Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 22, 2013 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ASBURY AUTOMOTIVE GROUP INC | |
Entity Central Index Key | 1144980 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 30,957,514 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $1.30 | $6.20 |
Contracts-in-transit | 100.7 | 129.4 |
Accounts receivable (net of allowance of $1.0) | 76.7 | 94.3 |
Inventories | 734.5 | 648.5 |
Deferred income taxes | 13.2 | 10.9 |
Assets held for sale | 9.2 | 27.6 |
Other current assets | 75.2 | 69.5 |
Total current assets | 1,010.80 | 986.4 |
PROPERTY AND EQUIPMENT, net | 634.3 | 565.8 |
GOODWILL | 52.8 | 28.4 |
DEFERRED INCOME TAXES, net of current portion | 18.1 | 27.5 |
OTHER LONG-TERM ASSETS | 59.5 | 53.3 |
Total assets | 1,775.50 | 1,661.40 |
CURRENT LIABILITIES: | ||
Floor plan notes payable—trade | 63.4 | 55.1 |
Floor plan notes payable—non-trade | 506.7 | 501.6 |
Current maturities of long-term debt | 8.5 | 4.6 |
Accounts payable and accrued liabilities | 194.7 | 209.1 |
Liabilities associated with assets held for sale | 0 | 9.4 |
Total current liabilities | 773.3 | 779.8 |
LONG-TERM DEBT | 511.3 | 461.4 |
OTHER LONG-TERM LIABILITIES | 20 | 17.4 |
COMMITMENTS AND CONTINGENCIES (Note 10) | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $.01 par value, 90,000,000 shares authorized; 40,103,569 and 39,824,708 shares issued, including shares held in treasury, respectively | 0.4 | 0.4 |
Additional paid-in capital | 508.5 | 499 |
Retained earnings | 136.6 | 54.4 |
Treasury stock, at cost; 9,133,443 and 8,507,948 shares, respectively | -174.3 | -149.4 |
Accumulated other comprehensive loss | -0.3 | -1.6 |
Total shareholders' equity | 470.9 | 402.8 |
Total liabilities and shareholders' equity | $1,775.50 | $1,661.40 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $1 | $1 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 40,103,569 | 39,824,708 |
Treasury stock, shares (in shares) | 9,133,443 | 8,507,948 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
REVENUES: | ||||
New vehicle | $759.70 | $672.30 | $2,167.20 | $1,895.20 |
Used vehicle | 421.6 | 333 | 1,183.10 | 980.4 |
Parts and service | 154 | 141.8 | 455.5 | 423.9 |
Finance and insurance, net | 54.7 | 44 | 154.1 | 123.1 |
Total revenues | 1,390 | 1,191.10 | 3,959.90 | 3,422.60 |
COST OF SALES: | ||||
New vehicle | 713.4 | 630.5 | 2,035.60 | 1,773 |
Used vehicle | 391.3 | 307.1 | 1,090.90 | 900.8 |
Parts and service | 60 | 59.3 | 179.5 | 178.3 |
Total cost of sales | 1,164.70 | 996.9 | 3,306 | 2,852.10 |
GROSS PROFIT | 225.3 | 194.2 | 653.9 | 570.5 |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 159.7 | 140 | 462 | 415.9 |
Depreciation and amortization | 6.2 | 5.5 | 18 | 16.9 |
Other operating expense (income), net | 1.4 | -0.5 | 5.9 | 0.1 |
Income from operations | 58 | 49.2 | 168 | 137.6 |
OTHER EXPENSES: | ||||
Floor plan interest expense | -2.9 | -2.9 | -9.1 | -8.5 |
Other interest expense, net | -11.1 | -8.7 | -29.8 | -26.6 |
Swap interest expense | -0.1 | -1.3 | -2.2 | -3.8 |
Convertible debt discount amortization | 0 | -0.1 | 0 | -0.4 |
Loss on extinguishment of long-term debt | -6.8 | 0 | -6.8 | 0 |
Total other expenses, net | -20.9 | -13 | -47.9 | -39.3 |
Income before income taxes | 37.1 | 36.2 | 120.1 | 98.3 |
INCOME TAX EXPENSE | 14.3 | 13.6 | 46.2 | 37.6 |
INCOME FROM CONTINUING OPERATIONS | 22.8 | 22.6 | 73.9 | 60.7 |
DISCONTINUED OPERATIONS, net of tax | -0.1 | -1.9 | 8.3 | -1.3 |
NET INCOME | $22.70 | $20.70 | $82.20 | $59.40 |
Basic— | ||||
Continuing operations (in dollars per share) | $0.74 | $0.73 | $2.40 | $1.95 |
Discontinued operations (in dollars per share) | $0 | ($0.06) | $0.27 | ($0.04) |
Net income (in dollars per share) | $0.74 | $0.67 | $2.67 | $1.91 |
Diluted— | ||||
Continuing operations (in dollars per share) | $0.73 | $0.72 | $2.38 | $1.92 |
Discontinued operations (in dollars per share) | $0 | ($0.06) | $0.26 | ($0.04) |
Net income (in dollars per share) | $0.73 | $0.66 | $2.64 | $1.88 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (in shares) | 30.7 | 31.1 | 30.8 | 31.1 |
Stock options (in shares) | 0 | 0.1 | 0 | 0.2 |
Restricted stock (in shares) | 0.2 | 0.2 | 0.2 | 0.2 |
Performance share units (in shares) | 0.2 | 0.1 | 0.1 | 0.1 |
Diluted (in shares) | 31.1 | 31.5 | 31.1 | 31.6 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $22.70 | $20.70 | $82.20 | $59.40 |
Other comprehensive income (loss) - net of tax: | ||||
Change in fair value of cash flow swaps | 0 | 0.1 | 0.2 | -0.2 |
Amortization of terminated cash flow swaps | 0.1 | 1.2 | 2 | 3.6 |
Income tax expense associated with cash flow swaps | -0.1 | -0.5 | -0.9 | -1.2 |
Comprehensive income | $22.70 | $21.50 | $83.50 | $61.60 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income | $82.20 | $59.40 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities— | ||
Depreciation and amortization | 18 | 16.9 |
Stock-based compensation | 6.9 | 5.6 |
Deferred income taxes | 7.1 | 9.3 |
Loss on extinguishment of debt | 6.8 | 0 |
Loaner vehicle amortization | 7.3 | 6.7 |
Excess tax benefit on share-based arrangements | -2.3 | -5.4 |
Impairment expenses | 0 | 2.3 |
Lease termination charges | 5.5 | 0 |
Loss on disposal of fixed assets | 2.3 | 0 |
Gain on sale of assets | -14.6 | -1.2 |
Other adjustments, net | 2.9 | 7.3 |
Changes in operating assets and liabilities, net of acquisitions and divestitures— | ||
Contracts-in-transit | 28.7 | 19.2 |
Accounts receivable | 6.7 | -12.3 |
Proceeds from the sale of accounts receivable | 10.9 | 14.3 |
Inventories | -28.5 | -37.5 |
Other current assets | -65.1 | -50.3 |
Floor plan notes payable—trade | 8.3 | -21.4 |
Accounts payable and accrued liabilities | -10.9 | 1.1 |
Proceeds from deferred compensation plan termination | 7.8 | 0 |
Distribution of deferred compensation plan assets to participants | -7.8 | 0 |
Deferred compensation plan excess funding refund | 0 | 3.2 |
Other long-term assets and liabilities, net | 2.8 | -0.6 |
Net cash provided by operating activities | 75 | 16.6 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Capital expenditures—excluding real estate | -29.4 | -33.1 |
Capital expenditures—capitalized interest | -0.9 | -0.7 |
Purchases of real estate | -10.7 | -6.5 |
Purchases of previously leased real estate | -32.8 | -8.6 |
Acquisitions | 61.8 | 0 |
Proceeds from the sale of assets | 33.9 | 4.3 |
Net cash used in investing activities | -101.7 | -44.6 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Floor plan borrowings—non-trade | 2,344.60 | 2,186.60 |
Floor plan borrowings—acquisitions | 11.3 | 0 |
Floor plan repayments—non-trade | -2,350.80 | -2,129 |
Floor plan repayments—non-trade divestitures | -5.4 | -2.1 |
Proceeds from borrowings | 200.9 | 34.1 |
Repayments of borrowings | -150.4 | -58.4 |
Payment of debt issuance costs | -6 | -0.3 |
Repurchases of common stock, including those associated with net share settlement of employee share-based awards | -24.9 | -17.7 |
Excess tax benefit on share-based arrangements | 2.3 | 5.4 |
Proceeds from the exercise of stock options | 0.2 | 3.9 |
Net cash provided by financing activities | 21.8 | 22.5 |
Net decrease in cash and cash equivalents | -4.9 | -5.5 |
CASH AND CASH EQUIVALENTS, beginning of period | 6.2 | 11.4 |
CASH AND CASH EQUIVALENTS, end of period | $1.30 | $5.90 |
Description_of_Business
Description of Business | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Description of Business | DESCRIPTION OF BUSINESS | |
We are one of the largest automotive retailers in the United States, operating 100 franchises (79 dealership locations) in 18 metropolitan markets within 10 states as of September 30, 2013. We offer an extensive range of automotive products and services, including new and used vehicles; vehicle maintenance, replacement parts and collision repair services; and financing, insurance and service contracts. As of September 30, 2013, we offered 29 domestic and foreign brands of new vehicles. Our current brand mix is weighted 87% towards luxury and mid-line import brands, with the remaining 13% consisting of domestic brands. We also operate 24 collision repair centers that serve customers in our local markets. | ||
Our retail network is made up of dealerships operating primarily under the following locally-branded dealership groups: | ||
• | Coggin dealerships, operating primarily in Jacksonville, Fort Pierce and Orlando, Florida; | |
• | Courtesy dealerships operating in Tampa, Florida; | |
• | Crown dealerships operating in New Jersey, North Carolina, South Carolina and Virginia; | |
• | Nalley dealerships operating in metropolitan Atlanta, Georgia; | |
• | McDavid dealerships operating in Austin, Dallas and Houston, Texas; | |
• | North Point dealerships operating in the Little Rock, Arkansas area; | |
• | Plaza dealerships operating in metropolitan St. Louis, Missouri; and | |
• | Gray-Daniels dealerships operating in the Jackson, Mississippi area. | |
Our operating results are generally subject to changes in the economic environment as well as seasonal variations. Historically, we have generated more revenue and operating income in the second and third quarters than in the first and fourth quarters of the calendar year. Generally, the seasonal variations in our operations are caused by factors related to weather conditions, changes in manufacturer incentive programs, model changeovers and consumer buying patterns, among other things. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation | |
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and reflect the consolidated accounts of Asbury Automotive Group, Inc. and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying Condensed Consolidated Financial Statements in order to conform to current presentation. These reclassifications had no effect on previously reported net income. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly and the effects of any revisions are reflected in the condensed consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying condensed consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, certain assumptions related to intangible and long-lived assets, reserves for insurance programs, reserves for certain legal or similar proceedings relating to our business operations, realization of deferred tax assets and reserves for estimated tax liabilities. | |
In the opinion of management, all adjustments (consisting only of normal, recurring adjustments) considered necessary for a fair presentation of the condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012, have been included. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for any other interim period, or any full year period. Our condensed consolidated financial statements should be read together with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2012. | |
Contracts-In-Transit | |
Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us. Amounts due from contracts-in-transit are generally collected within two weeks following the date of sale of the related vehicle. | |
Revenue Recognition | |
Revenue from the sale of new and used vehicles (which excludes sales tax) is recognized upon the latest of delivery, passage of title, signing of the sales contract or approval of financing. Revenue from the sale of parts, service and collision repair work (which excludes sales tax) is recognized upon delivery of parts to the customer or at the time vehicle service or repair work is completed, as applicable. Manufacturer incentives and rebates, including manufacturer holdbacks, floor plan interest assistance and certain advertising assistance, are recognized as a reduction of new vehicle cost of sales at the time the related vehicles are sold. | |
We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, credit life insurance and disability insurance, and other insurance, to customers (collectively “F&I”). We may be charged back (“chargebacks”) for F&I commissions in the event a contract is prepaid, defaulted upon or terminated. F&I commissions are recorded at the time a vehicle is sold and a reserve for future chargebacks is established based on historical chargeback experience and the termination provisions of the applicable contract. F&I commissions, net of estimated chargebacks, are included in Finance and Insurance, net in the accompanying Condensed Consolidated Statements of Income. | |
Earnings per Common Share | |
Basic earnings per common share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. | |
Discontinued Operations | |
Certain amounts reflected in the accompanying Condensed Consolidated Balance Sheets have been classified as Assets Held for Sale or Liabilities Associated with Assets Held for Sale, with such classification beginning on the date that the assets and associated liabilities were first considered held for sale. | |
We report franchises and ancillary businesses as discontinued operations when it is evident that the operations and cash flows of a franchise or ancillary business being actively marketed for sale will be eliminated from our on-going operations and that we will not have any significant continuing involvement in its operations. We do not classify franchises as discontinued operations if we believe that the cash flows generated by the franchise will be replaced by expanded operations of our remaining franchises within the respective local market area. | |
Amounts in the accompanying Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 have been reclassified to reflect the results of franchises sold or closed subsequent to September 30, 2012 as if we had classified those franchises as discontinued operations for all periods presented. | |
Statements of Cash Flows | |
Borrowings and repayments of floor plan notes payable to a lender unaffiliated with the manufacturer from which we purchase a particular new vehicle ("Non-Trade"), and all floor plan notes payable relating to pre-owned vehicles (together referred to as "Floor Plan Notes Payable-Non-Trade"), are classified as financing activities on the accompanying Condensed Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as “Floor Plan Notes Payable - Trade”) is classified as an operating activity on the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions are classified as a financing activity. Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to a lender not affiliated with the manufacturer from which we purchased the related inventory. Repayments of Floor Plan Notes Payable - Trade associated with divestitures are classified as an operating activity. Repayments of Floor Plan Notes Payable - Non-Trade associated with divestitures are classified as a financing activity. | |
Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowings from manufacturer affiliated lenders. Loaner vehicles are initially used by our service department for only a short period of time (typically six to twelve months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles and the related borrowings and repayments as operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. The cash outflow to acquire loaner vehicles is presented in Other Current Assets in the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings and repayments of loaner vehicle notes payable are presented in Accounts Payable and Accrued Liabilities in the accompanying Condensed Consolidated Statements of Cash Flows. When loaner vehicles are taken out of loaner status they are transferred to used vehicle inventory, which is reflected as a non-cash transfer in the accompanying Condensed Consolidated Statements of Cash Flows. The cash inflow from the sale of loaner vehicles is reflected in Inventories in the accompanying Condensed Consolidated Statements of Cash Flows. | |
Recent Accounting Pronouncements | |
During the first quarter of 2013, we adopted an accounting standard regarding the presentation of comprehensive income. This update was issued to improve the reporting of reclassifications out of Accumulated Other Comprehensive Income ("AOCI"). The update requires that significant items reclassified out of AOCI be presented in one place in the condensed consolidated financial statements. The adoption of this standard update did not have a significant impact on our condensed consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Business Combinations [Abstract] | ||||
ACQUISITIONS | ACQUISITIONS | |||
Results of acquired dealerships are included in our accompanying Condensed Consolidated Statements of Income commencing on the date of acquisition. Our acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values, with any excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as a combination of goodwill and manufacturer franchise rights. | ||||
In July 2013, we acquired three franchises (three dealership locations) for an aggregate purchase price of $61.8 million. We financed these acquisitions with $50.5 million of cash and $11.3 million of floor plan borrowings. | ||||
Below is the allocation of purchase price for acquisitions completed during the nine months ended September 30, 2013. The accounting for these acquisitions is based on currently available information and is considered preliminary, as we expect to finalize the valuation of manufacturer franchise rights and goodwill (both on a book basis and tax basis) during the fourth quarter of 2013. The $29.6 million of goodwill and manufacturer franchise rights will be deductible for federal and state income taxes ratably over a 15 year period. | ||||
As of September 30, 2013 | ||||
(In millions) | ||||
Inventory | $ | 11.9 | ||
Real estate | 18.7 | |||
Property and equipment | 1.6 | |||
Goodwill | 24.3 | |||
Manufacturer franchise rights | 5.3 | |||
Total purchase price | $ | 61.8 | ||
During the nine months ended September 30, 2012, we were awarded one Jaguar franchise, which was added to our Plaza | ||||
dealership locations in St. Louis, Missouri. We did not pay any amounts in connection with being awarded this franchise. |
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | INVENTORIES | |||||||
Inventories consisted of the following: | ||||||||
As of | ||||||||
30-Sep-13 | December 31, 2012 | |||||||
(In millions) | ||||||||
New vehicles | $ | 573.8 | $ | 517.4 | ||||
Used vehicles | 121.1 | 94.6 | ||||||
Parts and accessories | 39.6 | 36.5 | ||||||
Total inventories | $ | 734.5 | $ | 648.5 | ||||
The lower of cost or market reserves reduced total inventory cost by $5.4 million and $4.7 million as of September 30, 2013 and December 31, 2012, respectively. In addition to the inventories shown above, as of December 31, 2012 we had $6.6 million of inventories classified as Assets Held for Sale on the accompanying Condensed Consolidated Balance Sheet as they were associated with a franchise held for sale. As of September 30, 2013 and December 31, 2012, certain automobile manufacturer incentives reduced new vehicle inventory cost by $7.0 million and $6.3 million, respectively, and reduced new vehicle cost of sales from continuing operations for the nine months ended September 30, 2013 and September 30, 2012 by $20.4 million and $17.7 million, respectively. |
Assets_and_Liabilities_Held_fo
Assets and Liabilities Held for Sale | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Assets and Liabilities Held For Sale | ASSETS AND LIABILITIES HELD FOR SALE | |||||||
Assets and liabilities classified as held for sale include (i) assets and liabilities associated with discontinued operations held for sale at each balance sheet date and (ii) real estate not currently used in our operations that we are actively marketing to sell and the related mortgage notes payable, if applicable. | ||||||||
During the nine months ended September 30, 2013, we sold one franchise (one dealership location). There were no assets or liabilities associated with pending dispositions as of September 30, 2013. Assets and liabilities associated with pending dispositions totaled $18.4 million and $9.4 million, respectively, as of December 31, 2012. | ||||||||
Real estate not currently used in our operations that we are actively marketing to sell totaled $9.2 million as of September 30, 2013 and December 31, 2012. There were no liabilities associated with our real estate assets held for sale as of September 30, 2013 or December 31, 2012. | ||||||||
A summary of assets held for sale and liabilities associated with assets held for sale is as follows: | ||||||||
As of | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
(In millions) | ||||||||
Assets: | ||||||||
Inventories | $ | — | $ | 6.6 | ||||
Property and equipment, net | 9.2 | 20.7 | ||||||
Goodwill | — | 0.3 | ||||||
Total assets | 9.2 | 27.6 | ||||||
Liabilities: | ||||||||
Floor plan notes payable—non-trade | — | 5.4 | ||||||
Accrued liabilities | — | 4 | ||||||
Total liabilities | — | 9.4 | ||||||
Net assets held for sale | $ | 9.2 | $ | 18.2 | ||||
Longterm_Debt
Long-term Debt | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-term Debt | LONG-TERM DEBT | |||||||
Long-term debt consists of the following: | ||||||||
As of | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
(In millions) | ||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 300 | $ | 200 | ||||
7.625% Senior Subordinated Notes due 2017 | — | 143.2 | ||||||
Mortgage notes payable bearing interest at fixed and variable rates | 149.3 | 118.9 | ||||||
Real estate term loan facility | 57.3 | — | ||||||
Capital lease obligations | 3.7 | 3.9 | ||||||
510.3 | 466 | |||||||
Add: unamortized premium on 8.375% Senior Subordinated Notes due 2020 | 9.5 | — | ||||||
Long-term debt, including current portion | 519.8 | 466 | ||||||
Less: current portion | (8.5 | ) | (4.6 | ) | ||||
Long-term debt | $ | 511.3 | $ | 461.4 | ||||
8.375% Senior Subordinated Notes Add-On Issuance | ||||||||
In June 2013, the Company completed an add-on issuance of $100.0 million aggregate principal amount of 8.375% Senior Subordinated Notes due 2020 (the “8.375% Notes”) at a price of 109.75% of par, plus accrued interest from May 15, 2013 (the "June 2013 Offering"). After deducting the initial purchasers' discounts and expenses of $2.3 million, we received net proceeds of approximately $108.3 million from this offering. The $9.8 million premium paid by the initial purchasers of the 8.375% Notes was recorded as a component of long-term debt on our Condensed Consolidated Balance Sheet and is being amortized as a reduction of interest expense over the remaining term of the 8.375% Notes. The capitalized costs associated with the issuance and sale of the 8.375% Notes are being amortized as an addition to interest expense over the remaining term of the 8.375% Notes. Including the amortization of the $9.8 million premium, and assuming the 8.375% Notes are held until their maturity in November 2020, the effective interest rate on the June 2013 Offering will be 6.725%. | ||||||||
Revolving Credit Facility | ||||||||
In August 2013, the Company and certain of its subsidiaries entered into an amended and restated senior secured credit agreement with Bank of America, N.A. (“Bank of America”), as administrative agent, and the other agents and lenders party thereto (the “Restated Credit Agreement”). The Restated Credit Agreement amended and restated in its entirety the Company’s pre-existing senior secured credit agreement, dated as of October 14, 2011, by and among the Company and certain of its subsidiaries and Bank of America, as administrative agent, and the other agents and lenders party thereto (the “Prior Credit Agreement”). | ||||||||
The terms of the Restated Credit Agreement provide that the new vehicle inventory floor plan facility thereunder is increased by $200.0 million to $825.0 million, and that the interest rates on borrowings under the new vehicle and used vehicle floor plan facilities thereunder decrease by 25 basis points to the one-month London Interbank Offered Rate ("LIBOR") plus 1.25% and one-month LIBOR plus 1.50%, respectively, in each case as compared to the terms of the Prior Credit Agreement. The Restated Credit Agreement also extended the maturity date of the Prior Credit Agreement from October 2016 until August 2018. Except as described above, the terms of the Restated Credit Agreement did not materially change the terms of the Prior Credit Agreement. | ||||||||
Redemption of 7.625% Senior Subordinated Notes due 2017 | ||||||||
In September 2013, the Company redeemed all of the $143.2 million of its outstanding 7.625% Senior Subordinated Notes due 2017 (the "7.625% Notes"), using proceeds from the June 2013 Offering and borrowings under a real estate term loan credit agreement (the “Real Estate Credit Agreement”). In connection with the redemption, we recognized a $6.8 million loss, consisting of (i) $3.6 million of premiums paid pursuant to the terms of the redemption notice, (ii) a $3.1 million write-off of unamortized debt issuance costs associated with the 7.625% Notes and (iii) $0.1 million of third-party costs associated with the redemption of the 7.625% Notes. | ||||||||
Real Estate Term Loan Facility | ||||||||
In September 2013, the Company and certain of its subsidiaries entered into the Real Estate Credit Agreement with Bank of America, as lender. The Real Estate Credit Agreement provides for term loans to certain of the Company’s subsidiaries that are borrowers under the Real Estate Credit Agreement (collectively, the “Borrowers”) in an aggregate amount not to exceed $75.0 million (the “Real Estate Term Loan Facility”), subject to customary terms and conditions. In September 2013, certain of the Borrowers borrowed an aggregate amount of $57.3 million under the Real Estate Credit Agreement. As described above, the proceeds from borrowings under the Real Estate Credit Agreement were used to pay a portion of the redemption price in connection with our redemption of the 7.625% Notes. | ||||||||
Term loans under the Real Estate Term Loan Facility bear interest, at the option of the Company, based on the LIBOR plus 2.50% or the Base Rate (as described below) plus 1.50%. The Base Rate is the highest of (i) the Federal Funds rate plus 0.50%, (ii) the Bank of America prime rate, and (iii) one month LIBOR plus 1.0%. The Company is required to make quarterly principal payments of 1.25% of the initial amount of each loan on a twenty year repayment schedule, with a balloon repayment of the outstanding principal amount of loans due in September 2023, subject to an earlier maturity if the Company’s existing senior secured credit facility matures or is not otherwise refinanced by certain dates. The Borrowers can voluntarily prepay any loan in whole or in part any time without premium or penalty. | ||||||||
The representations and covenants contained in the Real Estate Credit Agreement are customary for financing transactions of this nature, including, among others, a requirement to comply with a minimum consolidated current ratio, minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Real Estate Credit Agreement. In addition, certain other covenants could restrict the Company’s ability to incur additional debt, pay dividends or acquire or dispose of assets. | ||||||||
The Real Estate Credit Agreement also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. Upon the occurrence of an event of default, the Company could be required to immediately repay all amounts outstanding under the Real Estate Term Loan Facility. | ||||||||
Borrowings under the Real Estate Term Loan Facility are guaranteed by each operating dealership subsidiary of the Company whose real estate is financed under the Real Estate Term Loan Facility, and collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder. | ||||||||
Mortgage Financing | ||||||||
During the nine months ended September 30, 2013, we also entered into three fixed rate mortgage notes payable, which were collateralized by the related real estate at three of our owned dealership locations. The initial principal amount of the mortgage notes payable was $33.9 million. In connection with our entrance into these mortgage notes payable, we paid approximately $0.4 million in debt issuance costs, which were capitalized and are being amortized to Other Interest Expense over the terms of the related mortgage notes payable. | ||||||||
Asbury Automotive Group, Inc. is a holding company with no independent assets or operations. For all periods presented, our 8.375% Notes and our 7.625% Notes have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries. Any subsidiaries which have not guaranteed such notes are “minor” (as defined in Rule 3-10(h) of Regulation S-X). As of September 30, 2013, there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or our guarantor subsidiaries. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||
Financial Instruments and Fair Value | FINANCIAL INSTRUMENTS AND FAIR VALUE | ||||||||||||||
In determining fair value, we use various valuation approaches, including market, income and/or cost approaches. Accounting standards establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: | |||||||||||||||
Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. | |||||||||||||||
Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include cash flow swap instruments and exchange-traded debt securities that are not actively traded or do not have a high trading volume. | |||||||||||||||
Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating fair value of non-financial assets and non-financial liabilities in purchase acquisitions and those used in assessing impairment of manufacturer franchise rights. | |||||||||||||||
The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required to determine fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||||
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. We use inputs that are current as of the measurement date, including during periods of significant market fluctuations. | |||||||||||||||
Financial instruments consist primarily of cash and cash equivalents, contracts-in-transit, accounts receivable, cash surrender value of corporate-owned life insurance policies, accounts payable, floor plan notes payable, subordinated long-term debt, mortgage notes payable and interest rate swap agreements. The carrying values of our financial instruments, with the exception of subordinated long-term debt, approximate fair value due either to their short-term nature or existence of variable interest rates, which approximate market rates. The fair market value of our subordinated long-term debt is based on reported market prices which reflect Level 2 inputs. Level 2 inputs are valuations based on quoted market prices in markets that are not active or do not have a high trading volume. A summary of the carrying values and fair values of our 8.375% Notes and our 7.625% Notes is as follows: | |||||||||||||||
As of | |||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||
(In millions) | |||||||||||||||
Carrying Value: | |||||||||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 309.5 | $ | 200 | |||||||||||
7.625% Senior Subordinated Notes due 2017 | — | 143.2 | |||||||||||||
Total carrying value | $ | 309.5 | $ | 343.2 | |||||||||||
Fair Value: | |||||||||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 333.8 | $ | 221.5 | |||||||||||
7.625% Senior Subordinated Notes due 2017 | — | 147.5 | |||||||||||||
Total fair value | $ | 333.8 | $ | 369 | |||||||||||
We have an interest rate swap agreement that had a notional principal amount of $18.8 million as of September 30, 2013. This swap is designed to provide a hedge against changes in variable interest rate cash flows through maturity in October 2015. The notional value of this swap is reducing over the remaining term to $16.1 million at maturity. This interest rate swap qualifies for cash flow hedge accounting treatment and does not, and will not, contain any ineffectiveness. | |||||||||||||||
Information about the effect of derivative instruments on the accompanying Condensed Consolidated Statements of Income, including the impact on AOCI (in millions): | |||||||||||||||
For the Three Months Ended September 30, | Derivative in Cash Flow Hedging Relationships | Results | Location of Results | Amount Reclassified from AOCI to Earnings–Active Swaps | Amount Reclassified from AOCI to Earnings–Terminated Swaps | Ineffective Results Recognized in Earnings | Location of | ||||||||
Recognized | Reclassified from | Ineffective Results | |||||||||||||
in AOCI | AOCI to Earnings | ||||||||||||||
(Effective | |||||||||||||||
Portion) | |||||||||||||||
2013 | Interest rate swaps | ($0.10) | Swap interest expense | $— | ($0.10) | $— | N/A | ||||||||
2012 | Interest rate swaps | ($0.20) | Swap interest expense | ($0.10) | ($1.20) | $— | N/A | ||||||||
For the Nine Months Ended September 30, | Derivative in Cash Flow Hedging Relationships | Results | Location of Results | Amount Reclassified from AOCI to Earnings–Active Swaps | Amount Reclassified from AOCI to Earnings–Terminated Swaps | Ineffective Results Recognized in Earnings | Location of | ||||||||
Recognized | Reclassified from | Ineffective Results | |||||||||||||
in AOCI | AOCI to Earnings | ||||||||||||||
(Effective | |||||||||||||||
Portion) | |||||||||||||||
2013 | Interest rate swaps | ($0.10) | Swap interest expense | ($0.20) | ($2.00) | $— | N/A | ||||||||
2012 | Interest rate swaps | ($0.40) | Swap interest expense | ($0.20) | ($3.60) | $— | N/A | ||||||||
On the basis of yield curve conditions as of September 30, 2013, we anticipate that the amount expected to be reclassified out of AOCI into earnings in the next 12 calendar months will be a loss of $0.2 million. | |||||||||||||||
Fair value estimates reflect a credit adjustment to the discount rate applied to all expected cash flows under the swap. Other than that assumption, all other inputs reflect Level 2 inputs. | |||||||||||||||
Information about amounts reclassified out of AOCI | (In millions) | ||||||||||||||
Accumulated other comprehensive loss—December 31, 2012 | $ | (1.6 | ) | ||||||||||||
Change in fair value of cash flow swaps | 0.2 | ||||||||||||||
Amortization of terminated cash flow swaps | 2 | ||||||||||||||
Total amount reclassified to swap interest expense | 2.2 | ||||||||||||||
Income tax impact associated with cash flow swaps | (0.9 | ) | |||||||||||||
Accumulated other comprehensive loss—September 30, 2013 | $ | (0.3 | ) | ||||||||||||
Market Risk Disclosures as of September 30, 2013: | |||||||||||||||
Instruments entered into for trading purposes—None | |||||||||||||||
Instruments entered into for hedging purposes (in millions)— | |||||||||||||||
Type of Derivative | Notional Size | Underlying Rate | Expiration | Fair Value | |||||||||||
Interest Rate Swap* | $ | 18.8 | 1 month LIBOR | Oct-15 | $ | (0.4 | ) | ||||||||
____________________________ | |||||||||||||||
* The total fair value of our swap is a $0.4 million net liability, of which $0.2 million is included in Accounts Payable and Accrued Liabilities and $0.2 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. | |||||||||||||||
Market Risk Disclosures as of December 31, 2012: | |||||||||||||||
Instruments entered into for trading purposes—None | |||||||||||||||
Instruments entered into for hedging purposes (in millions)— | |||||||||||||||
Type of Derivative | Notional Size | Underlying Rate | Expiration | Fair Value | |||||||||||
Interest Rate Swap* | $ | 19.7 | 1 month LIBOR | Oct-15 | $ | (0.6 | ) | ||||||||
____________________________ | |||||||||||||||
* The total fair value of our swap is a $0.6 million net liability, of which $0.3 million is included in Accounts Payable and Accrued Liabilities and $0.3 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. |
Discontinued_Operations_and_Di
Discontinued Operations and Divestitures | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Discontinued Operations and Divestitures | DISCONTINUED OPERATIONS AND DIVESTITURES | |||||||
During the nine months ended September 30, 2013, we sold one franchise (one dealership location) that was classified as discontinued operations. The accompanying Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 have been reclassified to reflect the status of our discontinued operations as of September 30, 2013. Operating expenses in the table below include rent and other expenses of idle facilities previously associated with businesses sold or closed prior to September 30, 2013. | ||||||||
The following tables provide further information regarding our discontinued operations as of September 30, 2013, and includes the results of businesses sold prior to September 30, 2013: | ||||||||
For the Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(In millions, except franchise data) | ||||||||
Franchises: | ||||||||
Mid-line import | — | 1 | ||||||
Luxury | — | 2 | ||||||
Total | — | 3 | ||||||
Revenues | $ | — | $ | 25 | ||||
Cost of sales | — | 20.8 | ||||||
Gross profit | — | 4.2 | ||||||
Operating expenses | 0.2 | 6.3 | ||||||
Impairment expenses | — | 2 | ||||||
Loss from operations | (0.2 | ) | (4.1 | ) | ||||
Gain on disposition | — | 1 | ||||||
Loss before income taxes | (0.2 | ) | (3.1 | ) | ||||
Income tax benefit | 0.1 | 1.2 | ||||||
Discontinued operations, net of tax | $ | (0.1 | ) | $ | (1.9 | ) | ||
For the Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(In millions, except franchise data) | ||||||||
Franchises: | ||||||||
Mid-line import | 1 | 1 | ||||||
Luxury | — | 3 | ||||||
Total | 1 | 4 | ||||||
Revenues | $ | 3.8 | $ | 93.1 | ||||
Cost of sales | 3.4 | 77.4 | ||||||
Gross profit | 0.4 | 15.7 | ||||||
Operating expenses | 1.5 | 16.8 | ||||||
Impairment expenses | — | 2 | ||||||
Loss from operations | (1.1 | ) | (3.1 | ) | ||||
Other expense, net | — | (0.2 | ) | |||||
Gain on disposition | 14.6 | 1.2 | ||||||
Income (loss) before income taxes | 13.5 | (2.1 | ) | |||||
Income tax (expense) benefit | (5.2 | ) | 0.8 | |||||
Discontinued operations, net of tax | $ | 8.3 | $ | (1.3 | ) | |||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2013 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION |
During the nine months ended September 30, 2013 and 2012, we made interest payments, including amounts capitalized, totaling $34.1 million and $33.1 million, respectively. Included in these interest payments are $8.6 million and $7.9 million of floor plan interest payments for the nine months ended September 30, 2013 and 2012, respectively. | |
During the nine months ended September 30, 2013 and 2012, we made income tax payments, net of refunds received, totaling $46.9 million and $24.4 million, respectively. | |
During the nine months ended September 30, 2013 and 2012, we sold $11.1 million and $14.7 million, respectively, of trade receivables, at a total discount of $0.2 million and $0.4 million, respectively. | |
During the nine months ended September 30, 2013 and 2012, we transferred $46.3 million and $40.4 million, respectively, of loaner vehicles from Other Current Assets to Inventory on our Condensed Consolidated Balance Sheets. | |
During the nine months ended September 30, 2013, we entered into three transactions in which we purchased various previously leased real estate, for a total purchase price of $32.8 million. These transactions included the termination of the related lease obligations, resulting in losses of $2.1 million and $5.5 million, which are included in Other Operating Expense, net in our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2013, respectively. | |
Until February 2012, we sponsored the Asbury Automotive Wealth Accumulation Plan (the “Deferred Compensation Plan” or the "Plan") wherein eligible employees, generally those at senior levels, could elect to defer a portion of their annual compensation. In February 2012, our Board of Directors elected to terminate the Plan. During the nine months ended September 30, 2013, we (i) received a $7.8 million lump sum distribution as a result of the termination of the Plan and (ii) used these proceeds to relieve our corresponding $7.8 million total liability to the Plan's participants. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
Our dealerships are party to dealer and framework agreements with applicable vehicle manufacturers. In accordance with these agreements, each dealership has certain rights and is subject to restrictions typical in the industry. The ability of these manufacturers to influence the operations of the dealerships or the loss of any of these agreements could have a materially negative impact on our operating results. | |
In some instances, manufacturers may have the right, and may direct us, to implement costly capital improvements to dealerships as a condition to entering into, renewing or extending franchise agreements with them. Manufacturers also typically require that their franchises meet specific standards of appearance. These factors, either alone or in combination, could cause us to use our financial resources on capital projects that we might not have planned for or otherwise determined to undertake. | |
From time to time, we and our dealerships are or may become involved in various claims relating to, and arising out of, our business and our operations. These claims may involve, but not be limited to, financial and other audits by vehicle manufacturers, lenders and certain federal, state and local government authorities, which have historically related primarily to (a) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (b) compliance with lender rules and covenants and (c) payments made to government authorities relating to federal, state and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings and other dispute resolution processes. Such claims, including class actions, could relate to, but may not be limited to, the practice of charging administrative fees and other fees and commissions, employment-related matters, truth-in-lending and other dealer assisted financing obligations, contractual disputes, actions brought by governmental authorities and other matters. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. | |
It is reasonably possible that losses in excess of the amounts accrued for the various types of claims currently known to us could be up to approximately $0.5 million in the aggregate. We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity or results of operations. | |
A significant portion of our business involves the sale of vehicles, parts or vehicles composed of parts that are manufactured outside the United States. As a result, our operations are subject to customary risks of importing merchandise, including fluctuations in the relative values of currencies, import duties, exchange controls, trade restrictions, work stoppages and general political and socio-economic conditions in foreign countries. The United States or the countries from which our products are imported may, from time to time, impose new quotas, duties, tariffs or other restrictions, or adjust presently prevailing quotas, duties or tariffs, which may affect our operations and our ability to purchase imported vehicles and/or parts at reasonable prices. | |
Substantially all of our facilities are subject to federal, state and local provisions regarding the discharge of materials into the environment. Compliance with these provisions has not had, nor do we expect such compliance to have, any material effect upon our capital expenditures, net earnings, financial condition, liquidity or competitive position. We believe that our current practices and procedures for the control and disposition of such materials comply with applicable federal, state and local requirements. No assurances can be provided, however, that future laws or regulations, or changes in existing laws or regulations, would not require us to expend significant resources in order to comply therewith. | |
We had $14.6 million of letters of credit outstanding as of September 30, 2013, which are required by certain of our insurance providers. In addition, as of September 30, 2013, we maintained a $5.0 million surety bond line in the ordinary course of our business. Our letters of credit and surety bond line are considered to be off balance sheet arrangements. | |
Our other material commitments include (i) floor plan notes payable, (ii) operating leases, (iii) long-term debt and (iv) interest on long-term debt, as described elsewhere herein. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and reflect the consolidated accounts of Asbury Automotive Group, Inc. and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying Condensed Consolidated Financial Statements in order to conform to current presentation. These reclassifications had no effect on previously reported net income. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly and the effects of any revisions are reflected in the condensed consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying condensed consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, certain assumptions related to intangible and long-lived assets, reserves for insurance programs, reserves for certain legal or similar proceedings relating to our business operations, realization of deferred tax assets and reserves for estimated tax liabilities. | |
Contracts-In-Transit | Contracts-In-Transit |
Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us. Amounts due from contracts-in-transit are generally collected within two weeks following the date of sale of the related vehicle. | |
Revenue Recognition | Revenue Recognition |
Revenue from the sale of new and used vehicles (which excludes sales tax) is recognized upon the latest of delivery, passage of title, signing of the sales contract or approval of financing. Revenue from the sale of parts, service and collision repair work (which excludes sales tax) is recognized upon delivery of parts to the customer or at the time vehicle service or repair work is completed, as applicable. Manufacturer incentives and rebates, including manufacturer holdbacks, floor plan interest assistance and certain advertising assistance, are recognized as a reduction of new vehicle cost of sales at the time the related vehicles are sold. | |
We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, credit life insurance and disability insurance, and other insurance, to customers (collectively “F&I”). We may be charged back (“chargebacks”) for F&I commissions in the event a contract is prepaid, defaulted upon or terminated. F&I commissions are recorded at the time a vehicle is sold and a reserve for future chargebacks is established based on historical chargeback experience and the termination provisions of the applicable contract. F&I commissions, net of estimated chargebacks, are included in Finance and Insurance, net in the accompanying Condensed Consolidated Statements of Income. | |
Earnings per Common Share | Earnings per Common Share |
Basic earnings per common share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. | |
Discontinued Operations | Discontinued Operations |
Certain amounts reflected in the accompanying Condensed Consolidated Balance Sheets have been classified as Assets Held for Sale or Liabilities Associated with Assets Held for Sale, with such classification beginning on the date that the assets and associated liabilities were first considered held for sale. | |
We report franchises and ancillary businesses as discontinued operations when it is evident that the operations and cash flows of a franchise or ancillary business being actively marketed for sale will be eliminated from our on-going operations and that we will not have any significant continuing involvement in its operations. We do not classify franchises as discontinued operations if we believe that the cash flows generated by the franchise will be replaced by expanded operations of our remaining franchises within the respective local market area. | |
Amounts in the accompanying Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 have been reclassified to reflect the results of franchises sold or closed subsequent to September 30, 2012 as if we had classified those franchises as discontinued operations for all periods presented. | |
Statements of Cash Flows | Statements of Cash Flows |
Borrowings and repayments of floor plan notes payable to a lender unaffiliated with the manufacturer from which we purchase a particular new vehicle ("Non-Trade"), and all floor plan notes payable relating to pre-owned vehicles (together referred to as "Floor Plan Notes Payable-Non-Trade"), are classified as financing activities on the accompanying Condensed Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as “Floor Plan Notes Payable - Trade”) is classified as an operating activity on the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions are classified as a financing activity. Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to a lender not affiliated with the manufacturer from which we purchased the related inventory. Repayments of Floor Plan Notes Payable - Trade associated with divestitures are classified as an operating activity. Repayments of Floor Plan Notes Payable - Non-Trade associated with divestitures are classified as a financing activity. | |
Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowings from manufacturer affiliated lenders. Loaner vehicles are initially used by our service department for only a short period of time (typically six to twelve months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles and the related borrowings and repayments as operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. The cash outflow to acquire loaner vehicles is presented in Other Current Assets in the accompanying Condensed Consolidated Statements of Cash Flows. Borrowings and repayments of loaner vehicle notes payable are presented in Accounts Payable and Accrued Liabilities in the accompanying Condensed Consolidated Statements of Cash Flows. When loaner vehicles are taken out of loaner status they are transferred to used vehicle inventory, which is reflected as a non-cash transfer in the accompanying Condensed Consolidated Statements of Cash Flows. The cash inflow from the sale of loaner vehicles is reflected in Inventories in the accompanying Condensed Consolidated Statements of Cash Flows. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Business Combinations [Abstract] | ||||
Schedule of Business Acquisitions | Below is the allocation of purchase price for acquisitions completed during the nine months ended September 30, 2013. The accounting for these acquisitions is based on currently available information and is considered preliminary, as we expect to finalize the valuation of manufacturer franchise rights and goodwill (both on a book basis and tax basis) during the fourth quarter of 2013. The $29.6 million of goodwill and manufacturer franchise rights will be deductible for federal and state income taxes ratably over a 15 year period. | |||
As of September 30, 2013 | ||||
(In millions) | ||||
Inventory | $ | 11.9 | ||
Real estate | 18.7 | |||
Property and equipment | 1.6 | |||
Goodwill | 24.3 | |||
Manufacturer franchise rights | 5.3 | |||
Total purchase price | $ | 61.8 | ||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Inventory | Inventories consisted of the following: | |||||||
As of | ||||||||
30-Sep-13 | December 31, 2012 | |||||||
(In millions) | ||||||||
New vehicles | $ | 573.8 | $ | 517.4 | ||||
Used vehicles | 121.1 | 94.6 | ||||||
Parts and accessories | 39.6 | 36.5 | ||||||
Total inventories | $ | 734.5 | $ | 648.5 | ||||
Assets_and_Liabilities_Held_fo1
Assets and Liabilities Held for Sale (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Disclosure of Long Lived Assets and Liabilities Held-for-sale | A summary of assets held for sale and liabilities associated with assets held for sale is as follows: | |||||||
As of | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
(In millions) | ||||||||
Assets: | ||||||||
Inventories | $ | — | $ | 6.6 | ||||
Property and equipment, net | 9.2 | 20.7 | ||||||
Goodwill | — | 0.3 | ||||||
Total assets | 9.2 | 27.6 | ||||||
Liabilities: | ||||||||
Floor plan notes payable—non-trade | — | 5.4 | ||||||
Accrued liabilities | — | 4 | ||||||
Total liabilities | — | 9.4 | ||||||
Net assets held for sale | $ | 9.2 | $ | 18.2 | ||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Long-term Debt | Long-term debt consists of the following: | |||||||
As of | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
(In millions) | ||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 300 | $ | 200 | ||||
7.625% Senior Subordinated Notes due 2017 | — | 143.2 | ||||||
Mortgage notes payable bearing interest at fixed and variable rates | 149.3 | 118.9 | ||||||
Real estate term loan facility | 57.3 | — | ||||||
Capital lease obligations | 3.7 | 3.9 | ||||||
510.3 | 466 | |||||||
Add: unamortized premium on 8.375% Senior Subordinated Notes due 2020 | 9.5 | — | ||||||
Long-term debt, including current portion | 519.8 | 466 | ||||||
Less: current portion | (8.5 | ) | (4.6 | ) | ||||
Long-term debt | $ | 511.3 | $ | 461.4 | ||||
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||
Schedule of Carrying Values and Fair Values of Liabilities | A summary of the carrying values and fair values of our 8.375% Notes and our 7.625% Notes is as follows: | ||||||||||||||
As of | |||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||
(In millions) | |||||||||||||||
Carrying Value: | |||||||||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 309.5 | $ | 200 | |||||||||||
7.625% Senior Subordinated Notes due 2017 | — | 143.2 | |||||||||||||
Total carrying value | $ | 309.5 | $ | 343.2 | |||||||||||
Fair Value: | |||||||||||||||
8.375% Senior Subordinated Notes due 2020 | $ | 333.8 | $ | 221.5 | |||||||||||
7.625% Senior Subordinated Notes due 2017 | — | 147.5 | |||||||||||||
Total fair value | $ | 333.8 | $ | 369 | |||||||||||
Schedule of Derivative Instruments Effect on Accumulated Other Comprehensive Income | Information about the effect of derivative instruments on the accompanying Condensed Consolidated Statements of Income, including the impact on AOCI (in millions): | ||||||||||||||
For the Three Months Ended September 30, | Derivative in Cash Flow Hedging Relationships | Results | Location of Results | Amount Reclassified from AOCI to Earnings–Active Swaps | Amount Reclassified from AOCI to Earnings–Terminated Swaps | Ineffective Results Recognized in Earnings | Location of | ||||||||
Recognized | Reclassified from | Ineffective Results | |||||||||||||
in AOCI | AOCI to Earnings | ||||||||||||||
(Effective | |||||||||||||||
Portion) | |||||||||||||||
2013 | Interest rate swaps | ($0.10) | Swap interest expense | $— | ($0.10) | $— | N/A | ||||||||
2012 | Interest rate swaps | ($0.20) | Swap interest expense | ($0.10) | ($1.20) | $— | N/A | ||||||||
For the Nine Months Ended September 30, | Derivative in Cash Flow Hedging Relationships | Results | Location of Results | Amount Reclassified from AOCI to Earnings–Active Swaps | Amount Reclassified from AOCI to Earnings–Terminated Swaps | Ineffective Results Recognized in Earnings | Location of | ||||||||
Recognized | Reclassified from | Ineffective Results | |||||||||||||
in AOCI | AOCI to Earnings | ||||||||||||||
(Effective | |||||||||||||||
Portion) | |||||||||||||||
2013 | Interest rate swaps | ($0.10) | Swap interest expense | ($0.20) | ($2.00) | $— | N/A | ||||||||
2012 | Interest rate swaps | ($0.40) | Swap interest expense | ($0.20) | ($3.60) | $— | N/A | ||||||||
Schedule of Amounts Reclassified out of AOCI | |||||||||||||||
Information about amounts reclassified out of AOCI | (In millions) | ||||||||||||||
Accumulated other comprehensive loss—December 31, 2012 | $ | (1.6 | ) | ||||||||||||
Change in fair value of cash flow swaps | 0.2 | ||||||||||||||
Amortization of terminated cash flow swaps | 2 | ||||||||||||||
Total amount reclassified to swap interest expense | 2.2 | ||||||||||||||
Income tax impact associated with cash flow swaps | (0.9 | ) | |||||||||||||
Accumulated other comprehensive loss—September 30, 2013 | $ | (0.3 | ) | ||||||||||||
Schedule of Instruments Entered Into For Hedging Purposes | Market Risk Disclosures as of September 30, 2013: | ||||||||||||||
Instruments entered into for trading purposes—None | |||||||||||||||
Instruments entered into for hedging purposes (in millions)— | |||||||||||||||
Type of Derivative | Notional Size | Underlying Rate | Expiration | Fair Value | |||||||||||
Interest Rate Swap* | $ | 18.8 | 1 month LIBOR | Oct-15 | $ | (0.4 | ) | ||||||||
____________________________ | |||||||||||||||
* The total fair value of our swap is a $0.4 million net liability, of which $0.2 million is included in Accounts Payable and Accrued Liabilities and $0.2 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. | |||||||||||||||
Market Risk Disclosures as of December 31, 2012: | |||||||||||||||
Instruments entered into for trading purposes—None | |||||||||||||||
Instruments entered into for hedging purposes (in millions)— | |||||||||||||||
Type of Derivative | Notional Size | Underlying Rate | Expiration | Fair Value | |||||||||||
Interest Rate Swap* | $ | 19.7 | 1 month LIBOR | Oct-15 | $ | (0.6 | ) | ||||||||
____________________________ | |||||||||||||||
* The total fair value of our swap is a $0.6 million net liability, of which $0.3 million is included in Accounts Payable and Accrued Liabilities and $0.3 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. |
Discontinued_Operations_and_Di1
Discontinued Operations and Divestitures (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Schedule of Discontinued Operations and Related Results of Business | The following tables provide further information regarding our discontinued operations as of September 30, 2013, and includes the results of businesses sold prior to September 30, 2013: | |||||||
For the Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(In millions, except franchise data) | ||||||||
Franchises: | ||||||||
Mid-line import | — | 1 | ||||||
Luxury | — | 2 | ||||||
Total | — | 3 | ||||||
Revenues | $ | — | $ | 25 | ||||
Cost of sales | — | 20.8 | ||||||
Gross profit | — | 4.2 | ||||||
Operating expenses | 0.2 | 6.3 | ||||||
Impairment expenses | — | 2 | ||||||
Loss from operations | (0.2 | ) | (4.1 | ) | ||||
Gain on disposition | — | 1 | ||||||
Loss before income taxes | (0.2 | ) | (3.1 | ) | ||||
Income tax benefit | 0.1 | 1.2 | ||||||
Discontinued operations, net of tax | $ | (0.1 | ) | $ | (1.9 | ) | ||
For the Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(In millions, except franchise data) | ||||||||
Franchises: | ||||||||
Mid-line import | 1 | 1 | ||||||
Luxury | — | 3 | ||||||
Total | 1 | 4 | ||||||
Revenues | $ | 3.8 | $ | 93.1 | ||||
Cost of sales | 3.4 | 77.4 | ||||||
Gross profit | 0.4 | 15.7 | ||||||
Operating expenses | 1.5 | 16.8 | ||||||
Impairment expenses | — | 2 | ||||||
Loss from operations | (1.1 | ) | (3.1 | ) | ||||
Other expense, net | — | (0.2 | ) | |||||
Gain on disposition | 14.6 | 1.2 | ||||||
Income (loss) before income taxes | 13.5 | (2.1 | ) | |||||
Income tax (expense) benefit | (5.2 | ) | 0.8 | |||||
Discontinued operations, net of tax | $ | 8.3 | $ | (1.3 | ) | |||
Description_of_Business_Detail
Description of Business (Details) | Sep. 30, 2013 |
states | |
VehicleBrands | |
CollisionRepairCenters | |
Franchises | |
DealershipLocations | |
MetropolitanMarkets | |
Business Organization [Line Items] | |
Number of franchises (in franchises) | 100 |
Number of dealership locations (in dealership locations) | 79 |
Number of metropolitan markets (in metropolitan markets) | 18 |
Number of states (in states) | 10 |
Number of vehicle brands (in vehicle brands) | 29 |
Number of collision repair centers (in collision repair centers) | 24 |
Luxury and Mid-line Import Brands [Member] | |
Business Organization [Line Items] | |
Weighted brand mix | 87.00% |
Domestic Brands [Member] | |
Business Organization [Line Items] | |
Weighted brand mix | 13.00% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Line Items] | |
General collection period for contracts-in-transit (in days) | 14 days |
Minimum [Member] | |
Accounting Policies [Line Items] | |
Loaner vehicle period of use before sale (in months) | 6 months |
Maximum [Member] | |
Accounting Policies [Line Items] | |
Loaner vehicle period of use before sale (in months) | 12 months |
Acquisitions_Details
Acquisitions (Details) (USD $) | 1 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Jul. 23, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
Three Franchises (Three Dealership Locations) [Member] | Three Franchises (Three Dealership Locations) [Member] | Jaguar [Member] | |
DealershipLocations | Franchises | ||
Franchises | |||
Business Acquisition [Line Items] | |||
Number of franchises acquired (in franchises) | 3 | ||
Number of dealership locations acquired (in dealership locations) | 3 | ||
Aggregate purchase price | $61.80 | ||
Cash paid for acquisition | 50.5 | ||
Floor plan borrowings for puchase of related inventory | 11.3 | ||
Goodwill and manufacturer franchise rights | $29.60 | ||
Goodwill and manufacturer franchise rights, period for federal and state tax deductions | 15 years | ||
Number of franchises awarded (in franchises) | 1 |
Acquisitions_Schedule_of_Busin
Acquisitions (Schedule of Business Acquisitions) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Business Acquisition [Line Items] | ||
Goodwill | $52.80 | $28.40 |
Three Franchises (Three Dealership Locations) [Member] | ||
Business Acquisition [Line Items] | ||
Inventory | 11.9 | |
Real estate | 18.7 | |
Property and equipment | 1.6 | |
Goodwill | 24.3 | |
Manufacturer franchise rights | 5.3 | |
Total purchase price | $61.80 |
Inventories_Details
Inventories (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Components of Inventory [Line Items] | |||
Inventories | $734.50 | $648.50 | |
Lower of cost or market inventory reserves | 5.4 | 4.7 | |
Inventories classified as Assets Held for Sale | 0 | 6.6 | |
New Vehicles [Member] | |||
Components of Inventory [Line Items] | |||
Inventories | 573.8 | 517.4 | |
Reduction of new vehicle inventory cost by automobile manufacturer incentives | 7 | 6.3 | |
Reduction to new vehicle cost of sales by automobile manufacturer incentives | 20.4 | 17.7 | |
Used Vehicles [Member] | |||
Components of Inventory [Line Items] | |||
Inventories | 121.1 | 94.6 | |
Parts and Accessories [Member] | |||
Components of Inventory [Line Items] | |||
Inventories | $39.60 | $36.50 |
Assets_and_Liabilities_Held_fo2
Assets and Liabilities Held for Sale (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
DealershipLocations | ||
Franchises | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of franchises, sold (in franchises) | 1 | |
Number of dealership locations, sold (in dealership locations) | 1 | |
Real estate held-for-sale | $9.20 | $9.20 |
Assets: | ||
Inventories | 0 | 6.6 |
Property and equipment, net | 9.2 | 20.7 |
Goodwill | 0 | 0.3 |
Total assets | 9.2 | 27.6 |
Liabilities: | ||
Floor plan notes payable—non-trade | 0 | 5.4 |
Accrued liabilities | 0 | 4 |
Total liabilities | 0 | 9.4 |
Net assets held for sale | 9.2 | 18.2 |
Pending Disposition [Member] | ||
Assets: | ||
Total assets | 18.4 | |
Liabilities: | ||
Total liabilities | $9.40 |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
Senior Subordinated Notes [Member] | Senior Subordinated Notes [Member] | Senior Subordinated Notes [Member] | Senior Subordinated Notes [Member] | Senior Subordinated Notes [Member] | Real Estate Term Loan Facility [Member] | Mortgages [Member] | One-Month LIBOR [Member] | LIBOR [Member] | Base Rate [Member] | Federal Funds [Member] | Reastated Credit Agreement [Member] | Reastated Credit Agreement [Member] | Reastated Credit Agreement [Member] | ||||||
8.375% Senior Subordinated Notes due 2020 | 8.375% Senior Subordinated Notes due 2020 | 8.375% Senior Subordinated Notes due 2020 | 7.625% Senior Subordinated Notes due 2017 | 7.625% Senior Subordinated Notes due 2017 | New Mortgage Notes Payable, Fixed Rate [Member] | Real Estate Term Loan Facility [Member] | Real Estate Term Loan Facility [Member] | Real Estate Term Loan Facility [Member] | Real Estate Term Loan Facility [Member] | Bank of America [Member] | Bank of America [Member] | Bank of America [Member] | |||||||
DealershipLocations | New Vehicles [Member] | Used Vehicles [Member] | |||||||||||||||||
debt_instrument | One-Month LIBOR [Member] | One-Month LIBOR [Member] | |||||||||||||||||
Additional Debt Issuance: | |||||||||||||||||||
Face value of debt instrument | $100 | $33.90 | |||||||||||||||||
Debt instrument, interest rate, stated rate | 8.38% | 8.38% | 8.38% | 7.63% | 7.63% | ||||||||||||||
Debt instrument, add-on debt issuance premium | 109.75% | ||||||||||||||||||
Debt instrument, unamortized discount | 2.3 | ||||||||||||||||||
Proceeds from add-on issuance of debt | 108.3 | ||||||||||||||||||
Debt instrument, unamortized premium | 9.5 | 9.5 | 0 | 9.8 | |||||||||||||||
Debt instrument, interest rate, effective rate | 6.73% | ||||||||||||||||||
Line of Credit Facility: | |||||||||||||||||||
Increase in line of credit facility | 200 | ||||||||||||||||||
Maximum borrowing capacity | 75 | 825 | |||||||||||||||||
Decrease in interest rate | 0.25% | ||||||||||||||||||
Interest rate | 1.25% | 1.50% | |||||||||||||||||
Debt Instrument, Redemption: | |||||||||||||||||||
Extinguishment of debt | 143.2 | ||||||||||||||||||
Loss on extinguishment of long-term debt | -6.8 | 0 | -6.8 | 0 | -6.8 | ||||||||||||||
Premiums paid pursuant to the terms of the redemption notice | 3.6 | ||||||||||||||||||
Third-party costs associated with the redemption | 0.1 | ||||||||||||||||||
Write off of deferred debt issuance cost | 3.1 | ||||||||||||||||||
Amount outstanding | 57.3 | ||||||||||||||||||
Periodic payment, principal | 1.25% | ||||||||||||||||||
Basis spread on variable rate | 1.00% | 2.50% | 1.50% | 0.50% | |||||||||||||||
Mortgage Notes Payable: | |||||||||||||||||||
Number of new debt instruments (in instruments) | 3 | ||||||||||||||||||
Number of dealership locations used as collateral for new debt (in dealership locations) | 3 | ||||||||||||||||||
Face value of debt instrument | 100 | 33.9 | |||||||||||||||||
Debt issuance costs | $0.40 |
Longterm_Debt_Schedule_of_Long
Long-term Debt (Schedule of Long-Term Debt) (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Capital lease obligations | $3.70 | $3.90 | |
Long term debt and capital lease obligations, current and noncurrent, before unamortized premium (discount) | 510.3 | 466 | |
Add: unamortized premium on 8.375% Senior Subordinated Notes due 2020 | 9.5 | 0 | |
Long-term debt, including current portion | 519.8 | 466 | |
Less: current portion | -8.5 | -4.6 | |
Long-term debt | 511.3 | 461.4 | |
Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 149.3 | 118.9 | |
Real Estate Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 57.3 | 0 | |
8.375% Senior Subordinated Notes due 2020 | Senior Subordinated Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate of debt instrument | 8.38% | 8.38% | 8.38% |
Long-term debt, gross | 300 | 200 | |
Add: unamortized premium on 8.375% Senior Subordinated Notes due 2020 | 9.8 | ||
7.625% Senior Subordinated Notes due 2017 | Senior Subordinated Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate of debt instrument | 7.63% | 7.63% | |
Long-term debt, gross | $0 | $143.20 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value (Details) (Interest Rate Swap [Member], USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Interest Rate Swap [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Notional principal amount of derivative liability | $18.80 |
Notional principal amount of derivative liability, at maturity | 16.1 |
Interest rate swap, net loss amount expected to be reclassified in the next twelve months | ($0.20) |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value (Summary of Carrying Values and Fair Values of Debt) (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | $309.50 | $343.20 | |
Portion at Fair Value, Fair Value Disclosure [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total fair value | 333.8 | 369 | |
Senior Subordinated Notes [Member] | 8.375% Senior Subordinated Notes due 2020 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | 309.5 | 200 | |
Total fair value | 333.8 | 221.5 | |
Stated interest rate of debt instrument | 8.38% | 8.38% | 8.38% |
Senior Subordinated Notes [Member] | 7.625% Senior Subordinated Notes due 2017 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | 0 | 143.2 | |
Total fair value | $0 | $147.50 | |
Stated interest rate of debt instrument | 7.63% | 7.63% |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value (Schedule of Derivative Instruments Effect on the Consolidated Income Statement, Including Accumulated Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Interest Rate Swap [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Results Recognized in AOCI (Effective Portion) | ($0.10) | ($0.20) | ($0.10) | ($0.40) |
Interest Expense [Member] | Interest Rate Swap [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount Reclassified from AOCI to Earnings | 0 | -0.1 | -0.2 | -0.2 |
Ineffective Results Recognized in Earnings | 0 | 0 | 0 | 0 |
Interest Expense [Member] | Terminated Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount Reclassified from AOCI to Earnings | ($0.10) | ($1.20) | ($2) | ($3.60) |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value (Schedule of Amounts Reclassified out of AOCI) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Reclassification out of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Accumulated other comprehensive loss, beginning of period | ($1.60) | |||
Income tax impact associated with cash flow swaps | 14.3 | 13.6 | 46.2 | 37.6 |
Accumulated other comprehensive loss, end of period | -0.3 | -0.3 | ||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Change in fair value of cash flow swaps | 0.2 | |||
Amortization of terminated cash flow swaps | 2 | |||
Total amount reclassified to swap interest expense | 2.2 | |||
Income tax impact associated with cash flow swaps | ($0.90) |
Financial_Instruments_and_Fair6
Financial Instruments and Fair Value (Schedule of Instruments Entered Into for Hedging Purposes) (Details) (Interest Rate Swap [Member], USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional size | $18.80 | |||
One-Month LIBOR [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional size | 18.8 | [1] | 19.7 | [2] |
Expiration | 1-Oct-15 | [1] | 1-Oct-15 | [2] |
Fair value of interest rate swaps | -0.4 | [1] | -0.6 | [2] |
One-Month LIBOR [Member] | Accounts Payable and Accrued Liabilities [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value of interest rate swaps | -0.2 | -0.3 | ||
One-Month LIBOR [Member] | Other Long-Term Liabilities [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value of interest rate swaps | ($0.20) | ($0.30) | ||
[1] | The total fair value of our swap is a $0.4 million net liability, of which $0.2 million is included in Accounts Payable and Accrued Liabilities and $0.2 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. | |||
[2] | The total fair value of our swap is a $0.6 million net liability, of which $0.3 million is included in Accounts Payable and Accrued Liabilities and $0.3 million is included in Other Long-Term Liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheet. |
Discontinued_Operations_and_Di2
Discontinued Operations and Divestitures (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Franchises | Franchises | Franchises | Franchises | |
DealershipLocations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of franchises, sold (in franchises) | 1 | |||
Number of dealership locations, sold (in dealership locations) | 1 | |||
Franchises, discontinued operations (in franchises) | 0 | 3 | 1 | 4 |
Revenues | $0 | $25 | $3.80 | $93.10 |
Cost of sales | 0 | 20.8 | 3.4 | 77.4 |
Gross profit | 0 | 4.2 | 0.4 | 15.7 |
Operating expenses | 0.2 | 6.3 | 1.5 | 16.8 |
Impairment expenses | 0 | 2 | 0 | 2 |
(Loss) income from operations | -0.2 | -4.1 | -1.1 | -3.1 |
Other expense, net | 0 | 0.2 | ||
Gain on sale of assets | 0 | 1 | 14.6 | 1.2 |
(Loss) Income before income taxes | -0.2 | -3.1 | 13.5 | -2.1 |
Income tax expense (benefit) | 0.1 | 1.2 | -5.2 | 0.8 |
Discontinued operations, net of tax | ($0.10) | ($1.90) | $8.30 | ($1.30) |
Mid-Line Import Franchises [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Franchises, discontinued operations (in franchises) | 0 | 1 | 1 | 1 |
Luxury Franchises [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Franchises, discontinued operations (in franchises) | 0 | 2 | 0 | 3 |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
transaction | |||
Supplemental Cash Flow Information [Abstract] | |||
Interest payments made including amounts capitalized | $34.10 | $33.10 | |
Cash paid during the period related to floor plan interest | 8.6 | 7.9 | |
Income tax payments, net of refunds received | 46.9 | 24.4 | |
Trade receivables sold | 11.1 | 14.7 | |
Discount on trade receivables sold | 0.2 | 0.4 | |
Loaner vehicles transferred from other current assets to inventory | 46.3 | 40.4 | |
Purchase of previously leased real estate, number of transactions entered in to during the period | 3 | ||
Purchase price of previously leased real estate | 32.8 | 8.6 | |
Loss on termination of related lease obligations | 2.1 | 5.5 | 0 |
Proceeds received from deferred compensation plan termination | 7.8 | 0 | |
Distribution of deferred compensation liability to plan participants | $7.80 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Threatened Litigation [Member] | |
Loss Contingencies [Line Items] | |
Reasonably possible losses in excess of accrued amounts | $0.50 |
Guarantee Obligations [Member] | |
Loss Contingencies [Line Items] | |
Amount of letters of credit outstanding | 14.6 |
Amount of surety bond line maintained | $5 |