Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ASBURY AUTOMOTIVE GROUP INC | |
Entity Central Index Key | 0001144980 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 19,403,758 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 |
CURRENT ASSETS: | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 10.9 | $ 8.3 | |
Contracts-in-transit | 158.9 | 198.3 | |
Accounts receivable, net | 115.1 | 130.3 | |
Total inventories | 1,167.8 | 1,067.6 | |
Assets held for sale | 55.3 | 26.3 | |
Other current assets | 120.6 | 122.2 | |
Total current assets | 1,628.6 | 1,553 | |
PROPERTY AND EQUIPMENT, net | 915.4 | 886.1 | |
OPERATING LEASE RIGHT-OF-USE ASSETS | 73.4 | 0 | |
GOODWILL | 213.2 | 181.2 | |
INTANGIBLE FRANCHISE RIGHTS | 65.8 | 65.8 | |
OTHER LONG-TERM ASSETS | 8.5 | 9.3 | |
Total assets | 2,904.9 | 2,695.4 | |
CURRENT LIABILITIES: | |||
Floor plan notes payable—trade, net | 132.3 | 114 | |
Floor plan notes payable—non-trade, net | 903 | 852.1 | |
Current maturities of long-term debt | 38.7 | 38.8 | |
Current maturities of operating leases | 18.3 | 0 | |
Accounts payable and accrued liabilities | 306.8 | 298.4 | |
Liabilities associated with assets held for sale | 17.7 | $ 0 | |
Total current liabilities | 1,416.8 | 1,303.3 | |
LONG-TERM DEBT | 874.7 | 866.5 | |
OPERATING LEASE LIABILITIES | 59.4 | 0 | |
DEFERRED INCOME TAXES | 21.3 | 21.7 | |
OTHER LONG-TERM LIABILITIES | 28.1 | 30.7 | |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
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; 41,194,169 and 41,065,069 shares issued, including shares held in treasury, respectively | 0.4 | 0.4 | |
Additional paid-in capital | 575.5 | 572.9 | |
Retained earnings | 957.7 | 922.7 | |
Treasury stock, at cost; 21,786,251 and 21,719,339 shares, respectively | (1,028.1) | (1,023.4) | |
Accumulated other comprehensive (loss) income | (0.9) | 0.6 | |
Total shareholders' equity | 504.6 | 473.2 | |
Total liabilities and shareholders' equity | $ 2,904.9 | $ 2,695.4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
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) | 41,194,169 | 41,065,069 |
Treasury stock, shares (in shares) | 21,786,251 | 21,719,339 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE: | ||
New vehicle | $ 871.8 | $ 857.1 |
Used vehicle | 509.9 | 484.6 |
Parts and service | 217.6 | 199.3 |
Finance and insurance, net | 71.5 | 68.2 |
TOTAL REVENUE | 1,670.8 | 1,609.2 |
COST OF SALES: | ||
New vehicle | 833.9 | 818.5 |
Used vehicle | 475.4 | 451.1 |
Parts and service | 82.3 | 74.2 |
TOTAL COST OF SALES | 1,391.6 | 1,343.8 |
GROSS PROFIT | 279.2 | 265.4 |
OPERATING EXPENSES: | ||
Selling, general, and administrative | 191 | 184.2 |
Depreciation and amortization | 8.6 | 8.2 |
Other operating expense (income), net | 1.8 | (0.2) |
INCOME FROM OPERATIONS | 77.8 | 73.2 |
OTHER EXPENSES: | ||
Floor plan interest expense | 10.2 | 6.6 |
Other interest expense, net | 13.9 | 13 |
Swap interest expense | 0 | 0.2 |
Total other expenses, net | 24.1 | 19.8 |
INCOME BEFORE INCOME TAXES | 53.7 | 53.4 |
Income tax expense | 12.8 | 13.3 |
NET INCOME | $ 40.9 | $ 40.1 |
Basic— | ||
Net income (in dollars per share) | $ 2.13 | $ 1.95 |
Diluted— | ||
Net income (in dollars per share) | $ 2.11 | $ 1.93 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
Basic (in shares) | 19.2 | 20.6 |
Restricted stock (in shares) | 0.1 | 0.1 |
Performance share units (in shares) | 0.1 | 0.1 |
Diluted (in shares) | 19.4 | 20.8 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 40.9 | $ 40.1 |
Other comprehensive income: | ||
Change in fair value of cash flow swaps | (1.8) | 2.8 |
Income tax expense (benefit) associated with cash flow swaps | 0.5 | (0.7) |
Comprehensive income | $ 39.6 | $ 42.2 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Comprehensive Income (Loss): | ||||||
Cumulative effect adjustment of ASU 2014-09 | $ 9.1 | $ 9.1 | ||||
Balance (in shares) at Dec. 31, 2017 | 40,969,987 | 20,156,962 | ||||
Balance at Dec. 31, 2017 | 394.2 | $ 0.4 | $ 563.5 | 750.3 | $ (919.1) | $ (0.9) |
Comprehensive Income (Loss): | ||||||
Net income | 40.1 | 40.1 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment and tax (benefit) expense | 2.1 | 2.1 | ||||
Comprehensive income | 42.2 | 40.1 | 2.1 | |||
Share-based compensation | 3.2 | 3.2 | ||||
Issuance of common stock in connection with share-based payment arrangements (in shares) | 181,720 | |||||
Issuance of common stock in connection with share-based payment arrangements | 0 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards (in shares) | 65,412 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards | (4.4) | $ (4.4) | ||||
Share repurchases (in shares) | 296,822 | |||||
Share repurchases | (20) | $ (20) | ||||
Balance (in shares) at Mar. 31, 2018 | 41,151,707 | 20,519,196 | ||||
Balance at Mar. 31, 2018 | 424.3 | $ 0.4 | 566.7 | 799.5 | $ (943.5) | 1.2 |
Comprehensive Income (Loss): | ||||||
Cumulative effect adjustment of ASU 2014-09 | 0 | 0.2 | (0.2) | |||
Balance (in shares) at Dec. 31, 2018 | 41,065,069 | 21,719,339 | ||||
Balance at Dec. 31, 2018 | 473.2 | $ 0.4 | 572.9 | 922.7 | $ (1,023.4) | 0.6 |
Comprehensive Income (Loss): | ||||||
Net income | 40.9 | 40.9 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment and tax (benefit) expense | (1.3) | (1.3) | ||||
Comprehensive income | 39.6 | 40.9 | (1.3) | |||
Share-based compensation | 3.9 | 3.9 | ||||
Issuance of common stock in connection with share-based payment arrangements (in shares) | 238,078 | |||||
Issuance of common stock in connection with share-based payment arrangements | 0 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards (in shares) | 66,912 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards | (4.7) | $ (4.7) | ||||
Share repurchases (in shares) | 108,978 | |||||
Share repurchases | (7.4) | $ (7.4) | ||||
Retirement of previously repurchased common stock (in shares) | (108,978) | (108,978) | ||||
Retirement of previously repurchased common stock | 0 | (1.3) | (6.1) | $ 7.4 | ||
Balance (in shares) at Mar. 31, 2019 | 41,194,169 | 21,786,251 | ||||
Balance at Mar. 31, 2019 | $ 504.6 | $ 0.4 | $ 575.5 | $ 957.7 | $ (1,028.1) | $ (0.9) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Change in fair value of cash flow swaps, tax | $ (0.5) | $ 0.7 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income | $ 40.9 | $ 40.1 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 8.6 | 8.2 |
Share-based compensation | 3.9 | 3.2 |
Loaner vehicle amortization | 5.8 | 5.8 |
Change in right of use asset | 4.5 | 0 |
Other adjustments, net | 3.2 | 1 |
Changes in operating assets and liabilities, net of acquisitions and divestitures— | ||
Contracts-in-transit | 39.4 | 41.6 |
Accounts receivable | 15.1 | 18.7 |
Inventories | (19.6) | (34.4) |
Other current assets | (41.3) | (32.5) |
Floor plan notes payable—trade, net | 3.8 | 6.3 |
Accounts payable and other current liabilities | 4.6 | (21.5) |
Operating lease liabilities | (4.6) | 0 |
Other long-term assets and liabilities, net | 0.9 | (0.7) |
Net cash provided by operating activities | 65.2 | 35.8 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Capital expenditures—excluding real estate | (3.6) | (3.3) |
Capital expenditures—real estate | 0 | (17.6) |
Purchases of previously leased real estate | 4.9 | 0 |
Acquisitions | (118.5) | (45.5) |
Proceeds from the sale of assets | 0 | 2 |
Net cash used in investing activities | (127) | (64.4) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Floor plan borrowings—non-trade | 1,066.3 | 1,014 |
Floor plan borrowings—acquisitions | 47.7 | 9.5 |
Floor plan repayments—non-trade | (1,033.6) | (966.8) |
Repayments of borrowings | (3.9) | (3.6) |
Repurchases of common stock, including shares associated with net share settlement of employee share-based awards | (12.1) | (24.4) |
Net cash provided by financing activities | 64.4 | 28.7 |
Net increase in cash and cash equivalents | 2.6 | 0.1 |
CASH AND CASH EQUIVALENTS, beginning of period | 8.3 | 4.7 |
CASH AND CASH EQUIVALENTS, end of period | $ 10.9 | $ 4.8 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We are one of the largest automotive retailers in the United States. As of March 31, 2019 we owned and operated 106 new vehicle franchises ( 87 dealership locations) representing 30 brands of automobiles and 25 collision repair centers in 17 metropolitan markets within nine states. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services; and finance and insurance products. For the three months ended March 31, 2019 , our new vehicle revenue brand mix consisted of 47% imports, 33% luxury, and 20% domestic brands. 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 North Carolina, South Carolina and Virginia; • Gray-Daniels dealerships operating in the Jackson, Mississippi area; • Hare and Estes dealerships operating in the Indianapolis, Indiana area; • McDavid dealerships operating in metropolitan Austin, Dallas and Houston, Texas; • Nalley dealerships operating in metropolitan Atlanta, Georgia; and • Plaza dealerships operating in metropolitan St. Louis, Missouri. 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, third, and fourth quarters than in the first quarter 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. 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 its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. 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 March 31, 2019 , and for the three months ended March 31, 2019 and 2018 , have been included, unless otherwise indicated. The results of operations for the three months ended March 31, 2019 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 audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018 . Use of Estimates 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, 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 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, variable consideration and constraint considerations related to retro-commission arrangements, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for insurance programs, certain assumptions related to intangible and long-lived assets, and reserves for certain legal or similar proceedings relating to our business operations. 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. Revenue Recognition Refer to Note 2 "Revenue Recognition". Income Taxes We use the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates. Share Repurchases Share repurchases may be made from time-to-time in open market transactions or through privately negotiated transactions under the authorization approved by the Board of Directors. Periodically, the Company may retire repurchased shares of common stock previously held by the Company as Treasury Shares. In accordance with our accounting policy, we allocate any excess share repurchase price over par value between additional paid-in capital, which is limited to amounts initially recorded for the same issue, and retained earnings. Earnings per Share Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per 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. Assets Held for Sale and Liabilities Associated with Assets Held for Sale Certain amounts have been classified as Assets Held for Sale in the accompanying Condensed Consolidated Balance Sheets. Assets and liabilities classified as held for sale include assets and liabilities associated with a pending dealership disposal, real estate not currently used in our operations that we are actively marketing to sell, and any related mortgage notes payable, if applicable. Classification as held for sale begins on the date that we have met all of the criteria for classification as held for sale. At the time of classifying assets as held for sale, we compare the carrying value of these assets to estimates of fair value to assess for impairment. We compare the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value and third-party desktop appraisals to assist in our fair value estimates related to real estate properties. 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 and repayments made in connection with all divestitures are classified as financing activities in the accompanying Condensed Consolidated Statement of Cash Flows. 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. Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowing from either our manufacturer affiliated lenders or through our senior secured credit agreement with Bank of America, as administrative agent, and the other agents and lenders party thereto (the "2016 Senior Credit Facility"). Loaner vehicles are initially used by our service department for a short period of time (typically six to twelve months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles in Other Current Assets and the borrowings and repayments of loaner vehicle notes payable in Accounts Payable and Accrued Liabilities in the accompanying Condensed Consolidated Statements of Cash Flows. Loaner vehicles are depreciated over the service period to their estimated value. At the end of the loaner service period, loaner vehicles are transferred from Other Current Assets to used vehicle inventory. These transfers are reflected as non-cash transfers between Other Current Assets and Inventories in the accompanying Condensed Consolidated Statements of Cash Flows. Recent Accounting Pronouncements Effective January 1, 2019, the Company adopted the new lease accounting guidance in Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (“ASC 842”) . Refer to Note 9 for additional information. On January 1, 2019, the Company adopted ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act") on items within accumulated other comprehensive income to retained earnings. During the first quarter of 2019, the Company elected to reclassify $0.2 million related to the change in deferred taxes associated with our cash flow hedges from accumulated other comprehensive income to retained earnings. This reclassification was recognized as a cumulative effect adjustment in the Condensed Consolidated Statements of Shareholders' Equity during the current quarter. On January 1, 2019, the Company adopted ASU 2017-12, "Derivatives and Hedging" (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This update is intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements and simplifies the application of hedge accounting guidance in certain situations. This update expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow hedges existing at the adoption date, this update requires adoption on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the effective date and the amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The adoption of this update did not have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses versus the current incurred loss model. The provisions of ASU 2016-13 are effective for fiscal years beginning after December 15, 2019. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We plan to adopt ASU 2016-13 in 2020 and are currently evaluating the expected impact from adopting this ASU on our consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three months ended March 31, 2019 and 2018 : As of March 31, 2019 March 31, 2018 (In millions) Revenue: New vehicle $ 871.8 $ 857.1 Used vehicle retail 458.2 435.8 Used vehicle wholesale 51.7 48.8 New and used vehicle 1,381.7 1,341.7 Sale of vehicle parts and accessories 36.9 33.8 Vehicle repair and maintenance services 180.7 165.5 Parts and services 217.6 199.3 Finance and insurance, net 71.5 68.2 Total revenue $ 1,670.8 $ 1,609.2 New vehicle and used vehicle retail Revenue from the sale of new and used vehicles (which excludes sales and other taxes) is recognized when the terms of the customer contract are satisfied which generally occurs with the signing of the sales contract and transfer of control of the vehicle to the customer. Incidental items that are immaterial in the context of the contract are accrued at the time of sale. Used vehicle wholesale Proceeds from the sale of these vehicles are recognized in used vehicle revenue upon transfer of control to end-users at auction. Sale of vehicle parts and accessories The Company recognizes revenue upon transfer of control to the customer which occurs at a point in time. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Vehicle repair and maintenance services The Company provides vehicle repair and maintenance services to its customers pursuant to the terms and conditions included within the customer contract ("repair order"). Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. As such, the Company recognizes revenue over time as the Company satisfies its performance obligation. Additionally, the Company has determined that parts and labor are not individually distinct in the context of a repair order and therefore are treated as a single performance obligation. Finance and Insurance, net We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed auto protection (known as "GAP") insurance, and other insurance, to end-users. Finance and insurance commission revenue is recognized at the point of sale since our performance obligation is to arrange financing or facilitating the sale of a third party’s products or services to our customers. The Company’s commission arrangements with third-party lenders and insurance administrators consists of fixed ("upfront") and variable consideration. Variable consideration includes commission charge backs ("chargebacks") in the event a contract is prepaid, defaulted upon, or terminated by the end-user. The Company reserves for future chargebacks based on historical chargeback experience and the termination provisions of the applicable contract and these reserves are established in the same period that the related revenue is recognized. We also participate in future profits pursuant to retrospective commission arrangements, which meet the definition of variable consideration, for certain insurance products associated with a third-party portfolio. The Company estimates the amount of variable consideration to be included in the transaction price based on historical payment trends and further constrains the variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. In making these assessments the Company considers the likelihood and magnitude of a potential reversal of revenue and updates its assessment when uncertainties associated with the constraint are removed. Contract Assets Changes in contract assets during the period are reflected in the table below. Contract assets related to vehicle repair and maintenance services are transferred to receivables when a repair order is completed and invoiced to the customer. Vehicle Repair and Maintenance Services Finance and Insurance, net Total (In millions) Contract Assets (Current), January 1, 2019 $ 4.1 $ 10.6 $ 14.7 Transferred to receivables from contract assets recognized at the beginning of the period (4.1 ) (3.3 ) (7.4 ) Increases related to revenue recognized, inclusive of adjustments to constraint, during the period 4.4 3.3 7.7 Contract Assets (Current), March 31, 2019 $ 4.4 $ 10.6 $ 15.0 |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2019 | |
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 such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The fair value of our manufacturer franchise rights are determined as of the acquisition date, by discounting the projected cash flows specific to each franchise. Included in this analysis are market participant assumptions, at a dealership level, regarding the cash flows directly attributable to the franchise rights, revenue growth rates, future gross margins and future selling, general, and administrative expenses. Using an estimated weighted average cost of capital, estimated residual values at the end of the forecast period and estimated future capital expenditure requirements, the Company calculates the fair value of the franchise rights. During the three months ended March 31, 2019 , we acquired the assets of eight franchises ( four dealership locations) in the Indianapolis, Indiana market for a purchase price of $121.0 million . We funded this acquisition with $70.8 million of cash, $47.7 million of floor plan borrowings for the purchase of the related new vehicle inventory, and purchase price holdbacks of $2.5 million for potential indemnity claims made by us with respect to the acquired franchises. Below is the preliminary allocation of purchase price for the acquisitions completed during the three months ended March 31, 2019 . We have not finalized our valuation for manufacturer franchise rights which will be reclassified from goodwill once completed. The goodwill and manufacturer rights associated with our acquisitions will be deductible for federal and state income tax purposes ratably over a 15 year period. As of March 31, 2019 (In millions) Inventory $ 58.1 Real estate 29.8 Property and equipment 1.8 Goodwill 32.1 Liabilities assumed (0.8 ) Total purchase price $ 121.0 During the three months ended March 31, 2018 , we acquired the assets of one franchise ( one dealership location) in the Indianapolis, Indiana market for a purchase price of $ 46.5 million . We funded this acquisition with $36.0 million of cash, $9.5 million of floor plan borrowings for the purchase of the related new vehicle inventory, and purchase price holdbacks of $1.0 million for potential indemnity claims made by us with respect to the acquired franchise. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) Vehicle receivables $ 40.8 $ 45.7 Manufacturer receivables 42.9 51.2 Other receivables 32.8 34.7 Total accounts receivable 116.5 131.6 Less—Allowance for doubtful accounts (1.4 ) (1.3 ) Accounts receivable, net $ 115.1 $ 130.3 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) New vehicles $ 973.2 $ 867.2 Used vehicles 152.5 158.9 Parts and accessories 42.1 41.5 Total inventories $ 1,167.8 $ 1,067.6 The lower of cost and net realizable value reserves reduced total inventories by $5.8 million and $6.1 million as of March 31, 2019 and December 31, 2018 , respectively. In addition to the inventories shown above, we had $14.5 million of inventories classified as Assets Held for Sale on the accompanying Condensed Consolidated Balance Sheet as of March 31, 2019 , associated with a pending dealership disposal. As of March 31, 2019 and December 31, 2018 , certain automobile manufacturer incentives reduced new vehicle inventory cost by $11.9 million and $10.1 million , respectively, and reduced new vehicle cost of sales for the three months ended March 31, 2019 and 2018 by $10.5 million and $9.4 million , respectively. |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS AND LIABILITIES HELD FOR SALE Assets and liabilities classified as held for sale include (i) assets and liabilities associated with a pending dealership disposal, (ii) real estate not currently used in our operations that we are actively marketing to sell and (iii) the related mortgage notes payable, if applicable. A summary of assets held for sale and liabilities associated with assets held for sale is as follows: As of March 31, 2019 December 31, 2018 (In millions) Assets: Inventories $ 14.5 $ — Property and equipment, net 40.7 26.3 Goodwill 0.1 — Total Assets 55.3 26.3 Liabilities: Floorplan notes payable—non trade 15.0 — Current maturities of long-term debt 0.2 — Long-term debt 2.5 — Total liabilities 17.7 — Net assets held for sale $ 37.6 $ 26.3 As of March 31, 2019 , there was one franchise ( one dealership location) pending disposition, with assets and liabilities totaling $29.0 million and $17.7 million , respectively. Assets held for sale, comprising real estate not currently used in our operations, totaled $26.3 million as of March 31, 2019 and December 31, 2018 , respectively. There were no liabilities associated with these real estate assets held for sale as of March 31, 2019 or December 31, 2018 . During the three months ended March 31, 2018, we sold one vacant property with a net book value of $2.0 million . |
FLOOR PLAN NOTES PAYABLE
FLOOR PLAN NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
FLOOR PLAN NOTES PAYABLE | FLOOR PLAN NOTES PAYABLE Floor plan notes payable consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) Floor plan notes payable—trade $ 146.4 $ 125.3 Floor plan notes payable offset account (14.1 ) (11.3 ) Floor plan notes payable—trade, net $ 132.3 $ 114.0 Floor plan notes payable—new non-trade (a) $ 933.9 $ 843.0 Floor plan notes payable—used non-trade — 30.0 Floor plan notes payable offset account (30.9 ) (20.9 ) Floor plan notes payable—non-trade, net $ 903.0 $ 852.1 ____________________________ (a) Amounts reflected for floor plan notes payable—new non-trade as of March 31, 2019 , excluded $15.0 million classified as Liabilities Associated with Assets Held for Sale. We have established a floor plan notes payable offset account with Ford Motor Credit Company that allows us to transfer cash to the account as an offset of our outstanding Floor Plan Notes Payable—Trade. Additionally, we have a similar floor plan offset account with Bank of America that allows us to offset our outstanding Floor Plan Notes Payable—Non-Trade. These accounts allow us to transfer cash to reduce the amount of outstanding floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the floor plan offset accounts into our operating cash accounts within one to two days. As of March 31, 2019 and December 31, 2018, we had $45.0 million and $32.2 million , respectively, in these floor plan offset accounts. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) 6.0% Senior Subordinated Notes due 2024 $ 600.0 $ 600.0 Mortgage notes payable bearing interest at fixed rates 130.6 132.2 2018 Bank of America Facility 25.4 25.7 2018 Wells Fargo Master Loan Facility 25.0 25.0 Prior real estate credit agreement (a) 37.4 40.8 Restated master loan agreement 82.0 83.3 Finance lease liability 17.6 3.1 Total debt outstanding 918.0 910.1 Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024 5.8 6.0 Less—debt issuance costs (10.4 ) (10.8 ) Long-term debt, including current portion 913.4 905.3 Less—current portion, net of current portion of debt issuance costs (38.7 ) (38.8 ) Long-term debt $ 874.7 $ 866.5 _____________________________ (a) Amounts reflected for prior real estate credit agreement as of March 31, 2019 , excluded a $2.7 million mortgage note payable classified as Liabilities Associated with Assets Held for Sale. We are a holding company with no independent assets or operations. For all relevant periods presented, our 6.0% Senior Subordinated Notes due 2024 (our "6.0% Notes") have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries. Any subsidiaries that have not guaranteed such notes are "minor" (as defined in Rule 3-10(h) of Regulation S-X). As of March 31, 2019 , there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or our guarantor subsidiaries. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Effective January 1, 2019, the Company adopted the new lease accounting guidance in Accounting Standards Update No. 2016-02, Leases (Topic 842) . The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification impacting the pattern of expense recognition in the income statement. The Company elected the package of practical expedients permitted in ASC 842. Accordingly, the Company accounted for its existing operating leases as an operating lease under the new guidance, without reassessing (a) whether the contract contains a lease under ASC 842, (b) whether classification of the operating lease would be different in accordance with ASC 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018) would have met the definition of initial direct costs in ASC 842 at lease commencement. In addition, the Company opted for the transition relief method specified in Accounting Standards Update No. 2018-11, which allowed for the effective date of the new leases standard as the date of initial application on transition. As a result of this election the Company (a) did not adjust comparative period financial information for the effects of ASC 842; (b) made the new required lease disclosures for periods after the effective date; and (c) carried forward our ASC 840 disclosures for comparative periods. As a result of the adoption of ASC 842, the Company recorded a right-of-use asset of $86.9 million , which represents the lease liability reduced for deferred rent amounts of $4.4 million and a lease liability of $91.3 million which represents the present value of remaining lease payments, discounted using the Company’s incremental borrowing rates based on the remaining lease terms. We lease real estate and equipment primarily under operating lease agreements. For leases with terms in excess of 12 months, we record a right-of-use asset and lease liability based on the present value of lease payments over the lease term. Escalation clauses, lease payments dependent on existing rates/indexes, renewal options, and purchase options are included within the determination of lease payments when appropriate. We have elected the practical expedient not to separate lease and non-lease components for all leases that qualify, except for information technology ("IT") assets that are embedded within service agreements (such as software license arrangements). When available, the rate implicit is utilized to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Balance Sheet Presentation As of Leases Classification March 31, 2019 (In millions) Assets: Operating Operating lease right-of-use assets $ 73.4 Finance Property and equipment, net 14.6 Total right-of-use assets $ 88.0 Liabilities: Current Operating Current maturities of operating leases $ 18.3 Finance Current maturities of long-term debt 0.6 Non-Current Operating Operating lease liabilities 59.4 Finance Long-term debt 17.0 Total lease liabilities $ 95.3 Lease Term and Discount Rate As of March 31, 2019 Weighted Average Lease Term - Operating Leases 6.1 years Weighted Average Lease Term - Finance Lease 1.9 years Weighted Average Discount Rate - Operating Leases 4.9 % Weighted Average Discount Rate - Finance Lease 4.1 % Lease Costs The following table provides certain information related to the lease costs for finance and operating leases during the three months ended March 31, 2019 . March 31, 2019 (In millions) Finance lease cost Amortization of right-of-use assets $ — Interest 0.1 Operating lease cost 5.5 Short-term lease cost 1.0 Variable lease cost 0.2 Total lease cost $ 6.8 Supplemental Cash Flow Information The following table presents supplemental cash flow information for leases during the three months ended March 31, 2019 . During the three months ended March 31, 2019 , we reassessed and remeasured an existing real estate lease, which was previously accounted for as an operating lease and finance lease for the land and building elements, respectively, due to the presence of a purchase price option which we concluded we are now reasonably certain to exercise. As reflected within the table below, we reduced a portion of the new finance lease right-of-use asset based on the existing finance lease liability at the time of remeasurement. March 31, 2019 (In millions) Supplemental Cash Flow: Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance lease $ 0.1 Operating cash flows from operating leases 5.6 Financing cash flows from finance lease 0.1 Right-of-use assets obtained in exchange for new finance lease liabilities 17.7 Right-of-use assets obtained in exchange for new operating lease liabilities 0.2 Changes to finance lease right-of-use asset resulting from lease reassessment event (3.1 ) Undiscounted Cash Flow The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities as of March 31, 2019. Finance Operating (In millions) 2019 (remaining nine months) $ 1.0 $ 16.2 2020 1.3 21.3 2021 16.7 18.2 2022 — 12.8 2023 — 4.8 Thereafter — 19.2 Total minimum lease payments 19.0 92.5 Less: amount of lease payments representing interest (1.4 ) (14.8 ) Present value of future minimum lease payments 17.6 77.7 Less: current obligations under leases (0.6 ) (18.3 ) Long-term lease obligation $ 17.0 $ 59.4 Future minimum payments under non-cancelable leases with initial terms in excess of one year at December 31, 2018, are as follows: Capital Operating (In millions) 2019 $ 0.4 $ 22.5 2020 0.4 22.2 2021 0.4 19.2 2022 0.4 14.0 2023 0.4 6.0 Thereafter 2.8 25.5 Total minimum lease payments 4.8 109.4 Less: Amounts representing interest (1.7 ) N/A $ 3.1 $ 109.4 Certain of our lease agreements include financial covenants and incorporate by reference the financial covenants set forth in the 2016 Senior Credit Facility. A breach of any of these covenants could immediately give rise to certain landlord remedies under our various lease agreements, the most severe of which include the following: (i) termination of the applicable lease and/or other leases with the same or an affiliated landlord under a cross-default provision, (ii) eviction from the premises; and (iii) the landlord having a claim for various damages. |
LEASES | LEASES Effective January 1, 2019, the Company adopted the new lease accounting guidance in Accounting Standards Update No. 2016-02, Leases (Topic 842) . The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification impacting the pattern of expense recognition in the income statement. The Company elected the package of practical expedients permitted in ASC 842. Accordingly, the Company accounted for its existing operating leases as an operating lease under the new guidance, without reassessing (a) whether the contract contains a lease under ASC 842, (b) whether classification of the operating lease would be different in accordance with ASC 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018) would have met the definition of initial direct costs in ASC 842 at lease commencement. In addition, the Company opted for the transition relief method specified in Accounting Standards Update No. 2018-11, which allowed for the effective date of the new leases standard as the date of initial application on transition. As a result of this election the Company (a) did not adjust comparative period financial information for the effects of ASC 842; (b) made the new required lease disclosures for periods after the effective date; and (c) carried forward our ASC 840 disclosures for comparative periods. As a result of the adoption of ASC 842, the Company recorded a right-of-use asset of $86.9 million , which represents the lease liability reduced for deferred rent amounts of $4.4 million and a lease liability of $91.3 million which represents the present value of remaining lease payments, discounted using the Company’s incremental borrowing rates based on the remaining lease terms. We lease real estate and equipment primarily under operating lease agreements. For leases with terms in excess of 12 months, we record a right-of-use asset and lease liability based on the present value of lease payments over the lease term. Escalation clauses, lease payments dependent on existing rates/indexes, renewal options, and purchase options are included within the determination of lease payments when appropriate. We have elected the practical expedient not to separate lease and non-lease components for all leases that qualify, except for information technology ("IT") assets that are embedded within service agreements (such as software license arrangements). When available, the rate implicit is utilized to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Balance Sheet Presentation As of Leases Classification March 31, 2019 (In millions) Assets: Operating Operating lease right-of-use assets $ 73.4 Finance Property and equipment, net 14.6 Total right-of-use assets $ 88.0 Liabilities: Current Operating Current maturities of operating leases $ 18.3 Finance Current maturities of long-term debt 0.6 Non-Current Operating Operating lease liabilities 59.4 Finance Long-term debt 17.0 Total lease liabilities $ 95.3 Lease Term and Discount Rate As of March 31, 2019 Weighted Average Lease Term - Operating Leases 6.1 years Weighted Average Lease Term - Finance Lease 1.9 years Weighted Average Discount Rate - Operating Leases 4.9 % Weighted Average Discount Rate - Finance Lease 4.1 % Lease Costs The following table provides certain information related to the lease costs for finance and operating leases during the three months ended March 31, 2019 . March 31, 2019 (In millions) Finance lease cost Amortization of right-of-use assets $ — Interest 0.1 Operating lease cost 5.5 Short-term lease cost 1.0 Variable lease cost 0.2 Total lease cost $ 6.8 Supplemental Cash Flow Information The following table presents supplemental cash flow information for leases during the three months ended March 31, 2019 . During the three months ended March 31, 2019 , we reassessed and remeasured an existing real estate lease, which was previously accounted for as an operating lease and finance lease for the land and building elements, respectively, due to the presence of a purchase price option which we concluded we are now reasonably certain to exercise. As reflected within the table below, we reduced a portion of the new finance lease right-of-use asset based on the existing finance lease liability at the time of remeasurement. March 31, 2019 (In millions) Supplemental Cash Flow: Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance lease $ 0.1 Operating cash flows from operating leases 5.6 Financing cash flows from finance lease 0.1 Right-of-use assets obtained in exchange for new finance lease liabilities 17.7 Right-of-use assets obtained in exchange for new operating lease liabilities 0.2 Changes to finance lease right-of-use asset resulting from lease reassessment event (3.1 ) Undiscounted Cash Flow The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities as of March 31, 2019. Finance Operating (In millions) 2019 (remaining nine months) $ 1.0 $ 16.2 2020 1.3 21.3 2021 16.7 18.2 2022 — 12.8 2023 — 4.8 Thereafter — 19.2 Total minimum lease payments 19.0 92.5 Less: amount of lease payments representing interest (1.4 ) (14.8 ) Present value of future minimum lease payments 17.6 77.7 Less: current obligations under leases (0.6 ) (18.3 ) Long-term lease obligation $ 17.0 $ 59.4 Future minimum payments under non-cancelable leases with initial terms in excess of one year at December 31, 2018, are as follows: Capital Operating (In millions) 2019 $ 0.4 $ 22.5 2020 0.4 22.2 2021 0.4 19.2 2022 0.4 14.0 2023 0.4 6.0 Thereafter 2.8 25.5 Total minimum lease payments 4.8 109.4 Less: Amounts representing interest (1.7 ) N/A $ 3.1 $ 109.4 Certain of our lease agreements include financial covenants and incorporate by reference the financial covenants set forth in the 2016 Senior Credit Facility. A breach of any of these covenants could immediately give rise to certain landlord remedies under our various lease agreements, the most severe of which include the following: (i) termination of the applicable lease and/or other leases with the same or an affiliated landlord under a cross-default provision, (ii) eviction from the premises; and (iii) the landlord having a claim for various damages. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE | 3 Months Ended |
Mar. 31, 2019 | |
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 and income 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 interest rate swap instruments, exchange-traded debt securities that are not actively traded or do not have a high trading volume, mortgage notes payable, and certain real estate properties on a non-recurring basis. 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 the fair value of certain non-financial assets and non-financial liabilities in purchase acquisitions and those used in the assessment of impairment for goodwill and 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 exit price 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 instruments. The carrying values of our financial instruments, with the exception of subordinated long-term debt and mortgage notes payable, approximate fair value due to (i) their short-term nature, (ii) recently completed market transactions, or (iii) existence of variable interest rates, which approximate market rates. The fair value of our subordinated long-term debt is based on reported market prices in an inactive market that reflects Level 2 inputs. We estimate the fair value of our mortgage notes payable using a present value technique based on current market interest rates for similar types of financial instruments that reflect Level 2 inputs. A summary of the carrying values and fair values of our 6.0% Notes and our mortgage notes payable is as follows: As of March 31, 2019 December 31, 2018 (In millions) Carrying Value: 6.0% Senior Subordinated Notes due 2024 $ 605.8 $ 606.0 Mortgage notes payable (a) 300.4 307.0 Total carrying value $ 906.2 $ 913.0 Fair Value: 6.0% Senior Subordinated Notes due 2024 $ 617.3 $ 570.0 Mortgage notes payable (a) 305.1 306.7 Total fair value $ 922.4 $ 876.7 _____________________________ (a) Amounts reflected for mortgage notes payable as of March 31, 2019 excluded a mortgage with an aggregate carrying value of $2.7 million classified as Liabilities Associated with Assets Held for Sale. Interest Rate Swap Agreements In June 2015, we entered into an interest rate swap agreement with a notional principal amount of $100.0 million . This swap was designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month London Interbank Offered Rate ("LIBOR"), through maturity in February 2025. The notional value of this swap was $83.8 million as of March 31, 2019 and is reducing over its remaining term to $53.1 million at maturity. In November 2013, we entered into an interest rate swap agreement with a notional principal amount of $75.0 million . This swap was designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month LIBOR rate, through maturity in September 2023. The notional value of this swap was $55.5 million as of March 31, 2019 and is reducing over its remaining term to $38.7 million at maturity. The fair value of cash flow swaps is calculated as the present value of expected future cash flows, determined on the basis of forward interest rates and present value factors. Fair value estimates reflect a credit adjustment to the discount rate applied to all expected cash flows under the swaps. Other than this input, all other inputs used in the valuation of these swaps are designated to be Level 2 fair values. The fair value of our swaps was a $1.2 million liability as of March 31, 2019 and a $0.6 million asset as of December 31, 2018 . The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the Condensed Consolidated Balance Sheets: As of March 31, 2019 December 31, 2018 (In millions) Other current assets $ — $ (0.2 ) Other long-term liabilities/(assets) 1.2 (0.4 ) Total fair value $ 1.2 $ (0.6 ) Both of our interest rate swaps qualify for cash flow hedge accounting treatment. These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. Information about the effect of our interest rate swap agreements on the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income, is as follows (in millions): For the Three Months Ended March 31, Results Recognized in Accumulated Other Comprehensive Income/(Loss) Location of Results Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings 2019 $ (1.8 ) Floor plan interest expense and Other interest expense, net $ — 2018 $ 2.6 Swap interest expense $ (0.2 ) On the basis of yield curve conditions as of March 31, 2019 and including assumptions about future changes in fair value, we expect the amount to be reclassified out of Accumulated Other Comprehensive Income/(Loss) into earnings within the next 12 months will be income of less than $0.1 million . |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION During the three months ended March 31, 2019 and 2018 , we made interest payments, including amounts capitalized, totaling $14.1 million and $10.1 million , respectively. Included in these interest payments are $9.8 million and $6.3 million , of floor plan interest payments during the three months ended March 31, 2019 and 2018 , respectively. During the three months ended March 31, 2019 , no income tax payments were made. During the three months ended March 31, 2018 , we made income tax payments, net of refunds received, totaling $0.2 million . During the three months ended March 31, 2019 and 2018 , we transferred $37.0 million and $44.7 million , respectively, of loaner vehicles from Other Current Assets to Inventories on our Condensed Consolidated Balance Sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
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 or lenders and certain federal, state, and local government authorities, which have historically related primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants, and (iii) 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. We believe we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Based on our review of the various types of claims currently known to us, there is no indication of material reasonably possible losses in excess of amounts accrued 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 $13.0 million of letters of credit outstanding as of March 31, 2019 , which are required by certain of our insurance providers. In addition, as of March 31, 2019 , 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 29, 2019, the Company closed on the sale of the dealership referred to in Note 6. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [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 its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. 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 March 31, 2019 , and for the three months ended March 31, 2019 and 2018 , have been included, unless otherwise indicated. The results of operations for the three months ended March 31, 2019 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 audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018 . |
Use of Estimates | Use of Estimates 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, 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 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, variable consideration and constraint considerations related to retro-commission arrangements, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for insurance programs, certain assumptions related to intangible and long-lived assets, and reserves for certain legal or similar proceedings relating to our business operations. |
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. |
Share Repurchases | Share Repurchases Share repurchases may be made from time-to-time in open market transactions or through privately negotiated transactions under the authorization approved by the Board of Directors. Periodically, the Company may retire repurchased shares of common stock previously held by the Company as Treasury Shares. In accordance with our accounting policy, we allocate any excess share repurchase price over par value between additional paid-in capital, which is limited to amounts initially recorded for the same issue, and retained earnings. |
Income Taxes | Income Taxes We use the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates. |
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per 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. |
Assets Held for Sale and Liabilities Associated with Assets Held for Sale | Assets Held for Sale and Liabilities Associated with Assets Held for Sale Certain amounts have been classified as Assets Held for Sale in the accompanying Condensed Consolidated Balance Sheets. Assets and liabilities classified as held for sale include assets and liabilities associated with a pending dealership disposal, real estate not currently used in our operations that we are actively marketing to sell, and any related mortgage notes payable, if applicable. Classification as held for sale begins on the date that we have met all of the criteria for classification as held for sale. At the time of classifying assets as held for sale, we compare the carrying value of these assets to estimates of fair value to assess for impairment. We compare the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value and third-party desktop appraisals to assist in our fair value estimates related to real estate properties. |
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 and repayments made in connection with all divestitures are classified as financing activities in the accompanying Condensed Consolidated Statement of Cash Flows. 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. Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowing from either our manufacturer affiliated lenders or through our senior secured credit agreement with Bank of America, as administrative agent, and the other agents and lenders party thereto (the "2016 Senior Credit Facility"). Loaner vehicles are initially used by our service department for a short period of time (typically six to twelve months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles in Other Current Assets and the borrowings and repayments of loaner vehicle notes payable in Accounts Payable and Accrued Liabilities in the accompanying Condensed Consolidated Statements of Cash Flows. Loaner vehicles are depreciated over the service period to their estimated value. At the end of the loaner service period, loaner vehicles are transferred from Other Current Assets to used vehicle inventory. These transfers are reflected as non-cash transfers between Other Current Assets and Inventories in the accompanying Condensed Consolidated Statements of Cash Flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2019, the Company adopted the new lease accounting guidance in Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (“ASC 842”) . Refer to Note 9 for additional information. On January 1, 2019, the Company adopted ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act") on items within accumulated other comprehensive income to retained earnings. During the first quarter of 2019, the Company elected to reclassify $0.2 million related to the change in deferred taxes associated with our cash flow hedges from accumulated other comprehensive income to retained earnings. This reclassification was recognized as a cumulative effect adjustment in the Condensed Consolidated Statements of Shareholders' Equity during the current quarter. On January 1, 2019, the Company adopted ASU 2017-12, "Derivatives and Hedging" (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This update is intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements and simplifies the application of hedge accounting guidance in certain situations. This update expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow hedges existing at the adoption date, this update requires adoption on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the effective date and the amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The adoption of this update did not have a material impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses versus the current incurred loss model. The provisions of ASU 2016-13 are effective for fiscal years beginning after December 15, 2019. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We plan to adopt ASU 2016-13 in 2020 and are currently evaluating the expected impact from adopting this ASU on our consolidated financial statements. |
Revenue Recognition | New vehicle and used vehicle retail Revenue from the sale of new and used vehicles (which excludes sales and other taxes) is recognized when the terms of the customer contract are satisfied which generally occurs with the signing of the sales contract and transfer of control of the vehicle to the customer. Incidental items that are immaterial in the context of the contract are accrued at the time of sale. Used vehicle wholesale Proceeds from the sale of these vehicles are recognized in used vehicle revenue upon transfer of control to end-users at auction. Sale of vehicle parts and accessories The Company recognizes revenue upon transfer of control to the customer which occurs at a point in time. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Vehicle repair and maintenance services The Company provides vehicle repair and maintenance services to its customers pursuant to the terms and conditions included within the customer contract ("repair order"). Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. As such, the Company recognizes revenue over time as the Company satisfies its performance obligation. Additionally, the Company has determined that parts and labor are not individually distinct in the context of a repair order and therefore are treated as a single performance obligation. Finance and Insurance, net We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed auto protection (known as "GAP") insurance, and other insurance, to end-users. Finance and insurance commission revenue is recognized at the point of sale since our performance obligation is to arrange financing or facilitating the sale of a third party’s products or services to our customers. The Company’s commission arrangements with third-party lenders and insurance administrators consists of fixed ("upfront") and variable consideration. Variable consideration includes commission charge backs ("chargebacks") in the event a contract is prepaid, defaulted upon, or terminated by the end-user. The Company reserves for future chargebacks based on historical chargeback experience and the termination provisions of the applicable contract and these reserves are established in the same period that the related revenue is recognized. We also participate in future profits pursuant to retrospective commission arrangements, which meet the definition of variable consideration, for certain insurance products associated with a third-party portfolio. The Company estimates the amount of variable consideration to be included in the transaction price based on historical payment trends and further constrains the variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. In making these assessments the Company considers the likelihood and magnitude of a potential reversal of revenue and updates its assessment when uncertainties associated with the constraint are removed. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes revenue from contracts with customers for the three months ended March 31, 2019 and 2018 : As of March 31, 2019 March 31, 2018 (In millions) Revenue: New vehicle $ 871.8 $ 857.1 Used vehicle retail 458.2 435.8 Used vehicle wholesale 51.7 48.8 New and used vehicle 1,381.7 1,341.7 Sale of vehicle parts and accessories 36.9 33.8 Vehicle repair and maintenance services 180.7 165.5 Parts and services 217.6 199.3 Finance and insurance, net 71.5 68.2 Total revenue $ 1,670.8 $ 1,609.2 |
Schedule of Contract with Customer, Assets | Changes in contract assets during the period are reflected in the table below. Contract assets related to vehicle repair and maintenance services are transferred to receivables when a repair order is completed and invoiced to the customer. Vehicle Repair and Maintenance Services Finance and Insurance, net Total (In millions) Contract Assets (Current), January 1, 2019 $ 4.1 $ 10.6 $ 14.7 Transferred to receivables from contract assets recognized at the beginning of the period (4.1 ) (3.3 ) (7.4 ) Increases related to revenue recognized, inclusive of adjustments to constraint, during the period 4.4 3.3 7.7 Contract Assets (Current), March 31, 2019 $ 4.4 $ 10.6 $ 15.0 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | Below is the preliminary allocation of purchase price for the acquisitions completed during the three months ended March 31, 2019 . We have not finalized our valuation for manufacturer franchise rights which will be reclassified from goodwill once completed. The goodwill and manufacturer rights associated with our acquisitions will be deductible for federal and state income tax purposes ratably over a 15 year period. As of March 31, 2019 (In millions) Inventory $ 58.1 Real estate 29.8 Property and equipment 1.8 Goodwill 32.1 Liabilities assumed (0.8 ) Total purchase price $ 121.0 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) Vehicle receivables $ 40.8 $ 45.7 Manufacturer receivables 42.9 51.2 Other receivables 32.8 34.7 Total accounts receivable 116.5 131.6 Less—Allowance for doubtful accounts (1.4 ) (1.3 ) Accounts receivable, net $ 115.1 $ 130.3 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) New vehicles $ 973.2 $ 867.2 Used vehicles 152.5 158.9 Parts and accessories 42.1 41.5 Total inventories $ 1,167.8 $ 1,067.6 |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Assets Held for Sale and Liabilities Associated with Assets Held for Sale | A summary of assets held for sale and liabilities associated with assets held for sale is as follows: As of March 31, 2019 December 31, 2018 (In millions) Assets: Inventories $ 14.5 $ — Property and equipment, net 40.7 26.3 Goodwill 0.1 — Total Assets 55.3 26.3 Liabilities: Floorplan notes payable—non trade 15.0 — Current maturities of long-term debt 0.2 — Long-term debt 2.5 — Total liabilities 17.7 — Net assets held for sale $ 37.6 $ 26.3 |
FLOOR PLAN NOTES PAYABLE (Table
FLOOR PLAN NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Floor Plan Notes Payable | Floor plan notes payable consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) Floor plan notes payable—trade $ 146.4 $ 125.3 Floor plan notes payable offset account (14.1 ) (11.3 ) Floor plan notes payable—trade, net $ 132.3 $ 114.0 Floor plan notes payable—new non-trade (a) $ 933.9 $ 843.0 Floor plan notes payable—used non-trade — 30.0 Floor plan notes payable offset account (30.9 ) (20.9 ) Floor plan notes payable—non-trade, net $ 903.0 $ 852.1 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: As of March 31, 2019 December 31, 2018 (In millions) 6.0% Senior Subordinated Notes due 2024 $ 600.0 $ 600.0 Mortgage notes payable bearing interest at fixed rates 130.6 132.2 2018 Bank of America Facility 25.4 25.7 2018 Wells Fargo Master Loan Facility 25.0 25.0 Prior real estate credit agreement (a) 37.4 40.8 Restated master loan agreement 82.0 83.3 Finance lease liability 17.6 3.1 Total debt outstanding 918.0 910.1 Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024 5.8 6.0 Less—debt issuance costs (10.4 ) (10.8 ) Long-term debt, including current portion 913.4 905.3 Less—current portion, net of current portion of debt issuance costs (38.7 ) (38.8 ) Long-term debt $ 874.7 $ 866.5 _____________________________ (a) Amounts reflected for prior real estate credit agreement as of March 31, 2019 , excluded a $2.7 million mortgage note payable classified as Liabilities Associated with Assets Held for Sale. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | Balance Sheet Presentation As of Leases Classification March 31, 2019 (In millions) Assets: Operating Operating lease right-of-use assets $ 73.4 Finance Property and equipment, net 14.6 Total right-of-use assets $ 88.0 Liabilities: Current Operating Current maturities of operating leases $ 18.3 Finance Current maturities of long-term debt 0.6 Non-Current Operating Operating lease liabilities 59.4 Finance Long-term debt 17.0 Total lease liabilities $ 95.3 |
Lease Term and Discount Rate, Lessee | Lease Term and Discount Rate As of March 31, 2019 Weighted Average Lease Term - Operating Leases 6.1 years Weighted Average Lease Term - Finance Lease 1.9 years Weighted Average Discount Rate - Operating Leases 4.9 % Weighted Average Discount Rate - Finance Lease 4.1 % |
Lease, Cost | The following table provides certain information related to the lease costs for finance and operating leases during the three months ended March 31, 2019 . March 31, 2019 (In millions) Finance lease cost Amortization of right-of-use assets $ — Interest 0.1 Operating lease cost 5.5 Short-term lease cost 1.0 Variable lease cost 0.2 Total lease cost $ 6.8 |
Schedule of Cash Flow, Supplemental Disclosures | The following table presents supplemental cash flow information for leases during the three months ended March 31, 2019 . During the three months ended March 31, 2019 , we reassessed and remeasured an existing real estate lease, which was previously accounted for as an operating lease and finance lease for the land and building elements, respectively, due to the presence of a purchase price option which we concluded we are now reasonably certain to exercise. As reflected within the table below, we reduced a portion of the new finance lease right-of-use asset based on the existing finance lease liability at the time of remeasurement. March 31, 2019 (In millions) Supplemental Cash Flow: Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance lease $ 0.1 Operating cash flows from operating leases 5.6 Financing cash flows from finance lease 0.1 Right-of-use assets obtained in exchange for new finance lease liabilities 17.7 Right-of-use assets obtained in exchange for new operating lease liabilities 0.2 Changes to finance lease right-of-use asset resulting from lease reassessment event (3.1 ) |
Lessee, Operating Lease, Liability, Maturity | The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities as of March 31, 2019. Finance Operating (In millions) 2019 (remaining nine months) $ 1.0 $ 16.2 2020 1.3 21.3 2021 16.7 18.2 2022 — 12.8 2023 — 4.8 Thereafter — 19.2 Total minimum lease payments 19.0 92.5 Less: amount of lease payments representing interest (1.4 ) (14.8 ) Present value of future minimum lease payments 17.6 77.7 Less: current obligations under leases (0.6 ) (18.3 ) Long-term lease obligation $ 17.0 $ 59.4 |
Finance Lease, Liability, Maturity | The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities as of March 31, 2019. Finance Operating (In millions) 2019 (remaining nine months) $ 1.0 $ 16.2 2020 1.3 21.3 2021 16.7 18.2 2022 — 12.8 2023 — 4.8 Thereafter — 19.2 Total minimum lease payments 19.0 92.5 Less: amount of lease payments representing interest (1.4 ) (14.8 ) Present value of future minimum lease payments 17.6 77.7 Less: current obligations under leases (0.6 ) (18.3 ) Long-term lease obligation $ 17.0 $ 59.4 |
Schedule of Future Minimum Payments for Operating Leases | Future minimum payments under non-cancelable leases with initial terms in excess of one year at December 31, 2018, are as follows: Capital Operating (In millions) 2019 $ 0.4 $ 22.5 2020 0.4 22.2 2021 0.4 19.2 2022 0.4 14.0 2023 0.4 6.0 Thereafter 2.8 25.5 Total minimum lease payments 4.8 109.4 Less: Amounts representing interest (1.7 ) N/A $ 3.1 $ 109.4 |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum payments under non-cancelable leases with initial terms in excess of one year at December 31, 2018, are as follows: Capital Operating (In millions) 2019 $ 0.4 $ 22.5 2020 0.4 22.2 2021 0.4 19.2 2022 0.4 14.0 2023 0.4 6.0 Thereafter 2.8 25.5 Total minimum lease payments 4.8 109.4 Less: Amounts representing interest (1.7 ) N/A $ 3.1 $ 109.4 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE FINANCIAL INSTRUMENTS AND FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Liabilities | A summary of the carrying values and fair values of our 6.0% Notes and our mortgage notes payable is as follows: As of March 31, 2019 December 31, 2018 (In millions) Carrying Value: 6.0% Senior Subordinated Notes due 2024 $ 605.8 $ 606.0 Mortgage notes payable (a) 300.4 307.0 Total carrying value $ 906.2 $ 913.0 Fair Value: 6.0% Senior Subordinated Notes due 2024 $ 617.3 $ 570.0 Mortgage notes payable (a) 305.1 306.7 Total fair value $ 922.4 $ 876.7 _____________________________ (a) Amounts reflected for mortgage notes payable as of March 31, 2019 excluded a mortgage with an aggregate carrying value of $2.7 million classified as Liabilities Associated with Assets Held for Sale. |
Schedule of Derivative Instruments Fair Value | The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the Condensed Consolidated Balance Sheets: As of March 31, 2019 December 31, 2018 (In millions) Other current assets $ — $ (0.2 ) Other long-term liabilities/(assets) 1.2 (0.4 ) Total fair value $ 1.2 $ (0.6 ) |
Schedule of Derivative Instruments Effect on Accumulated Other Comprehensive Income | Information about the effect of our interest rate swap agreements on the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income, is as follows (in millions): For the Three Months Ended March 31, Results Recognized in Accumulated Other Comprehensive Income/(Loss) Location of Results Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings 2019 $ (1.8 ) Floor plan interest expense and Other interest expense, net $ — 2018 $ 2.6 Swap interest expense $ (0.2 ) |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)VehicleBrandsdealership_locationfranchiseMetropolitanMarketsstatesCollisionRepairCenters | |
Business Organization [Line Items] | |
Number of franchises (in franchises) | franchise | 106 |
Number of dealership locations (in dealership locations) | dealership_location | 87 |
Number of metropolitan markets (in metropolitan markets) | MetropolitanMarkets | 17 |
Number of states (in states) | states | 9 |
Number of vehicle brands (in vehicle brands) | VehicleBrands | 30 |
Number of collision repair centers (in collision repair centers) | CollisionRepairCenters | 25 |
Reclassification from AOCI to retained earnings | $ | $ 0.2 |
Minimum | |
Business Organization [Line Items] | |
Loaner vehicle period of use before sale (in months) | 6 months |
Maximum | |
Business Organization [Line Items] | |
Loaner vehicle period of use before sale (in months) | 12 months |
Mid-line Import Brands | |
Business Organization [Line Items] | |
Weighted brand mix (percent) | 47.00% |
Luxury Brands | |
Business Organization [Line Items] | |
Weighted brand mix (percent) | 33.00% |
Domestic Brands | |
Business Organization [Line Items] | |
Weighted brand mix (percent) | 20.00% |
REVENUE RECOGNITION (Disaggrega
REVENUE RECOGNITION (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1,670.8 | $ 1,609.2 |
New and used vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,381.7 | 1,341.7 |
New and used vehicle | New vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 871.8 | 857.1 |
New and used vehicle | Used vehicle retail | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 458.2 | 435.8 |
New and used vehicle | Used vehicle wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51.7 | 48.8 |
Parts and services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 217.6 | 199.3 |
Parts and services | Sale of vehicle parts and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 36.9 | 33.8 |
Parts and services | Vehicle repair and maintenance services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 180.7 | 165.5 |
Finance and insurance, net | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 71.5 | $ 68.2 |
REVENUE RECOGNITION (Contract A
REVENUE RECOGNITION (Contract Assets) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Change in Contract with Customer, Asset [Roll Forward] | |
Contract Assets (Current), January 1, 2019 | $ 14.7 |
Transferred to receivables from contract assets recognized at the beginning of the period | (7.4) |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 7.7 |
Contract Assets (Current), March 31, 2019 | 15 |
Vehicle Repair and Maintenance Services | Vehicle repair and maintenance services | |
Change in Contract with Customer, Asset [Roll Forward] | |
Contract Assets (Current), January 1, 2019 | 4.1 |
Transferred to receivables from contract assets recognized at the beginning of the period | (4.1) |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 4.4 |
Contract Assets (Current), March 31, 2019 | 4.4 |
Finance and Insurance, net | |
Change in Contract with Customer, Asset [Roll Forward] | |
Contract Assets (Current), January 1, 2019 | 10.6 |
Transferred to receivables from contract assets recognized at the beginning of the period | (3.3) |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 3.3 |
Contract Assets (Current), March 31, 2019 | $ 10.6 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)dealership_locationfranchise | Mar. 31, 2018USD ($)dealership_locationfranchise | |
Series of Individual Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Aggregate purchase price | $ 121 | $ 46.5 |
Cash paid for acquisition | 70.8 | 36 |
Floor plan borrowings for puchase of related inventory | 47.7 | 9.5 |
Holdback | $ 2.5 | $ 1 |
Goodwill and manufacturer franchise rights, period for federal and state tax deductions | 15 years | |
Indiana | ||
Business Acquisition [Line Items] | ||
Number of franchises acquired (in franchises) | franchise | 8 | 1 |
Number of dealership locations acquired (in dealership locations) | dealership_location | 4 | 1 |
ACQUISITIONS (Schedule of Busin
ACQUISITIONS (Schedule of Business Acquisitions) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 213.2 | $ 181.2 |
Series of Individual Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Inventory | 58.1 | |
Real estate | 29.8 | |
Property and equipment | 1.8 | |
Goodwill | 32.1 | |
Liabilities assumed | (0.8) | |
Total purchase price | $ 121 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 116.5 | $ 131.6 |
Less—Allowance for doubtful accounts | (1.4) | (1.3) |
Accounts receivable, net | 115.1 | 130.3 |
Vehicle receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 40.8 | 45.7 |
Manufacturer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 42.9 | 51.2 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 32.8 | $ 34.7 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Components of Inventory [Line Items] | |||
Total inventories | $ 1,167.8 | $ 1,067.6 | |
Lower of cost or market inventory reserves | 5.8 | 6.1 | |
Held-for-sale | |||
Components of Inventory [Line Items] | |||
Total inventories | 14.5 | ||
New vehicles | |||
Components of Inventory [Line Items] | |||
Total inventories | 973.2 | 867.2 | |
Reduction of new vehicle inventory cost by automobile manufacturer incentives | (11.9) | (10.1) | |
Reduction to cost of sales | 10.5 | $ 9.4 | |
Used vehicles | |||
Components of Inventory [Line Items] | |||
Total inventories | 152.5 | 158.9 | |
Parts and accessories | |||
Components of Inventory [Line Items] | |||
Total inventories | $ 42.1 | $ 41.5 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE (Narrative) (Details) $ in Millions | Mar. 31, 2019USD ($)dealership_locationfranchiseproperty | Dec. 31, 2018USD ($) |
Long Lived Assets Held-for-sale [Line Items] | ||
Number of franchises (in franchises) | franchise | 106 | |
Number of dealership locations (in dealership locations) | dealership_location | 87 | |
Assets | $ 55.3 | $ 26.3 |
Liabilities | 17.7 | 0 |
Real estate held-for-sale | $ 26.3 | $ 26.3 |
Pending disposition | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Number of franchises (in franchises) | franchise | 1 | |
Number of dealership locations (in dealership locations) | dealership_location | 1 | |
Assets | $ 29 | |
Liabilities | 17.7 | |
Disposed of by sale | Vacant property | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Real estate held-for-sale | $ 2 | |
Number of real estate properties | property | 1 |
ASSETS AND LIABILITIES HELD F_4
ASSETS AND LIABILITIES HELD FOR SALE (Assets Held for Sale and Liabilities Associated with the Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Inventories | $ 14.5 | $ 0 |
Property and equipment, net | 40.7 | 26.3 |
Goodwill | 0.1 | 0 |
Total Assets | 55.3 | 26.3 |
Liabilities: | ||
Floor plan notes payable—non-trade | 15 | 0 |
Current maturities of long-term debt | 0.2 | 0 |
Long-term debt | 2.5 | 0 |
Total liabilities | 17.7 | 0 |
Net assets held for sale | $ 37.6 | $ 26.3 |
FLOOR PLAN NOTES PAYABLE (Detai
FLOOR PLAN NOTES PAYABLE (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Floor plan notes payable—trade | $ 146.4 | $ 125.3 |
Floor plan notes payable offset account | (14.1) | (11.3) |
Floor plan notes payable—trade, net | 132.3 | 114 |
Floor plan notes payable—non-trade | 933.9 | 843 |
Floor plan notes payable—used non-trade | 0 | 30 |
Floor plan notes payable offset account | (30.9) | (20.9) |
Floor plan notes payable—non-trade, net | 903 | 852.1 |
Floor plan notes payable, offsets | (45) | $ (32.2) |
Floor plan notes payable—non-trade | ||
Debt Instrument [Line Items] | ||
Liabilities associated with assets held for sale | $ 15 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Debt Instrument [Line Items] | |||
Finance lease liability | $ 17.6 | $ 3.1 | |
Total debt outstanding | 918 | 910.1 | |
Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024 | 5.8 | 6 | |
Less—debt issuance costs | (10.4) | (10.8) | |
Long-term debt, including current portion | 913.4 | 905.3 | |
Less—current portion, net of current portion of debt issuance costs | (38.7) | (38.8) | |
Long-term debt | 874.7 | 866.5 | |
2018 Bank of America Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 25.4 | 25.7 | |
2018 Wells Fargo Master Loan Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 25 | 25 | |
Liabilities associated with assets held for sale | 2.7 | ||
Prior real estate credit agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 37.4 | 40.8 | |
Restated master loan agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 82 | 83.3 | |
Senior Subordinated Notes | 6.0% Senior Subordinated Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Stated interest rate of debt instrument | 6.00% | 6.00% | |
Long-term debt, gross | $ 600 | 600 | |
Mortgage notes payable bearing interest at fixed rates | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 130.6 | $ 132.2 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | $ 73.4 | $ 0 |
Operating lease, liability | 77.7 | |
Accounting Standards Update 2018-11 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | 86.9 | |
Lease liability reduced for deferent rent | 4.4 | |
Operating lease, liability | $ 91.3 |
LEASES (Balance Sheets) (Detail
LEASES (Balance Sheets) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Assets, Operating | $ 73.4 | $ 0 |
Assets, Finance | 14.6 | |
Total right-of-use assets | 88 | |
Liabilities, Current, Operating | 18.3 | 0 |
Liabilities, Current, Finance | 0.6 | |
Liabilities, Non-Current, Operating | 59.4 | $ 0 |
Liabilities, Non-Current, Finance | 17 | |
Total lease liabilities | $ 95.3 |
LEASES (Lease Term and Discount
LEASES (Lease Term and Discount Rate) (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Weighted Average Lease Term - Operating Leases | 6 years 1 month 6 days |
Weighted Average Lease Term - Finance Lease | 1 year 10 months 24 days |
Weighted Average Discount Rate - Operating Leases | 4.90% |
Weighted Average Discount Rate - Finance Leases | 4.10% |
LEASES (Cost) (Details)
LEASES (Cost) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Finance lease cost, Amortization of right-of-use assets | $ 0 |
Finance lease cost, interest | 0.1 |
Operating lease cost | 5.5 |
Short-term lease cost | 1 |
Variable lease cost | 0.2 |
Total lease cost | $ 6.8 |
LEASES (Other Information) (Det
LEASES (Other Information) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from finance lease | $ 0.1 |
Operating cash flows from operating leases | 5.6 |
Financing cash flows from finance lease | 0.1 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 17.7 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 0.2 |
Changes to finance lease right-of-use asset resulting from lease reassessment event | $ (3.1) |
LEASES (Liabilities) (Details)
LEASES (Liabilities) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Finance Lease Liabilities, Payments, Due [Abstract] | ||
2019 (remaining nine months) | $ 1 | |
2020 | 1.3 | |
2021 | 16.7 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 19 | |
Less: amount of lease payments representing interest | (1.4) | |
Present value of future minimum lease payments | 17.6 | $ 3.1 |
Less: current obligations under leases | (0.6) | |
Long-term lease obligation | 17 | |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2019 (remaining nine months) | 16.2 | |
2020 | 21.3 | |
2021 | 18.2 | |
2022 | 12.8 | |
2023 | 4.8 | |
Thereafter | 19.2 | |
Total minimum lease payments | 92.5 | |
Less: amount of lease payments representing interest | (14.8) | |
Present value of future minimum lease payments | 77.7 | |
Less: current obligations under leases | (18.3) | 0 |
Long-term lease obligation | $ 59.4 | $ 0 |
LEASES LEASES (Minimum Payments
LEASES LEASES (Minimum Payments) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Capital | |
2019 | $ 0.4 |
2020 | 0.4 |
2021 | 0.4 |
2022 | 0.4 |
2023 | 0.4 |
Thereafter | 2.8 |
Total minimum lease payments | 4.8 |
Less: Amounts representing interest | 1.7 |
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments | 3.1 |
Operating | |
2019 | 22.5 |
2020 | 22.2 |
2021 | 19.2 |
2022 | 14 |
2023 | 6 |
Thereafter | 25.5 |
Total minimum lease payments | $ 109.4 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE (Summary of Carrying Values and Fair Values of Debt) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | $ 906.2 | $ 913 | |
Total fair value | 922.4 | 876.7 | |
Mortgage notes payable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | 300.4 | 307 | |
Total fair value | 305.1 | 306.7 | |
6.0% Senior Subordinated Notes due 2024 | Senior Subordinated Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total carrying value | 605.8 | 606 | |
Total fair value | $ 617.3 | $ 570 | |
Stated interest rate of debt instrument | 6.00% | 6.00% | |
2018 Wells Fargo Master Loan Facility | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Liabilities associated with assets held for sale | $ 2.7 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE FINANCIAL INSTRUMENTS AND FAIR VALUE (Narrative) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2015 | Nov. 30, 2013 |
Fair Value, Inputs, Level 2 | Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of interest rate swaps | $ 1,200,000 | |||
Fair Value, Inputs, Level 2 | Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of interest rate swaps | $ (600,000) | |||
New Interest Rate Swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional principal amount of derivative liability | 83,800,000 | $ 100,000,000 | ||
Notional principal amount of derivative liability, at maturity | $ 53,100,000 | |||
Interest Rate Swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional principal amount of derivative liability | 55,500,000 | $ 75,000,000 | ||
Notional principal amount of derivative liability, at maturity | $ 38,700,000 | |||
Fair value of interest rate swaps | 1,200,000 | $ (600,000) | ||
Interest rate swap, net loss amount expected to be reclassified in the next twelve months | $ (100,000) |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Fair value of Interest Rate Swaps) (Details) - Interest Rate Swap - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 1.2 | $ (0.6) |
Other current assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | 0 | (0.2) |
Other long-term liabilities/(assets) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 1.2 | $ (0.4) |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Derivative Instruments Effect on the Consolidated Income Statement, Including Accumulated Other Comprehensive Income) (Details) - Interest Rate Swap - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Results Recognized in Accumulated Other Comprehensive Income/(Loss) | $ (1.8) | $ 2.6 |
Interest Expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings | $ 0 | $ (0.2) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest payments made including amounts capitalized | $ 14,100,000 | $ 10,100,000 |
Cash paid during the period related to floor plan interest | 9,800,000 | 6,300,000 |
Income taxes paid, net | 0 | 200,000 |
Loaner vehicles transferred from other current assets to inventory | $ 37,000,000 | $ 44,700,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Guarantee Obligations $ in Millions | Mar. 31, 2019USD ($) |
Loss Contingencies [Line Items] | |
Amount of surety bond line maintained | $ 5 |
Reastated Credit Agreement | Bank of America, N.A. | |
Loss Contingencies [Line Items] | |
Amount of letters of credit outstanding | $ 13 |