Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-31262 | |
Entity Registrant Name | ASBURY AUTOMOTIVE GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0609375 | |
Entity Address, Address Line One | 2905 Premiere Parkway NW, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Duluth | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30097 | |
City Area Code | 770 | |
Local Phone Number | 418-8200 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | ABG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,534,085 | |
Entity Central Index Key | 0001144980 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 296.8 | $ 235.3 |
Short-term investments | 5.5 | 5.4 |
Contracts-in-transit, net | 156.3 | 220.8 |
Accounts receivable, net | 166.6 | 171.9 |
Inventories, net | 1,081.4 | 959.2 |
Assets held for sale | 44.9 | 29.1 |
Other current assets | 298.8 | 288.1 |
Total current assets | 2,050.2 | 1,909.8 |
INVESTMENTS | 280.8 | 235 |
PROPERTY AND EQUIPMENT, net | 1,930.5 | 1,941 |
OPERATING LEASE RIGHT-OF-USE ASSETS | 239.7 | 235.4 |
GOODWILL | 1,783.4 | 1,783.4 |
INTANGIBLE FRANCHISE RIGHTS | 1,800.1 | 1,800.1 |
OTHER LONG-TERM ASSETS | 98.1 | 116.7 |
Total assets | 8,182.8 | 8,021.4 |
CURRENT LIABILITIES: | ||
Floor plan notes payable—trade, net | 45.6 | 51 |
Floor plan notes payable—non-trade, net | 0 | 0 |
Current maturities of long-term debt | 83.1 | 84.5 |
Current maturities of operating leases | 22.6 | 23.6 |
Accounts payable and accrued liabilities | 672.2 | 645 |
Deferred revenue—current | 221.8 | 218.9 |
Liabilities associated with assets held for sale | 23.1 | 10.5 |
Total current liabilities | 1,068.3 | 1,033.4 |
LONG-TERM DEBT | 3,194.8 | 3,216.8 |
LONG-TERM LEASE LIABILITY | 224.2 | 218.4 |
DEFERRED REVENUE | 491.9 | 495 |
DEFERRED INCOME TAXES | 99.3 | 100.7 |
OTHER LONG-TERM LIABILITIES | 55.1 | 53.5 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
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; 43,549,857 and 43,593,809 shares issued, including shares held in treasury, respectively | 0.4 | 0.4 |
Additional paid-in capital | 1,288 | 1,281.4 |
Retained earnings | 2,763.3 | 2,610.1 |
Treasury stock, at cost; 22,015,888 and 22,024,479 shares, respectively | (1,064.3) | (1,063) |
Accumulated other comprehensive gain | 61.8 | 74.4 |
Total shareholders' equity | 3,049.2 | 2,903.5 |
Total liabilities and shareholders' equity | $ 8,182.8 | $ 8,021.4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
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) | 43,549,857 | 43,593,809 |
Treasury stock (in shares) | 22,015,888 | 22,024,479 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUE: | ||
New vehicle | $ 1,767.7 | $ 1,855.6 |
Used vehicle | 1,126.5 | 1,350.9 |
Parts and service | 515.6 | 501.9 |
Finance and insurance, net | 172.5 | 203.4 |
TOTAL REVENUE | 3,582.3 | 3,911.8 |
COST OF SALES: | ||
New vehicle | 1,588.8 | 1,631.6 |
Used vehicle | 1,049.5 | 1,251.6 |
Parts and service | 233.5 | 225.4 |
Finance and insurance | 14.3 | 11.2 |
TOTAL COST OF SALES | 2,886.1 | 3,119.8 |
GROSS PROFIT | 696.2 | 792 |
OPERATING EXPENSES: | ||
Selling, general, and administrative | 403 | 455.5 |
Depreciation and amortization | 16.7 | 18.4 |
Other operating income, net | 0 | (2.7) |
INCOME FROM OPERATIONS | 276.5 | 320.8 |
OTHER EXPENSES: | ||
Floor plan interest expense | 0.6 | 2.6 |
Other interest expense, net | 37.3 | 37.6 |
Gain on dealership divestitures, net | 0 | (33.1) |
Total other expenses, net | 38 | 7.1 |
INCOME BEFORE INCOME TAXES | 238.5 | 313.7 |
Income tax expense | 57.1 | 76 |
NET INCOME | $ 181.4 | $ 237.7 |
Basic— | ||
Net income (in dollars per share) | $ 8.42 | $ 10.43 |
Diluted— | ||
Net income (in dollars per share) | $ 8.37 | $ 10.38 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
Basic (in shares) | 21.6 | 22.8 |
Performance share units (in shares) | 0.1 | 0.1 |
Diluted (in shares) | 21.7 | 22.9 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 181.4 | $ 237.7 |
Other comprehensive income: | ||
Change in fair value of cash flow swaps | (19.4) | 42.2 |
Income tax benefit (expense) associated with cash flow swaps | 4.7 | (10.4) |
Gains (losses) on available-for-sale debt securities | 2.5 | (2.2) |
Income tax (expense) benefit associated with available-for-sale debt securities | (0.5) | 0.2 |
Comprehensive income | $ 168.7 | $ 267.5 |
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) |
Balance (in shares) at Dec. 31, 2021 | 45,052,293 | 21,914,251 | ||||
Balance at Dec. 31, 2021 | $ 2,115.5 | $ 0.4 | $ 1,278.6 | $ 1,881.3 | $ (1,044.1) | $ (0.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 237.7 | 237.7 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment | 31.8 | 31.8 | ||||
Unrealized loss on changes in fair value of debt securities, net of reclassification adjustment and $0.2 million tax benefit | (2) | (2) | ||||
Comprehensive income | 267.5 | 237.7 | 29.8 | |||
Share-based compensation | 7 | 7 | ||||
Issuance of common stock, net of forfeitures in connection with share-based payment arrangements (in shares) | (115,435) | |||||
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements | 0 | 0 | ||||
Repurchase of common stock associated with net share settlements of employee share-based awards (in shares) | 53,810 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards | (8.9) | $ (8.9) | ||||
Share issues (repurchases) (in shares) | 1,069,203 | |||||
Share repurchases | $ (198.6) | 1.4 | $ (200) | |||
Retirement of common stock (in shares) | (1,069,203) | (1,069,203) | (1,069,203) | |||
Retirement of common stock | $ 0 | (12.9) | (187.1) | $ 200 | ||
Balance (in shares) at Mar. 31, 2022 | 44,098,525 | 21,968,061 | ||||
Balance at Mar. 31, 2022 | 2,182.5 | $ 0.4 | 1,274.1 | 1,931.9 | $ (1,053) | 29.1 |
Balance (in shares) at Dec. 31, 2022 | 43,593,809 | 22,024,479 | ||||
Balance at Dec. 31, 2022 | 2,903.5 | $ 0.4 | 1,281.4 | 2,610.1 | $ (1,063) | 74.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 181.4 | 181.4 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment | (14.6) | (14.6) | ||||
Unrealized loss on changes in fair value of debt securities, net of reclassification adjustment and $0.2 million tax benefit | 2 | 2 | ||||
Comprehensive income | 168.7 | 181.4 | (12.6) | |||
Share-based compensation | 8.6 | 8.6 | ||||
Issuance of common stock, net of forfeitures in connection with share-based payment arrangements (in shares) | (120,575) | |||||
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements | ||||||
Repurchase of common stock associated with net share settlements of employee share-based awards (in shares) | 45,613 | |||||
Repurchase of common stock associated with net share settlements of employee share-based awards | $ (10.9) | $ (10.9) | ||||
Share issues (repurchases) (in shares) | 110,323 | 110,323 | ||||
Share repurchases | $ (20.7) | $ (20.7) | ||||
Retirement of common stock (in shares) | (164,527) | (164,527) | ||||
Retirement of common stock | 0 | (2) | (28.2) | $ 30.2 | ||
Balance (in shares) at Mar. 31, 2023 | 43,549,857 | 22,015,888 | ||||
Balance at Mar. 31, 2023 | $ 3,049.2 | $ 0.4 | $ 1,288 | $ 2,763.3 | $ (1,064.3) | $ 61.8 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Change in fair value of cash flow swaps, tax | $ 4.7 | $ 10.4 |
Gains (losses) on changes in fair value of debt securities, tax benefit | 0.5 | 0.2 |
Share repurchases | $ (20.7) | $ (198.6) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income | $ 181.4 | $ 237.7 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 16.7 | 18.4 |
Share-based compensation | 8.6 | 7 |
Deferred income taxes | 2.8 | (0.4) |
Unrealized (gains) losses on investments | (3.1) | 3.3 |
Loaner vehicle amortization | 6.7 | 3.2 |
Gain on divestitures, net | 0 | 33.1 |
Change in right-of-use assets | 6.3 | 7.3 |
Other adjustments, net | 0.8 | 0.4 |
Changes in operating assets and liabilities, net of acquisitions and divestitures— | ||
Contracts-in-transit | 64.5 | (1.8) |
Accounts receivable | 5.2 | 35.7 |
Inventories | (33.3) | 70.3 |
Other current assets | (109.5) | (82.5) |
Floor plan notes payable—trade, net | (5.4) | (22) |
Deferred revenue | (0.2) | 15.5 |
Accounts payable and accrued liabilities | 33.8 | 163 |
Operating lease liabilities | (5.9) | (7) |
Other long-term assets and liabilities, net | 2.3 | (6) |
Net cash provided by operating activities | 171.7 | 409 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Capital expenditures—excluding real estate | (15.2) | (20.8) |
Divestitures | 0 | 252.2 |
Purchases of debt securities—available-for-sale | (44.1) | (12.3) |
Purchases of equity securities | 0 | (3.3) |
Proceeds from the sale of debt securities—available-for-sale | 3.5 | 12.2 |
Proceeds from the sale of equity securities | 0.6 | 3.3 |
Net cash (used in) provided by investing activities | (55.2) | 231.3 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Floor plan borrowings—non-trade | 1,799.6 | 1,873.7 |
Floor plan repayments—non-trade | (1,798.2) | (2,004.1) |
Floor plan repayments—divestitures | 0 | (19.9) |
Repayments of borrowings | (15.3) | (7.7) |
Proceeds from revolving credit facility | 0 | 320 |
Repayments of revolving credit facility | 0 | (489) |
Proceeds from issuance of common stock | 0 | 1.4 |
Payment of debt issuance costs | 0 | (0.4) |
Purchases of treasury stock | 30.2 | 200 |
Repurchases of common stock, including amounts associated with net share settlements of employee share-based awards | (10.9) | (8.9) |
Net cash used in financing activities | (55) | (534.9) |
Net increase in cash and cash equivalents | 61.5 | 105.4 |
CASH AND CASH EQUIVALENTS, beginning of period | 235.3 | 178.9 |
CASH AND CASH EQUIVALENTS, end of period | $ 296.8 | $ 284.3 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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 Asbury Automotive Group, Inc., a Delaware corporation organized in 2002, is one of the largest automotive retailers in the United States. Our store operations are conducted by our subsidiaries. As of March 31, 2023, we owned and operated 184 new vehicle franchises (139 dealership locations), representing 31 brands of automobiles, and 32 collision centers in 14 states. For the three months ended March 31, 2023, our new vehicle revenue brand mix consisted of 34% luxury, 38% imports and 28% domestic brands. 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 (collectively referred to as "parts and services" or "P&S"); and finance and insurance ("F&I") products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection ("GAP") debt cancellation and prepaid maintenance. The finance and insurance products are provided by independent third parties and Total Care Auto, Powered by Landcar ("TCA"). The Company reflects its operations in two reportable segments: Dealerships and TCA. 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. (the "Company") and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. If necessary, reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements in order to conform to current presentation. In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair statement of the condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, have been included, unless otherwise indicated. Amounts presented in the condensed consolidated financial statements have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute or tie to prior year financial statements due to rounding. The results of operations for the three months ended March 31, 2023 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, 2022. 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. Estimates made in the accompanying condensed consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for self-insurance programs, and certain assumptions related to goodwill and dealership franchise rights intangible assets. 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 stock. 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. During the three months ended March 31, 2023 and 2022, the Company repurchased 110,323 and 1,069,203 shares and retired 164,527 and 1,069,203 shares, of our common stock under our share repurchase program, respectively. The cash paid for share repurchases was $20.7 million and $200.0 million for the three months ended March 31, 2023 and 2022, respectively. From April 1, 2023 through April 27, 2023, the Company repurchased 149,765 shares for $28.7 million pursuant to a 10b5-1 agreement. 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. The Company excluded 4,005 and 2,123 restricted share units and 476 and 533 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from its computation of diluted earnings per share for the three months ended March 31, 2023 and 2022, respectively, because they were anti-dilutive. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. Recent Accounting Pronouncements In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities-Supplier Finance Programs. This standard serves to improve transparency about supplier finance programs. The ASU requires certain disclosures around key terms of outstanding supply chain finance programs and changes in obligations during a reporting period related to vendors participating in these programs. The new disclosure requirements do not affect the recognition, measurement or financial statement presentation of any amounts due. The guidance is effective for fiscal years beginning after December 15, 2022, except for rollforward information, which is effective in the first quarter of 2024. Early adoption is permitted. The adoption of this new guidance on January 1, 2023 did not have a material impact on our condensed consolidated financial statements. Refer to Note 8, "Floor Plan Notes Payable." |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenue Revenue from contracts with customers for the three months ended March 31, 2023 and 2022 consists of the following: For the Three Months Ended March 31, 2023 2022 (In millions) Revenue: New vehicle $ 1,767.7 $ 1,855.6 Used vehicle retail 1,021.6 1,217.0 Used vehicle wholesale 104.9 134.0 New and used vehicle 2,894.2 3,206.5 Sale of vehicle parts and accessories 126.0 130.2 Vehicle repair and maintenance services 389.6 371.7 Parts and service 515.6 501.9 Finance and insurance, net 172.5 203.4 Total revenue $ 3,582.3 $ 3,911.8 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. Certain incremental sales commissions payable to obtain an F&I revenue contract with a customer have been capitalized and are amortized using the same pattern of recognition applicable to the associated F&I revenue contract. Vehicle Repair and Maintenance Services Finance and Insurance, net Deferred Sales Commissions Total (In millions) Balance as of January 1, 2023 $ 14.7 $ 14.7 $ 37.2 $ 66.6 Transferred to receivables from contract assets recognized at the beginning of the period (14.7) (3.0) — (17.7) Amortization of costs to obtain a contract with a customer — — (2.0) (2.0) Costs incurred to obtain a contract with a customer — — 8.6 8.6 Increases related to revenue recognized, inclusive of adjustments to constraint, during the period 16.3 2.8 — 19.1 Balance as of March 31, 2023 $ 16.3 $ 14.5 $ 43.8 $ 74.6 Contract Assets (current), March 31, 2023 16.3 14.5 12.9 43.7 Contract Assets (long-term), March 31, 2023 — — 30.9 30.9 Deferred Revenue The condensed consolidated balance sheets reflect $713.7 million and $713.9 million of deferred revenue as of March 31, 2023 and December 31, 2022, respectively. Approximately $62.4 million of deferred revenue at December 31, 2022 was recorded in finance and insurance, net revenue in the condensed consolidated statements of income during the three months ended March 31, 2023. |
DIVESTITURES
DIVESTITURES | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURESDuring the three months ended March 31, 2022, we sold one franchise (one dealership location) in St. Louis, Missouri, and three franchises (three dealership locations) in the Denver, Colorado market. The Company recorded a pre-tax gain totaling $33.1 million, for the three months ended March 31, 2022, which is presented in our accompanying condensed consolidated statements of income as gain on dealership divestitures, net. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) Vehicle receivables $ 48.1 $ 50.4 Manufacturer receivables 42.1 43.3 Other receivables 78.6 80.5 Total accounts receivable 168.9 174.1 Less—Allowance for credit losses (2.3) (2.2) Accounts receivable, net $ 166.6 $ 171.9 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) New vehicles $ 643.0 $ 527.7 Used vehicles 308.5 304.4 Parts and accessories 129.9 127.2 Total inventories, net (a) $ 1,081.4 $ 959.2 ____________________________ (a) Inventories, net as of March 31, 2023 and December 31, 2022, excluded $5.0 million and $3.4 million classified as assets held for sale, respectively. |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 3 Months Ended |
Mar. 31, 2023 | |
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 pending dealership disposals, (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, 2023 December 31, 2022 (In millions) Assets: Inventory $ 5.0 $ 3.4 Loaners, net 0.9 0.9 Property and equipment, net 36.0 24.0 Operating lease right-of-use assets 2.1 — Goodwill 0.9 0.9 Total assets held for sale 44.9 29.1 Liabilities: Floor plan notes payable—non-trade 4.2 2.8 Loaners notes payable 1.0 0.8 Current maturities of long-term debt 1.0 0.6 Current maturities of operating leases 0.5 — Long-term debt 14.8 6.2 Operating lease liabilities 1.6 — Total liabilities associated with assets held for sale 23.1 10.5 Net assets held for sale $ 21.8 $ 18.7 As of March 31, 2023, assets held for sale consisted of one franchise (one dealership location), real estate associated with five used vehicle stores, one collision center, and one real estate property not currently used in our operations. As of December 31, 2022, assets held for sale consisted of one franchise (one dealership location) in addition to one real estate property not currently used in our operations. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Our investment portfolio is primarily funded by product premiums from the sale of our TCA F&I products. The amortized cost, gross unrealized gains and losses and estimated fair values of debt securities available-for-sale, equity securities, and other investments measured at net asset value are as follows: As of March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In millions) Short-term investments $ 5.5 $ — $ — $ 5.5 U.S. Treasury 11.9 0.1 (0.1) 11.9 Municipal 28.3 0.2 (0.2) 28.3 Corporate 93.8 0.6 (1.4) 93.0 Mortgage and other asset-backed securities 96.5 0.6 (1.1) 96.0 Total debt securities 236.0 1.5 (2.8) 234.6 Common stock 51.7 — — 51.7 Total investments $ 287.7 $ 1.5 $ (2.8) $ 286.3 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In millions) Short-term investments $ 5.4 $ — $ — $ 5.4 U.S. Treasury 11.8 — (0.2) 11.6 Municipal 22.8 — (0.4) 22.4 Corporate 81.8 0.2 (2.3) 79.7 Mortgage and other asset-backed securities 73.8 0.3 (1.4) 72.7 Total debt securities 195.5 0.5 (4.4) 191.7 Common stock 48.7 — — 48.7 Total investments $ 244.2 $ 0.5 $ (4.4) $ 240.4 The Company had an unrealized gain of $2.6 million and an unrealized loss of $0.4 million related to equity securities held as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company had $1.5 million and $1.3 million of accrued interest receivable, which is included in other current assets on the condensed consolidated balance sheets. The Company does not consider accrued interest receivable in the carrying amount of financial assets held at amortized cost basis or in the allowance for credit losses. A summary of amortized costs and fair value of investments by time to maturity, is as follows: As of March 31, 2023 Amortized Cost Fair Value (In millions) Due in 1 year or less $ 5.5 $ 5.5 Due in 1-5 years 87.7 87.0 Due in 6-10 years 44.0 43.9 Due after 10 years 2.3 2.3 Total by maturity 139.5 138.7 Mortgage and other asset-backed securities 96.5 96.0 Common stock 51.7 51.7 Total investment securities $ 287.7 $ 286.3 There were no gross losses and $0.1 million gross gains realized related to the sale of available-for-sale debt securities carried at fair value for the three months ended March 31, 2023. There were no gross gains or losses realized related to the sale of equity securities carried at fair value for the three months ended March 31, 2023. The following tables summarize the amount of unrealized losses, defined as the amount by which the amortized cost exceeds fair value, and the related fair value of investments with unrealized losses. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. The reference point for determining how long an investment was in an unrealized loss position was March 31, 2023. As of March 31, 2023 Less than 12 Months Greater than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In millions) Short-term investments $ 4.0 $ — $ — $ — $ 4.0 $ — U.S. Treasury 7.4 (0.1) 0.1 — 7.5 (0.1) Municipal 14.8 (0.1) 0.9 — 15.7 (0.2) Corporate 52.4 (0.8) 9.5 (0.6) 61.9 (1.4) Mortgage and other asset-backed securities 55.3 (0.9) 3.5 (0.3) 58.8 (1.1) Total debt securities $ 133.9 $ (1.9) $ 13.9 $ (0.9) $ 147.8 $ (2.8) As of December 31, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In millions) U.S. Treasury $ 9.2 $ (0.2) $ — $ — $ 9.2 $ (0.2) Municipal 19.0 (0.4) — — 19.0 (0.4) Corporate 66.2 (0.1) 5.2 (0.3) 71.4 (0.4) Mortgage and other asset-backed securities 51.4 (1.3) 1.5 (0.2) 52.9 (1.5) Total debt securities $ 145.7 $ (2.0) $ 6.8 $ (0.5) $ 152.6 $ (2.5) The Company reviews the investment securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors including changes in credit ratings. The decline in fair value identified in the tables above are a result of widening market spreads and not a result of credit quality. Additionally, the Company has |
FLOOR PLAN NOTES PAYABLE
FLOOR PLAN NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
FLOOR PLAN NOTES PAYABLE | FLOOR PLAN NOTES PAYABLE Floor plan notes payable consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) Floor plan notes payable—trade $ 59.9 $ 65.1 Floor plan notes payable offset account (14.3) (14.2) Floor plan notes payable—trade, net $ 45.6 $ 51.0 Floor plan notes payable—new non-trade (a) $ 680.0 $ 613.6 Floor plan notes payable offset account (b) (680.0) (613.6) Floor plan notes payable—non-trade, net $ — $ — ____________________________ (a) Floor plan notes payable—new non-trade as of March 31, 2023 and December 31, 2022, excluded $4.2 million and $2.8 million classified as liabilities associated with assets held for sale, respectively. (b) In addition to the $680.0 million and $613.6 million shown above as of March 31, 2023 and December 31, 2022, respectively, we held $158.1 million and $164.0 million, in the floor plan notes payable offset account as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, $77.2 million of the $158.1 million was reflected within cash and cash equivalents and the remaining $80.9 million was shown as an offset to loaner vehicles notes payable. As of December 31, 2022, $100.8 million of the $164.0 million was reflected within cash and cash equivalents and the remaining $63.2 million was shown as an offset to loaner vehicles notes payable. Loaner vehicle notes payable is included in accounts payable and accrued liabilities within the condensed consolidated balance sheets. We have floor plan offset accounts that allow us to offset our floor plan notes payable balances outstanding with transfers of 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 offset account into our operating cash accounts within the same day. We have the ability to convert a portion of our availability under the Revolving Credit Facility to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility. The maximum amount we are allowed to convert is determined based on our aggregate revolving commitment under the Revolving Credit Facility, less $50.0 million. In addition, we are able to convert any amounts moved to the New Vehicle Floor Plan Facility or Used Vehicle Floor Plan Facility back to the Revolving Credit Facility. On May 27, 2022, $389.0 million of our availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan Facility to take advantage of lower commitment fee rates. On March 31, 2023, we designated this $389.0 million back to the Revolving Credit Facility. In addition to our new and used vehicle floor plan facilities, we have loaner vehicle floor plan facilities with Ford Motor Credit Company (“Ford Credit”), Bank of America and certain original equipment manufacturers (“OEMs”). Generally, the loaner vehicle programs with the OEMs provide for a short-term lease of the loaner vehicle pursuant to which we make monthly payments. During the term of the lease, the title and ownership of the loaner vehicles are retained by the OEM. We are obligated to purchase the loaner vehicle upon expiration of the lease. Under certain programs, we have the option to purchase the loaner vehicle prior to the expiration of the lease term. Loaner vehicles notes payable related to Ford Credit as of March 31, 2023 and December 31, 2022 were $13.7 million and $13.4 million, respectively. Loaner vehicles notes payable related to Bank of America as of March 31, 2023 and December 31, 2022 were $0.0 million and $10.8 million, net of offsets of $80.9 million and $63.2 million, respectively. Loaner vehicles notes payable related to OEMs as of March 31, 2023 and December 31, 2022 were $75.1 million and $70.4 million, respectively. Long-term debt consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) 4.50% Senior Notes due 2028 $ 405.0 $ 405.0 4.625% Senior Notes due 2029 800.0 800.0 4.75% Senior Notes due 2030 445.0 445.0 5.00% Senior Notes due 2032 600.0 600.0 Mortgage notes payable bearing interest at fixed rates (a) 37.7 38.3 2021 Real Estate Facility (b) 642.9 660.6 2021 BofA Real Estate Facility 171.5 173.3 2018 Bank of America Facility (c) 53.5 54.5 2018 Wells Fargo Master Loan Facility 75.7 76.9 2013 BofA Real Estate Facility 24.3 24.9 2015 Wells Fargo Master Loan Facility 41.1 42.3 Finance lease liability 8.4 8.4 Total debt outstanding 3,304.9 3,329.2 Add—unamortized premium on 4.50% Senior Notes due 2028 0.8 0.8 Add—unamortized premium on 4.75% Senior Notes due 2030 1.5 1.6 Less—debt issuance costs (29.3) (30.4) Long-term debt, including current portion 3,277.9 3,301.2 Less—current portion, net of current portion of debt issuance costs (83.1) (84.5) Long-term debt $ 3,194.8 $ 3,216.8 ____________________________ (a) Mortgage notes payable excluded $2.7 million that were classified as liabilities associated with assets held for sale as of both March 31, 2023 and December 31, 2022. (b) Amounts reflected for the 2021 Real Estate Facility as of March 31, 2023 exclude $9.2 million classified as liabilities associated with assets held for sale. (c) Amounts reflected for the 2018 Bank of America Facility as of March 31, 2023 and December 31, 2022, exclude $4.0 million and $4.1 million classified as liabilities associated with assets held for sale. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | FLOOR PLAN NOTES PAYABLE Floor plan notes payable consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) Floor plan notes payable—trade $ 59.9 $ 65.1 Floor plan notes payable offset account (14.3) (14.2) Floor plan notes payable—trade, net $ 45.6 $ 51.0 Floor plan notes payable—new non-trade (a) $ 680.0 $ 613.6 Floor plan notes payable offset account (b) (680.0) (613.6) Floor plan notes payable—non-trade, net $ — $ — ____________________________ (a) Floor plan notes payable—new non-trade as of March 31, 2023 and December 31, 2022, excluded $4.2 million and $2.8 million classified as liabilities associated with assets held for sale, respectively. (b) In addition to the $680.0 million and $613.6 million shown above as of March 31, 2023 and December 31, 2022, respectively, we held $158.1 million and $164.0 million, in the floor plan notes payable offset account as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, $77.2 million of the $158.1 million was reflected within cash and cash equivalents and the remaining $80.9 million was shown as an offset to loaner vehicles notes payable. As of December 31, 2022, $100.8 million of the $164.0 million was reflected within cash and cash equivalents and the remaining $63.2 million was shown as an offset to loaner vehicles notes payable. Loaner vehicle notes payable is included in accounts payable and accrued liabilities within the condensed consolidated balance sheets. We have floor plan offset accounts that allow us to offset our floor plan notes payable balances outstanding with transfers of 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 offset account into our operating cash accounts within the same day. We have the ability to convert a portion of our availability under the Revolving Credit Facility to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility. The maximum amount we are allowed to convert is determined based on our aggregate revolving commitment under the Revolving Credit Facility, less $50.0 million. In addition, we are able to convert any amounts moved to the New Vehicle Floor Plan Facility or Used Vehicle Floor Plan Facility back to the Revolving Credit Facility. On May 27, 2022, $389.0 million of our availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan Facility to take advantage of lower commitment fee rates. On March 31, 2023, we designated this $389.0 million back to the Revolving Credit Facility. In addition to our new and used vehicle floor plan facilities, we have loaner vehicle floor plan facilities with Ford Motor Credit Company (“Ford Credit”), Bank of America and certain original equipment manufacturers (“OEMs”). Generally, the loaner vehicle programs with the OEMs provide for a short-term lease of the loaner vehicle pursuant to which we make monthly payments. During the term of the lease, the title and ownership of the loaner vehicles are retained by the OEM. We are obligated to purchase the loaner vehicle upon expiration of the lease. Under certain programs, we have the option to purchase the loaner vehicle prior to the expiration of the lease term. Loaner vehicles notes payable related to Ford Credit as of March 31, 2023 and December 31, 2022 were $13.7 million and $13.4 million, respectively. Loaner vehicles notes payable related to Bank of America as of March 31, 2023 and December 31, 2022 were $0.0 million and $10.8 million, net of offsets of $80.9 million and $63.2 million, respectively. Loaner vehicles notes payable related to OEMs as of March 31, 2023 and December 31, 2022 were $75.1 million and $70.4 million, respectively. Long-term debt consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) 4.50% Senior Notes due 2028 $ 405.0 $ 405.0 4.625% Senior Notes due 2029 800.0 800.0 4.75% Senior Notes due 2030 445.0 445.0 5.00% Senior Notes due 2032 600.0 600.0 Mortgage notes payable bearing interest at fixed rates (a) 37.7 38.3 2021 Real Estate Facility (b) 642.9 660.6 2021 BofA Real Estate Facility 171.5 173.3 2018 Bank of America Facility (c) 53.5 54.5 2018 Wells Fargo Master Loan Facility 75.7 76.9 2013 BofA Real Estate Facility 24.3 24.9 2015 Wells Fargo Master Loan Facility 41.1 42.3 Finance lease liability 8.4 8.4 Total debt outstanding 3,304.9 3,329.2 Add—unamortized premium on 4.50% Senior Notes due 2028 0.8 0.8 Add—unamortized premium on 4.75% Senior Notes due 2030 1.5 1.6 Less—debt issuance costs (29.3) (30.4) Long-term debt, including current portion 3,277.9 3,301.2 Less—current portion, net of current portion of debt issuance costs (83.1) (84.5) Long-term debt $ 3,194.8 $ 3,216.8 ____________________________ (a) Mortgage notes payable excluded $2.7 million that were classified as liabilities associated with assets held for sale as of both March 31, 2023 and December 31, 2022. (b) Amounts reflected for the 2021 Real Estate Facility as of March 31, 2023 exclude $9.2 million classified as liabilities associated with assets held for sale. (c) Amounts reflected for the 2018 Bank of America Facility as of March 31, 2023 and December 31, 2022, exclude $4.0 million and $4.1 million classified as liabilities associated with assets held for sale. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE | 3 Months Ended |
Mar. 31, 2023 | |
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 presumptions 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 certain 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 reflect 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 subordinated long-term debt and our mortgage notes payable is as follows: As of March 31, 2023 December 31, 2022 (In millions) Carrying Value: 4.50% Senior Notes due 2028 $ 402.3 $ 409.5 4.625% Senior Notes due 2029 789.4 789.1 4.75% Senior Notes due 2030 441.8 441.7 5.00% Senior Notes due 2032 591.7 591.5 Mortgage notes payable (a) 1,044.2 1,061.1 Total carrying value $ 3,269.5 $ 3,292.9 Fair Value: 4.50% Senior Notes due 2028 $ 367.5 $ 354.4 4.625% Senior Notes due 2029 708.0 672.0 4.75% Senior Notes due 2030 393.8 372.7 5.00% Senior Notes due 2032 523.5 492.0 Mortgage notes payable (a) 1,045.2 1,069.8 Total fair value $ 3,038.0 $ 2,960.9 ____________________________ (a) Mortgage notes payable as of March 31, 2023 and December 31, 2022, exclude $15.8 million and $6.8 million classified as liabilities associated with assets held for sale, respectively. Interest Rate Swap Agreements We currently have seven interest rate swap agreements. In January 2022, we entered into two new interest rate swap agreements with a combined notional principal amount of $550.0 million. These swaps are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the SOFR rate. All interest rate swap agreements with an inception date of 2021 and prior were amended on June 1, 2022 to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR as compared to the previous benchmark rate of one-month LIBOR. The revisions to the interest rate swap agreements did not impact our hedge accounting because we applied the accounting expedients outlined in ASU 2020-04 and ASU 2021-01 of ASC Topic 848, Reference Rate Reform . The following table provides information on the attributes of each swap as of March 31, 2023: Inception Date Notional Principal at Inception Notional Value as of March 31, 2023 Notional Principal at Maturity Maturity Date (In millions) January 2022 $ 300.0 $ 285.0 $ 228.8 December 2026 January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031 May 2021 $ 184.4 $ 171.5 $ 110.6 May 2031 July 2020 $ 93.5 $ 80.1 $ 50.6 December 2028 July 2020 $ 85.5 $ 72.1 $ 57.3 November 2025 June 2015 $ 100.0 $ 62.7 $ 53.1 February 2025 November 2013 $ 75.0 $ 40.5 $ 38.7 September 2023 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 inputs. The fair value of our swaps was an $83.0 million and a $102.4 million net asset as of March 31, 2023 and December 31, 2022, respectively. 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, 2023 December 31, 2022 (In millions) Other current assets $ 27.9 $ 29.6 Other long-term assets 55.1 72.8 Total fair value $ 83.0 $ 102.4 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 accumulated other comprehensive income 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 in 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 Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) 2023 $ (27.0) Other interest expense, net $ (7.7) 2022 $ 45.4 Other interest expense, net $ 3.1 On the basis of yield curve conditions as of March 31, 2023 and including assumptions about future changes in fair value, we expect the amount to be reclassified out of Accumulated Other Comprehensive Income into earnings within the next 12 months will be gains of $27.9 million. Investments The table below presents the Company’s investment securities that are measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy within which those measurements fall: As of March 31, 2023 Level 1 Level 2 Level 3 Total (In millions) Cash equivalents $ 2.5 $ — $ — $ 2.5 Short-term investments 1.5 4.0 — 5.5 U.S. Treasury 11.9 — — 11.9 Municipal — 28.3 — 28.3 Corporate — 93.0 — 93.0 Mortgage and other asset-backed securities — 96.0 — 96.0 Total debt securities 13.4 221.3 — 234.6 Common stock 51.7 — — 51.7 Total $ 65.1 $ 221.3 $ — $ 286.3 As of December 31, 2022 Level 1 Level 2 Level 3 Total (In millions) Cash equivalents $ 6.6 $ — $ — $ 6.6 Short-term investments 0.6 4.8 — 5.4 U.S. Treasury 11.6 — — 11.6 Municipal — 22.4 — 22.4 Corporate — 79.7 — 79.7 Mortgage and other asset-backed securities — 72.6 — 72.6 Total debt securities 12.2 179.5 — 191.7 Common stock 48.7 — — 48.7 Total $ 60.9 $ 179.5 $ — $ 240.4 We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain investments. Such reclassifications are reported as transfers in and out of Level 3, or between other levels, at the beginning fair value for the reporting period in which the changes occur. Available-for-sale debt securities are recorded at fair value and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to finance and insurance, net revenue in the period or periods during which the debt securities are sold and the gains or losses are realized. Information about the effect of our available-for-sale debt securities in 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 Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) 2023 $ 2.6 Revenue-Finance and Insurance, net $ 0.1 2022 $ (2.5) Revenue-Finance and Insurance, net $ (0.3) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATIONDuring the three months ended March 31, 2023 and 2022, we made interest payments, including amounts capitalized, totaling $28.4 million and $31.6 million, respectively. Included in these interest payments is net interest received of $0.2 million during the three months ended March 31, 2023 due to cash held in our floor plan offset accounts, and $2.6 million of floor plan interest payments during the three months ended March 31, 2022.During the three months ended March 31, 2023 and 2022, we transferred $90.4 million and $57.5 million, respectively, of loaner vehicles from other current assets to inventories on our condensed consolidated balance sheets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION As of March 31, 2023, the Company had two reportable segments: (1) Dealerships and (2) TCA. Our dealership operations are organized by management into geographic market-based groups within the Dealerships segment. The operations of our F&I product provider is reflected within our TCA segment. Our Chief Operating Decision Maker is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic market level for our dealerships and at the TCA segment level for our F&I product provider's operations. The geographic dealership group operating segments have been aggregated into one reportable segment as their operations (i) have similar economic characteristics (our markets all have similar long-term average gross margins), (ii) offer similar products and services (all of our markets offer new and used vehicles, parts and service, and finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our markets distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. TCA's vehicle protection products are sold through affiliated dealerships and the revenue from the related commissions is included in finance and insurance, net revenue in the Dealerships segment before consolidation. The corresponding claims expense incurred and the amortization of deferred acquisition costs is recorded as a cost of sales in the TCA segment. The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's vehicle protection products. Upon consolidation, the associated service revenue and costs recorded by the Dealerships segment are eliminated against claims expense recorded by the TCA segment. Reportable segment financial information for the three months ended March 31, 2023 and 2022, are as follows: Three Months Ended March 31, 2023 Dealerships TCA Eliminations Total Company (In millions) Revenue $ 3,556.3 $ 70.7 $ (44.7) $ 3,582.3 Gross profit $ 679.6 $ 21.1 $ (4.5) $ 696.2 Three Months Ended March 31, 2022 Dealerships TCA Eliminations Total Company (In millions) Revenue $ 3,894.2 $ 57.3 $ (39.7) $ 3,911.8 Gross profit $ 781.4 $ 12.4 $ (1.9) $ 792.0 Total assets by segment as of March 31, 2023 and as of December 31, 2022 are as follows: As of March 31, 2023 Dealerships TCA Eliminations Total Company (In millions) Total assets $ 7,348.7 $ 840.5 $ (6.4) $ 8,182.8 As of December 31, 2022 Dealerships TCA Eliminations Total Company (In millions) Total assets $ 7,170.8 $ 869.2 $ (18.6) $ 8,021.4 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESOur 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 for which we might not have planned 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. 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 $12.5 million of letters of credit outstanding as of March 31, 2023, which are required by certain of our insurance providers. In addition, as of March 31, 2023, we maintained a $17.4 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. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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. (the "Company") and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. If necessary, reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements in order to conform to current presentation. In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair statement of the condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, have been included, unless otherwise indicated. Amounts presented in the condensed consolidated financial statements have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute or tie to prior year financial statements due to rounding. The results of operations for the three months ended March 31, 2023 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, 2022. |
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. Estimates made in the accompanying condensed consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for self-insurance programs, and certain assumptions related to goodwill and dealership franchise rights intangible assets. |
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 stock. 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. During the three months ended March 31, 2023 and 2022, the Company repurchased 110,323 and 1,069,203 shares and retired 164,527 and 1,069,203 shares, of our common stock under our share repurchase program, respectively. The cash paid for share repurchases was $20.7 million and $200.0 million for the three months ended March 31, 2023 and 2022, respectively. From April 1, 2023 through April 27, 2023, the Company repurchased 149,765 shares for $28.7 million pursuant to a 10b5-1 agreement. |
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. The Company excluded 4,005 and 2,123 restricted share units and 476 and 533 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from its computation of diluted earnings per share for the three months ended March 31, 2023 and 2022, respectively, because they were anti-dilutive. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, Liabilities-Supplier Finance Programs. This standard serves to improve transparency about supplier finance programs. The ASU requires certain disclosures around key terms of outstanding supply chain finance programs and changes in obligations during a reporting period related to vendors participating in these programs. The new disclosure requirements do not affect the recognition, measurement or financial statement presentation of any amounts due. The guidance is effective for fiscal years beginning after December 15, 2022, except for rollforward information, which is effective in the first quarter of 2024. Early adoption is permitted. The adoption of this new guidance on January 1, 2023 did not have a material impact on our condensed consolidated financial statements. Refer to Note 8, "Floor Plan Notes Payable." |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue from contracts with customers for the three months ended March 31, 2023 and 2022 consists of the following: For the Three Months Ended March 31, 2023 2022 (In millions) Revenue: New vehicle $ 1,767.7 $ 1,855.6 Used vehicle retail 1,021.6 1,217.0 Used vehicle wholesale 104.9 134.0 New and used vehicle 2,894.2 3,206.5 Sale of vehicle parts and accessories 126.0 130.2 Vehicle repair and maintenance services 389.6 371.7 Parts and service 515.6 501.9 Finance and insurance, net 172.5 203.4 Total revenue $ 3,582.3 $ 3,911.8 |
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. Certain incremental sales commissions payable to obtain an F&I revenue contract with a customer have been capitalized and are amortized using the same pattern of recognition applicable to the associated F&I revenue contract. Vehicle Repair and Maintenance Services Finance and Insurance, net Deferred Sales Commissions Total (In millions) Balance as of January 1, 2023 $ 14.7 $ 14.7 $ 37.2 $ 66.6 Transferred to receivables from contract assets recognized at the beginning of the period (14.7) (3.0) — (17.7) Amortization of costs to obtain a contract with a customer — — (2.0) (2.0) Costs incurred to obtain a contract with a customer — — 8.6 8.6 Increases related to revenue recognized, inclusive of adjustments to constraint, during the period 16.3 2.8 — 19.1 Balance as of March 31, 2023 $ 16.3 $ 14.5 $ 43.8 $ 74.6 Contract Assets (current), March 31, 2023 16.3 14.5 12.9 43.7 Contract Assets (long-term), March 31, 2023 — — 30.9 30.9 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) Vehicle receivables $ 48.1 $ 50.4 Manufacturer receivables 42.1 43.3 Other receivables 78.6 80.5 Total accounts receivable 168.9 174.1 Less—Allowance for credit losses (2.3) (2.2) Accounts receivable, net $ 166.6 $ 171.9 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) New vehicles $ 643.0 $ 527.7 Used vehicles 308.5 304.4 Parts and accessories 129.9 127.2 Total inventories, net (a) $ 1,081.4 $ 959.2 ____________________________ (a) Inventories, net as of March 31, 2023 and December 31, 2022, excluded $5.0 million and $3.4 million classified as assets held for sale, respectively. |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 December 31, 2022 (In millions) Assets: Inventory $ 5.0 $ 3.4 Loaners, net 0.9 0.9 Property and equipment, net 36.0 24.0 Operating lease right-of-use assets 2.1 — Goodwill 0.9 0.9 Total assets held for sale 44.9 29.1 Liabilities: Floor plan notes payable—non-trade 4.2 2.8 Loaners notes payable 1.0 0.8 Current maturities of long-term debt 1.0 0.6 Current maturities of operating leases 0.5 — Long-term debt 14.8 6.2 Operating lease liabilities 1.6 — Total liabilities associated with assets held for sale 23.1 10.5 Net assets held for sale $ 21.8 $ 18.7 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Carrying Amounts of Investment Securities and Fair Values | The amortized cost, gross unrealized gains and losses and estimated fair values of debt securities available-for-sale, equity securities, and other investments measured at net asset value are as follows: As of March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In millions) Short-term investments $ 5.5 $ — $ — $ 5.5 U.S. Treasury 11.9 0.1 (0.1) 11.9 Municipal 28.3 0.2 (0.2) 28.3 Corporate 93.8 0.6 (1.4) 93.0 Mortgage and other asset-backed securities 96.5 0.6 (1.1) 96.0 Total debt securities 236.0 1.5 (2.8) 234.6 Common stock 51.7 — — 51.7 Total investments $ 287.7 $ 1.5 $ (2.8) $ 286.3 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In millions) Short-term investments $ 5.4 $ — $ — $ 5.4 U.S. Treasury 11.8 — (0.2) 11.6 Municipal 22.8 — (0.4) 22.4 Corporate 81.8 0.2 (2.3) 79.7 Mortgage and other asset-backed securities 73.8 0.3 (1.4) 72.7 Total debt securities 195.5 0.5 (4.4) 191.7 Common stock 48.7 — — 48.7 Total investments $ 244.2 $ 0.5 $ (4.4) $ 240.4 |
Schedule of Amortized Cost and Fair Value of TCA's Investment | A summary of amortized costs and fair value of investments by time to maturity, is as follows: As of March 31, 2023 Amortized Cost Fair Value (In millions) Due in 1 year or less $ 5.5 $ 5.5 Due in 1-5 years 87.7 87.0 Due in 6-10 years 44.0 43.9 Due after 10 years 2.3 2.3 Total by maturity 139.5 138.7 Mortgage and other asset-backed securities 96.5 96.0 Common stock 51.7 51.7 Total investment securities $ 287.7 $ 286.3 |
Schedule of Unrealized Loss on Investments | The following tables summarize the amount of unrealized losses, defined as the amount by which the amortized cost exceeds fair value, and the related fair value of investments with unrealized losses. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. The reference point for determining how long an investment was in an unrealized loss position was March 31, 2023. As of March 31, 2023 Less than 12 Months Greater than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In millions) Short-term investments $ 4.0 $ — $ — $ — $ 4.0 $ — U.S. Treasury 7.4 (0.1) 0.1 — 7.5 (0.1) Municipal 14.8 (0.1) 0.9 — 15.7 (0.2) Corporate 52.4 (0.8) 9.5 (0.6) 61.9 (1.4) Mortgage and other asset-backed securities 55.3 (0.9) 3.5 (0.3) 58.8 (1.1) Total debt securities $ 133.9 $ (1.9) $ 13.9 $ (0.9) $ 147.8 $ (2.8) As of December 31, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In millions) U.S. Treasury $ 9.2 $ (0.2) $ — $ — $ 9.2 $ (0.2) Municipal 19.0 (0.4) — — 19.0 (0.4) Corporate 66.2 (0.1) 5.2 (0.3) 71.4 (0.4) Mortgage and other asset-backed securities 51.4 (1.3) 1.5 (0.2) 52.9 (1.5) Total debt securities $ 145.7 $ (2.0) $ 6.8 $ (0.5) $ 152.6 $ (2.5) |
FLOOR PLAN NOTES PAYABLE (Table
FLOOR PLAN NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Floor Plan Notes Payable | Floor plan notes payable consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) Floor plan notes payable—trade $ 59.9 $ 65.1 Floor plan notes payable offset account (14.3) (14.2) Floor plan notes payable—trade, net $ 45.6 $ 51.0 Floor plan notes payable—new non-trade (a) $ 680.0 $ 613.6 Floor plan notes payable offset account (b) (680.0) (613.6) Floor plan notes payable—non-trade, net $ — $ — ____________________________ (a) Floor plan notes payable—new non-trade as of March 31, 2023 and December 31, 2022, excluded $4.2 million and $2.8 million classified as liabilities associated with assets held for sale, respectively. (b) In addition to the $680.0 million and $613.6 million shown above as of March 31, 2023 and December 31, 2022, respectively, we held $158.1 million and $164.0 million, in the floor plan notes payable offset account as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, $77.2 million of the $158.1 million was reflected within cash and cash equivalents and the remaining $80.9 million was shown as an offset to loaner vehicles notes payable. As of December 31, 2022, $100.8 million of the $164.0 million was reflected within cash and cash equivalents and the remaining $63.2 million was shown as an offset to loaner vehicles notes payable. Loaner vehicle notes payable is included in accounts payable and accrued liabilities within the condensed consolidated balance sheets. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: As of March 31, 2023 December 31, 2022 (In millions) 4.50% Senior Notes due 2028 $ 405.0 $ 405.0 4.625% Senior Notes due 2029 800.0 800.0 4.75% Senior Notes due 2030 445.0 445.0 5.00% Senior Notes due 2032 600.0 600.0 Mortgage notes payable bearing interest at fixed rates (a) 37.7 38.3 2021 Real Estate Facility (b) 642.9 660.6 2021 BofA Real Estate Facility 171.5 173.3 2018 Bank of America Facility (c) 53.5 54.5 2018 Wells Fargo Master Loan Facility 75.7 76.9 2013 BofA Real Estate Facility 24.3 24.9 2015 Wells Fargo Master Loan Facility 41.1 42.3 Finance lease liability 8.4 8.4 Total debt outstanding 3,304.9 3,329.2 Add—unamortized premium on 4.50% Senior Notes due 2028 0.8 0.8 Add—unamortized premium on 4.75% Senior Notes due 2030 1.5 1.6 Less—debt issuance costs (29.3) (30.4) Long-term debt, including current portion 3,277.9 3,301.2 Less—current portion, net of current portion of debt issuance costs (83.1) (84.5) Long-term debt $ 3,194.8 $ 3,216.8 ____________________________ (a) Mortgage notes payable excluded $2.7 million that were classified as liabilities associated with assets held for sale as of both March 31, 2023 and December 31, 2022. (b) Amounts reflected for the 2021 Real Estate Facility as of March 31, 2023 exclude $9.2 million classified as liabilities associated with assets held for sale. (c) Amounts reflected for the 2018 Bank of America Facility as of March 31, 2023 and December 31, 2022, exclude $4.0 million and $4.1 million classified as liabilities associated with assets held for sale. |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Liabilities | A summary of the carrying values and fair values of our subordinated long-term debt and our mortgage notes payable is as follows: As of March 31, 2023 December 31, 2022 (In millions) Carrying Value: 4.50% Senior Notes due 2028 $ 402.3 $ 409.5 4.625% Senior Notes due 2029 789.4 789.1 4.75% Senior Notes due 2030 441.8 441.7 5.00% Senior Notes due 2032 591.7 591.5 Mortgage notes payable (a) 1,044.2 1,061.1 Total carrying value $ 3,269.5 $ 3,292.9 Fair Value: 4.50% Senior Notes due 2028 $ 367.5 $ 354.4 4.625% Senior Notes due 2029 708.0 672.0 4.75% Senior Notes due 2030 393.8 372.7 5.00% Senior Notes due 2032 523.5 492.0 Mortgage notes payable (a) 1,045.2 1,069.8 Total fair value $ 3,038.0 $ 2,960.9 ____________________________ (a) Mortgage notes payable as of March 31, 2023 and December 31, 2022, exclude $15.8 million and $6.8 million classified as liabilities associated with assets held for sale, respectively. |
Schedule of Derivative Instruments | The following table provides information on the attributes of each swap as of March 31, 2023: Inception Date Notional Principal at Inception Notional Value as of March 31, 2023 Notional Principal at Maturity Maturity Date (In millions) January 2022 $ 300.0 $ 285.0 $ 228.8 December 2026 January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031 May 2021 $ 184.4 $ 171.5 $ 110.6 May 2031 July 2020 $ 93.5 $ 80.1 $ 50.6 December 2028 July 2020 $ 85.5 $ 72.1 $ 57.3 November 2025 June 2015 $ 100.0 $ 62.7 $ 53.1 February 2025 November 2013 $ 75.0 $ 40.5 $ 38.7 September 2023 |
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, 2023 December 31, 2022 (In millions) Other current assets $ 27.9 $ 29.6 Other long-term assets 55.1 72.8 Total fair value $ 83.0 $ 102.4 |
Schedule of Derivative Instruments Effect on Accumulated Other Comprehensive Income | Information about the effect of our interest rate swap agreements in 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 Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) 2023 $ (27.0) Other interest expense, net $ (7.7) 2022 $ 45.4 Other interest expense, net $ 3.1 |
Schedule of Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The table below presents the Company’s investment securities that are measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy within which those measurements fall: As of March 31, 2023 Level 1 Level 2 Level 3 Total (In millions) Cash equivalents $ 2.5 $ — $ — $ 2.5 Short-term investments 1.5 4.0 — 5.5 U.S. Treasury 11.9 — — 11.9 Municipal — 28.3 — 28.3 Corporate — 93.0 — 93.0 Mortgage and other asset-backed securities — 96.0 — 96.0 Total debt securities 13.4 221.3 — 234.6 Common stock 51.7 — — 51.7 Total $ 65.1 $ 221.3 $ — $ 286.3 As of December 31, 2022 Level 1 Level 2 Level 3 Total (In millions) Cash equivalents $ 6.6 $ — $ — $ 6.6 Short-term investments 0.6 4.8 — 5.4 U.S. Treasury 11.6 — — 11.6 Municipal — 22.4 — 22.4 Corporate — 79.7 — 79.7 Mortgage and other asset-backed securities — 72.6 — 72.6 Total debt securities 12.2 179.5 — 191.7 Common stock 48.7 — — 48.7 Total $ 60.9 $ 179.5 $ — $ 240.4 |
Schedule of Debt Securities, Available-for-Sale | Information about the effect of our available-for-sale debt securities in 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 Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) 2023 $ 2.6 Revenue-Finance and Insurance, net $ 0.1 2022 $ (2.5) Revenue-Finance and Insurance, net $ (0.3) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Reportable segment financial information for the three months ended March 31, 2023 and 2022, are as follows: Three Months Ended March 31, 2023 Dealerships TCA Eliminations Total Company (In millions) Revenue $ 3,556.3 $ 70.7 $ (44.7) $ 3,582.3 Gross profit $ 679.6 $ 21.1 $ (4.5) $ 696.2 Three Months Ended March 31, 2022 Dealerships TCA Eliminations Total Company (In millions) Revenue $ 3,894.2 $ 57.3 $ (39.7) $ 3,911.8 Gross profit $ 781.4 $ 12.4 $ (1.9) $ 792.0 Total assets by segment as of March 31, 2023 and as of December 31, 2022 are as follows: As of March 31, 2023 Dealerships TCA Eliminations Total Company (In millions) Total assets $ 7,348.7 $ 840.5 $ (6.4) $ 8,182.8 As of December 31, 2022 Dealerships TCA Eliminations Total Company (In millions) Total assets $ 7,170.8 $ 869.2 $ (18.6) $ 8,021.4 |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 27, 2023 USD ($) shares | Mar. 31, 2023 USD ($) VehicleBrands dealership_location segment CollisionRepairCenters states franchise shares | Mar. 31, 2022 USD ($) shares | |
Business Organization [Line Items] | |||
Number of franchises (in franchises) | franchise | 184 | ||
Number of dealership locations (in dealership locations) | dealership_location | 139 | ||
Number of vehicle brands (in vehicle brands) | VehicleBrands | 31 | ||
Number of collision repair centers (in collision repair centers) | CollisionRepairCenters | 32 | ||
Number of states (in states) | states | 14 | ||
Number of reportable segments | segment | 2 | ||
Share issues (repurchases) (in shares) | 110,323 | ||
Retirement of common stock (in shares) | 1,069,203 | ||
Treasury stock, retired (in shares) | 164,527 | ||
Treasury stock, acquired value | $ | $ 20.7 | $ 198.6 | |
Cash paid to acquire treasury stock | $ | $ 200 | ||
Subsequent Event | |||
Business Organization [Line Items] | |||
Share issues (repurchases) (in shares) | 149,765 | ||
Treasury stock, acquired value | $ | $ 28.7 | ||
Restricted Share Units | |||
Business Organization [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 4,005 | 2,123 | |
Performance Share Units | |||
Business Organization [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 476 | 533 | |
Luxury Brands | |||
Business Organization [Line Items] | |||
Weighted brand mix (percent) | 34% | ||
Mid-line Import Brands | |||
Business Organization [Line Items] | |||
Weighted brand mix (percent) | 38% | ||
Domestic Brands | |||
Business Organization [Line Items] | |||
Weighted brand mix (percent) | 28% |
REVENUE RECOGNITION (Disaggrega
REVENUE RECOGNITION (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,582.3 | $ 3,911.8 |
New and used vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,894.2 | 3,206.5 |
New and used vehicle | New vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,767.7 | 1,855.6 |
New and used vehicle | Used vehicle retail | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,021.6 | 1,217 |
New and used vehicle | Used vehicle wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 104.9 | 134 |
Parts and service | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 515.6 | 501.9 |
Parts and service | Sale of vehicle parts and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 126 | 130.2 |
Parts and service | Vehicle repair and maintenance services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 389.6 | 371.7 |
Finance and insurance, net | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 172.5 | $ 203.4 |
REVENUE RECOGNITION (Contract A
REVENUE RECOGNITION (Contract Assets) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Change in Contract with Customer, Asset [Roll Forward] | |
Balance as of January 1, 2023 | $ 66.6 |
Transferred to receivables from contract assets recognized at the beginning of the period | (17.7) |
Amortization of costs to obtain a contract with a customer | (2) |
Costs incurred to obtain a contract with a customer | 8.6 |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 19.1 |
Balance as of June 30, 2023 | 74.6 |
Contract Assets (current), March 31, 2023 | 43.7 |
Contract Assets (long-term), March 31, 2023 | 30.9 |
Deferred Commissions | |
Change in Contract with Customer, Asset [Roll Forward] | |
Balance as of January 1, 2023 | 37.2 |
Transferred to receivables from contract assets recognized at the beginning of the period | 0 |
Amortization of costs to obtain a contract with a customer | (2) |
Costs incurred to obtain a contract with a customer | 8.6 |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 0 |
Balance as of June 30, 2023 | 43.8 |
Contract Assets (current), March 31, 2023 | 12.9 |
Contract Assets (long-term), March 31, 2023 | 30.9 |
Vehicle repair and maintenance services | |
Change in Contract with Customer, Asset [Roll Forward] | |
Balance as of January 1, 2023 | 14.7 |
Transferred to receivables from contract assets recognized at the beginning of the period | (14.7) |
Amortization of costs to obtain a contract with a customer | 0 |
Costs incurred to obtain a contract with a customer | 0 |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 16.3 |
Balance as of June 30, 2023 | 16.3 |
Contract Assets (current), March 31, 2023 | 16.3 |
Contract Assets (long-term), March 31, 2023 | 0 |
Finance and Insurance, net | |
Change in Contract with Customer, Asset [Roll Forward] | |
Balance as of January 1, 2023 | 14.7 |
Transferred to receivables from contract assets recognized at the beginning of the period | (3) |
Amortization of costs to obtain a contract with a customer | 0 |
Costs incurred to obtain a contract with a customer | 0 |
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period | 2.8 |
Balance as of June 30, 2023 | 14.5 |
Contract Assets (current), March 31, 2023 | 14.5 |
Contract Assets (long-term), March 31, 2023 | $ 0 |
REVENUE RECOGNITION (Narrative)
REVENUE RECOGNITION (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Deferred revenue | $ 713.7 | $ 713.9 |
Finance and insurance, net | ||
Business Acquisition [Line Items] | ||
Deferred revenue | $ 62.4 |
DIVESTITURES (Details)
DIVESTITURES (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) dealership_location franchise | Mar. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||
Gain on divestitures, net | $ | $ 0 | $ (33.1) |
Missouri | Disposed of by sale | ||
Business Acquisition [Line Items] | ||
Number of franchises, sold (in franchises) | franchise | 1 | |
Number of dealership locations, sold (in dealership locations) | dealership_location | 1 | |
Colorado | Disposed of by sale | ||
Business Acquisition [Line Items] | ||
Number of franchises, sold (in franchises) | franchise | 3 | |
Number of dealership locations, sold (in dealership locations) | dealership_location | 3 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 168.9 | $ 174.1 |
Less—Allowance for doubtful accounts | (2.3) | (2.2) |
Accounts receivable, net | 166.6 | 171.9 |
Vehicle receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 48.1 | 50.4 |
Manufacturer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 42.1 | 43.3 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 78.6 | $ 80.5 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Components of Inventory [Line Items] | |||
Total inventories | $ 1,081.4 | $ 959.2 | |
Lower of cost or market inventory reserves | 9.5 | 10.7 | |
Held-for-sale | |||
Components of Inventory [Line Items] | |||
Total inventories | 5 | 3.4 | |
New vehicles | |||
Components of Inventory [Line Items] | |||
Total inventories | 643 | 527.7 | |
Reduction of new vehicle inventory cost by automobile manufacturer incentives | (4) | (2.7) | |
Reduction to cost of sales | 22.3 | $ 25.5 | |
Used vehicles | |||
Components of Inventory [Line Items] | |||
Total inventories | 308.5 | 304.4 | |
Parts and accessories | |||
Components of Inventory [Line Items] | |||
Total inventories | $ 129.9 | $ 127.2 |
ASSETS HELD FOR SALE (Assets He
ASSETS HELD FOR SALE (Assets Held for Sale and Liabilities Associated with the Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Inventory | $ 5 | $ 3.4 |
Loaners, net | 0.9 | 0.9 |
Property and equipment, net | 36 | 24 |
Operating lease right-of-use assets | 2.1 | 0 |
Goodwill | 0.9 | 0.9 |
Total assets held for sale | 44.9 | 29.1 |
Liabilities: | ||
Floor plan notes payable—non-trade | 4.2 | 2.8 |
Loaners notes payable | 1 | 0.8 |
Current maturities of long-term debt | 1 | 0.6 |
Current maturities of operating leases | 0.5 | 0 |
Long-term debt | 14.8 | 6.2 |
Operating lease liabilities | 1.6 | 0 |
Total liabilities associated with assets held for sale | 23.1 | 10.5 |
Net assets held for sale | $ 21.8 | $ 18.7 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE (Narrative) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||||||||
Mar. 31, 2023 USD ($) dealership_location | Mar. 31, 2022 USD ($) | Jun. 30, 2022 dealership_location | Mar. 31, 2023 dealership_location | Mar. 31, 2023 franchise | Mar. 31, 2023 usedVehicleStore | Mar. 31, 2023 collisionCenters | Mar. 31, 2023 property | Dec. 31, 2022 USD ($) | Dec. 31, 2022 franchise | Dec. 31, 2022 property | |
Long Lived Assets Held-for-sale [Line Items] | |||||||||||
Number of collision centers (in collision centers) | collisionCenters | 1 | ||||||||||
Number of dealership locations (in dealership locations) | dealership_location | 139 | ||||||||||
Number of used vehicle stores | usedVehicleStore | 5 | ||||||||||
Assets held-for-sale | $ 21.8 | $ 18.7 | |||||||||
Liabilities associated with assets held for sale | 23.1 | $ 10.5 | |||||||||
Gain on divestitures, net | $ 0 | $ 33.1 | |||||||||
Held-for-sale | |||||||||||
Long Lived Assets Held-for-sale [Line Items] | |||||||||||
Number of real estate properties | 1 | 1 | 1 | 1 | |||||||
Number of dealership locations acquired (in dealership locations) | dealership_location | 1,000,000 | 1 |
INVESTMENTS - Carrying Amounts
INVESTMENTS - Carrying Amounts of Investments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 287.7 | $ 244.2 |
Gross Unrealized Gains | 1.5 | 0.5 |
Gross Unrealized Losses | (2.8) | (4.4) |
Fair Value | 286.3 | 240.4 |
Interest receivable | 1.5 | 1.3 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5.5 | 5.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 5.5 | 5.4 |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 11.9 | 11.8 |
Gross Unrealized Gains | 0.1 | 0 |
Gross Unrealized Losses | (0.1) | (0.2) |
Fair Value | 11.9 | 11.6 |
Municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28.3 | 22.8 |
Gross Unrealized Gains | 0.2 | 0 |
Gross Unrealized Losses | (0.2) | (0.4) |
Fair Value | 28.3 | 22.4 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 93.8 | 81.8 |
Gross Unrealized Gains | 0.6 | 0.2 |
Gross Unrealized Losses | (1.4) | (2.3) |
Fair Value | 93 | 79.7 |
Mortgage and other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 96.5 | 73.8 |
Gross Unrealized Gains | 0.6 | 0.3 |
Gross Unrealized Losses | (1.1) | (1.4) |
Fair Value | 96 | 72.7 |
Total debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 236 | 195.5 |
Gross Unrealized Gains | 1.5 | 0.5 |
Gross Unrealized Losses | (2.8) | (4.4) |
Fair Value | 234.6 | 191.7 |
Common Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 51.7 | 48.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 51.7 | $ 48.7 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Unrealized gain (loss) | $ 2,600,000 | $ (400,000) |
Interest receivable | 1,500,000 | $ 1,300,000 |
Debt securities, available-for-sale, realized loss | 0 | |
Debt securities, available-for-sale, realized gain | 100,000 | |
HTM, allowance | $ 0 |
INVESTMENTS - Amortized Cost an
INVESTMENTS - Amortized Cost and Fair Value of TCA's Investment (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Available-for-Sale, Amortized Cost | ||
Due in 1 year or less | $ 5.5 | |
Due in 1-5 years | 87.7 | |
Due in 5-10 years | 44 | |
Due after 10 years | 2.3 | |
Total by maturity | 139.5 | |
Available-for-Sale, Fair Value | ||
Due in 1 year or less | 5.5 | |
Due in 1-5 years | 87 | |
Due in 5-10 years | 43.9 | |
Due after 10 years | 2.3 | |
Total by maturity | 138.7 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 287.7 | $ 244.2 |
Fair Value | 286.3 | 240.4 |
Mortgage and other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 96.5 | 73.8 |
Fair Value | 96 | 72.7 |
Common Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 51.7 | 48.7 |
Fair Value | $ 51.7 | $ 48.7 |
INVESTMENTS - Schedule of Gross
INVESTMENTS - Schedule of Gross Realized Gains and Losses (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 133.9 | $ 145.7 |
Less than 12 Months, Gross Unrealized Losses | 1.9 | 2 |
12 Months or Longer, Fair Value | 13.9 | 6.8 |
12 Months or Longer, Gross Unrealized Losses | 0.9 | 0.5 |
Total Fair Value | 147.8 | 152.6 |
Total Gross Unrealized Losses | 2.8 | 2.5 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 4 | |
Less than 12 Months, Gross Unrealized Losses | 0 | |
12 Months or Longer, Fair Value | 0 | |
12 Months or Longer, Gross Unrealized Losses | 0 | |
Total Fair Value | 4 | |
Total Gross Unrealized Losses | 0 | |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 7.4 | 9.2 |
Less than 12 Months, Gross Unrealized Losses | 0.1 | 0.2 |
12 Months or Longer, Fair Value | 0.1 | 0 |
12 Months or Longer, Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 7.5 | 9.2 |
Total Gross Unrealized Losses | 0.1 | 0.2 |
Municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 14.8 | 19 |
Less than 12 Months, Gross Unrealized Losses | 0.1 | 0.4 |
12 Months or Longer, Fair Value | 0.9 | 0 |
12 Months or Longer, Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 15.7 | 19 |
Total Gross Unrealized Losses | 0.2 | 0.4 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 52.4 | 66.2 |
Less than 12 Months, Gross Unrealized Losses | 0.8 | 0.1 |
12 Months or Longer, Fair Value | 9.5 | 5.2 |
12 Months or Longer, Gross Unrealized Losses | 0.6 | 0.3 |
Total Fair Value | 61.9 | 71.4 |
Total Gross Unrealized Losses | 1.4 | 0.4 |
Mortgage and other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 55.3 | 51.4 |
Less than 12 Months, Gross Unrealized Losses | 0.9 | 1.3 |
12 Months or Longer, Fair Value | 3.5 | 1.5 |
12 Months or Longer, Gross Unrealized Losses | 0.3 | 0.2 |
Total Fair Value | 58.8 | 52.9 |
Total Gross Unrealized Losses | $ 1.1 | $ 1.5 |
FLOOR PLAN NOTES PAYABLE - Sche
FLOOR PLAN NOTES PAYABLE - Schedule of Floor Plan Notes Payable (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Floor Plan Notes Payable [Line Items] | ||
Floor plan notes payable—trade | $ 59.9 | $ 65.1 |
Floor plan notes payable offset account | (14.3) | (14.2) |
Floor plan notes payable—trade, net | 45.6 | 51 |
Floor plan notes payable—non-trade | 680 | 613.6 |
Floor plan notes payable offset account (b) | (680) | (613.6) |
Floor plan notes payable—non-trade, net | 0 | 0 |
Floor plan notes payable—non-trade, liabilities associated with assets held for sale | 4.2 | 2.8 |
Floor plan, notes payable, offset account, additional amount | 158.1 | 164 |
Cash and Cash Equivalents | ||
Floor Plan Notes Payable [Line Items] | ||
Floor plan, notes payable, offset account, additional amount | 77.2 | 100.8 |
Accounts Payable and Accrued Liabilities | ||
Floor Plan Notes Payable [Line Items] | ||
Floor plan, notes payable, offset account, additional amount | $ 80.9 | $ 63.2 |
FLOOR PLAN NOTES PAYABLE - Narr
FLOOR PLAN NOTES PAYABLE - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | May 27, 2022 |
Floor Plan Notes Payable [Line Items] | |||
Debt instrument, conversion, maximum convertible amount, amount subtracted from contractual total | $ 50 | ||
Amount available under revolving loan credit facility transferred to new vehicle floor plan facility | $ 389 | ||
Loaner Vehicle Notes Payable - Ford Credit | |||
Floor Plan Notes Payable [Line Items] | |||
Notes payable | 13.7 | $ 13.4 | |
Loaner Vehicle Notes Payable - Bank of America | |||
Floor Plan Notes Payable [Line Items] | |||
Notes payable | 0 | 10.8 | |
Notes payable, offsets | 80.9 | 63.2 | |
Loaner Vehicle Notes Payable - OEMs | |||
Floor Plan Notes Payable [Line Items] | |||
Notes payable | $ 75.1 | $ 70.4 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Finance lease liability | $ 8.4 | $ 8.4 |
Total debt outstanding | 3,304.9 | 3,329.2 |
Less—debt issuance costs | (29.3) | (30.4) |
Long-term debt, including current portion | 3,277.9 | 3,301.2 |
Less—current portion, net of current portion of debt issuance costs | (83.1) | (84.5) |
Long-term debt | 3,194.8 | 3,216.8 |
2021 Real Estate Facility (b) | Bank of America, N.A. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 642.9 | 660.6 |
2021 BofA Real Estate Facility | Wells Fargo Bank, National Association | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 171.5 | 173.3 |
2018 BofA Real Estate Facility | ||
Debt Instrument [Line Items] | ||
Liabilities associated with assets held for sale | 4 | 4.1 |
2018 BofA Real Estate Facility | Bank of America, N.A. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 53.5 | 54.5 |
2018 Wells Fargo Master Loan Facility | Wells Fargo Bank, National Association | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 75.7 | 76.9 |
2013 BofA Real Estate Facility | Bank of America, N.A. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 24.3 | 24.9 |
2015 Wells Fargo Master Loan Facility | Wells Fargo Bank, National Association | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 41.1 | 42.3 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Stated interest rate of debt instrument | 4.50% | |
Long-term debt, gross | $ 405 | 405 |
Add—unamortized premium | $ 0.8 | 0.8 |
Senior Notes | 4.625% Senior Notes due 2029 | ||
Debt Instrument [Line Items] | ||
Stated interest rate of debt instrument | 4.625% | |
Long-term debt, gross | $ 800 | 800 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Stated interest rate of debt instrument | 4.75% | |
Long-term debt, gross | $ 445 | 445 |
Add—unamortized premium | $ 1.5 | 1.6 |
Senior Notes | 5.00% Senior Notes due 2032 | ||
Debt Instrument [Line Items] | ||
Stated interest rate of debt instrument | 5% | |
Long-term debt, gross | $ 600 | 600 |
Mortgage notes payable bearing interest at fixed rates | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 37.7 | 38.3 |
Liabilities associated with assets held for sale | 2.7 | $ 2.7 |
2021 Real Estate Facility (b) | ||
Debt Instrument [Line Items] | ||
Liabilities associated with assets held for sale | $ 9.2 |
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, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total carrying value | $ 3,269.5 | $ 3,292.9 |
Total fair value | $ 3,038 | 2,960.9 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate of debt instrument | 4.50% | |
Total carrying value | $ 402.3 | 409.5 |
Total fair value | $ 367.5 | 354.4 |
Senior Notes | 4.625% Senior Notes due 2029 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate of debt instrument | 4.625% | |
Total carrying value | $ 789.4 | 789.1 |
Total fair value | $ 708 | 672 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate of debt instrument | 4.75% | |
Total carrying value | $ 441.8 | 441.7 |
Total fair value | $ 393.8 | 372.7 |
Senior Notes | 5.00% Senior Notes due 2032 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate of debt instrument | 5% | |
Total carrying value | $ 591.7 | 591.5 |
Total fair value | 523.5 | 492 |
Mortgage notes payable | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total carrying value | 1,044.2 | 1,061.1 |
Total fair value | 1,045.2 | 1,069.8 |
Liabilities associated with assets HFS, FV | $ 15.8 | $ 6.8 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE (Narrative) (Details) | Mar. 31, 2023 USD ($) numberOfInstruments | Dec. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) numberOfInstruments |
Level 2 | Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of interest rate swaps | $ (83,000,000) | $ (102,400,000) | |
Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of instruments held | numberOfInstruments | 7 | 2 | |
Notional amount | $ 550,000,000 | ||
Notional principal amount at maturity | $ 228,800,000 | ||
Fair value of interest rate swaps | $ 83,000,000 | $ 102,400,000 | |
Interest rate swap, net loss amount expected to be reclassified in the next twelve months | $ (27,900,000) |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE (Interest Rate Swap Agreements) (Details) - USD ($) | Mar. 31, 2023 | Jan. 31, 2022 | May 31, 2021 | Jul. 31, 2020 | Jun. 30, 2015 | Nov. 30, 2013 |
Interest Rate Swap, January 2022 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | $ 285,000,000 | $ 300,000,000 | ||||
Notional Principal at Maturity | 228,800,000 | |||||
Interest Rate Swap, January 2022 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | 250,000,000 | 250,000,000 | ||||
Notional Principal at Maturity | $ 250,000,000 | |||||
Interest Rate Swap, May 2021 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | 171,500,000 | $ 184,400,000 | ||||
Notional Principal at Maturity | $ 110,600,000 | |||||
Interest Rate Swap, July 20 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | 80,100,000 | $ 93,500,000 | ||||
Notional Principal at Maturity | 50,600,000 | |||||
Interest Rate Swap, July 20 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | 72,100,000 | 85,500,000 | ||||
Notional Principal at Maturity | $ 57,300,000 | |||||
Interest Rate Swap, June 2015 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | 62,700,000 | $ 100,000,000 | ||||
Notional Principal at Maturity | $ 53,100,000 | |||||
Interest Rate Swap, November 2013 | ||||||
Derivative [Line Items] | ||||||
Notional Principal at Inception | $ 40,500,000 | $ 75,000,000 | ||||
Notional Principal at Maturity | $ 38,700,000 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Fair value of Interest Rate Swaps) (Details) - Interest Rate Swap - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 83 | $ 102.4 |
Other current assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | 27.9 | 29.6 |
Other long-term assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 55.1 | $ 72.8 |
FINANCIAL INSTRUMENTS AND FAI_7
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, 2023 | Mar. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Results Recognized in Accumulated Other Comprehensive Income/(Loss) | $ (27) | $ 45.4 |
Other interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings | $ (7.7) | |
Other interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings | $ 3.1 |
FINANCIAL INSTRUMENTS AND FAI_8
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Investments at Fair Value) (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 2.5 | $ 6.6 |
Investments, fair value | 286.3 | 240.4 |
Total | Total debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 234.6 | 191.7 |
Total | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 5.5 | 5.4 |
Total | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 11.9 | 11.6 |
Total | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 28.3 | 22.4 |
Total | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 93 | 79.7 |
Total | Mortgage and other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 96 | 72.6 |
Total | Common Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 51.7 | 48.7 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2.5 | 6.6 |
Investments, fair value | 65.1 | 60.9 |
Level 1 | Total debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 13.4 | 12.2 |
Level 1 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 1.5 | 0.6 |
Level 1 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 11.9 | 11.6 |
Level 1 | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 1 | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 1 | Mortgage and other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 1 | Common Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 51.7 | 48.7 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Investments, fair value | 221.3 | 179.5 |
Level 2 | Total debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 221.3 | 179.5 |
Level 2 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 4 | 4.8 |
Level 2 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 2 | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 28.3 | 22.4 |
Level 2 | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 93 | 79.7 |
Level 2 | Mortgage and other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 96 | 72.6 |
Level 2 | Common Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Investments, fair value | 0 | 0 |
Level 3 | Total debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | Mortgage and other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | 0 | 0 |
Level 3 | Common Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, fair value | $ 0 | $ 0 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Results Recognized in Accumulated Other Comprehensive Income/(Loss) | $ 2.6 | $ (2.5) |
Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings | $ 0.1 | $ (0.3) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest payments made including amounts capitalized | $ 28.4 | $ 31.6 |
Cash paid during the period related to floor plan interest | (0.2) | 2.6 |
Loaner vehicles transferred from other current assets to inventory | $ 90.4 | $ 57.5 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Revenues | $ 3,582.3 | $ 3,911.8 | |
Gross profit | 696.2 | 792 | |
Assets | 8,182.8 | $ 8,021.4 | |
Intersegment Eliminations | |||
Business Acquisition [Line Items] | |||
Revenues | (44.7) | (39.7) | |
Gross profit | (4.5) | (1.9) | |
Assets | (6.4) | (18.6) | |
Dealerships | |||
Business Acquisition [Line Items] | |||
Revenues | 3,556.3 | 3,894.2 | |
Gross profit | 679.6 | 781.4 | |
Assets | 7,348.7 | 7,170.8 | |
TCA | |||
Business Acquisition [Line Items] | |||
Revenues | 70.7 | 57.3 | |
Gross profit | 21.1 | $ 12.4 | |
Assets | $ 840.5 | $ 869.2 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Guarantee Obligations $ in Millions | Mar. 31, 2023 USD ($) |
Loss Contingencies [Line Items] | |
Amount of surety bond line maintained | $ 17.4 |
Reastated Credit Agreement | Bank of America, N.A. | |
Loss Contingencies [Line Items] | |
Amount of letters of credit outstanding | $ 12.5 |