (in shares) at Dec. 31, 2018 | 22 | 1 | ||||||
Balance at Dec. 31, 2018 | $ 1,197.2 | $ 0 | $ 0.1 | $ 35 | $ 0 | $ 1,162.1 | $ 0.9 | $ 0.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 56.4 | 56.4 | ||||||
Issuance of stock in connection with employee stock plans | 2.3 | $ 2.3 | ||||||
Issuance of restricted stock to employees (in shares) | 0.1 | |||||||
Issuance of restricted stock to employees | 0 | $ 0 | ||||||
Repurchase of Class A common stock | (3.1) | $ (3.1) | ||||||
Class B common stock converted to Class A common stock (in shares) | 0.2 | (0.2) | ||||||
Class B common stock converted to Class A common stock | 0 | |||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 3.5 | $ 10.5 | (7) | |||||
Dividends paid | (6.7) | (6.7) | ||||||
Balance (in shares) at Mar. 31, 2019 | 22.3 | 0.8 | ||||||
Balance at Mar. 31, 2019 | 1,250.5 | $ 9.7 | $ 0.1 | 28 | 0 | 1,212.7 | ||
Balance (in shares) at Dec. 31, 2018 | 22 | 1 | ||||||
Balance at Dec. 31, 2018 | 1,197.2 | $ 0 | $ 0.1 | 35 | 0 | 1,162.1 | 0.9 | 0.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 203.5 | |||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (1.9) | |||||||
Balance (in shares) at Sep. 30, 2019 | 22.6 | 0.6 | ||||||
Balance at Sep. 30, 2019 | $ 1,359.2 | $ 16.9 | $ 0.1 | 3.4 | (1.9) | 1,340.7 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Balance (in shares) at Dec. 31, 2018 | 22 | 1 | ||||||
Balance at Dec. 31, 2018 | $ 1,197.2 | $ 0 | $ 0.1 | 35 | 0 | 1,162.1 | 0.9 | 0.9 |
Balance (in shares) at Dec. 31, 2019 | 22.6 | 0.6 | ||||||
Balance at Dec. 31, 2019 | 1,467.7 | $ 20.5 | $ 0.1 | 46 | (0.7) | 1,401.8 | (4.8) | (4.8) |
Balance (in shares) at Mar. 31, 2019 | 22.3 | 0.8 | ||||||
Balance at Mar. 31, 2019 | 1,250.5 | $ 9.7 | $ 0.1 | 28 | 0 | 1,212.7 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 61.9 | 61.9 | ||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (0.9) | (0.9) | ||||||
Issuance of stock in connection with employee stock plans (in shares) | 0.1 | |||||||
Issuance of stock in connection with employee stock plans | 2.8 | $ 2.8 | ||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 3.9 | $ 0.5 | 3.4 | |||||
Option premiums paid | (36.5) | (31.4) | (5.1) | |||||
Dividends paid | (7) | (7) | ||||||
Balance (in shares) at Jun. 30, 2019 | 22.4 | 0.8 | ||||||
Balance at Jun. 30, 2019 | 1,274.7 | $ 13 | $ 0.1 | 0 | (0.9) | 1,262.5 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 85.2 | 85.2 | ||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (1) | (1) | ||||||
Issuance of stock in connection with employee stock plans | 2.9 | $ 2.9 | ||||||
Class B common stock converted to Class A common stock (in shares) | 0.2 | (0.2) | ||||||
Class B common stock converted to Class A common stock | 0 | |||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 4.4 | $ 1 | 3.4 | |||||
Dividends paid | (7) | (7) | ||||||
Balance (in shares) at Sep. 30, 2019 | 22.6 | 0.6 | ||||||
Balance at Sep. 30, 2019 | 1,359.2 | $ 16.9 | $ 0.1 | 3.4 | (1.9) | 1,340.7 | ||
Balance (in shares) at Dec. 31, 2019 | 22.6 | 0.6 | ||||||
Balance at Dec. 31, 2019 | 1,467.7 | $ 20.5 | $ 0.1 | 46 | (0.7) | 1,401.8 | (4.8) | (4.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 46.2 | 46.2 | ||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (5.1) | (5.1) | ||||||
Issuance of stock in connection with employee stock plans | 2.6 | $ 2.6 | ||||||
Issuance of restricted stock to employees (in shares) | 0.1 | |||||||
Issuance of restricted stock to employees | 0 | $ 0 | ||||||
Repurchase of Class A common stock (in shares) | (0.5) | |||||||
Repurchase of Class A common stock | (48.2) | $ (32) | (16.2) | |||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 5.1 | $ 8.9 | (3.8) | |||||
Dividends paid | (7) | (7) | ||||||
Balance (in shares) at Mar. 31, 2020 | 22.2 | 0.6 | ||||||
Balance at Mar. 31, 2020 | $ 1,456.5 | $ 0 | $ 0.1 | 26 | (5.8) | 1,436.2 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Balance (in shares) at Dec. 31, 2019 | 22.6 | 0.6 | ||||||
Balance at Dec. 31, 2019 | $ 1,467.7 | $ 20.5 | $ 0.1 | 46 | (0.7) | 1,401.8 | $ (4.8) | $ (4.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 282.7 | |||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (6.1) | |||||||
Balance (in shares) at Sep. 30, 2020 | 22.4 | 0.4 | ||||||
Balance at Sep. 30, 2020 | 1,694.4 | $ 5.9 | $ 0.1 | 36.4 | (6.8) | 1,658.8 | ||
Balance (in shares) at Mar. 31, 2020 | 22.2 | 0.6 | ||||||
Balance at Mar. 31, 2020 | 1,456.5 | $ 0 | $ 0.1 | 26 | (5.8) | 1,436.2 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 77.7 | 77.7 | ||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | (1.4) | (1.4) | ||||||
Issuance of stock in connection with employee stock plans | 3.5 | 3.5 | ||||||
Repurchase of Class A common stock | (2.3) | $ (2.3) | ||||||
Class B common stock converted to Class A common stock (in shares) | 0.2 | (0.2) | ||||||
Class B common stock converted to Class A common stock | 0 | $ 0 | $ 0 | |||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 5 | $ 0.9 | 4.1 | |||||
Dividends paid | (6.8) | (6.8) | ||||||
Balance (in shares) at Jun. 30, 2020 | 22.4 | 0.4 | ||||||
Balance at Jun. 30, 2020 | 1,532.2 | $ 2.1 | $ 0.1 | 30.1 | (7.2) | 1,507.1 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 158.8 | 158.8 | ||||||
Gain (loss) on cash flow hedges, net of tax benefit (expense) | 0.4 | 0.4 | ||||||
Issuance of stock in connection with employee stock plans | 3.1 | 3.1 | ||||||
Repurchase of Class A common stock | (0.1) | (0.1) | ||||||
Compensation for stock and stock option issuances and excess tax benefits from option exercises | 7.1 | $ 0.8 | 6.3 | |||||
Dividends paid | (7.1) | (7.1) | ||||||
Balance (in shares) at Sep. 30, 2020 | 22.4 | 0.4 | ||||||
Balance at Sep. 30, 2020 | $ 1,694.4 | $ 5.9 | $ 0.1 | $ 36.4 | $ (6.8) | $ 1,658.8 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||||||
Gain (Loss) on cash flow hedges, tax benefit (expense) | $ (0.1) | $ 0.5 | $ 1.8 | $ 0.4 | $ 0.3 | $ 2.2 | $ 0.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Cash flows from operating activities: | |||
Net income | $ 282.7 | $ 203.5 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Asset impairments | 7.9 | 0.5 | |
Depreciation and amortization | 67.3 | 60.9 | |
Stock-based compensation | 17.2 | 11.8 | |
Gain on disposal of other assets | (0.5) | 0 | |
Gain on disposal of franchise | (1.4) | (9.1) | |
Deferred income taxes | 6.8 | 39.5 | |
(Increase) decrease (net of acquisitions and dispositions): | |||
Accounts receivable, net | (11.3) | 69.7 | |
Inventories | 457 | (4.1) | |
Other assets | 7.8 | 22.3 | |
Increase (decrease) (net of acquisitions and dispositions): | |||
Floor plan notes payable | (128) | 83.1 | |
Trade payables | 25 | 0.1 | |
Accrued liabilities | 23.6 | (36.5) | |
Other long-term liabilities and deferred revenue | 46.5 | 11.8 | |
Net cash provided by operating activities | 800.6 | 453.5 | |
Cash flows from investing activities: | |||
Capital expenditures | (125.6) | (91.9) | |
Proceeds from sales of assets | 5.1 | 0.8 | |
Cash paid for other investments | (9.9) | (6.7) | |
Cash paid for acquisitions, net of cash acquired | (609.5) | (142.8) | |
Proceeds from sales of stores | 11.6 | 40.9 | |
Net cash used in investing activities | (728.3) | (199.7) | |
Cash flows from financing activities: | |||
Repayments on floor plan notes payable, net: non-trade | (317.8) | (114) | |
Borrowings on lines of credit | 1,740.5 | 2,147 | |
Repayments on lines of credit | (1,485) | (2,209.6) | |
Principal payments on long-term debt and capital leases, scheduled | (20.7) | (18) | |
Principal payments on long-term debt and capital leases, other | (6.3) | (11) | |
Proceeds from issuance of long-term debt | 56.5 | 0 | |
Payments of debt issuance costs | (4.1) | (0.4) | |
Proceeds from issuance of common stock | 9.2 | 8 | |
Repurchase of common stock | (50.6) | (3.1) | |
Dividends paid | (20.9) | (20.7) | |
Other financing activity | 0 | (36.5) | |
Net cash used in financing activities | (99.2) | (258.3) | |
Decrease in cash and cash equivalents | (26.9) | (4.5) | |
Cash and cash equivalents at beginning of period | 84 | 31.6 | |
Cash and cash equivalents at end of period | 57.1 | 27.1 | |
Supplemental disclosure of cash flow information: | |||
Cash paid during the period for interest | 82.7 | 107.6 | |
Cash paid during the period for income taxes, net | 74.1 | 13.8 | |
Floor plan debt paid in connection with store disposals | 22 | 12.3 | |
Supplemental schedule of non-cash activities: | |||
Debt issued in connection with acquisitions | 0 | 26.4 | |
Contingent consideration in connection with acquisitions | 9.7 | 0 | |
ROU assets obtained in exchange for lease liabilities | [1] | $ 44.1 | 260.3 |
Acquisition of finance leases in connection with acquisitions | $ 0 | ||
[1] | The amount for the nine months ended September 30, 2019 includes the transition adjustment for the adoption of Topic 842. |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements Basis of Presentation These condensed Consolidated Financial Statements contain unaudited information as of September 30, 2020 , and for the three and nine months ended September 30, 2020 and 2019 . The unaudited interim financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by accounting principles generally accepted in the United States of America for annual financial statements are not included herein. In management’s opinion, these unaudited financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with our 2019 audited Consolidated Financial Statements and the related notes thereto. The financial information as of December 31, 2019 , is derived from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2020 . The unaudited interim condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our 2019 Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which replaces the existing incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Topic 326 made changes to the accounting for available-for-sale debt securities. We adopted Topic 326 using a modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a decrease to retained earnings, net of tax, of $4.8 million as of January 1, 2020 for the cumulative effect of adopting Topic 326. The transition adjustment is related to updating our allowance for loan loss methodology related to our auto loan receivables. Our methodology incorporates a combination of historical loan loss experience, current conditions and forecasts, as well as the value of any underlying assets securing the receivables. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements,” which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries when estimating the allowance. In May 2019, the FASB issued ASU 2019-05, “Targeted Transition Relief,” which allows entities with an option to elect fair value for certain instruments upon adoption of Topic 326. The impact of adopting Topic 326 on the accompanying Consolidated Balance Sheets as of January 1, 2020 was as follows (in millions): Impact on Consolidated Balance Sheets December 31, 2019 Adjustments January 1, 2020 CECL Adoption: Accounts receivable, net of allowance for doubtful accounts of $7.3 $ 505.0 $ (0.5 ) $ 504.5 Other non-current assets 388.5 (6.0 ) 382.5 Total Assets 6,083.9 (6.5 ) 6,077.4 Deferred income taxes 131.1 (1.7 ) 129.4 Total Liabilities 4,616.2 (1.7 ) 4,614.5 Retained earnings 1,401.8 (4.8 ) 1,397.0 Total Liabilities and Stockholders’ Equity 6,083.9 (6.5 ) 6,077.4 Reclassifications Certain immaterial reclassifications of amounts previously reported have been made to the accompanying condensed Consolidated Financial Statements to maintain consistency and comparability between periods presented. |
Contract Liabilities and Assets
Contract Liabilities and Assets | 9 Months Ended |
Sep. 30, 2020 | |
Disaggregation of Revenue [Abstract] | |
Contract Liabilities and Assets | Contract Liabilities and Assets Contract Liabilities We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $187.8 million and $171.5 million as of September 30, 2020 , and December 31, 2019 , respectively; and we recognized $7.7 million and $23.8 million of revenue in the three and nine months ended September 30, 2020 , related to our contract liability balance at December 31, 2019 . Our contract liability balance is included in accrued liabilities and deferred revenue. Contract Assets Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract. Our contract asset balances associated with future estimated variable consideration were $8.2 million and $8.9 million as of September 30, 2020 and December 31, 2019 , respectively; and are included in trade receivables and other non-current assets. |
Accounts Receivable and Contrac
Accounts Receivable and Contract Assets | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable and Contract Assets | Accounts Receivable and Contract Assets Accounts receivable consisted of the following (in millions): September 30, 2020 December 31, 2019 Contracts in transit $ 235.9 $ 269.7 Trade receivables 56.7 52.8 Vehicle receivables 55.3 50.9 Manufacturer receivables 107.1 112.4 Auto loan receivables 95.8 62.2 Other receivables 33.5 19.4 584.3 567.4 Less: Allowance for doubtful accounts (6.3 ) (7.3 ) Less: Long-term portion of accounts receivable, net (66.3 ) (55.1 ) Total accounts receivable, net $ 511.7 $ 505.0 Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received approximately ten days after selling a vehicle. • Trade receivables are comprised of amounts due from customers for open charge accounts, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. • Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products. Interest income on auto loan receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. All other receivables are recorded at invoice and do not bear interest until they are 60 days past due. The balance of auto loan receivables is made up primarily of sub-prime loans secured by the related vehicle. More than 95% of the portfolio is aged less than 60 days past due with less than 5% on non-accrual status. As of September 30, 2020 , the allowance for credit losses related to auto loan receivables was $13.9 million and included in allowance for doubtful accounts and other non-current assets. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon reaching 120 days past due status. The annual activity for charges and subsequent recoveries is immaterial. The remainder of our receivables are due primarily from manufacturer partners and various third-party lenders. The historical losses related to these balances are immaterial. The long-term portion of accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of inventories, net, consisted of the following (in millions): September 30, 2020 December 31, 2019 New vehicles $ 1,271.0 $ 1,704.1 Used vehicles 765.2 638.1 Parts and accessories 92.5 91.5 Total inventories $ 2,128.7 $ 2,433.7 |
Goodwill and Franchise Value
Goodwill and Franchise Value | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Franchise Value | Goodwill and Franchise Value The changes in the carrying amounts of goodwill are as follows (in millions): Domestic Import Luxury Consolidated Balance as of December 31, 2018 ¹ $ 164.5 $ 188.9 $ 81.5 $ 434.9 Adjustments to purchase price allocations 2 1.6 1.6 1.9 5.1 Additions through acquisitions 2 6.2 9.0 2.2 17.4 Reductions from impairments (0.3 ) (1.3 ) (0.1 ) (1.7 ) Reductions through divestitures (0.2 ) (0.9 ) — (1.1 ) Balance as of December 31, 2019 ¹ 171.8 197.3 85.5 454.6 Additions through acquisitions 3 32.0 92.9 17.0 141.9 Reductions through divestitures (0.1 ) (0.7 ) — (0.8 ) Reductions from impairments (0.5 ) (3.0 ) — (3.5 ) Balance as of September 30, 2020 $ 203.2 $ 286.5 $ 102.5 $ 592.2 1 Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. 2 Our purchase price allocation for the 2018 acquisitions were finalized in 2019. As a result, we added $22.5 million of goodwill. 3 Our purchase price allocation for a portion of the 2019 acquisitions was finalized in 2020. As a result, we added $141.9 million of goodwill. Our purchase price allocation for the remaining 2019 and 2020 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 . The changes in the carrying amounts of franchise value are as follows (in millions): Franchise Value Balance as of December 31, 2018 $ 288.7 Adjustments to purchase price allocations 1 3.5 Additions through acquisitions 1 20.9 Reductions through divestitures (6.0 ) Reductions from impairments (0.4 ) Balance as of December 31, 2019 306.7 Additions through acquisitions 2 53.9 Reductions through divestitures (0.7 ) Reductions from impairments (4.4 ) Balance as of September 30, 2020 $ 355.5 1 Our purchase price allocation for the 2018 acquisitions were finalized in 2019. As a result, we added $24.4 million of franchise value. 2 Our purchase price allocation for a portion of the 2019 acquisitions was finalized in 2020. As a result, we added $53.9 million of franchise value. Our purchase price allocation for the remaining 2019 and 2020 acquisitions are preliminary and franchise value is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 . |
Credit Facilities and Long-term
Credit Facilities and Long-term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-term Debt | Credit Facilities and Long-term Debt On July 14, 2020 , we entered into a five-year real-estate backed facility with eight financial institutions, including two manufacturer affiliated finance companies, maturing in July 2025. The real-estate backed credit facility provides a total financing commitment of up to $254.7 million in working capital financing for general corporate purposes, including acquisitions and working capital, collateralized by real estate and certain other assets owned by us. The interest rate on this credit facility uses one-month LIBOR plus a margin ranging from 2.00% to 2.50% based on our leverage ratio, or a base rate of 0.75% plus a margin. The facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties by us. Financial covenants include requirements to maintain minimum current and fixed charge coverage ratios, and a maximum leverage ratio, consistent with those under the our existing syndicated credit facility with U.S. Bank National Association as administrative agent. As of September 30, 2020, no amounts were outstanding on the real-estate backed facility. On July 31, 2020, we entered into a securitization facility which provides initial commitments for borrowings of up to $100 million , which may be increased to $150 million in certain circumstances, and matures in July 2022. As of September 30, 2020, we had $12.5 million drawn on the securitization facility, which is recorded as part of Long-term debt, less current maturities in the Consolidated Balance Sheets. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Repurchases of Class A Common Stock Repurchases of our Class A Common Stock occurred under a repurchase authorization granted by our Board of Directors and related to shares withheld as part of the vesting of restricted stock units ("RSUs"). On October 22, 2018, our Board of Directors approved an additional $250 million repurchase authorization of our Class A common stock, increasing our total share repurchase authorization to $500 million . Share repurchases under this authorization were as follows: Repurchases Occurring in 2020 Cumulative Repurchases as of September 30, 2020 Shares Average Price Shares Average Price Share Repurchase Authorization 563,953 $ 81.71 3,719,048 $ 84.02 As of September 30, 2020 , we had $187.5 million available for repurchases pursuant to our share repurchase authorization. In addition, during 2020 , we repurchased 30,143 shares at an average price of $147.12 per share, for a total of $4.4 million , related to tax withholdings associated with the vesting of RSUs. The repurchase of shares related to tax withholdings associated with stock awards does not reduce the number of shares available for repurchase as approved by our Board of Directors. ATM Equity Offering On July 24, 2020, we entered into an ATM Equity Offering Sales Agreement, which allows us to offer and sell, from time to time, shares of our Class A common stock, no par value, having an aggregate gross sales price of up to $400 million . The shares will be issued pursuant to a registration statement on Form S-3 (File No. 333-239969), which became effective upon its filing on July 21, 2020. Under this agreement, we may enter into forward share purchase transactions. As of September 30, 2020, no amounts have been issued in relation to the ATM Equity Offering Sales Agreement. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories: • Level 1 - quoted prices in active markets for identical securities; • Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and • Level 3 - significant unobservable inputs, including our own assumptions in determining fair value. We determined that the carrying value of cash equivalents, accounts receivable, trade payables, accrued liabilities and short-term borrowings approximate their fair values because of the nature of their terms and current market rates of these instruments. We believe the carrying value of our variable rate debt approximates fair value. We have fixed rate debt primarily consisting of amounts outstanding under our senior notes and real estate mortgages. We calculated the estimated fair value of the senior notes using quoted prices for the identical liability (Level 1) and calculated the estimated fair value of the fixed rate real estate mortgages using a discounted cash flow methodology with estimated current interest rates based on a similar risk profile and duration (Level 2). The fixed cash flows are discounted and summed to compute the fair value of the debt. As of September 30, 2020 , our real estate mortgages and other debt, which includes capital leases, had maturity dates between October 31, 2020 , and August 31, 2038 . We have derivative instruments consisting of interest rate collars. The fair value of derivative liabilities is measured using observable Level 2 market expectations at each measurement date and is recorded as current liabilities and other long-term liabilities in the Consolidated Balance Sheets. See Note 12 for more details regarding our derivative contracts. We estimate the value of other long-lived assets that are recorded at fair value on a non-recurring basis on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income and replacement cost approaches. Because these valuations contain unobservable inputs, we classified the measurement of fair value of long-lived assets as Level 3. There were no changes to our valuation techniques during the nine -month period ended September 30, 2020 . Below are our derivative liabilities that are measured at fair value (in millions): Fair Value at September 30, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative contract, net $ — $ 9.2 $ — Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative contract, net $ — $ 1.0 $ — A summary of the aggregate carrying values, excluding unamortized debt issuance cost, and fair values of our long-term fixed interest rate debt is as follows (in millions): September 30, 2020 December 31, 2019 Carrying value 5.250% Senior notes due 2025 $ 300.0 $ 300.0 4.625% Senior notes due 2027 400.0 400.0 Real estate mortgages and other debt 605.9 466.6 $ 1,305.9 $ 1,166.6 Fair value 5.250% Senior notes due 2025 $ 309.0 $ 315.0 4.625% Senior notes due 2027 406.5 412.0 Real estate mortgages and other debt 603.7 468.7 $ 1,319.2 $ 1,195.7 Goodwill and franchise value for our reporting units are tested for impairment annually as of October 1 or more frequently when events or changes in circumstances indicate that impairment may have occurred. During the second quarter of 2020, there were indications of a triggering event at certain locations. We tested the goodwill and franchise value for these locations. As a result, we identified certain reporting units where it was more likely than not the fair value was less than the carrying amount, and recorded non-cash impairment charges of $3.5 million and $4.4 million , which was equal to the difference between the fair value and the carrying value for goodwill and franchise value, respectively. The impairment charges for both goodwill and franchise value reduced the carrying value to zero at these locations. The non-cash impairment charges are included in “Asset impairments” in the accompanying Consolidated Statements of Operations and are reported in the “Corporate and Other” category of our segment information. |
Net Income Per Share of Class A
Net Income Per Share of Class A and Class B Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Class A and Class B Common Stock | Net Income Per Share of Class A and Class B Common Stock We compute net income per share of Class A and Class B common stock using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding common shares underlying equity awards that are unvested or subject to forfeiture. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the common shares issuable upon the net exercise of stock options and unvested RSUs and is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares. Except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock are identical. Under our Articles of Incorporation, the Class A and Class B common stock share equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation that would adversely alter the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The following is a reconciliation of net income and weighted average shares used for our basic earnings per share (“EPS”) and diluted EPS (in millions, except per share amounts): Three Months Ended September 30, 2020 2019 (in millions, except per share data) Class A Class B Class A Class B Net income applicable to common stockholders - basic $ 156.0 $ 2.8 $ 83.0 $ 2.2 Reallocation of net income due to conversion of Class B to Class A common shares outstanding 0.2 — 0.2 — Conversion of Class B common shares into Class A common shares 2.6 — 2.0 — Net income applicable to common stockholders - diluted $ 158.8 $ 2.8 $ 85.2 $ 2.2 Weighted average common shares outstanding – basic 22.5 0.4 22.6 0.6 Conversion of Class B common shares into Class A common shares 0.4 — 0.6 — Effect of dilutive stock options on weighted average common shares 0.2 — 0.2 — Weighted average common shares outstanding – diluted 23.1 0.4 23.4 0.6 Net income per common share - basic $ 6.95 $ 6.95 $ 3.67 $ 3.67 Net income per common share - diluted $ 6.86 $ 6.86 $ 3.64 $ 3.64 The effect of antidilutive securities on Class A and Class B common stock was evaluated for the three-month periods ended September 30, 2020 , and 2019 and was determined to be immaterial. Nine Months Ended September 30, 2020 2019 (in millions, except per share data) Class A Class B Class A Class B Net income applicable to common stockholders - basic $ 276.4 $ 6.3 $ 198.2 $ 5.3 Reallocation of net income due to conversion of Class B to Class A common shares outstanding 0.5 — 0.6 — Conversion of Class B common shares into Class A common shares 5.8 — 4.7 — Net income applicable to common stockholders - diluted $ 282.7 $ 6.3 $ 203.5 $ 5.3 Weighted average common shares outstanding – basic 22.5 0.5 22.6 0.6 Conversion of Class B common shares into Class A common shares 0.5 — 0.6 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.2 — 0.1 — Weighted average common shares outstanding – diluted 23.2 0.5 23.3 0.6 Net income per common share - basic $ 12.29 $ 12.29 $ 8.77 $ 8.77 Net income per common share - diluted $ 12.18 $ 12.18 $ 8.72 $ 8.72 The effect of antidilutive securities on Class A and Class B common stock was evaluated for the nine -month periods ended September 30, 2020 , and 2019 and was determined to be immaterial. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | Segments While we have determined that each individual store is a reporting unit, we have aggregated our reporting units into three reportable segments based on their economic similarities: Domestic, Import and Luxury. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Chrysler, General Motors and Ford. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Honda, Toyota, Subaru, Nissan and Volkswagen. Our Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by BMW, Mercedes and Lexus. The franchises in each segment also sell used vehicles, parts and automotive services, as well as automotive finance and insurance products. Corporate and other revenue and income includes the results of operations of our stand-alone body shops offset by unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other reportable segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden a stand-alone dealership would experience. Examples of these internal allocations include internal rent expense, internal floor plan financing charges, and internal fees charged to offset employees within our corporate headquarters who perform certain dealership functions. We define our chief operating decision maker (“CODM”) to be certain members of our executive management group. Historical and forecasted operational performance is evaluated on a store-by-store basis and on a consolidated basis by the CODM. We derive the operating results of the segments directly from our internal management reporting system. The accounting policies used to derive segment results are substantially the same as those used to determine our consolidated results, excepted for the internal allocation within Corporate and other discussed above. Our CODM does not regularly review capital expenditures on a reporting unit level. Performance measurement of each reportable segment by the CODM are based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance of and to allocate resources, mainly associated with expected inventory and working capital requirements, to each of the reportable segments. Certain financial information on a segment basis is as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenues: Domestic New vehicle retail $ 621.3 $ 613.0 $ 1,591.0 $ 1,682.7 Used vehicle retail 378.8 328.1 1,096.4 949.6 Used vehicle wholesale 31.9 30.3 77.7 89.5 Finance and insurance 53.2 48.1 149.2 137.2 Service, body and parts 118.0 122.8 337.5 359.2 Fleet and other 11.5 15.5 35.1 47.6 1,214.7 1,157.8 3,286.9 3,265.8 Import New vehicle retail 822.9 824.8 1,995.9 2,198.1 Used vehicle retail 451.9 380.9 1,152.6 1,085.7 Used vehicle wholesale 42.2 28.4 88.6 85.3 Finance and insurance 81.1 65.2 195.0 180.9 Service, body and parts 141.3 129.2 371.3 374.2 Fleet and other 11.1 9.2 28.9 38.1 1,550.5 1,437.7 3,832.3 3,962.3 Luxury New vehicle retail 440.8 387.0 1,039.0 1,110.2 Used vehicle retail 261.8 206.7 642.5 596.0 Used vehicle wholesale 24.8 16.4 50.3 59.0 Finance and insurance 25.6 19.2 60.2 54.1 Service, body and parts 96.0 84.9 244.8 248.0 Fleet and other 1.9 15.2 13.9 81.7 850.9 729.4 2,050.7 2,149.0 3,616.1 3,324.9 9,169.9 9,377.1 Corporate and other 4.1 7.5 12.6 26.7 $ 3,620.2 $ 3,332.4 $ 9,182.5 $ 9,403.8 Segment income 1 : Domestic $ 81.1 $ 37.9 $ 168.3 $ 94.1 Import 102.6 48.3 176.2 117.8 Luxury 39.2 13.0 53.1 36.5 Total segment income for reportable segments $ 222.9 $ 99.2 $ 397.6 $ 248.4 1 Segment income for each of the segments is defined as income before income taxes, depreciation and amortization, other interest expense and other income, net. Reconciliation of total segment income for reportable segments to our consolidated income before income taxes. Three Months Ended Nine Months Ended 2020 2019 2020 2019 Total segment income for reportable segments $ 222.9 $ 99.2 $ 397.6 $ 248.4 Corporate and other 33.5 50.6 103.5 129.3 Depreciation and amortization (22.9 ) (20.9 ) (67.3 ) (60.9 ) Other interest expense (16.6 ) (14.8 ) (50.4 ) (45.0 ) Other income, net 2.2 3.3 8.2 8.9 Income before income taxes $ 219.1 $ 117.4 $ 391.6 $ 280.7 September 30, 2020 December 31, 2019 Total assets: Domestic $ 1,249.9 $ 1,467.6 Import 1,477.7 1,306.5 Luxury 869.3 945.2 Corporate and other 2,798.8 2,364.6 $ 6,395.7 $ 6,083.9 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and nonlease components related to leases of real property. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 25 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do no contain any material residual value guarantees or material restrictive covenants. In the third quarter of 2020, $103.1 million in finance leases were added to long-term debt, with the current portion included in current maturities of long-term debt. The related assets are included in property, plant and equipment, net of accumulated amortization. These amounts are related to leases entered into as part of certain 2020 acquisitions, and valuations are still preliminary. We expect additional finance leases to be recorded in the fourth quarter related to certain third quarter 2020 acquisitions. These amounts are included in other non-current assets until we finalize our purchase accounting We rent or sublease certain real estate to third parties. |
Leases | Leases We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and nonlease components related to leases of real property. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 25 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do no contain any material residual value guarantees or material restrictive covenants. In the third quarter of 2020, $103.1 million in finance leases were added to long-term debt, with the current portion included in current maturities of long-term debt. The related assets are included in property, plant and equipment, net of accumulated amortization. These amounts are related to leases entered into as part of certain 2020 acquisitions, and valuations are still preliminary. We expect additional finance leases to be recorded in the fourth quarter related to certain third quarter 2020 acquisitions. These amounts are included in other non-current assets until we finalize our purchase accounting We rent or sublease certain real estate to third parties. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We account for derivative financial instruments by recording the fair value as either an asset or liability in our Consolidated Balance Sheets and recognize the resulting gains or losses as adjustments to accumulated other comprehensive income (loss). We do not hold or issue derivative financial instruments for trading or speculative purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss (“AOCI”) in stockholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. In the second quarter of 2019, to hedge the business exposure to rising interest rates on a portion of our variable rate debt, we entered into a 5 -year zero-cost interest rate collar, with an aggregate notional amount of $300 million . This instrument hedges interest rate risk related to a portion of our $1.3 billion of non-trade floor plan notes payable. The gains and losses from the cash flow hedge are recorded in AOCI and released to interest expense in the same period that the hedged interest expense on the floor plan is recognized. As of September 30, 2020 , we have had a total loss of $9.2 million recorded associated with the fair value of our derivative instrument, included as a component of accrued liabilities and other long-term liabilities with the offsets in our deferred tax liability and AOCI. As of September 30, 2020 , the amount of net losses we expect to reclassify from AOCI into interest expense in earnings within the next twelve months is $2.7 million . The actual amount reclassified could vary due to future changes in the fair value of the derivative. We reclassified $0.7 million and $1.1 million from AOCI for the three and nine months ended September 30, 2020 , respectively. No amounts were reclassified from AOCI in 2019. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions In the first nine months of 2020 , we completed the following acquisitions: • In February 2020, Sacramento Lexus and Roseville Lexus in California. • In June 2020, Hank’s Body Shop in Billings, Montana. • In June 2020, Chrysler Dodge Jeep Ram of Bend and Nissan of Bend in Oregon. • In July 2020, Subaru of Thousand Oaks in California. • In July 2020, BMW of San Francisco in California. • In August 2020, John Eagle Auto Group, a ten store platform in Texas. • In September 2020, Knoxville Chrysler Dodge Jeep Ram in Tennessee. Revenue and operating income contributed by the 2020 acquisitions subsequent to the date of acquisition were as follows (in millions): Nine Months Ended September 30, 2020 Revenue $ 261.3 Operating income 9.2 In the first nine months of 2019 , we completed the following acquisitions: • In May 2019, Hamilton Honda in Hamilton Township, New Jersey. • In May 2019, Ford Lincoln of Morgantown in Morgantown, West Virginia. • In July 2019, Mission Viejo Jaguar Land Rover in Mission Viejo, California. • In August 2019, Hazleton Honda in Hazleton, Pennsylvania. All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition. The following tables summarize the consideration paid for the 2020 acquisitions and the amount of identified assets acquired and liabilities assumed as of the acquisition date (in millions): Consideration Cash paid, net of cash acquired $ 609.5 The purchase price allocations for the Sacramento Lexus, Roseville Lexus, Chrysler Dodge Jeep Ram of Bend, Nissan of Bend, Subaru of Thousand Oaks, BMW of San Francisco, the John Eagle Auto Group, and Knoxville Chrysler Dodge Jeep Ram acquisitions are preliminary, and we have not obtained and evaluated all of the detailed information necessary to finalize the opening balance sheet amounts in all respects. We recorded the purchase price allocations based upon information that is currently available. Unallocated items are recorded as a component of other non-current assets in the Consolidated Balance Sheets. The following table details the preliminary purchase price allocations for the 2020 acquisitions (in millions): Assets Acquired and Liabilities Assumed Accounts receivable $ 0.2 Inventories, net 189.3 Property and equipment, net 125.8 Other non-current assets 416.5 Floor plan notes payable (13.1 ) Debt and finance lease obligations (103.1 ) Other long-term liabilities (6.1 ) $ 609.5 We expect substantially all of the goodwill related to acquisitions completed in 2020 to be deductible for federal income tax purposes. In the three and nine -month periods ended September 30, 2020 , we recorded $0.6 million and $1.6 million , respectively, in acquisition-related expenses as a component of selling, general and administrative expense. Comparatively, we recorded $0.2 million and $1.9 million of acquisition-related expenses in each of the same periods in 2019. The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three and nine -month periods ended September 30, 2020 and 2019 , had occurred on January 1, 2019 (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue $ 3,745.3 $ 3,738.3 $ 10,000.7 $ 10,548.8 Net income 160.1 92.3 291.9 220.4 Basic net income per share 7.01 3.97 12.71 9.50 Diluted net income per share 6.92 3.94 12.58 9.44 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Issuance of Common Stock On October 5, 2020, we completed the public offering of 3,659,091 shares of our Class A common stock, no par value per share, which included the exercise in full by the underwriters of their option to purchase up to 477,272 additional shares of our Class A common stock, for total net proceeds of approximately $777 million . 4.375% Senior Notes Due 2031 On October 9, 2020, we issued $550 million in aggregate principal amount of 4.375% Senior Notes due 2031 to eligible purchasers in a private placement under Rule 144A and Regulation S of the Securities Act of 1933. Interest accrues on the Senior Notes from October 9, 2020 and is payable semiannually on January 15 and July 15. We may redeem the Senior Notes in whole or in part, on or after October 15, 2025, at the redemption prices set forth in the Indenture. Prior to October 15, 2025, we may redeem the Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a make-whole premium set forth in the Indenture. In addition, prior to October 15, 2025, we may redeem up to 40% of the Senior Notes from the proceeds of certain equity offerings. Upon certain change of control events (as set forth in the Indenture), the holders of the Senior Notes may require us to repurchase all or a portion of the Senior Notes at a purchase price of 101% of their principal amount plus accrued and unpaid interest, if any, to the date of purchase. Investment in Shift Technologies, Inc. On October 13, 2020, Shift Technologies, Inc. (“Shift”) merged with Insurance Acquisition Corp., a publicly listed company. Shift was the surviving company that was subsequently listed on the NYSE. Our investment in Shift will be converted to a minority equity investment and will have a readily determinable fair value. The fair value will be updated at each reporting period and will be based upon the quoted price in active markets for the identical asset (Level 1). As of September 30, 2020, our investment in Shift was $64.0 million and was included as a component of other non-current assets in the Consolidated Balance Sheets. |
Interim Financial Statements (P
Interim Financial Statements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These condensed Consolidated Financial Statements contain unaudited information as of September 30, 2020 , and for the three and nine months ended September 30, 2020 and 2019 . The unaudited interim financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by accounting principles generally accepted in the United States of America for annual financial statements are not included herein. In management’s opinion, these unaudited financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with our 2019 audited Consolidated Financial Statements and the related notes thereto. The financial information as of December 31, 2019 , is derived from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2020 . The unaudited interim condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our 2019 Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. |
Reclassifications | Reclassifications Certain immaterial reclassifications of amounts previously reported have been made to the accompanying condensed Consolidated Financial Statements to maintain consistency and comparability between periods presented. |
Revenue Recognition | Contract Liabilities We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $187.8 million and $171.5 million as of September 30, 2020 , and December 31, 2019 , respectively; and we recognized $7.7 million and $23.8 million of revenue in the three and nine months ended September 30, 2020 , related to our contract liability balance at December 31, 2019 . Our contract liability balance is included in accrued liabilities and deferred revenue. Contract Assets Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract. Our contract asset balances associated with future estimated variable consideration were $8.2 million and $8.9 million as of September 30, 2020 and December 31, 2019 , respectively; and are included in trade receivables and other non-current assets. |
Accounts Receivable and Contract Assets | Accounts receivable classifications include the following: • Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received approximately ten days after selling a vehicle. • Trade receivables are comprised of amounts due from customers for open charge accounts, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products. • Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer. • Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims. • Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products. Interest income on auto loan receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. All other receivables are recorded at invoice and do not bear interest until they are 60 days past due. The balance of auto loan receivables is made up primarily of sub-prime loans secured by the related vehicle. More than 95% of the portfolio is aged less than 60 days past due with less than 5% on non-accrual status. As of September 30, 2020 , the allowance for credit losses related to auto loan receivables was $13.9 million and included in allowance for doubtful accounts and other non-current assets. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon reaching 120 days past due status. The annual activity for charges and subsequent recoveries is immaterial. The remainder of our receivables are due primarily from manufacturer partners and various third-party lenders. The historical losses related to these balances are immaterial. The long-term portion of accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets. |
Fair Value Disclosures for Financial Assets and Liabilities | Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories: • Level 1 - quoted prices in active markets for identical securities; • Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and • Level 3 - significant unobservable inputs, including our own assumptions in determining fair value. We determined that the carrying value of cash equivalents, accounts receivable, trade payables, accrued liabilities and short-term borrowings approximate their fair values because of the nature of their terms and current market rates of these instruments. We believe the carrying value of our variable rate debt approximates fair value. We have fixed rate debt primarily consisting of amounts outstanding under our senior notes and real estate mortgages. We calculated the estimated fair value of the senior notes using quoted prices for the identical liability (Level 1) and calculated the estimated fair value of the fixed rate real estate mortgages using a discounted cash flow methodology with estimated current interest rates based on a similar risk profile and duration (Level 2). The fixed cash flows are discounted and summed to compute the fair value of the debt. As of September 30, 2020 , our real estate mortgages and other debt, which includes capital leases, had maturity dates between October 31, 2020 , and August 31, 2038 . We have derivative instruments consisting of interest rate collars. The fair value of derivative liabilities is measured using observable Level 2 market expectations at each measurement date and is recorded as current liabilities and other long-term liabilities in the Consolidated Balance Sheets. See Note 12 for more details regarding our derivative contracts. We estimate the value of other long-lived assets that are recorded at fair value on a non-recurring basis on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income and replacement cost approaches. Because these valuations contain unobservable inputs, we classified the measurement of fair value of long-lived assets as Level 3. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements. |
Interim Financial Statements (T
Interim Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Impact of Adopting Topic 326 on the Condensed Consolidated Balance Sheet | The impact of adopting Topic 326 on the accompanying Consolidated Balance Sheets as of January 1, 2020 was as follows (in millions): Impact on Consolidated Balance Sheets December 31, 2019 Adjustments January 1, 2020 CECL Adoption: Accounts receivable, net of allowance for doubtful accounts of $7.3 $ 505.0 $ (0.5 ) $ 504.5 Other non-current assets 388.5 (6.0 ) 382.5 Total Assets 6,083.9 (6.5 ) 6,077.4 Deferred income taxes 131.1 (1.7 ) 129.4 Total Liabilities 4,616.2 (1.7 ) 4,614.5 Retained earnings 1,401.8 (4.8 ) 1,397.0 Total Liabilities and Stockholders’ Equity 6,083.9 (6.5 ) 6,077.4 |
Accounts Receivable and Contr_2
Accounts Receivable and Contract Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following (in millions): September 30, 2020 December 31, 2019 Contracts in transit $ 235.9 $ 269.7 Trade receivables 56.7 52.8 Vehicle receivables 55.3 50.9 Manufacturer receivables 107.1 112.4 Auto loan receivables 95.8 62.2 Other receivables 33.5 19.4 584.3 567.4 Less: Allowance for doubtful accounts (6.3 ) (7.3 ) Less: Long-term portion of accounts receivable, net (66.3 ) (55.1 ) Total accounts receivable, net $ 511.7 $ 505.0 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The components of inventories, net, consisted of the following (in millions): September 30, 2020 December 31, 2019 New vehicles $ 1,271.0 $ 1,704.1 Used vehicles 765.2 638.1 Parts and accessories 92.5 91.5 Total inventories $ 2,128.7 $ 2,433.7 |
Goodwill and Franchise Value (T
Goodwill and Franchise Value (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amounts of goodwill are as follows (in millions): Domestic Import Luxury Consolidated Balance as of December 31, 2018 ¹ $ 164.5 $ 188.9 $ 81.5 $ 434.9 Adjustments to purchase price allocations 2 1.6 1.6 1.9 5.1 Additions through acquisitions 2 6.2 9.0 2.2 17.4 Reductions from impairments (0.3 ) (1.3 ) (0.1 ) (1.7 ) Reductions through divestitures (0.2 ) (0.9 ) — (1.1 ) Balance as of December 31, 2019 ¹ 171.8 197.3 85.5 454.6 Additions through acquisitions 3 32.0 92.9 17.0 141.9 Reductions through divestitures (0.1 ) (0.7 ) — (0.8 ) Reductions from impairments (0.5 ) (3.0 ) — (3.5 ) Balance as of September 30, 2020 $ 203.2 $ 286.5 $ 102.5 $ 592.2 1 Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008. 2 Our purchase price allocation for the 2018 acquisitions were finalized in 2019. As a result, we added $22.5 million of goodwill. 3 Our purchase price allocation for a portion of the 2019 acquisitions was finalized in 2020. As a result, we added $141.9 million of goodwill. Our purchase price allocation for the remaining 2019 and 2020 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 . |
Schedule of Franchise Value | The changes in the carrying amounts of franchise value are as follows (in millions): Franchise Value Balance as of December 31, 2018 $ 288.7 Adjustments to purchase price allocations 1 3.5 Additions through acquisitions 1 20.9 Reductions through divestitures (6.0 ) Reductions from impairments (0.4 ) Balance as of December 31, 2019 306.7 Additions through acquisitions 2 53.9 Reductions through divestitures (0.7 ) Reductions from impairments (4.4 ) Balance as of September 30, 2020 $ 355.5 1 Our purchase price allocation for the 2018 acquisitions were finalized in 2019. As a result, we added $24.4 million of franchise value. 2 Our purchase price allocation for a portion of the 2019 acquisitions was finalized in 2020. As a result, we added $53.9 million of franchise value. Our purchase price allocation for the remaining 2019 and 2020 acquisitions are preliminary and franchise value is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 13 . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Share Repurchases | Share repurchases under this authorization were as follows: Repurchases Occurring in 2020 Cumulative Repurchases as of September 30, 2020 Shares Average Price Shares Average Price Share Repurchase Authorization 563,953 $ 81.71 3,719,048 $ 84.02 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Long-Lived Assets Measured at Fair Value | Below are our derivative liabilities that are measured at fair value (in millions): Fair Value at September 30, 2020 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative contract, net $ — $ 9.2 $ — Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Measured on a recurring basis: Derivative contract, net $ — $ 1.0 $ — |
Schedule of Aggregate Carrying Values and Fair Values of Long-term Fixed Interest Rate Debt | A summary of the aggregate carrying values, excluding unamortized debt issuance cost, and fair values of our long-term fixed interest rate debt is as follows (in millions): September 30, 2020 December 31, 2019 Carrying value 5.250% Senior notes due 2025 $ 300.0 $ 300.0 4.625% Senior notes due 2027 400.0 400.0 Real estate mortgages and other debt 605.9 466.6 $ 1,305.9 $ 1,166.6 Fair value 5.250% Senior notes due 2025 $ 309.0 $ 315.0 4.625% Senior notes due 2027 406.5 412.0 Real estate mortgages and other debt 603.7 468.7 $ 1,319.2 $ 1,195.7 |
Net Income Per Share of Class_2
Net Income Per Share of Class A and Class B Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30, 2020 2019 (in millions, except per share data) Class A Class B Class A Class B Net income applicable to common stockholders - basic $ 156.0 $ 2.8 $ 83.0 $ 2.2 Reallocation of net income due to conversion of Class B to Class A common shares outstanding 0.2 — 0.2 — Conversion of Class B common shares into Class A common shares 2.6 — 2.0 — Net income applicable to common stockholders - diluted $ 158.8 $ 2.8 $ 85.2 $ 2.2 Weighted average common shares outstanding – basic 22.5 0.4 22.6 0.6 Conversion of Class B common shares into Class A common shares 0.4 — 0.6 — Effect of dilutive stock options on weighted average common shares 0.2 — 0.2 — Weighted average common shares outstanding – diluted 23.1 0.4 23.4 0.6 Net income per common share - basic $ 6.95 $ 6.95 $ 3.67 $ 3.67 Net income per common share - diluted $ 6.86 $ 6.86 $ 3.64 $ 3.64 Nine Months Ended September 30, 2020 2019 (in millions, except per share data) Class A Class B Class A Class B Net income applicable to common stockholders - basic $ 276.4 $ 6.3 $ 198.2 $ 5.3 Reallocation of net income due to conversion of Class B to Class A common shares outstanding 0.5 — 0.6 — Conversion of Class B common shares into Class A common shares 5.8 — 4.7 — Net income applicable to common stockholders - diluted $ 282.7 $ 6.3 $ 203.5 $ 5.3 Weighted average common shares outstanding – basic 22.5 0.5 22.6 0.6 Conversion of Class B common shares into Class A common shares 0.5 — 0.6 — Effect of employee stock purchases and restricted stock units on weighted average common shares 0.2 — 0.1 — Weighted average common shares outstanding – diluted 23.2 0.5 23.3 0.6 Net income per common share - basic $ 12.29 $ 12.29 $ 8.77 $ 8.77 Net income per common share - diluted $ 12.18 $ 12.18 $ 8.72 $ 8.72 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Certain Information on a Segment Basis | Certain financial information on a segment basis is as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenues: Domestic New vehicle retail $ 621.3 $ 613.0 $ 1,591.0 $ 1,682.7 Used vehicle retail 378.8 328.1 1,096.4 949.6 Used vehicle wholesale 31.9 30.3 77.7 89.5 Finance and insurance 53.2 48.1 149.2 137.2 Service, body and parts 118.0 122.8 337.5 359.2 Fleet and other 11.5 15.5 35.1 47.6 1,214.7 1,157.8 3,286.9 3,265.8 Import New vehicle retail 822.9 824.8 1,995.9 2,198.1 Used vehicle retail 451.9 380.9 1,152.6 1,085.7 Used vehicle wholesale 42.2 28.4 88.6 85.3 Finance and insurance 81.1 65.2 195.0 180.9 Service, body and parts 141.3 129.2 371.3 374.2 Fleet and other 11.1 9.2 28.9 38.1 1,550.5 1,437.7 3,832.3 3,962.3 Luxury New vehicle retail 440.8 387.0 1,039.0 1,110.2 Used vehicle retail 261.8 206.7 642.5 596.0 Used vehicle wholesale 24.8 16.4 50.3 59.0 Finance and insurance 25.6 19.2 60.2 54.1 Service, body and parts 96.0 84.9 244.8 248.0 Fleet and other 1.9 15.2 13.9 81.7 850.9 729.4 2,050.7 2,149.0 3,616.1 3,324.9 9,169.9 9,377.1 Corporate and other 4.1 7.5 12.6 26.7 $ 3,620.2 $ 3,332.4 $ 9,182.5 $ 9,403.8 Segment income 1 : Domestic $ 81.1 $ 37.9 $ 168.3 $ 94.1 Import 102.6 48.3 176.2 117.8 Luxury 39.2 13.0 53.1 36.5 Total segment income for reportable segments $ 222.9 $ 99.2 $ 397.6 $ 248.4 1 Segment income for each of the segments is defined as income before income taxes, depreciation and amortization, other interest expense and other income, net. Reconciliation of total segment income for reportable segments to our consolidated income before income taxes. Three Months Ended Nine Months Ended 2020 2019 2020 2019 Total segment income for reportable segments $ 222.9 $ 99.2 $ 397.6 $ 248.4 Corporate and other 33.5 50.6 103.5 129.3 Depreciation and amortization (22.9 ) (20.9 ) (67.3 ) (60.9 ) Other interest expense (16.6 ) (14.8 ) (50.4 ) (45.0 ) Other income, net 2.2 3.3 8.2 8.9 Income before income taxes $ 219.1 $ 117.4 $ 391.6 $ 280.7 September 30, 2020 December 31, 2019 Total assets: Domestic $ 1,249.9 $ 1,467.6 Import 1,477.7 1,306.5 Luxury 869.3 945.2 Corporate and other 2,798.8 2,364.6 $ 6,395.7 $ 6,083.9 |
Reconciliation of Assets from Segment to Consolidated | September 30, 2020 December 31, 2019 Total assets: Domestic $ 1,249.9 $ 1,467.6 Import 1,477.7 1,306.5 Luxury 869.3 945.2 Corporate and other 2,798.8 2,364.6 $ 6,395.7 $ 6,083.9 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Revenue and Operating Income from Acquisitions | Revenue and operating income contributed by the 2020 acquisitions subsequent to the date of acquisition were as follows (in millions): Nine Months Ended September 30, 2020 Revenue $ 261.3 Operating income 9.2 |
Summary of Acquisitions | The following tables summarize the consideration paid for the 2020 acquisitions and the amount of identified assets acquired and liabilities assumed as of the acquisition date (in millions): Consideration Cash paid, net of cash acquired $ 609.5 |
Assets Acquired and Liabilities Assumed | The following table details the preliminary purchase price allocations for the 2020 acquisitions (in millions): Assets Acquired and Liabilities Assumed Accounts receivable $ 0.2 Inventories, net 189.3 Property and equipment, net 125.8 Other non-current assets 416.5 Floor plan notes payable (13.1 ) Debt and finance lease obligations (103.1 ) Other long-term liabilities (6.1 ) $ 609.5 |
Pro Forma Summary of All Acquisitions | The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three and nine -month periods ended September 30, 2020 and 2019 , had occurred on January 1, 2019 (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue $ 3,745.3 $ 3,738.3 $ 10,000.7 $ 10,548.8 Net income 160.1 92.3 291.9 220.4 Basic net income per share 7.01 3.97 12.71 9.50 Diluted net income per share 6.92 3.94 12.58 9.44 |
Interim Financial Statements (D
Interim Financial Statements (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative effect of adopting Topic 326 | $ (1,694.4) | $ (1,467.7) | $ (1,197.2) | $ (1,532.2) | $ (1,456.5) | $ (1,359.2) | $ (1,274.7) | $ (1,250.5) | |
Accounts receivable, net | 511.7 | 505 | $ 504.5 | ||||||
Allowance for doubtful accounts | 6.3 | 7.3 | |||||||
Other non-current assets | 632.8 | 388.5 | 382.5 | ||||||
Total Assets | 6,395.7 | 6,083.9 | 6,077.4 | ||||||
Deferred income taxes | 135.7 | 131.1 | 129.4 | ||||||
Total Liabilities | 4,701.3 | 4,616.2 | 4,614.5 | ||||||
Retained earnings | 1,658.8 | 1,401.8 | 1,397 | ||||||
Total Liabilities and Stockholders’ Equity | $ 6,395.7 | $ 6,083.9 | 6,077.4 | ||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201602Member | ||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative effect of adopting Topic 326 | $ 4.8 | $ (0.9) | |||||||
Accounts receivable, net | (0.5) | ||||||||
Other non-current assets | (6) | ||||||||
Total Assets | (6.5) | ||||||||
Deferred income taxes | (1.7) | ||||||||
Total Liabilities | (1.7) | ||||||||
Retained earnings | (4.8) | ||||||||
Total Liabilities and Stockholders’ Equity | (6.5) | ||||||||
Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative effect of adopting Topic 326 | $ (1,658.8) | (1,401.8) | (1,162.1) | $ (1,507.1) | $ (1,436.2) | $ (1,340.7) | $ (1,262.5) | $ (1,212.7) | |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Cumulative effect of adopting Topic 326 | $ 4.8 | $ (0.9) | $ 4.8 |
Contract Liabilities and Asse_2
Contract Liabilities and Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Abstract] | |||
Contract liability | $ 187.8 | $ 187.8 | $ 171.5 |
Contract liability, revenue recognized | 7.7 | 23.8 | |
Contract asset | $ 8.2 | $ 8.2 | $ 8.9 |
Accounts Receivable and Contr_3
Accounts Receivable and Contract Assets (Summary of Accounts Receivable) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | $ 584.3 | $ 567.4 | |
Less: Allowance for doubtful accounts | (6.3) | (7.3) | |
Less: Long-term portion of accounts receivable, net | (66.3) | (55.1) | |
Accounts receivable, net | 511.7 | $ 504.5 | 505 |
Contracts in transit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 235.9 | 269.7 | |
Trade receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 56.7 | 52.8 | |
Vehicle receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 55.3 | 50.9 | |
Manufacturer receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 107.1 | 112.4 | |
Auto loan receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 95.8 | 62.2 | |
Less: Allowance for doubtful accounts | (13.9) | ||
Other receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | $ 33.5 | $ 19.4 |
Accounts Receivable and Contr_4
Accounts Receivable and Contract Assets (Additional Information) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Period that contracts in transit are outstanding | 10 days | |
Threshold period for interest to bear on receivables | 60 days | |
Allowance for doubtful accounts | $ 6.3 | $ 7.3 |
Auto loan receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables, 60 days or less past due, percent | 95.00% | |
Receivables, 60 days or less past due, non-accrual status, percent | 5.00% | |
Allowance for doubtful accounts | $ 13.9 |
Inventories (Components of Inve
Inventories (Components of Inventories, net) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Total inventories | $ 2,128.7 | $ 2,433.7 |
New vehicles | ||
Inventory [Line Items] | ||
Total inventories | 1,271 | 1,704.1 |
Used vehicles | ||
Inventory [Line Items] | ||
Total inventories | 765.2 | 638.1 |
Parts and accessories | ||
Inventory [Line Items] | ||
Total inventories | $ 92.5 | $ 91.5 |
Goodwill and Franchise Value (S
Goodwill and Franchise Value (Schedule of Goodwill) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2008 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 454.6 | $ 434.9 | ||
Adjustments to purchase price allocations | 5.1 | |||
Additions through acquisitions | 141.9 | 17.4 | ||
Reductions from impairments | $ (3.5) | (1.7) | ||
Reductions through divestitures | (0.8) | (1.1) | ||
Ending balance | 592.2 | 454.6 | ||
Accumulated impairment loss | $ 299.3 | |||
Goodwill acquired including purchase accounting adjustments | 22.5 | |||
Domestic | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 171.8 | 164.5 | ||
Adjustments to purchase price allocations | 1.6 | |||
Additions through acquisitions | 32 | 6.2 | ||
Reductions from impairments | (0.5) | (0.3) | ||
Reductions through divestitures | (0.1) | (0.2) | ||
Ending balance | 203.2 | 171.8 | ||
Import | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 197.3 | 188.9 | ||
Adjustments to purchase price allocations | 1.6 | |||
Additions through acquisitions | 92.9 | 9 | ||
Reductions from impairments | (3) | (1.3) | ||
Reductions through divestitures | (0.7) | (0.9) | ||
Ending balance | 286.5 | 197.3 | ||
Luxury | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 85.5 | 81.5 | ||
Adjustments to purchase price allocations | 1.9 | |||
Additions through acquisitions | 17 | 2.2 | ||
Reductions from impairments | 0 | (0.1) | ||
Reductions through divestitures | 0 | 0 | ||
Ending balance | $ 102.5 | $ 85.5 |
Goodwill and Franchise Value _2
Goodwill and Franchise Value (Schedule of Franchise Value) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Indefinite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 306.7 | $ 288.7 | |
Adjustments to purchase price allocations | 3.5 | ||
Additions through acquisitions | 53.9 | 20.9 | |
Reductions through divestitures | (0.7) | (6) | |
Reductions from impairments | $ (4.4) | (0.4) | |
Ending balance | $ 355.5 | 306.7 | |
Franchise value acquired, including purchase accounting adjustments | $ 24.4 |
Credit Facilities and Long-te_2
Credit Facilities and Long-term Debt (Details) | Jul. 14, 2020USD ($)financial_institutionCompany | Sep. 30, 2020USD ($) | Jul. 31, 2020USD ($) |
Real-Estate Backed Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 5 years | ||
Debt instrument, number of counter-parties | financial_institution | 8 | ||
Number of manufacturer-affiliated finance companies | Company | 2 | ||
Total financing commitment (Up to) | $ 254,700,000 | ||
Line of credit outstanding amount | $ 0 | ||
Securitization facility | |||
Debt Instrument [Line Items] | |||
Total financing commitment (Up to) | $ 100,000,000 | ||
Line of credit facility, maximum borrowing capacity in certain circumstances | $ 150,000,000 | ||
Long-term debt, less current maturities | $ 12,500,000 | ||
Base Rate | Real-Estate Backed Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Minimum | London Interbank Offered Rate (LIBOR) | Real-Estate Backed Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.00% | ||
Maximum | London Interbank Offered Rate (LIBOR) | Real-Estate Backed Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 2 Months Ended | 9 Months Ended | 56 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Jul. 24, 2020 | Oct. 22, 2018 | |
Class A common stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Additional authorized repurchase amount | $ 250,000,000 | ||||
Authorized repurchase amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||
Shares repurchased pursuant to repurchase authorizations (in shares) | 563,953 | 3,719,048 | |||
Shares repurchased pursuant to repurchase authorizations, average price (in dollars per share) | $ 81.71 | $ 84.02 | |||
Remaining authorized repurchase amount | $ 187,500,000 | $ 187,500,000 | $ 187,500,000 | ||
Class A common stock | Restricted Stock Units (RSUs) | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Number of shares repurchased | 30,143 | ||||
Average purchase price per share (in dollars per share) | $ 147.12 | ||||
Amount related to tax withholdings associated with vesting of RSUs | $ 4,400,000 | ||||
ATM Equity Offering | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Sale of stock, maximum aggregate gross sales price | $ 400,000,000 | ||||
Sale of stock, number of shares issued (in shares) | 0 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contract, net | $ 9.2 | |
Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contract, net | 0 | $ 0 |
Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contract, net | 9.2 | 1 |
Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contract, net | $ 0 | $ 0 |
Fair Value Measurements (Long-t
Fair Value Measurements (Long-term Fixed Interest Rate Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Senior Notes | 5.250% Senior notes due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate (percent) | 5.25% | |
Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate (percent) | 4.625% | |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 1,305.9 | $ 1,166.6 |
Carrying value | Senior Notes | 5.250% Senior notes due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 300 | 300 |
Carrying value | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 400 | 400 |
Carrying value | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 605.9 | 466.6 |
Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 1,319.2 | 1,195.7 |
Fair value | Senior Notes | 5.250% Senior notes due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 309 | 315 |
Fair value | Senior Notes | 4.625% Senior notes due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 406.5 | 412 |
Fair value | Real estate mortgages and other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 603.7 | $ 468.7 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Goodwill impairment | $ 3.5 | $ 1.7 |
Franchise value, impairment | $ 4.4 | $ 0.4 |
Net Income Per Share of Class_3
Net Income Per Share of Class A and Class B Common Stock (Earnings Per Share Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average common shares outstanding - basic (in shares) | 22.9 | 23.2 | 23 | 23.2 |
Weighted average common shares outstanding - diluted (in shares) | 23.1 | 23.4 | 23.2 | 23.3 |
Net income per common share - basic (in dollars per share) | $ 6.95 | $ 3.67 | $ 12.30 | $ 8.77 |
Net income per common share - diluted (in dollars per share) | $ 6.86 | $ 3.64 | $ 12.18 | $ 8.72 |
Class A common stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income applicable to common stockholders - basic | $ 156 | $ 83 | $ 276.4 | $ 198.2 |
Reallocation of net income due to conversion of Class B to Class A common shares outstanding | 0.2 | 0.2 | 0.5 | 0.6 |
Conversion of Class B common shares into Class A common shares | 2.6 | 2 | 5.8 | 4.7 |
Net income applicable to common stockholders - diluted | $ 158.8 | $ 85.2 | $ 282.7 | $ 203.5 |
Weighted average common shares outstanding - basic (in shares) | 22.5 | 22.6 | 22.5 | 22.6 |
Conversion of Class B common shares into Class A common shares (in shares) | 0.4 | 0.6 | 0.5 | 0.6 |
Effect of employee stock purchases and restricted stock units on weighted average common shares (in shares) | 0.2 | 0.2 | 0.2 | 0.1 |
Weighted average common shares outstanding - diluted (in shares) | 23.1 | 23.4 | 23.2 | 23.3 |
Net income per common share - basic (in dollars per share) | $ 6.95 | $ 3.67 | $ 12.29 | $ 8.77 |
Net income per common share - diluted (in dollars per share) | $ 6.86 | $ 3.64 | $ 12.18 | $ 8.72 |
Class B common stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income applicable to common stockholders - basic | $ 2.8 | $ 2.2 | $ 6.3 | $ 5.3 |
Reallocation of net income due to conversion of Class B to Class A common shares outstanding | 0 | 0 | 0 | 0 |
Conversion of Class B common shares into Class A common shares | 0 | 0 | 0 | 0 |
Net income applicable to common stockholders - diluted | $ 2.8 | $ 2.2 | $ 6.3 | $ 5.3 |
Weighted average common shares outstanding - basic (in shares) | 0.4 | 0.6 | 0.5 | 0.6 |
Conversion of Class B common shares into Class A common shares (in shares) | 0 | 0 | 0 | 0 |
Effect of employee stock purchases and restricted stock units on weighted average common shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 0.4 | 0.6 | 0.5 | 0.6 |
Net income per common share - basic (in dollars per share) | $ 6.95 | $ 3.67 | $ 12.29 | $ 8.77 |
Net income per common share - diluted (in dollars per share) | $ 6.86 | $ 3.64 | $ 12.18 | $ 8.72 |
Segments (Narrative) (Details)
Segments (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segments (Schedule of Certain F
Segments (Schedule of Certain Financial Information on a Segment Basis) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 3,620.2 | $ 3,332.4 | $ 9,182.5 | $ 9,403.8 |
Income before income taxes | 219.1 | 117.4 | 391.6 | 280.7 |
Depreciation and amortization | (67.3) | (60.9) | ||
Other interest expense | (16.6) | (14.8) | (50.4) | (45) |
Income before income taxes | 2.2 | 3.3 | 8.2 | 8.9 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 3,616.1 | 3,324.9 | 9,169.9 | 9,377.1 |
Income before income taxes | 222.9 | 99.2 | 397.6 | 248.4 |
Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,214.7 | 1,157.8 | 3,286.9 | 3,265.8 |
Income before income taxes | 81.1 | 37.9 | 168.3 | 94.1 |
Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,550.5 | 1,437.7 | 3,832.3 | 3,962.3 |
Income before income taxes | 102.6 | 48.3 | 176.2 | 117.8 |
Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 850.9 | 729.4 | 2,050.7 | 2,149 |
Income before income taxes | 39.2 | 13 | 53.1 | 36.5 |
Corporate and other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 4.1 | 7.5 | 12.6 | 26.7 |
Income before income taxes | 33.5 | 50.6 | 103.5 | 129.3 |
Segment reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | (22.9) | (20.9) | (67.3) | (60.9) |
Other interest expense | (16.6) | (14.8) | (50.4) | (45) |
Income before income taxes | 2.2 | 3.3 | 8.2 | 8.9 |
New vehicle retail | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,883.3 | 1,824.8 | 4,624.6 | 4,993.3 |
New vehicle retail | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 621.3 | 613 | 1,591 | 1,682.7 |
New vehicle retail | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 822.9 | 824.8 | 1,995.9 | 2,198.1 |
New vehicle retail | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 440.8 | 387 | 1,039 | 1,110.2 |
Used vehicle retail | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 1,093.2 | 916.3 | 2,889.7 | 2,632.4 |
Used vehicle retail | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 378.8 | 328.1 | 1,096.4 | 949.6 |
Used vehicle retail | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 451.9 | 380.9 | 1,152.6 | 1,085.7 |
Used vehicle retail | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 261.8 | 206.7 | 642.5 | 596 |
Used vehicle wholesale | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 98.8 | 74.4 | 216.8 | 233.5 |
Used vehicle wholesale | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 31.9 | 30.3 | 77.7 | 89.5 |
Used vehicle wholesale | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 42.2 | 28.4 | 88.6 | 85.3 |
Used vehicle wholesale | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 24.8 | 16.4 | 50.3 | 59 |
Finance and insurance | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 160.5 | 136.3 | 407.2 | 382.7 |
Finance and insurance | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 53.2 | 48.1 | 149.2 | 137.2 |
Finance and insurance | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 81.1 | 65.2 | 195 | 180.9 |
Finance and insurance | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 25.6 | 19.2 | 60.2 | 54.1 |
Service, body and parts | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 359.5 | 340.5 | 964.9 | 993.3 |
Service, body and parts | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 118 | 122.8 | 337.5 | 359.2 |
Service, body and parts | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 141.3 | 129.2 | 371.3 | 374.2 |
Service, body and parts | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 96 | 84.9 | 244.8 | 248 |
Fleet and other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 24.9 | 40.1 | 79.3 | 168.6 |
Fleet and other | Operating segments | Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 11.5 | 15.5 | 35.1 | 47.6 |
Fleet and other | Operating segments | Import | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 11.1 | 9.2 | 28.9 | 38.1 |
Fleet and other | Operating segments | Luxury | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 1.9 | $ 15.2 | $ 13.9 | $ 81.7 |
Segments (Reconciliation of Ass
Segments (Reconciliation of Assets from Segment to Consolidated) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 6,395.7 | $ 6,077.4 | $ 6,083.9 |
Operating segments | Domestic | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 1,249.9 | 1,467.6 | |
Operating segments | Import | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 1,477.7 | 1,306.5 | |
Operating segments | Luxury | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 869.3 | 945.2 | |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Total Assets | $ 2,798.8 | $ 2,364.6 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($)option | Sep. 30, 2019USD ($) | |
Lessor, Lease, Description [Line Items] | ||
Acquisition of finance leases in connection with acquisitions | $ | $ 103.1 | $ 0 |
Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Number of option to renew | option | 1 | |
Lease renewal term | 1 year | |
Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Lease renewal term | 25 years |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Agreement term | 5 years | ||||
Aggregate notional amount | $ 300,000,000 | ||||
Floor plan notes payable: non-trade | $ 1,293,200,000 | $ 1,300,000,000 | $ 1,293,200,000 | $ 1,642,400,000 | |
Fair value of derivative instruments | 9,200,000 | 9,200,000 | |||
Amount of net losses expected to reclassify from AOCI into interest expense in earnings within the next twelve months | 2,700,000 | 2,700,000 | |||
Amount reclassified from AOCI | $ 700,000 | $ 1,100,000 | $ 0 |
Acquisitions (Revenue and Opera
Acquisitions (Revenue and Operating Income from Acquisitions) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Business Combinations [Abstract] | |
Revenue | $ 261.3 |
Operating income | $ 9.2 |
Acquisitions (Summary of Acquis
Acquisitions (Summary of Acquisitions) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||
Cash paid, net of cash acquired | $ 609.5 | $ 142.8 |
2020 Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash paid, net of cash acquired | $ 609.5 |
Acquisitions (Assets Acquired a
Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - 2020 Acquisitions $ in Millions | Sep. 30, 2020USD ($) |
Business Acquisition [Line Items] | |
Accounts receivable | $ 0.2 |
Inventories, net | 189.3 |
Property and equipment, net | 125.8 |
Other non-current assets | 416.5 |
Floor plan notes payable | (13.1) |
Debt and finance lease obligations | (103.1) |
Other long-term liabilities | (6.1) |
Assets acquired and liabilities assumed | $ 609.5 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||||
Acquisition-related expenses | $ 0.6 | $ 0.2 | $ 1.6 | $ 1.9 |
Acquisitions (Pro Forma Summary
Acquisitions (Pro Forma Summary of All Acquisitions) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||||
Revenue | $ 3,745.3 | $ 3,738.3 | $ 10,000.7 | $ 10,548.8 |
Net income | $ 160.1 | $ 92.3 | $ 291.9 | $ 220.4 |
Basic net income per share (in dollars per share) | $ 7.01 | $ 3.97 | $ 12.71 | $ 9.50 |
Diluted net income per share (in dollars per share) | $ 6.92 | $ 3.94 | $ 12.58 | $ 9.44 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 09, 2020 | Oct. 05, 2020 | Sep. 30, 2020 |
Shift Technologies Inc | |||
Subsequent Event [Line Items] | |||
Equity method investments | $ 64,000,000 | ||
Subsequent Event | Senior Notes | 4.375% Senior Notes Due 2031 | |||
Subsequent Event [Line Items] | |||
Aggregate principal amount | $ 550,000,000 | ||
Stated interest rate (percent) | 4.375% | ||
Redemption percentage price (percent) | 100.00% | ||
Percentage of principal amount redeemed (up to) | 40.00% | ||
Redemption price upon certain equity offerings | 101.00% | ||
Subsequent Event | Class A common stock | |||
Subsequent Event [Line Items] | |||
Common stock issued (in shares) | 3,659,091 | ||
Option to purchase by underwriters, number of shares | 477,272 | ||
Proceeds from issuance of stock | $ 777,000,000 |