Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 12, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 1-13461 | ||
Entity Registrant Name | Group 1 Automotive, Inc | ||
Entity Central Index Key | 0001031203 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 76-0506313 | ||
Entity Address, Address Line One | 800 Gessner, | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, Postal Zip Code | 77024 | ||
Entity Address, City or Town | Houston, | ||
Entity Address, State or Province | TX | ||
City Area Code | 713 | ||
Local Phone Number | 647-5700 | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | GPI | ||
Security Exchange Name | NYSE | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.1 | ||
Entity Common Stock, Shares Outstanding | 18,095,702 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive proxy statement for its 2021 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of December 31, 2020, are incorporated by reference into Part III of this Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 87.3 | $ 23.8 |
Contracts-in-transit and vehicle receivables, net | 211.2 | 253.8 |
Accounts and notes receivable, net | 200 | 225.1 |
Inventories | 1,468 | 1,901.7 |
Prepaid expenses | 19.4 | 96.4 |
Other current assets | 18.4 | 15.5 |
TOTAL CURRENT ASSETS | 2,004.2 | 2,516.3 |
Property and equipment, net | 1,608.2 | 1,547.1 |
Operating lease assets | 209.9 | 220.1 |
Goodwill | 997.1 | 1,008.3 |
Intangible franchise rights | 232.8 | 253.5 |
Other long-term assets | 37.2 | 24.8 |
TOTAL ASSETS | 5,089.4 | 5,570.2 |
CURRENT LIABILITIES: | ||
Floorplan notes payable — credit facility and other, net of offset account of $160.4 and $106.8, respectively | 767.6 | 1,144.4 |
Floorplan notes payable — manufacturer affiliates, net of offset account of $16.0 and $4.1, respectively | 327.5 | 459.9 |
Current maturities of long-term debt | 56.7 | 59.1 |
Current operating lease liabilities | 21.5 | 24.6 |
Accounts payable | 442.6 | 527.5 |
Accrued expenses and other current liabilities | 226.9 | 206.7 |
TOTAL CURRENT LIABILITIES | 1,842.7 | 2,422.3 |
Long-term debt | 1,294.7 | 1,432.1 |
Long-term operating lease liabilities | 207.6 | 210.7 |
Deferred income taxes | 141 | 145.7 |
Long-term interest rate swap liabilities | 40.6 | 4.4 |
Other long-term liabilities | 113.2 | 99.2 |
Commitments and Contingencies (Note 16) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 50,000,000 shares authorized; 25,433,048 and 25,486,711 issued, respectively | 0.3 | 0.3 |
Additional paid-in capital | 308.3 | 295.3 |
Retained earnings | 1,817.9 | 1,542.4 |
Accumulated other comprehensive income (loss) | (184) | (147) |
Treasury stock, at cost; 7,342,546 and 6,858,503 shares, respectively | (492.8) | (435.3) |
TOTAL STOCKHOLDERS’ EQUITY | 1,449.6 | 1,255.7 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 5,089.4 | $ 5,570.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Offset account related to floorplan notes payable | $ 160.4 | $ 106.8 |
FMCC offset | $ 16 | $ 4.1 |
Preferred stock | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 1,000,000 | 1,000,000 |
Shares issued (in shares) | 0 | 0 |
Shares outstanding (in shares) | 0 | 0 |
Common stock | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 50,000,000 | 50,000,000 |
Shares issued (in shares) | 25,433,048 | 25,486,711 |
Treasury stock | ||
Treasury stock (in shares) | 7,342,546 | 6,858,503 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | $ 10,851,800 | $ 12,043,800 | $ 11,601,400 |
COST OF SALES | 9,082,900 | 10,227,800 | 9,876,300 |
GROSS PROFIT | 1,769,000 | 1,816,000 | 1,725,100 |
Selling, general and administrative expenses | 1,169,300 | 1,358,400 | 1,273,100 |
Depreciation and amortization expense | 75,800 | 71,600 | 67,100 |
Asset impairments | 37,700 | 22,200 | 43,900 |
INCOME (LOSS) FROM OPERATIONS | 486,100 | 363,700 | 341,100 |
INTEREST EXPENSE: | |||
Floorplan interest expense | 39,500 | 61,600 | 59,900 |
Other interest expense, net | 62,600 | 74,900 | 75,800 |
(Gain) loss on extinguishment of debt | 13,700 | 0 | 0 |
INCOME (LOSS) BEFORE INCOME TAXES | 370,300 | 227,300 | 205,400 |
(Benefit) provision for income taxes | 83,800 | 53,300 | 47,600 |
NET INCOME (LOSS) | $ 286,500 | $ 174,000 | $ 157,800 |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 15.55 | $ 9.35 | $ 7.83 |
Weighted average common shares outstanding (in shares) | 17,754,666 | 17,917,195 | 19,452,560 |
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 15.51 | $ 9.34 | $ 7.83 |
Weighted average common shares outstanding (in shares) | 17,806,578 | 17,936,074 | 19,461,052 |
New vehicle retail sales | |||
REVENUES | $ 5,580,800 | $ 6,314,100 | $ 6,181,400 |
COST OF SALES | 5,250,400 | 6,013,300 | 5,870,500 |
Used vehicle retail sales | |||
REVENUES | 3,105,700 | 3,366,600 | 3,166,100 |
COST OF SALES | 2,896,900 | 3,165,300 | 2,980,100 |
Used vehicle wholesale sales | |||
REVENUES | 308,100 | 355,200 | 369,600 |
COST OF SALES | 297,100 | 354,100 | 367,900 |
Parts and service sales | |||
REVENUES | 1,389,300 | 1,510,000 | 1,416,900 |
COST OF SALES | 638,500 | 695,000 | 657,700 |
Finance, insurance and other, net | |||
REVENUES | $ 467,900 | $ 497,900 | $ 467,500 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
NET INCOME (LOSS) | $ 286.5 | $ 174 | $ 157.8 |
Other comprehensive income (loss), net of taxes: | |||
Foreign currency translation adjustment | (8.7) | 3.9 | (24.2) |
Net unrealized gain (loss) on interest rate risk management activities, net of tax: | |||
Unrealized gain (loss) arising during the period, net | (36.7) | (13.3) | |
Unrealized gain (loss) arising during the period, net | 6.5 | ||
Unrealized gain (loss) on interest rate risk management activities, net of tax | (28.4) | (13) | |
Unrealized gain (loss) on interest rate risk management activities, net of tax | 9.8 | ||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (37.1) | (9.2) | (14.4) |
COMPREHENSIVE INCOME (LOSS) | 249.4 | 164.8 | 143.4 |
SG&A | |||
Net unrealized gain (loss) on interest rate risk management activities, net of tax: | |||
Reclassification adjustment for gain (loss), net of tax | 0.1 | 0 | |
Reclassification adjustment for gain (loss), net of tax | (0.7) | ||
Interest Expense | |||
Net unrealized gain (loss) on interest rate risk management activities, net of tax: | |||
Reclassification adjustment for gain (loss), net of tax | $ 8.2 | $ 0.2 | |
Reclassification adjustment for gain (loss), net of tax | $ 3.9 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tax benefit (provision) of unrealized gain (loss) on interest rate swap | $ 11.4 | $ 4.1 | |
Tax benefit (provision) of unrealized gain (loss) on interest rate swap | $ 2.1 | ||
SG&A | |||
Tax benefit (provision) of reclassification adjustment | 0.2 | ||
Interest Expense | |||
Tax benefit (provision) of reclassification adjustment | $ 2.6 | $ 0.1 | |
Tax benefit (provision) of reclassification adjustment | $ 1.2 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
BALANCE (in shares) at Dec. 31, 2017 | 25,515,374 | |||||||
BALANCE at Dec. 31, 2017 | $ 1,124.3 | $ 11.4 | $ 0.3 | $ 291.5 | $ 1,246.3 | $ 11.4 | $ (123.2) | $ (290.5) |
Net income (loss) | 157.8 | 157.8 | ||||||
Other comprehensive income (loss), net of taxes | (14.4) | (14.4) | ||||||
Tax effects reclassified from accumulated other comprehensive income | 0 | 0.2 | (0.2) | |||||
Purchases of treasury stock | (183.9) | (183.9) | ||||||
Net issuance of treasury shares to employee stock compensation plans (in shares) | (21,046) | |||||||
Net issuance of treasury shares to stock compensation plans | 2.7 | (17.4) | 20.1 | |||||
Stock-based compensation | 18.7 | 18.7 | ||||||
Cash dividends, net of estimated forfeitures related to participating securities | (20.8) | (20.8) | ||||||
BALANCE (in shares) at Dec. 31, 2018 | 25,494,328 | |||||||
BALANCE at Dec. 31, 2018 | 1,095.7 | $ (6.1) | $ 0.3 | 292.8 | 1,394.8 | $ (6.1) | (137.8) | (454.4) |
Net income (loss) | 174 | 174 | ||||||
Other comprehensive income (loss), net of taxes | (9.2) | (9.2) | ||||||
Purchases of treasury stock | (1.4) | (1.4) | ||||||
Net issuance of treasury shares to employee stock compensation plans (in shares) | (7,617) | |||||||
Net issuance of treasury shares to stock compensation plans | 4.2 | (16.3) | 20.5 | |||||
Stock-based compensation | 18.8 | 18.8 | ||||||
Cash dividends, net of estimated forfeitures related to participating securities | (20.3) | (20.3) | ||||||
BALANCE (in shares) at Dec. 31, 2019 | 25,486,711 | |||||||
BALANCE at Dec. 31, 2019 | 1,255.7 | $ 0.3 | 295.3 | 1,542.4 | (147) | (435.3) | ||
Net income (loss) | 286.5 | 286.5 | ||||||
Other comprehensive income (loss), net of taxes | (37.1) | (37.1) | ||||||
Purchases of treasury stock | (80.2) | (80.2) | ||||||
Net issuance of treasury shares to employee stock compensation plans (in shares) | (53,663) | |||||||
Net issuance of treasury shares to stock compensation plans | 3.3 | (19.4) | 22.7 | |||||
Stock-based compensation | 32.3 | 32.3 | ||||||
Cash dividends, net of estimated forfeitures related to participating securities | (11) | (11) | ||||||
BALANCE (in shares) at Dec. 31, 2020 | 25,433,048 | |||||||
BALANCE at Dec. 31, 2020 | $ 1,449.6 | $ 0.3 | $ 308.3 | $ 1,817.9 | $ (184) | $ (492.8) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Estimated forfeitures related to participating securities (in dollars per share) | $ 0.60 | $ 1.09 | $ 1.04 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 286,500 | $ 174,000 | $ 157,800 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 75,800 | 71,600 | 67,100 |
Change in operating lease assets | 24,000 | 28,200 | |
Deferred income taxes | (900) | 16,200 | 3,500 |
Asset impairments | 37,700 | 22,200 | 43,900 |
Stock-based compensation | 32,300 | 18,800 | 18,700 |
Amortization of debt discount and issue costs | 3,200 | 4,000 | 3,400 |
(Gain) loss on disposition of assets | (5,800) | (5,900) | (26,800) |
(Gain) loss on extinguishment of debt | 13,700 | 0 | 0 |
Other | 2,200 | 1,100 | 900 |
Changes in assets and liabilities, net of acquisitions and dispositions: | |||
Accounts payable and accrued expenses | (45,900) | 123,100 | 18,400 |
Accounts and notes receivable | 21,200 | (32,500) | 2,900 |
Inventories | 416,100 | (28,800) | (80,600) |
Contracts-in-transit and vehicle receivables | 43,500 | 12,700 | 39,500 |
Prepaid expenses and other assets | 56,900 | (44,000) | (16,300) |
Floorplan notes payable — manufacturer affiliates | (132,200) | 38,900 | 38,400 |
Deferred revenues | (500) | (500) | (800) |
Operating lease liabilities | (22,300) | (28,300) | |
Net cash provided by (used in) operating activities | 805,400 | 370,900 | 270,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cash paid for acquisitions, net of cash received | (1,300) | (143,200) | (135,300) |
Proceeds from disposition of franchises, property and equipment | 29,800 | 43,400 | 107,900 |
Purchases of property and equipment | (103,200) | (191,800) | (141,000) |
Other | 0 | 0 | 500 |
Net cash provided by (used in) investing activities | (74,700) | (291,600) | (168,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings on credit facility — floorplan line and other | 9,998,100 | 7,304,600 | 6,954,300 |
Repayments on credit facility — floorplan line and other | (10,374,000) | (7,423,200) | (6,870,100) |
Borrowings on credit facility — acquisition line | 284,000 | 319,000 | 165,300 |
Repayments on credit facility — acquisition line | (309,500) | (281,400) | (158,500) |
Debt issue costs | (9,000) | (5,400) | 0 |
Borrowings of senior notes | 550,000 | 0 | 0 |
Repayments of senior notes | (857,900) | 0 | 0 |
Borrowings on other debt | 271,900 | 350,900 | 210,700 |
Principal payments on other debt | (134,000) | (314,000) | (210,300) |
Proceeds from employee stock purchase plan | 9,600 | 8,600 | 7,600 |
Payments of tax withholding for stock-based awards | (6,200) | (4,400) | (4,900) |
Proceeds from termination of mortgage swap | 0 | ||
Repurchases of common stock, amounts based on settlement date | (80,200) | (1,400) | (183,900) |
Dividends paid | (11,000) | (20,300) | (20,900) |
Net cash provided by (used in) financing activities | (668,100) | (67,000) | (109,500) |
Effect of exchange rate changes on cash | (3,400) | (2,900) | (3,300) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 59,200 | 9,300 | (10,900) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 28,100 | 18,700 | 29,600 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 87,300 | $ 28,100 | $ 18,700 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Group 1 Automotive, Inc., a Delaware corporation, is a leading operator in the automotive retailing industry with business activities in 15 states in the U.S., 33 towns in the U.K. and three states in Brazil. Group 1 Automotive, Inc. and its subsidiaries are collectively referred to as the “Company” in these Notes to Consolidated Financial Statements. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. As of December 31, 2020, the Company’s retail network consisted of 117 dealerships in the U.S, 50 dealerships in the U.K. and 17 dealerships in Brazil. The U.S. and Brazil are led by the President, U.S. and Brazilian Operations , and the U.K is led by an Operations Director, each reporting directly to the Company's Chief Executive Officer. The President, U.S. and Brazilian Operations, and the U.K. Operations Director are responsible for the overall performance of their respective regions, as well as for overseeing field level management. COVID-19 Pandemic Since emerging in December 2019 , the COVID-19 pandemic has spread globally, including to all of the Company's markets in the U.S., U.K. and Brazil, significantly impacting the Company’s operating results starting in mid-March 2020. There have been extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 across the world, including mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Beginning in mid-March 2020, these measures significantly reduced the operating capacity of all of the Company’s dealerships in the U.S., U.K. and Brazil. Beginning in December 2020 and January 2021, vaccines deemed highly effective started rolling out to the general population in the U.S., U.K. and Brazil. The rollout of the vaccine is expected to help control the spread of the virus. However, the timeline and effectiveness of vaccinating the critical mass of the population in our markets are uncertain. As such, the extent to which the impact of the COVID-19 pandemic may negatively affect the Company’s business, financial condition and results of operations will depend on future developments and new information that may emerge regarding the severity and duration of the COVID-19 pandemic. If the current U.K. lockdown is extended for a significant period of time, or if additional lockdowns, other travel and business restrictions or additional restrictions are imposed in the Company’s markets, the adverse impact on the Company’s business, results of operations and cash flows could be material. The associated risks are further described in Item 1A. Risk Factors of this Form 10-K. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and reflect the consolidated accounts of the parent company, Group 1 Automotive, Inc., and its subsidiaries, all of which are wholly owned. All intercompany balances and transactions have been eliminated in consolidation. During the year ended December 31, 2020, the Company recorded an out-of-period adjustment of $10.6 million resulting in an increase to Selling, general and administrative expenses and Additional paid-in capital to correct stock-based compensation for awards granted in prior years to retirement eligible employees not recognized timely due to the incorrect treatment of a non-substantive service condition. The impact to the year ended December 31, 2020 was a decrease to net income of $9.7 million resulting in a decrease to diluted earnings per common share of $0.53. The effect of this adjustment on any previously reported period was not material based on a quantitative and qualitative evaluation. Certain prior-period amounts have been reclassified to conform to current-period presentation. Specifically, the long-term liabilities associated with the Company’s interest rate swaps have been reclassified from the caption Other long-term liabilities to the caption Long-term interest rate swap liabilities in the Consolidated Balance Sheets. This reclassification had no effect on any subtotal in the Consolidated Balance Sheets. Additionally, repayments and borrowings on the Company’s real estate related and other debt have been combined within the captions Repayments on other debt and Borrowings on other debt , respectively, in the Consolidated Statements of Cash Flows. The aforementioned reclassifications within the Consolidated Statements of Cash Flows had no effect on any subtotal in the statements. Certain amounts in the Consolidated Financial Statements and the accompanying notes may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented. These Consolidated Financial Statements reflect, in the opinion of management, all normal recurring adjustments necessary to fairly state, in all material respects, the Company’s financial position and results of operations for the periods presented. Use of Estimates The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances, however, actual results could differ materially from such estimates. The significant estimates made by management in the accompanying Consolidated Financial Statements include, but are not limited to, inventory valuation adjustments, reserves for future chargebacks on finance, insurance and vehicle service contract fees, self-insured property and casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation. Additionally, while the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date. Segment Reporting See discussion of the Company’s reportable segments in Note 19. Segment Information. Revenue Recognition Refer to the discussion of the Company’s revenue streams and accounting policies related to revenue recognition in Note 2. Revenues. Cash and Cash Equivalents Cash and cash equivalents include demand deposits and various other short-term investments with original maturities of three months or less at the date of purchase. Receivables Refer to Note 7. Receivables, Net and Contract Assets for further discussion of the Company’s receivable accounts and related accounting policies. Inventories New and used retail vehicles are initially valued in inventory at cost, which consists of the amount paid to acquire the inventory, plus the cost of reconditioning, cost of equipment added and transportation cost. All vehicles are carried at the lower of specific cost or net realizable value and are removed from inventory using the specific identification method in the Consolidated Balance Sheets. In determining the lower of specific cost or net realizable value of new and used vehicles, the Company considers historical loss experience and current market trends. Parts and accessories inventories are valued at lower of cost or net realizable value and determined on a first-in, first-out basis in the Consolidated Balance Sheets. The Company incurs shipping costs in connection with selling parts to customers which is included in Cost of Sales in the Consolidated Statements of Operations. Impairments of inventory, net of insurance proceeds, related to catastrophic events are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. During the year ended December 31, 2020, the Company recorded $0.9 million of impairment charges as a result of hail storms and flood damage from Hurricane Sally and Hurricane Zeta. During the years ended December 31, 2019 and 2018, impairments of inventory were $16.1 million and $6.1 million, respectively. Certain manufacturers offer rebates that result in purchase discounts once the incentives are met, providing the Company with volume incentives to order and/or sell certain models and/or volumes of inventory over designated periods of time. The Company also receives dealer rebates and incentive payments on parts purchases from the automobile manufacturers on new vehicle retail sales. Additionally, the Company receives interest assistance from certain automobile manufacturers that is reflected as a vehicle purchase price discount. The rebates, interest assistance and other dealer incentives reduce inventory costs in the Consolidated Balance Sheets and are reflected as a reduction to Cost of Sales in the Consolidated Statements of Operations as the vehicles are sold. Refer to Note 8. Inventories for further discussion of the Company’s inventory accounts. Property and Equipment, Net Property and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the estimated term of the lease or the estimated useful life of the asset. Property and equipment estimated useful lives are as follows: Estimated Buildings and leasehold improvements 25 to 50 Machinery and dealership equipment 7 to 20 Office equipment, furniture and fixtures 3 to 20 Company vehicles 3 to 5 Expenditures for major additions or improvements, which improve or extend the useful lives of the assets are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of the assets, are expensed as incurred. Disposals are removed at cost less accumulated depreciation, and any resulting gain or loss is reflected in Selling, general and administrative expenses in the Consolidated Statements of Operations. The Company reviews property and equipment for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). This review consists of comparing the carrying amount of the asset group with its expected future undiscounted cash flows. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. If the asset group’s carrying amount exceeds its future undiscounted cash flows, an impairment charge is measured as the amount by which its carrying amount exceeds its fair value. The fair value of property is typically based on a third appraisal which requires adjustments to market-based valuation inputs to reflect the different characteristics between the property being measured and comparable properties, which are considered level 3 inputs within the fair value hierarchy described further in Note 6. Financial Instruments and Fair Value Measurements. During the years ended December 31, 2020, 2019 and 2018, the Company recorded $4.2 million, $1.8 million and $5.1 million of impairment of property and equipment, respectively. Refer to Note 9. Property and Equipment, Net for further discussion . Business Combinations Business acquisitions are accounted for under the acquisition method of accounting. The allocations of purchase price to the assets acquired and liabilities assumed are assigned and recorded based on estimates of fair value as of the acquisition date, and are subject to change within the one year purchase price allocation period. The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of property and intangible franchise rights. The Company typically utilizes third-party experts to determine the fair values of property acquired. The Company utilizes the fair value model as discussed under the “Intangible Franchise Rights” section of this footnote to determine the fair value of intangible franchise rights acquired, supplemented with assistance from third-party experts as needed. Refer to Note 3. Acquisitions and Dispositions for further discussion of the Company’s business combinations. Goodwill and Intangible Franchise Rights Goodwill represents the excess, at the date of acquisition, of the purchase price of an acquired business over the fair value of the net tangible and intangible assets acquired. The Company is organized into three geographic regions, the U.S. region, the U.K. region and the Brazil region. The Company has determined that each region represents a reporting unit for the purpose of assessing goodwill for impairment. The Company’s only recognized identifiable intangible assets, other than goodwill, are rights under franchise agreements with manufacturers, which are recorded at the dealership level. The franchise agreements consist of terms that are definite as well as terms that do not expire. For the terms that are definite, the Company believes that these agreements can be renewed without substantial cost based on the history with the manufacturer. As such, none of the Company’s franchise rights are amortized as the Company believes that its franchise arrangements will contribute to cash flows for an indefinite period of time. The Company evaluates goodwill and intangible franchise rights for impairment annually in the fourth quarter as of October 31, or more frequently if events or circumstances indicate possible impairment has occurred. In evaluating goodwill and intangibles for impairment, an optional qualitative assessment may be initially performed to determine whether it is more- likely-than-not (i.e., a likelihood of greater than 50%) that an impairment exists. If it is concluded that it is more-likely-than-not that an impairment exists, a quantitative test is required to measure the amount of impairment which, for goodwill, consists of comparing the fair value of the reporting unit to its carrying amount and, for intangibles, consists of comparing the fair value of the intangible asset to its carrying amount. When a quantitative impairment test is performed, the Company estimates fair value of goodwill using a combination of the discounted cash flow, or income approach, and the market approach. The Company weights the income approach and market approach 80% and 20%, respectively, in the fair value model. For intangible franchise rights, the fair value of the respective franchise right is estimated using a discounted cash flow, or income approach. The income approach measures fair value by discounting expected future cash flows at a WACC that proportionately weights the cost of debt and equity. Significant assumptions in the model include revenue growth rates, future gross margins, future SG&A expenses, the WACC and terminal growth rates. The Company applies a five year projection period which aligns with the Company’s strategic plan. Key considerations in the assumed growth rates include industry SAAR projections, macroeconomic conditions including consumer confidence levels, unemployment rates and gross domestic product growth, and internal measures such as historical financial performance, cost control and planned capital expenditures. The revenue growth rates assume a significant increase in 2021 as the business recovers from the pandemic and limited increases in the next four years corresponding with the industry SAAR projections plus a return to more normal vehicle gross margins as inventories recover. Beyond the five forecasted years, the terminal value is determined using a perpetuity growth rate based on long-term inflation projections for each reporting unit. Significant inputs to the WACC include the risk free rate, an adjustment for stock market risk, an adjustment for company size risk and country risk adjustments for U.K. and Brazil. In 2020, the WACC applied in the impairment tests for the U.S., the U.K. and Brazil was 11%, 13% and 16%, respectively. For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pre-tax net income weighted as appropriate by reporting unit. Each of the significant assumptions to the fair value model are considered level 3 inputs within the fair value hierarchy described further in Note 6. Financial Instruments and Fair Value Measurements. Developing these assumptions requires applying management’s knowledge of the industry, recent transactions and reasonable performance expectations for its operations. The qualitative test includes a review of changes, since the last quantitative test was performed, in those assumptions having the most significant impact on the current year fair value, which are consistent with the significant assumptions identified in the quantitative test above. During the year ended December 31, 2020, the Company recorded goodwill impairment charges of $10.7 million within the Brazil reporting unit. No impairments were recorded during the years ended December 31, 2019 and 2018. During the years ended December 31, 2020, 2019 and 2018, the Company recorded $20.8 million, $19.0 million and $38.7 million, re spectively, of impairment of intangible franchise rights. The impairment charges were recognized within Asset impairments in the Company’s Consolidated Statements of Operations. Refer to Note 11. Intangible Franchise Rights and Goodwill for further discussion of the Company’s goodwill and intangibles, including results of its impairment testing. Income Taxes The Company is subject to income taxes at the federal level and in 15 states in the U.S., as well as in the U.K. and Brazil, each of which has unique tax rates and payment calculations. As the amount of income generated in each jurisdiction varies from period to period, the Company’s estimated effective tax rate can vary based on the proportion of taxable income generated in each jurisdiction. The Company follows the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the underlying assets are realized or liabilities are settled. A valuation allowance reduces deferred tax assets when it is more-likely-than-not that some or all of the deferred tax assets will not be realized. The Company has recognized deferred tax assets, net of valuation allowances, that it believes will be realized, based primarily on the assumption of future taxable income. As it relates to U.S. state net operating losses, as well as deferred tax assets primarily relating to net operating losses and goodwill for certain Brazil subsidiaries, a corresponding valuation allowance has been established to the extent that the Company has determined that net income attributable to certain jurisdictions may not be sufficient to realize the benefit. Refer to Note 14. Income Taxes for further discussion. Derivative Financial Instruments The Company holds derivative financial instruments consisting of interest rate swaps that are designated as cash flow hedges. Refer to the discussion of the Company’s accounting policies relating to its derivative financial instruments, including fair value measurements, in Note 6. Financial Instruments and Fair Value Measurements. Foreign Currency Translation The functional currency for the Company’s U.K. subsidiaries is GBP and for the Brazil subsidiaries is BRL. All assets and liabilities of foreign subsidiaries are translated into USD using period-end exchange rates and all revenues and expenses are translated at average rates during the respective period. The gains and losses resulting from translation adjustments are recorded in accumulated other comprehensive income (loss) in stockholders’ equity. Earnings Per Share Refer to the discussion of the Company’s earnings per share calculation in Note 5. Earnings Per Share. Advertising The Company expenses the costs of advertising as incurred. Advertising expense is included in Selling, general and administrative expenses in the Consolidated Statements of Operations and totaled $49.9 million for the year ended December 31, 2020, and $75.2 million for both years ended December 31, 2019 and 2018, respectively. The Company receives advertising assistance from certain automobile manufacturers, which the Company is required to spend on qualified advertising and which is subject to audit and chargeback by the manufacturer. The assistance is accounted for as a reduction to SG&A expenses as earned and amounted to $13.0 million, $15.4 million and $14.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. Business and Credit Risk Concentrations The Company owns and operates franchised automotive dealerships in the U.S., U.K. and Brazil. Automotive dealerships operate pursuant to franchise agreements with vehicle manufacturers. Franchise agreements generally provide the manufacturers or distributors with considerable influence over the operations of the dealership. The success of any franchised automotive dealership is dependent, to a large extent, on the financial condition, management, marketing, production and distribution capabilities of the vehicle manufacturers or distributors of which the Company holds franchises. The Company purchases substantially all of its new vehicles from various manufacturers or distributors at the prevailing prices to all franchised dealers. The Company’s sales volume could be adversely impacted by the manufacturers’ or distributors’ inability to supply the dealerships with an adequate supply of vehicles. The following table sets forth sales of manufacturers that comprised 10% or greater of the Company’s total new vehicle unit sales during the year ended December 31, 2020: Manufacturer Percentage of New Vehicle Retail Units Sold Toyota/Lexus 23.9 % Volkswagen/Audi/Porsche/SEAT/SKODA 14.9 % BMW/MINI 11.4 % Ford/Lincoln 10.5 % Concentrations of credit risk related to the Company’s customer base is primarily limited to financial institutions, vehicle manufacturers and other large institutions that have a national presence. The remaining customer base is mostly comprised of a large number of local customers widely dispersed across the various markets and regions in which the Company operates, and therefore does not result in concentration of credit risk. Refer to Note 7. Receivables, Net and Contract Assets for further discussion of the Company’s receivables. Statements of Cash Flows With respect to all new vehicle floorplan borrowings, the vehicle manufacturers draft the funds directly from the Company’s credit facilities with no cash flow to or from the Company. With respect to borrowings for used vehicle financing in the U.S., the Company finances up to 85% of the value of the used vehicle inventory and the borrowed funds flow from the lender directly to the Company. In the U.K. and Brazil, the Company chooses which used vehicles to finance and the borrowings flow directly to the Company from the lender. Excluding the cash flows from or to manufacturer affiliated lenders participating in the Company’s syndicated lending group under the Revolving Credit Facility as defined in Note 12. Floorplan Notes Payable, all borrowings from, and repayments to, lenders affiliated with the vehicle manufacturers are presented within Cash Flows from Operating Activities on the Consolidated Statements of Cash Flows. All borrowings from, and repayments to, the Company’s credit facilities (including the cash flows from or to manufacturer affiliated lenders participating in the Revolving Credit Facility) are presented within Cash Flows from Financing Activities. Refer to Note 18. Cash Flow Information for further discussion. Stock-Based Compensation Refer to the discussion of the Company’s share-based payment awards and related accounting policies in Note 4. Stock-Based Compensation Plans. Self-Insured Medical, Property and Casualty Reserves The Company purchases insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks and maintains reserves for liabilities related to its self-insured portions. With the assistance of a third-party actuary, the Company estimates these reserves using historical claims experience adjusted for loss trending and loss development factors, which are compiled at least on an annual basis. In the interim, the Company monitors actual experience for unusual variances that would impact the estimates. As of December 31, 2020 and 2019, the Company reserved $24.0 million and $24.4 million re lated to self-insured liabilities, respectively. Leases Refer to the discussion of the Company’s leases and related accounting policies in Note 10. Leases. The Company reviews ROU assets for impairment at the lowest level of identifiable cash flows whenever evidence exists that the carrying value of an asset may not be recoverable (i.e., triggering events). This review consists of comparing the carrying amount of the asset group with its expected future undiscounted cash flows. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. If the asset group’s carrying amount exceeds its future undiscounted cash flows, an impairment charge is measured as the amount by which its carrying amount exceeds its fair value. The fair value of the ROU asset is calculated based on the discounted market rent over the remaining lease period. The market rent reflects current lease rates on comparable properties and requires adjustments to reflect the different characteristics between the property being measured and the comparable property, which are considered level 3 inputs within the fair value hierarchy described further in Note 6. Financial Instruments and Fair Value Measurements. During the years ended December 31, 2020 and 2019, the Company recorded $2.0 million and $1.4 million , re spectively, of impairment of ROU assets. The impairment charges were recognized within Asset impairments in the Company’s Condensed Consolidated Statements of Operations. Refer to Note 10. Leases for further discussion of lease impairments . Recent Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The Company adopted this ASU on January 1, 2020. Refer to the discussion of the adoption in Note 7. Receivables, Net and Contract Assets. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The ASU provides optional expedients and exceptions for companies that have contracts, hedging relationships and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform. The optional expedients and exceptions apply during the transition period and are intended to ease the financial reporting burdens mainly related to contract modification accounting, hedge accounting and lease accounting. The transition period is effective as of March 12, 2020 and will apply through December 31, 2022. LIBOR is used as an interest rate “benchmark” in the majority of the Company’s floorplan notes payable, as well as its mortgages, other debt and lease contracts. Additionally, the Company’s derivative instruments are benchmarked to LIBOR. The Company will apply the relief described as its arrangements are modified and does not expect the adoption will have an impact on the Company’s consolidated financial statements due to the relief provided. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES The Company’s material revenue streams are the sale of new and used vehicles; the sale of vehicle parts; the performance of maintenance and repair services; and the arrangement of vehicle financing and the sale of service and other insurance contracts. Revenue recognition for each of these streams is discussed below. With respect to the cost of freight and shipping from the Company’s dealerships to its customers, the Company’s policy is to recognize such cost within cost of sales in the Consolidated Statements of Operations. Also, with respect to taxes imposed by governmental authorities on new and used vehicle sales transactions that are collected by the Company and remitted on behalf of its customers to the government, the Company’s policy is to exclude such taxes from revenues. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“Topic 606”) using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. The Company recognized an after-tax cumulative-effect adjustment to retained earnings of $4.8 million for maintenance and repair services and $6.6 million for the arrangement of associated vehicle financing and the sale of service and insurance contracts as of the date of adoption. The following tables present the Company's revenues disaggregated by its geographical segments (in millions): Year Ended December 31, 2020 U.S. U.K. Brazil Total New vehicle retail sales $ 4,406.6 $ 1,021.8 $ 152.4 $ 5,580.8 Used vehicle retail sales 2,348.5 707.2 50.0 3,105.7 Used vehicle wholesale sales 169.4 126.4 12.3 308.1 Total new and used vehicle sales 6,924.5 1,855.3 214.7 8,994.6 Parts and service sales (1) 1,162.6 194.8 31.9 1,389.3 Finance, insurance and other, net (2) 416.3 46.6 5.0 467.9 Total revenues $ 8,503.4 $ 2,096.8 $ 251.6 $ 10,851.8 Year Ended December 31, 2019 U.S. U.K. Brazil Total New vehicle retail sales $ 4,832.2 $ 1,195.1 $ 286.8 $ 6,314.1 Used vehicle retail sales 2,509.9 771.3 85.4 3,366.6 Used vehicle wholesale sales 174.5 162.3 18.3 355.2 Total new and used vehicle sales 7,516.6 2,128.7 390.6 10,035.9 Parts and service sales (1) 1,234.4 227.9 47.6 1,510.0 Finance, insurance and other, net (2) 433.2 57.0 7.6 497.9 Total revenues $ 9,184.2 $ 2,413.7 $ 445.9 $ 12,043.8 Year Ended December 31, 2018 U.S. U.K. Brazil Total New vehicle retail sales $ 4,682.8 $ 1,217.1 $ 281.4 $ 6,181.4 Used vehicle retail sales 2,307.0 771.7 87.4 3,166.1 Used vehicle wholesale sales 178.9 173.8 16.9 369.6 Total new and used vehicle sales 7,168.7 2,162.6 385.7 9,717.0 Parts and service sales (1) 1,153.3 217.6 46.0 1,416.9 Finance, insurance and other, net (2) 401.3 57.2 9.0 467.5 Total revenues $ 8,723.3 $ 2,437.4 $ 440.7 $ 11,601.4 (1) The Company has applied the optional exemption not to disclose revenues related to remaining performance obligations on its maintenance and repair services as the duration of these contracts is less than one year. (2) Includes variable consideration recognized of $27.6 million , $19.5 million and $18.7 million during the years ended December 31, 2020, 2019 and 2018, respectively, relating to performance obligations satisfied in previous periods on the Company’s retrospective commission income contracts. Refer to Arrangement of Vehicle Financing and the Sale of Service and Other Insurance Contracts section within this Note for further discussion of these arrangements. New and Used Retail Vehicle Sales Revenues from the sale of new and used vehicles is recognized upon delivery of the vehicle to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. In some cases, the Company uses a third-party transport company to facilitate delivery of used vehicles to the customer. The transaction price for new and used vehicle sales is the stand-alone sales price of each individual vehicle and is generally settled within 30 days of the satisfaction of the performance obligation. Used Vehicle Wholesale Sales When the Company uses a third-party auction to facilitate the delivery of used vehicles to the customer, the Company has determined that the auction acts as an agent under the arrangement. Therefore, the Company recognizes revenues and cost of sales on a gross basis upon delivery of the vehicle by the auction to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. The transaction price for wholesale vehicle sales is established by the winning bid under the auction process and is generally settled within 30 days of the satisfaction of the performance obligation. Parts Sales Revenues from the sale of vehicle parts is recognized upon delivery of the parts to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. The transaction price for vehicle parts sales is the stand-alone sales price of each individual part and is generally settled within 30 days of the satisfaction of the performance obligation. Service Sales The Company performs maintenance and repair services, including collision restoration. In certain jurisdictions, the Company has an enforceable right to payment for performance completed to date on open work orders and as such, the transfer of control of vehicle maintenance and repair services and satisfaction of the performance obligation to its customer occurs over time. For these contracts that qualify for revenue recognition over time, the Company uses the input method for the measurement of progress and recognition of revenues, utilizing labor cost incurred to estimate the services performed for which the Company has an enforceable right to payment. The Company believes this method is the most objective measure of progress and provides a faithful depiction of the Company’s transfer of services to the customer. The transaction price for maintenance and repair services is the total of the labor and, if applicable, vehicle parts used in the performance of the service, as well as the margin above cost charged to the customer. Arrangement of Vehicle Financing and the Sale of Service and Other Insurance Contracts The Company receives commissions from F&I providers for the arrangement of vehicle financing and the sale of service and other insurance products. Within the context of these contracts with the F&I providers, the Company has determined that it is an agent for the F&I providers. The Company has a single performance obligation associated with the F&I contracts, which is the facilitation of the financing of the vehicle or sale of the insurance product. Revenues from these contracts is recognized when the facilitated contract between the F&I provider and the customer is executed, which is when the performance obligation is satisfied. With regards to the upfront commission for these contracts, the transaction price is the amount earned for each individual contract executed and is generally collected within 30 days of the satisfaction of the performance Charge Backs The Company may be charged back in the future for commissions received on F&I contract or vehicle service contract fees in the event of early termination of the contracts by customers. A reserve for future amounts estimated to be charged back, representing variable consideration, is recorded as a reduction to Finance, insurance and other, net in the Consolidated Statements of Operations. The reserve is estimated based on the Company’s historical charge back results and the termination provisions of the applicable contracts, and was $47.1 million a nd $49.7 million at December 31, 2020 and 2019, respectively. Retrospective Commissions and Associated Contract Assets In some cases, the Company also earns retrospective commission income by participating in the future profitability of the portfolio of product contracts sold by the Company. This contingent consideration is variable and is generally settled over five to seven years from the satisfaction of the performance obligation. The Company utilizes the “expected value” method to predict the amount of consideration to which the Company will be entitled, subject to constraint in the estimate. The estimated amount under the expected value method is accrued upfront when the facilitated contract between the F&I provider and the customer is executed, which is when the performance obligation is satisfied. The estimated amount is reflected as a contract asset within Other current assets and Other long-term assets in the Consolidated Balance Sheets until the right to such consideration becomes unconditional, at which time amounts due are reclassified to accounts receivable. Changes in the estimated amount of variable consideration are adjusted through revenues. The change in contract assets during the year ended December 31, 2020 is reflected in the table below (in millions): F&I, Net Contract Assets, January 1, 2020 $ 21.6 Changes related to revenue recognition during the period 27.6 Amounts invoiced during the period (13.9) Contract Assets, December 31, 2020 $ 35.3 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Acquisitions As described in Note 1. Business and Summary of Significant Accounting Policies, the Company accounts for business combinations under the acquisition method of accounting, under which the Company allocates the purchase price to the assets and liabilities assumed based on an estimate of fair value. During the year ended December 31, 2020, the Company acquired a collision center in the U.S., which was integrated into an existing dealership. Aggregate consideration paid was $1.3 million. During the year ended December 31, 2019, the Company acquired four dealerships representing six franchises in the U.S. and four dealerships representing five franchises in the U.K. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, totaled $143.2 million. The Company also opened one dealership representing one franchise in the U.S. and two dealerships representing three franchises in the U.K. During the year ended December 31, 2018, the Company acquired four dealerships representing four franchises in the U.S., five dealerships representing eight franchises in the U.K. and one dealership representing one franchise in Brazil. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, totaled $140.4 million, including $5.1 million of cash received. The Company also opened one dealership representing one franchise in the U.S., added one franchise and opened one additional dealership representing one franchise in the U.K., and opened one dealership representing one franchise in Brazil. Dispositions During the year ended December 31, 2020, the Company’s dispositions included two dealerships representing three franchises in the U.S. The Company recorded a net pre-tax gain totaling $3.1 million related to these dispositions. During the year ended December 31, 2019, the Company’s dispositions included four dealerships representing seven franchises and two terminated franchises in the U.S., three dealerships representing four terminated franchises in the U.K. and one dealership representing one franchise in Brazil. The Company recorded a net pre-tax gain totaling $5.0 million related to these dispositions. During the year ended December 31, 2018, the Company’s dispositions included two dealerships representing three franchises and one terminated franchise in the U.S. and one dealership representing one franchise and one terminated franchise in the U.K. The Company recorded a net pre-tax gain totaling $24.4 million related to these dispositions. The Company’s dispositions generally consist of dealership assets and related real estate. Gains and losses on dispositions are recorded in Selling, general and administrative expenses |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS Under the Company’s 2014 Long Term Incentive Plan (the “Incentive Plan”), the Company currently grants RSAs, RSUs (also referred to as “Phantom Stock”) and performance awards to Company employees and non-employee directors. The aggregate maximum number of shares that may be issued or transferred under the Incentive Plan is 2.2 million. The Incentive Plan expires on May 21, 2024. The terms of the awards (including vesting schedules) are established by the Compensation Committee of the Company’s Board of Directors. As of December 31, 2020, there were 1.4 million shares available for issuance under the Incentive Plan. Restricted Stock Awards The Company grants RSAs to employees and non-employee directors, at no cost to the recipient. RSAs qualify as participating securities as each award contains non-forfeitable rights to dividends. As such, the two-class method is required for the computation of EPS. RSAs contain voting rights and are accounted for as outstanding when granted. Refer to Note 5. Earnings (Loss) Per Share for further details. RSAs are subject to vesting periods of up to five years and are considered outstanding at the date of grant. Compensation expense for RSAs is calculated based on the market price of the Company’s common stock at the date of grant and recognized over the requisite vesting period on a straight-line basis. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate is adjusted annually based on the extent to which actual or expected forfeitures differ from the previous estimate. The Company issues new shares of common stock or treasury shares, if available, to settle vested RSAs. The following table summarizes RSA activity and related information for 2020: Awards Weighted Average Nonvested at January 1, 2020 674,206 $ 70.19 Granted 180,925 $ 95.10 Vested (214,635) $ 73.65 Forfeited (19,953) $ 68.86 Nonvested at December 31, 2020 620,543 $ 76.22 The total fair value of RSAs that vested during the years ended December 31, 2020, 2019 and 2018 , was $15.8 million, $15.8 million and $15.2 million, respectively. As of December 31, 2020, there was $23.1 million of total unrecognized compensation cost related to RSAs which is expected to be recognized over a weighted-average period of 3.2 years. Restricted Stock Units Under the Incentive Plan, the Company grants to non-employee directors, at their election, RSUs, at no cost to the recipient. RSUs are vested 100% at the time of grant, and settled on the date of the directors “separation of service”, as such term is defined in IRS code §1.409A-1(h), and generally includes departure due to either death, disability, or retirement. RSUs convey no voting rights, and therefore are not considered outstanding when granted. Granted RSUs participate in dividends, however the dividends are not payable until a directors separation of service with the Company. In the event a director terminates his or her directorship with the Company for reasons other than defined above, the RSUs granted and any accrued dividends will be forfeited. Prior to January 1, 2019, RSUs settled in shares of the Company’s common stock. Effective January 1, 2019, RSUs will settle in a lump sum cash payment equal to the average of the Company’s high and low stock price on the separation of service date (no stock is issued) and constitute liability instruments, which require remeasurements to fair value each reporting period. The changes in fair value as a result of the changes in the Company’s stock price is recognized in Selling, general and administrative expenses in the Consolidated Statements of Operations. The following table summarizes cash-settled RSU activity and related information for 2020: Awards Weighted Average Unsettled at January 1, 2020 10,689 $ 53.33 Granted 5,982 $ 100.26 Unsettled at December 31, 2020 16,671 $ 130.30 As of December 31, 2020, the total liability for unsettled cash-settled RSUs, recorded at fair value, was $2.2 million. Performance Awards Under the Incentive Plan, the Company grants to certain employees shares of the Company’s common stock in the form of performance awards. The performance awards contain both performance and market conditions to be evaluated over a two three The following table summarizes performance awards activity and related information for 2020: Awards Weighted Average Nonvested at January 1, 2020 30,555 $ 65.83 Granted 20,992 $ 103.29 Forfeited (6,444) $ 80.62 Nonvested at December 31, 2020 45,103 $ 81.15 As of December 31, 2020, there was $1.0 million of total unrecognized compensation cost related to performance awards which is expected to be recognized over a weighted-average period of 1.6 years. Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “Purchase Plan”) authorizes the issuance of up to 4.5 million shares of common stock and provides that no options to purchase shares may be granted under the Purchase Plan after May 19, 2025. The Purchase Plan is available to all employees of the Company and its participating subsidiaries and is a qualified plan as defined by Section 423 of the Internal Revenue Code. At the end of each fiscal quarter (the “Option Period”) during the term of the Purchase Plan, employees can acquire shares of common stock from the Company at 85% of the fair market value of the common stock on the first or the last day of the Option Period, whichever is lower. As of December 31, 2020, there were 646,118 shares available for issuance under the Purchase Plan. During the years ended December 31, 2020, 2019 and 2018, the Company issued 202,393, 142,576 and 148,007 shares, respectively, of common stock to employees participating in the Purchase Plan. With respect to shares issued under the Purchase Plan, the Company’s Board of Directors has authorized specific share repurchases to fund the shares issuable under the Purchase Plan. The weighted average per share fair value of employee stock purchase rights issued pursuant to the Purchase Plan was $19.51, $16.00 and $15.15 during the years ended December 31, 2020, 2019 and 2018, respectively. The fair value of stock purchase rights is calculated using the grant date stock price, the value of the embed ded call option and the value of the embedded put option. Cash received from Purchase Plan purchases was $9.6 million, $8.6 million and $7.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. Employees can contribute a maximum of 10% of their compensation, up to a maximum of $25,000 annually under the Purchase Plan. Stock-Based Compensation Total stock-based compensation includes expenses for both equity and cash-settled awards and is recognized in Selling, general and administrative expenses in the Consolidated Statements of Operations. Stock-based compensation related to equity-settled awards was $32.3 million, $18.8 million and $18.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Stock-based compensation related to cash-settled awards was $1.1 million for both the years ended December 31, 2020 and 2019. The Company did not grant cash-settled awards prior to January 1, 2019, and therefore did not incur any such expense for the year ended December 31, 2018. Tax benefits related to total stock-based compensation were $5.0 million, $3.5 million and $3.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHAREThe two-class method is utilized for the computation of the Company’s EPS. The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends. The Company’s RSAs are participating securities. Income allocated to these participating securities is excluded from net earnings available to common shares, as shown in the table below. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period. The following table sets forth the calculation of EPS for the years ended December 31, 2020, 2019 and 2018 (in millions, except share and per share data): Years Ended December 31, 2020 2019 2018 Weighted average basic common shares outstanding 17,754,666 17,917,195 19,452,560 Dilutive effect of stock-based awards and employee stock purchases 51,912 18,879 8,492 Weighted average dilutive common shares outstanding 17,806,578 17,936,074 19,461,052 Basic: Net income (loss) $ 286.5 $ 174.0 $ 157.8 Less: Earnings (loss) allocated to participating securities 10.3 6.4 5.4 Net income (loss) available to basic common shares $ 276.2 $ 167.6 $ 152.4 Basic earnings (loss) per common share $ 15.55 $ 9.35 $ 7.83 Diluted: Net income (loss) $ 286.5 $ 174.0 $ 157.8 Less: Earnings (loss) allocated to participating securities 10.3 6.4 5.4 Net income (loss) available to diluted common shares $ 276.2 $ 167.6 $ 152.4 Diluted earnings (loss) per common share $ 15.51 $ 9.34 $ 7.83 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the most advantageous market in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: • Level 1 — Quoted prices for identical assets or liabilities in active markets. • Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or model-derived valuations or other inputs that are observable or that can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Cash and Cash Equivalents, Contracts-In-Transit and Vehicle Receivables, Accounts and Notes Receivables, Accounts Payable, Variable Rate Long-Term Debt and Floorplan Notes Payable The fair values of these financial instruments approximate their carrying values due to the short-term nature of these instruments and/or the existence of variable interest rates. Demand Notes The Company periodically invests in demand notes with manufacturer-affiliated finance companies that bear interest at a variable rate determined by the manufacturer and represent unsecured, unsubordinated and unguaranteed debt obligations of the manufacturer. The instruments are redeemable on demand by the Company and therefore these instruments are recorded in Cash and cash equivalents in the accompanying Consolidated Balance Sheets. As of December 31, 2020, the carrying value of these instruments was $60.0 million, and there was no material carrying value as of December 31, 2019. The Company determined that the valuation measurement inputs of these instruments include inputs other than quoted market prices, that are observable or that can be corroborated by observable data by correlation. Accordingly, the Company has classified these instruments within Level 2 of the hierarchy framework. Fixed Rate Long-Term Debt The Company’s fixed rate long-term debt primarily consists of amounts outstanding under its senior unsecured notes and certain mortgage facilities. See Note 13. Debt for further discussion of the Company’s long-term debt arrangements. On August 17, 2020, the Company issued $550.0 million in aggregate principal of 4.00% Senior Notes due August 2028 (“4.00% Senior Notes”). Refer to Note 13. Debt for further discussion of the issuance. The Company estimates the fair value of its 4.00% Senior Notes using quoted prices for the identical liability (Level 1) and estimates the fair value of its fixed-rate mortgage facilities using a present value technique based on current market interest rates for similar types of financial instruments (Level 2). The carrying value and fair value of the Company’s 4.00% Senior Notes and fixed-rate mortgages were as follows (in millions): December 31, 2020 December 31, 2019 Carrying Value (1) Fair Value Carrying Value (1) Fair Value 4.00% Senior Notes $ 550.0 $ 567.0 $ — $ — Real estate related 84.3 77.0 40.7 41.1 Total $ 634.3 $ 644.0 $ 40.7 $ 41.1 (1) Carrying value excludes unamortized debt issuance costs. On April 2, 2020, the Company fully redeemed $300.0 million in aggregate principal amount of its outstanding 5.25% Senior Notes due June 2023. Refer to Note 13. Debt for further discussion of the redemption. On September 2, 2020, the Company fully redeemed $550.0 million in aggregate principal amount of its outstanding 5.00% Senior Notes due June 2022. Refer to Note 13. Debt for further discussion of the redemption. Asset Impairments When an asset impairment is required, the Company impairs any carrying value of the asset in excess of the estimated fair value of the asset, which includes goodwill, intangible franchise rights, property and equipment and ROU assets. Refer to Note 1. Business and Summary of Significant Accounting Policies for further discussion of the significant inputs to the respective fair value models and their levels within the fair value hierarchy. Derivative Financial Instruments The Company holds interest rate swaps to hedge against variability of interest payments indexed to LIBOR. The interest rate swaps are designated as cash flow hedges and the related gains or losses are deferred in stockholders’ equity as a component of Accumulated other comprehensive income (loss) . The deferred gains or losses are recognized in income in the period in which the related items being hedged are recognized in expense. Monthly contractual settlements of the positions are recognized as Floorplan interest expense or Other interest expense, net, in the Company’s Consolidated Statements of Operations. The Company had no gains or losses related to ineffectiveness recognized in the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020, the Company held 36 interest rate swaps in effect with a total notional value of $798.7 million that fixed its underlying one-month LIBOR at a weighted average rate of 1.4%. The Company also held 10 interest rate swaps with forward start dates beginning January 2021, that had an aggregate notional value of $575.0 million with a weighted average interest rate of 1.4% as of December 31, 2020. The maturity dates of the Company’s interest rate swaps range between August 2021 and December 2031. The Company’s interest rate swaps are measured at fair value utilizing the option-pricing Black-Scholes present value technique. This technique utilizes a one-month LIBOR forward yield curve matched to the identical maturity term of the instrument being measured. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. The fair value of the interest rate swaps also considers the credit risk of the Company for instruments in a liability position or the counterparty for instruments in an asset position. The credit risk is calculated using the spread between the one-month LIBOR yield curve and the relevant interest rate according to rating agencies. The inputs to the fair value measurements reflect Level 2 inputs. Assets and liabilities associated with the Company’s interest rate swaps as reflected in the Consolidated Balance Sheets were as follows (in millions): December 31, 2020 2019 Assets: Other current assets $ 1.9 $ — Other long-term assets 0.3 1.9 Total assets $ 2.3 $ 1.9 Liabilities: Accrued expenses and other current liabilities $ 4.2 $ 2.8 Long-term interest rate swap liabilities 40.6 4.4 Total liabilities $ 44.8 $ 7.2 The following tables present the impact of the Company’s interest rate swaps (in millions): Amount of Unrealized Income (Loss), Net of Tax, Recognized in Other Comprehensive Income (Loss) Years Ended December 31, Derivatives in Cash Flow Hedging Relationship 2020 2019 2018 Interest rate swaps $ (36.7) $ (13.3) $ 6.5 Amount of Income (Loss) Reclassified from Other Comprehensive Income (Loss) into Statements of Operations Income Statement Classification Years Ended December 31, 2020 2019 2018 Floorplan interest expense, net $ (7.9) $ (0.4) $ (4.7) Other interest expense, net $ (2.9) $ 0.1 $ (0.5) The net amount of loss expected to be reclassified out of Accumulated other comprehensive income (loss) into earnings as an offset to Floorplan interest expense or Other interest expense, net in the next twelve months is $2.3 million. |
Receivables, Net and Contract A
Receivables, Net and Contract Assets | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
RECEIVABLES, NET AND CONTRACT ASSETS | RECEIVABLES, NET AND CONTRACT ASSETS Contracts-in-Transit and Vehicle Receivables Contracts-in-transit and vehicle receivables consist primarily of amounts due from financing institutions on retail finance contracts from vehicle sales, and also includes receivables related to vehicle wholesale sales. Accounts and Notes Receivable Accounts and notes receivable consist primarily of amounts due from manufacturers related to dealer incentives, and also includes receivables related to parts and service sales. The Company’s receivables and contract assets consisted of the following (in millions): December 31, 2020 2019 Contracts-in-transit and vehicle receivables, net: Contracts-in-transit $ 147.1 $ 169.9 Vehicle receivables 64.5 84.3 Total contracts-in-transit and vehicle receivables 211.5 254.1 Less: allowance for doubtful accounts (1) 0.3 0.3 Total contracts-in-transit and vehicle receivables, net $ 211.2 $ 253.8 Accounts and notes receivables, net: Manufacturer receivables $ 108.7 $ 123.9 Parts and service receivables 53.2 57.0 F&I receivables 27.4 28.3 Other 13.8 18.7 Total accounts and notes receivables 203.1 227.9 Less: allowance for doubtful accounts (1) 3.2 2.8 Total accounts and notes receivables, net $ 200.0 $ 225.1 Within Other current assets and Other long-term assets: Total contract assets (1), (2) $ 35.3 $ 21.6 (1) The allowance for doubtful accounts as of December 31, 2020 is calculated under the current expected credit loss (“CECL”) model described below, which was introduced under ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), that became effective for the Company on January 1, 2020. The adoption of ASC 326 did not materially change the calculation of the allowance for doubtful accounts. (2) See further discussion of the Company’s Contract Assets balance at Note 2. Revenues. No allowance for doubtful accounts was recorded as of December 31, 2020 or December 31, 2019. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The Company’s inventories consisted of the following (in millions): December 31, 2020 2019 New vehicles $ 902.5 $ 1,328.6 Used vehicles 374.8 346.7 Rental vehicles 110.7 140.9 Parts, accessories and other 80.1 85.5 Total inventories $ 1,468.0 $ 1,901.7 As described in Note 1. Business and Summary of Significant Accounting Policies, inventories are valued at lower of cost or net realizable value. The lower of specific cost or net realizable value adjustments reduced total inventory cost by $8.8 million a nd $9.7 m illion at December 31, 2020 and 2019, respectively. Interest assistance reduced inventory costs by $7.4 million a nd $10.7 million at December 31, 2020 and 2019, respectively, and reduced cost of sales by $47.3 million, $49.1 million and $47.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Refer to Note 1. Business and Summary of Significant Accounting Policies for further discussion of the Company’s accounting policies for inventories. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The Company’s property and equipment consisted of the following (in millions): December 31, 2020 2019 Land $ 619.8 $ 571.3 Buildings and leasehold improvements 1,107.1 1,067.6 Machinery and dealership equipment 145.8 138.2 Office equipment, furniture and fixtures 124.1 118.5 Company vehicles 15.0 15.1 Construction in progress 56.6 36.5 Total 2,068.4 1,947.3 Less: accumulated depreciation and amortization 460.2 400.2 Property and equipment, net $ 1,608.2 $ 1,547.1 For the years ended December 31, 2020, 2019 and 2018 the Company recognized $4.2 million, $1.3 million and $5.1 millio n, respectively, in asset impairment charges related to property and equipment in the Company’s U.S. segment. For the year ended December 31, 2019, the Company recognized $0.5 million in asset impairment charges related to property and equipment in the Company’s Brazil segment. Property and equipment impairment charges are reflected in Asset impairments in the Consolidated Statements of Operations. Depreciation and amortization expense totaled $75.8 million, $71.6 million and $67.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company capitalized $1.1 million, $1.3 million and $1.3 million of interest on construction projects for the years ended December 31, 2020, 2019 and 2018, |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases real estate, office equipment and dealership operating assets under long-term lease agreements and subleases certain real estate to third parties. On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (“Topic 842”) and all subsequent amendments using the optional transition method applied to leases existing at January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting policies under ASC Topic 840, Leases (“ASC 840”). Upon adoption of Topic 842, the Company recognized ROU assets and lease liabilities based on the present value of its remaining minimum rental payments for existing operating leases as of the adoption date, utilizing the Company’s applicable incremental borrowing rate also as of the adoption date. The adoption of Topic 842 resulted in the Company recognizing $222.6 million of operating ROU assets and $236.7 million of operating lease liabilities as of January 1, 2019. The difference between ROU assets and lease liabilities was primarily due to the recognition of a $6.1 million cumulative-effect adjustment, net of deferred tax impact, to retained earnings as of January 1, 2019 resulting from the impairment of certain operating ROU assets upon the adoption of Topic 842. The remaining difference between the ROU assets and lease liabilities is primarily the result of prepaid rent. The Company’s accounting for its finance leases, previously termed capital leases under ASC 840, remained substantially unchanged. The adoption of Topic 842 had no material net impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. The Company recognizes ROU assets and lease liabilities at commencement based on the present value of lease payments over the lease term. For such leases, the aggregate present value of the Company’s lease payments may include options to purchase the leased property or lease terms with options to renew or terminate the lease, when the option is at the Company’s sole discretion and it is reasonably certain that the Company will exercise such an option. The Company’s leases may also include rental payments adjusted periodically for inflation. Payments based on a change in an index or rates are not considered in the determination of lease payments for purposes of measuring the related lease liability. The Company discounts lease payments using its incremental borrowing rate based on information available as of the measurement date. Subsequent to the recognition of its ROU assets and lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. None of the Company’s lease agreements contain material residual value guarantees or material restrictive covenants. For the Company’s dealership operating leases, the Company has elected to separate lease and non-lease components and has allocated the consideration between the lease and non-lease components based on the estimated fair value of the leased component. For all other asset classes, the Company has elected to combine and account for both lease and non-lease components as a single component. The Company has elected not to record leases with an initial term of 12 months or less on the balance sheet for all asset classes. The Company performs interim reviews of its ROU assets for impairment when evidence exists that the carrying value of an asset may not be recoverable. During the year ended December 31, 2020, the Company recognized ROU asset impairment charges of $1.8 million within the U.K. segment and $0.2 million within the Brazil segment. During the year ended December 31, 2019, the Company recognized $1.4 million within the U.K. segment. All of the aforementioned impairment charges were related to operating leases and were recognized within Asset impairments in the Company's Consolidated Statements of Operations. Additional information regarding the Company’s operating and finance leases is as follows (in millions, except for lease term and discount rate information): Leases Balance Sheet Classification December 31, 2020 December 31, 2019 Assets: Operating Operating lease assets $ 209.9 $ 220.1 Finance Property and equipment, net 117.8 75.5 Total $ 327.7 $ 295.5 Liabilities: Current: Operating Current operating lease liabilities $ 21.5 $ 24.6 Finance Current maturities of long-term debt 9.4 6.6 Noncurrent: Operating Operating lease liabilities, net of current portion 207.6 210.7 Finance Long-term debt, net of current maturities 115.5 76.3 Total $ 353.9 $ 318.3 Lease Expense Income Statement Classification Year Ended December 31, 2020 Year Ended December 31, 2019 Operating Selling, general and administrative expenses $ 35.3 $ 40.1 Operating Asset impairments 2.0 1.4 Variable Selling, general and administrative expenses 2.8 2.3 Sublease income Selling, general and administrative expenses (1.3) (1.5) Finance: Amortization of lease assets Depreciation and amortization expense 6.3 5.5 Interest on lease liabilities Other interest expense, net 7.0 4.8 Net lease expense $ 52.1 $ 52.6 December 31, 2020 Maturities of Lease Liabilities Operating Leases Finance Leases 2021 $ 33.4 $ 16.2 2022 33.3 12.8 2023 31.0 11.5 2024 26.6 25.2 2025 24.1 33.9 Thereafter 182.0 71.2 Total lease payments 330.3 170.8 Less: lease payments representing interest (101.2) (45.9) Present value of lease liabilities $ 229.1 $ 124.9 Weighted-Average Lease Term and Discount Rate December 31, 2020 December 31, 2019 Weighted-average remaining lease terms: Operating 12.8 11.0 Finance 15.9 11.8 Weighted-average discount rates: Operating 5.6 % 6.1 % Finance 6.2 % 7.2 % Other Information December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 35.2 $ 41.6 Operating cash flows used in finance leases $ 7.0 $ 4.8 Financing cash flows used in finance leases $ 6.3 $ 3.8 ROU assets obtained in exchange for lease obligations: Operating leases, initial recognition $ 4.3 $ 34.0 Operating leases, modifications and remeasurements $ 9.7 $ (9.1) Finance leases, initial recognition $ 15.7 $ 29.6 Finance leases, modifications and remeasurements $ 31.8 $ 8.2 |
LEASES | LEASES The Company leases real estate, office equipment and dealership operating assets under long-term lease agreements and subleases certain real estate to third parties. On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (“Topic 842”) and all subsequent amendments using the optional transition method applied to leases existing at January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting policies under ASC Topic 840, Leases (“ASC 840”). Upon adoption of Topic 842, the Company recognized ROU assets and lease liabilities based on the present value of its remaining minimum rental payments for existing operating leases as of the adoption date, utilizing the Company’s applicable incremental borrowing rate also as of the adoption date. The adoption of Topic 842 resulted in the Company recognizing $222.6 million of operating ROU assets and $236.7 million of operating lease liabilities as of January 1, 2019. The difference between ROU assets and lease liabilities was primarily due to the recognition of a $6.1 million cumulative-effect adjustment, net of deferred tax impact, to retained earnings as of January 1, 2019 resulting from the impairment of certain operating ROU assets upon the adoption of Topic 842. The remaining difference between the ROU assets and lease liabilities is primarily the result of prepaid rent. The Company’s accounting for its finance leases, previously termed capital leases under ASC 840, remained substantially unchanged. The adoption of Topic 842 had no material net impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. The Company recognizes ROU assets and lease liabilities at commencement based on the present value of lease payments over the lease term. For such leases, the aggregate present value of the Company’s lease payments may include options to purchase the leased property or lease terms with options to renew or terminate the lease, when the option is at the Company’s sole discretion and it is reasonably certain that the Company will exercise such an option. The Company’s leases may also include rental payments adjusted periodically for inflation. Payments based on a change in an index or rates are not considered in the determination of lease payments for purposes of measuring the related lease liability. The Company discounts lease payments using its incremental borrowing rate based on information available as of the measurement date. Subsequent to the recognition of its ROU assets and lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. None of the Company’s lease agreements contain material residual value guarantees or material restrictive covenants. For the Company’s dealership operating leases, the Company has elected to separate lease and non-lease components and has allocated the consideration between the lease and non-lease components based on the estimated fair value of the leased component. For all other asset classes, the Company has elected to combine and account for both lease and non-lease components as a single component. The Company has elected not to record leases with an initial term of 12 months or less on the balance sheet for all asset classes. The Company performs interim reviews of its ROU assets for impairment when evidence exists that the carrying value of an asset may not be recoverable. During the year ended December 31, 2020, the Company recognized ROU asset impairment charges of $1.8 million within the U.K. segment and $0.2 million within the Brazil segment. During the year ended December 31, 2019, the Company recognized $1.4 million within the U.K. segment. All of the aforementioned impairment charges were related to operating leases and were recognized within Asset impairments in the Company's Consolidated Statements of Operations. Additional information regarding the Company’s operating and finance leases is as follows (in millions, except for lease term and discount rate information): Leases Balance Sheet Classification December 31, 2020 December 31, 2019 Assets: Operating Operating lease assets $ 209.9 $ 220.1 Finance Property and equipment, net 117.8 75.5 Total $ 327.7 $ 295.5 Liabilities: Current: Operating Current operating lease liabilities $ 21.5 $ 24.6 Finance Current maturities of long-term debt 9.4 6.6 Noncurrent: Operating Operating lease liabilities, net of current portion 207.6 210.7 Finance Long-term debt, net of current maturities 115.5 76.3 Total $ 353.9 $ 318.3 Lease Expense Income Statement Classification Year Ended December 31, 2020 Year Ended December 31, 2019 Operating Selling, general and administrative expenses $ 35.3 $ 40.1 Operating Asset impairments 2.0 1.4 Variable Selling, general and administrative expenses 2.8 2.3 Sublease income Selling, general and administrative expenses (1.3) (1.5) Finance: Amortization of lease assets Depreciation and amortization expense 6.3 5.5 Interest on lease liabilities Other interest expense, net 7.0 4.8 Net lease expense $ 52.1 $ 52.6 December 31, 2020 Maturities of Lease Liabilities Operating Leases Finance Leases 2021 $ 33.4 $ 16.2 2022 33.3 12.8 2023 31.0 11.5 2024 26.6 25.2 2025 24.1 33.9 Thereafter 182.0 71.2 Total lease payments 330.3 170.8 Less: lease payments representing interest (101.2) (45.9) Present value of lease liabilities $ 229.1 $ 124.9 Weighted-Average Lease Term and Discount Rate December 31, 2020 December 31, 2019 Weighted-average remaining lease terms: Operating 12.8 11.0 Finance 15.9 11.8 Weighted-average discount rates: Operating 5.6 % 6.1 % Finance 6.2 % 7.2 % Other Information December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 35.2 $ 41.6 Operating cash flows used in finance leases $ 7.0 $ 4.8 Financing cash flows used in finance leases $ 6.3 $ 3.8 ROU assets obtained in exchange for lease obligations: Operating leases, initial recognition $ 4.3 $ 34.0 Operating leases, modifications and remeasurements $ 9.7 $ (9.1) Finance leases, initial recognition $ 15.7 $ 29.6 Finance leases, modifications and remeasurements $ 31.8 $ 8.2 |
Intangible Franchise Rights and
Intangible Franchise Rights and Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE FRANCHISE RIGHTS AND GOODWILL | INTANGIBLE FRANCHISE RIGHTS AND GOODWILL The Company evaluates its intangible assets, consisting entirely of indefinite-lived franchise rights and goodwill assets, for impairment annually, or more frequently if events or circumstances indicate possible impairment. Refer to Note 1. Business and Summary of Significant Accounting Policies for further discussion of the Company’s accounting policies relating to impairment testing, including the fair value models and significant inputs and assumptions to the models. As described in Note 1. Business and Summary of Significant Accounting Policies, since emerging in December 2019, the COVID-19 pandemic has spread globally, including to all of the Company’s markets in the U.S., U.K. and Brazil. While the U.S. and U.K. began to show signs of recovery in the second quarter of 2020, the Company’s showrooms in Brazil did not fully reopen until May 2020 and then operated at reduced hours. Despite operations resuming in Brazil, the impact of the virus continued to worsen in the second quarter and had not yet reached its peak in some of the Company’s Brazilian markets. The slower than expected recovery from the COVID-19 pandemic in Brazil during the second quarter of 2020 constituted a triggering event indicating that goodwill may be impaired. Therefore the Company performed a quantitative goodwill impairment test for the Brazil reporting unit as of May 31, 2020 and as a result, the Company recorded a goodwill impairment charge of $10.7 million within the Brazil reporting unit. There was no remaining goodwill balance in the Brazil segment following the impairment charges recorded in the second quarter of 2020. The impact of the COVID-19 pandemic on the economy and unemployment during the second quarter of 2020 also adversely impacted the Company’s long-term outlook projections compared to the projections in first quarter of 2020. As a result, it was concluded that it was more-likely-than-not that the intangible franchise rights of some dealerships were impaired, requiring a quantitative test as of May 31, 2020. As a result of the quantitative impairment test, the Company determined that the fair value of the franchise rights on certain dealerships in the U.K. and Brazil were below their respective carrying values, which resulted in franchise rights impairment charges of $11.1 million in the U.K. segment and $0.1 million in the Brazil segment. There was no remaining intangible franchise rights balance in the Brazil segment following the impairment charges recorded in the second quarter of 2020. The Company performed its annual impairment assessment of the carrying value of its goodwill and intangible franchise rights as of October 31, 2020. For the goodwill test, the Company elected to perform a qualitative assessment of each of its reporting units and determined that it was not more-likely-than-not that the fair value of the reporting unit was less than its respective carrying amount. Thus, no additional goodwill impairment was recorded for the year ended December 31, 2020. For the intangible franchise rights test, the Company elected to perform a qualitative assessment to determine whether it was more-likely-than-not that the carrying value of the franchise rights were more than their respective fair values. Based on the results of the qualitative assessment, certain dealerships required a quantitative test based on their actual results through October 31, 2020 and an update of the annual budget in the fourth quarter of 2020. This resulted in additional franchise rights impairment charges of $9.7 million in the U.S. segment during the fourth quarter of 2020. During the year ended December 31, 2019, the Company recorded $13.4 million in the U.S. segment and $5.6 million in the U.K. segment of impairments on intangible franchise rights. During the year ended December 31, 2018, the company recorded $38.3 million in the U.S. segment and $0.5 million in the U.K. segment of impairments on intangible franchise rights. During the year ended December 31, 2020, no additional intangible franchise rights were purchased or acquired through business combinations. During the year ended December 31, 2019, the Company recorded additional indefinite-lived intangible franchise rights acquired through business combinations of $12.1 million in the U.S segment. Refer to Note 3. Acquisitions and Dispositions for further discussion of the Company’s acquisitions. The following table presents the Company’s intangible franchise rights balances by reportable segment as of December 31, 2020 and 2019 (in millions): Intangible Franchise Rights U.S. U.K. Brazil Total Balance, December 31, 2019 $ 223.1 $ 30.4 $ 0.1 $ 253.5 Balance, December 31, 2020 $ 213.4 $ 19.4 $ — $ 232.8 The following is a roll-forward of the Company’s goodwill accounts by reporting unit (in millions): Goodwill U.S. U.K. Brazil Total Balance, December 31, 2018 (1) $ 861.6 $ 87.6 $ 14.7 $ 963.9 Additions through acquisitions 42.0 1.3 — 43.3 Disposals (1.3) — (0.3) (1.6) Currency translation — 3.2 (0.5) 2.7 Balance, December 31, 2019 (1) $ 902.3 $ 92.1 $ 13.9 $ 1,008.3 Additions through acquisitions 1.4 — — 1.4 Disposals (2.0) — — (2.0) Impairments — — (10.7) (10.7) Currency translation — 3.2 (3.1) 0.1 Balance, December 31, 2020 $ 901.7 $ 95.4 $ — $ 997.1 (1) Net of accumulated impairments of $97.8 million, comprised of $40.6 million in the U.S. reporting unit and $57.2 million in the Brazil reporting unit. |
Floorplan Notes Payable
Floorplan Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
FLOORPLAN NOTES PAYABLE | FLOORPLAN NOTES PAYABLE The Company’s floorplan notes payable consisted of the following (in millions): December 31, 2020 2019 Revolving credit facility — floorplan notes payable $ 901.6 $ 1,206.0 Revolving credit facility — floorplan notes payable offset account (160.4) (106.8) Revolving credit facility — floorplan notes payable, net 741.2 1,099.1 Other non-manufacturer facilities 26.4 45.3 Floorplan notes payable — credit facility and other, net $ 767.6 $ 1,144.4 FMCC facility $ 111.2 $ 208.5 FMCC facility offset account (16.0) (4.1) FMCC facility, net 95.2 204.5 Other manufacturer affiliate facilities 232.3 255.4 Floorplan notes payable — manufacturer affiliates, net $ 327.5 $ 459.9 Floorplan Notes Payable — Credit Facility Revolving Credit Facility In the U.S., the Company has a $1.75 billion revolving syndicated credit arrangement with 22 participating financial institutions that matures on June 27, 2024 (“Revolving Credit Facility”). The Revolving Credit Facility consists of two tranches: (i) a $1.70 billion maximum capacity tranche for U.S. vehicle inventory floorplan financing (“U.S. Floorplan Line”) which had the outstanding balance, net of offset account discussed below, is reported in Floorplan notes payable — credit facility and other, net ; and (ii) a $349.0 million maximum capacity and $50.0 million minimum capacity tranche (“Acquisition Line”), which is not due until maturity of the Revolving Credit Facility and is therefore classified in Long-term debt — see Note 13. Debt for additional discussion. The capacity under these two tranches can be re-designated within the overall $1.75 billion commitment, subject to the aforementioned limits. The Acquisition Line includes a $100 million sub-limit for letters of credit. As of December 31, 2020 and 2019, the Company had $17.8 million and $23.6 million, respectively, in outstanding letters of credit. The U.S. Floorplan Line bears interest at rates equal to LIBOR plus 110 basis points for new vehicle inventory and LIBOR plus 140 basis points for used vehicle inventory. The weighted average interest rate on the U.S. Floorplan line was 1.20% as December 31, 2020, excluding the impact of the Company’s interest rate derivative instruments. The Acquisition Line bears interest at LIBOR or a LIBOR equivalent plus 100 to 200 basis points, depending on the Company’s total adjusted leverage ratio, on borrowings in USD, Euros or GBP. The U.S. Floorplan Line requires a commitment fee of 0.15% per annum on the unused portion. Amounts borrowed by the Company under the U.S. Floorplan Line for specific vehicle inventory are to be repaid upon the sale of the vehicle financed and in no case is a borrowing for a vehicle to remain outstanding for greater than one year. The Acquisition Line requires a commitment fee ranging from 0.15% to 0.40% per annum, depending on the Company’s total adjusted leverage ratio, based on a minimum commitment of $50.0 million less outstanding borrowings. In conjunction with the Revolving Credit Facility, the Company has $3.6 million and $4.7 million of related unamortized debt issuance costs as of December 31, 2020 and 2019, respectively, which are included in Prepaid expenses and Other long-term assets in the Company’s Consolidated Balance Sheets and amortized over the term of the facility. Under the Revolving Credit Facility, dividends are permitted to the extent that no event of default exists and the Company is in compliance with the financial covenants contained therein. The indentures governing the 4.00% Senior Note and certain mortgage term loans also contain restrictions on the Company’s ability to pay dividends and to repurchase shares of outstanding common stock. After giving effect to the applicable restrictions on share repurchases and certain other transactions under the debt agreements, the Company was limited to $235.3 million of such restrictions as of December 31, 2020. Offset Accounts Offset accounts consist of immediately available cash used to pay down the U.S. Floorplan Line and FMCC Facility, and therefore offset the respective outstanding balances in the Company’s Consolidated Balance Sheets. The offset accounts are the Company’s primary options for the short-term investment of excess cash. Floorplan Notes Payable — Manufacturer Affiliates FMCC Facility The Company has a $300.0 million floorplan arrangement with FMCC for financing of new Ford vehicles in the U.S. This facility bears interest at the higher of the actual U.S. Prime rate or a Prime floor of 4.00%, plus 150 basis points minus certain incentives. The interest rate on the FMCC Facility was 5.50% before considering the applicable incentives as of December 31, 2020. Other Manufacturer Facilities |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt consisted of the following (in millions): December 31, 2020 2019 4.00% Senior Notes due August 15, 2028 $ 550.0 $ — 5.00% Senior Notes aggregate principal redeemed September 2, 2020 — 550.0 5.25% Senior Notes aggregate principal redeemed April 2, 2020 — 300.0 Acquisition Line 47.8 72.5 Other debt: Real estate related 619.8 453.3 Finance leases 124.8 83.0 Other 20.0 42.8 Total other debt 764.6 579.1 Total debt 1,362.4 1,501.6 Less: unamortized discount — 5.6 Less: unamortized debt issuance costs 11.0 4.8 Less: current maturities 56.7 59.1 Total long-term debt $ 1,294.7 $ 1,432.1 The aggregate annual maturities of debt for the next five years, excluding debt issuance costs, are as follows (in millions): Total Years Ended December 31, 2021 $ 57.3 2022 70.1 2023 94.9 2024 144.9 2025 93.1 Thereafter 902.2 Total $ 1,362.4 4.00% Senior Notes The Company has the following Senior Notes outstanding as of December 31, 2020: Description Principal Amount Maturity Date Effective Interest Rate (1) Interest Payment Dates 4.00% Senior Notes $550.0 August 15, 2028 4.21% February 15 th , August 15 th (1) The effective interest rate is after the impact of associated debt issuance costs. The Company, at its option, may redeem some or all of the Senior Notes at the redemption prices (expressed as percentages of principal amount of the notes) set forth below, plus accrued and unpaid interest. Redemption Period Redemption Price August 15, 2023 102.000% August 15, 2024 101.333% August 15, 2025 100.667% August 15, 2026 and thereafter 100.000% The 4.00% Senior Notes are unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of the Company’s future subordinated debt. The 4.00% Senior Notes are guaranteed by substantially all of the Company’s U.S. subsidiaries. The U.S. subsidiary guarantees rank equally in the right of payment to all of the Company’s U.S. subsidiary guarantor’s existing and future senior unsecured debt. The Company may be required to purchase the 4.00% Senior Notes if it sells certain assets or triggers the change in control provisions defined in the senior notes indenture. The 4.00% Senior Notes contain customary restrictions on the Company, including the ability to pay dividends, incur additional indebtedness, create liens, sell or otherwise dispose of assets and repurchase shares of outstanding common stock. Such restrictions are similar to those contained in the Company’s 5.00% and 5.25% Senior Notes that were redeemed in the current year, as described further below. 5.00% Senior Notes Redemption On September 2, 2020, the Company fully redeemed $550.0 million in aggregate principal amount of its outstanding 5.00% Senior Notes due June 2022, at par value. The Company recognized a loss on extinguishmen t of $3.3 million whi ch included write offs of unamortized discount in the amount of $2.6 million and unamortized debt issuance costs in the amount of $0.7 million. Additionally, the Company paid accrued interest of $6.9 million up to the date of redemption. 5.25% Senior Notes Redemption On April 2, 2020, the Company fully redeemed $300.0 million in aggregate principal amount of its outstanding 5.25% Senior Notes due June 2023, at a premium of 102.625%. The total redemption price, consisting of the principal amount of the notes redeemed plus associated premium, amounted to $307.9 million. The Company recognized a loss on extinguishment of $10.4 million which included write offs of unamortized discount in the amount of $1.9 million and unamortized debt issuance costs in the amount of $0.6 million. Additionally, the Company paid accrued interest of $4.6 million up to the date of redemption. Acquisition Line The proceeds of the Acquisition Line are used for working capital, general corporate and acquisition purposes. As of December 31, 2020, borrowings under the Acquisition Line, a component of the Revolving Credit Facility (as described in Note 12. Floorplan Notes Payable), totaled $47.8 million. The average interest rate on this facility was 1.29% as of December 31, 2020. Real Estate Related The Company has mortgage loans in the U.S., U.K. and Brazil that are paid in installments. As of December 31, 2020, borrowings outstanding under these facilities totaled $619.8 million, gross of debt issuance costs, comprised of $514.9 million in the U.S., $92.9 million in the U.K. and $12.0 million in Brazil. The Company’s mortgage loans are secured by real property owned by the Company. The carrying values of the related collateralized real estate as of December 31, 2020 and 2019 was $893.6 million and $436.2 million, respectively. The Brazilian mortgages are additionally secured by a guarantee from the Company. Finance Leases |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income taxes and income taxes in numerous U.S. states. In addition, the Company is subject to income tax in the U.K. and Brazil relative to its foreign subsidiaries. Income (loss) before income taxes by geographic area was as follows (in millions): Years Ended December 31, 2020 2019 2018 Domestic $ 366.6 $ 227.9 $ 192.1 Foreign 3.7 (0.6) 13.3 Total income (loss) before income taxes $ 370.3 $ 227.3 $ 205.4 Federal, state and foreign income tax (benefits) provisions were as follows (in millions): Years Ended December 31, 2020 2019 2018 Federal: Current $ 70.8 $ 30.9 $ 35.9 Deferred 5.4 16.5 2.6 State: Current 7.0 3.8 4.3 Deferred (1.3) 4.0 0.9 Foreign: Current 7.0 2.3 3.9 Deferred (5.1) (4.3) — (Benefit) provision for income taxes $ 83.8 $ 53.3 $ 47.6 Actual income tax expense differed from income tax expense computed by applying the applicable U.S. federal statutory corporate tax rate of 21.0% to income before income taxes, as follows (in millions): Years Ended December 31, 2020 2019 2018 Provision at the U.S. federal statutory rate $ 77.7 $ 47.7 $ 43.1 Increase (decrease) resulting from: State income tax, net of benefit for federal deduction 5.8 5.2 3.6 Foreign income tax rate differential (1.4) 0.9 (0.3) Tax Credits (0.3) (1.1) (1.3) Changes in valuation allowances 2.3 (1.7) 3.4 Tax Act — Enactment date effect — — (0.6) Stock-based compensation (0.8) — (0.1) Uncertain tax benefits (0.3) 0.7 0.4 Other 0.8 1.6 (0.7) (Benefit) provision for income taxes $ 83.8 $ 53.3 $ 47.6 For the year ended December 31, 2020, the Company recorded a tax provision of $83.8 million . The Company recognizes the tax on global intangible low-taxed income (“GILTI”) as a period expense in the period the tax is incurred. Under this policy, the Company has not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period. For the year ended December 31, 2020, the Company estimated it has no GILTI tax liability. The Company’s 2020 effective income tax rate was more than the U.S. federal statutory rate of 21.0%, due primarily to: (1) the taxes provided for in U.S. state jurisdictions; and (2) increased valuation allowances provided for goodwill in Brazil; partially offset by: (1) Brazil losses benefited at a higher tax rate than the U.S. rate, and (2) excess tax deductions for stock based compensation. As a result of these items recorded in 2020 compared to the 2019 items discussed below, the effective tax rate for the year ended December 31, 2020 decreased to 22.6%, as compared to 23.4% for the year ended December 31, 2019. The Company's 2019 effective income tax rate was more than the U.S. federal statutor y rate of 21.0%, due primarily to: (1) the taxes provided for in U.S. state jurisdictions; and (2) valuation allowances provided for net operating losses a nd other deferred tax assets in certain U.S. states, partially offset by: (1) reduced valuation allowances provided for net operating losses in Brazil; and (2) tax credits. As a result of these items recorded in 2019 compared to the 2018 items discussed below, the effective tax rate for the year ended December 31, 2019 increas ed to 23.4%, as compared to 23.2% fo r the year ended December 31, 2018. The Company's 2018 effective income tax rate was more than the U.S. federal statutory rate of 21.0%, due primarily to: (1) the taxes provided for in U.S. state jurisdictions; and (2) valuation allowances provided for net operating losses and other deferred tax assets in certain U.S. states and in Brazil, partially offset by: (1) income generated in the U.K., which is taxed at a 19.0% statutory rate; (2) employment tax credits; and (3) the enactment date adjustments from the Tax Act. As a result of these items recorded in 2018 compared to the 2017 items discussed below, the effective tax rate for the year ended December 31, 2018 was 23.2%. Deferred income tax provisions resulted from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following (in millions): December 31, 2020 2019 Deferred tax assets: Loss reserves and accruals $ 52.9 $ 42.8 Interest rate swaps 10.0 1.3 U.S. state net operating loss (“NOL”) carryforwards 34.5 38.2 Foreign NOL carryforwards 28.9 37.6 Operating lease liabilities 56.9 55.5 Goodwill and intangible franchise rights 2.6 — Other 2.2 1.5 Deferred tax assets 188.0 176.9 Less: valuation allowance on deferred tax assets 60.5 69.7 Net deferred tax assets $ 127.5 $ 107.2 Deferred tax liabilities: Goodwill and intangible franchise rights $ 142.0 $ 135.1 Depreciation expense 71.1 68.0 Operating lease ROU assets 45.0 45.4 Other 2.0 — Deferred tax liabilities 260.1 248.5 Net deferred tax liability $ 132.6 $ 141.3 The classification of the Company’s net deferred tax liability within the Consolidated Balance Sheets is as follows (in millions): December 31, 2020 2019 Deferred tax asset, included in Other long-term assets $ 8.4 $ 4.4 Deferred tax liability, included in Deferred income taxes 141.0 145.7 Net deferred tax liability $ 132.6 $ 141.3 As of December 31, 2020, the Company had state pre-tax NOL carryforwards in the U.S. of $564.8 million that will expire between 2020 and 2039, and foreign pre-tax NOL carryforwards of $85.1 million that may be carried forward indefinitely. To the extent that the Company expects that net income will not be sufficient to realize these NOLs in certain jurisdictions, a valuation allowance has been established. The Company believes it is more-likely-than-not that its deferred tax assets, net of valuation allowances provided, will be realized, based primarily on its expectation of future taxable income, considering future reversals of existing taxable temporary differences. As of December 31, 2020, the Company had two controlled foreign corporations that own its foreign operations (the “Foreign Subsidiaries”). The Company has not provided for U.S. deferred taxes on the outside basis differences of its Foreign Subsidiaries, as the Company has taken the position that its investment in the Foreign Subsidiaries will be permanently reinvested outside the U.S. The book basis for one of the Company’s Foreign Subsidiaries that consists of the Company’s U.K. operations exceeded the tax basis by approximately $13.1 million , as of December 31, 2020. If a taxable event resulting in the recognition of these outside basis differences occurred, the resulting tax would not be material. Based on the statutes of limitations in the applicable jurisdiction in which the Company operates, the Company is generally no longer subject to examinations by U.S. tax authorities in years prior to 2016, by U.K. tax authorities in years prior to 2016 and by Brazil tax authorities in years prior to 2015. A reconciliation of the Company’s unrecognized tax benefits is as follows (in millions): 2020 2019 2018 Balance at January 1 $ 2.4 $ 1.6 $ 1.2 Additions for current tax 0.5 1.0 0.6 Additions based on tax positions in prior years — — — Reductions for tax positions (0.4) — — Settlements with tax authorities — — — Reductions due to lapse of statutes of limitations (0.5) (0.2) (0.1) Balance at December 31 $ 2.0 $ 2.4 $ 1.6 Included in the balance of unrecognized tax benefits as of December 31, 2020, 2019 and 2018, are $1.7 million, $2.1 million and $1.4 million, respectively, of tax benefits that would affect the effective tax rate if recognized. For the years ended December 31, 2020, 2019 and 2018 the Company recorded approximately $0.3 million, $0.3 million, $0.2 million, respectively, of interest and penalty related to its uncertain tax positions. Consistent with prior practice, the Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the Consolidated Statements of Operations. |
Employee Savings Plans
Employee Savings Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE SAVINGS PLANS | EMPLOYEE SAVINGS PLANS The Company has a deferred compensation plan to provide select employees and non-employee members of the Company’s Board of Directors with the opportunity to accumulate additional savings for retirement on a tax-deferred basis (“Deferred Compensation Plan”). Participants in the Deferred Compensation Plan are allowed to defer receipt of a portion of their salary, compensation or bonus, or in the case of the Company’s non-employee directors, annual retainer and meeting fees earned. The participants receive a rate of return as determined by management and approved by the Board of Directors, however, the Company has complete discretion over how the funds are utilized. Participants in the Deferred Compensation Plan are unsecured creditors of the Company. The balances due to participants of the Deferred Compensation Plan as of December 31, 2020 and 2019 were $78.4 million and $72.3 million, resp ectively, with $5.3 million and $3.3 million c lassified as current for each respective period. In the U.S., the Company offers a 401(k) plan to eligible employees and provides matching contribution to employees that participate in the plan. For the years ended December 31, 2020, 2019 and 2018, the matching contributions paid by the Company totaled $3.6 million, $6.6 million and $6.2 million, respectively. In the U.K., the Company offers private personal pension plans and provides matching contributions to eligible employees that participate in the plan. For the years ended December 31, 2020, 2019 and 2018, the matching contributions paid by the Company totaled $2.9 million, $3.7 million and $2.5 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, the Company’s dealerships are named in various types of litigation involving customer claims, employment matters, class action claims, purported class action claims, claims involving the manufacturers of automobiles, contractual disputes and other matters arising in the ordinary course of business. The Company may be involved in legal proceedings or suffer losses that could have a material adverse effect on the Company’s business. In the normal course of business, the Company is required to respond to customer, employee and other third-party complaints. In addition, the manufacturers of the vehicles that the Company sells and services have audit rights allowing them to review the validity of amounts claimed for incentive, rebate, or warranty-related items and charge the Company back for amounts determined to be invalid payments under the manufacturers’ programs, subject to the Company’s right to appeal any such decision. Legal Proceedings As of December 31, 2020, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition, or cash flows, including class action lawsuits. However, the results of current, or future, matters cannot be predicted with certainty and an unfavorable resolution of one or more of such matters could have a material adverse effect on the Company’s results of operations, financial condition, or cash flows. Other Matters |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in the balances of each component of Accumulated other comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018 were as follows (in millions): Year Ended December 31, 2020 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2019 $ (142.9) $ (4.1) $ (147.0) Other comprehensive income (loss) before reclassifications: Pre-tax (8.7) (45.5) (54.2) Tax effect — 8.8 8.8 Amounts reclassified from accumulated other comprehensive income (loss): Floorplan interest expense (pre-tax) — 7.9 7.9 Other interest expense, net (pre-tax) — 2.8 2.8 Realized (gain) loss on interest rate swap termination (pre-tax) — 0.1 0.1 Provision (benefit) for income taxes — (2.6) (2.6) Net current period other comprehensive income (loss) (8.7) (28.4) (37.1) Balance, December 31, 2020 $ (151.6) $ (32.5) $ (184.0) Year Ended December 31, 2019 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2018 $ (146.7) $ 8.9 $ (137.8) Other comprehensive income (loss) before reclassifications: Pre-tax 3.9 (17.4) (13.5) Tax effect — 4.1 4.1 Amounts reclassified from accumulated other comprehensive income (loss) to: Floorplan interest expense (pre-tax) — 0.4 0.4 Other interest expense (pre-tax) — (0.2) (0.2) Provision (benefit) for income taxes — (0.1) (0.1) Net current period other comprehensive income (loss) 3.9 (13.0) (9.2) Balance, December 31, 2019 $ (142.9) $ (4.1) $ (147.0) Year Ended December 31, 2018 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2017 $ (122.6) $ (0.7) $ (123.2) Other comprehensive income (loss) before reclassifications: Pre-tax (24.2) 8.6 (15.5) Tax effect — (2.1) (2.1) Amounts reclassified from accumulated other comprehensive income (loss) to: Floorplan interest expense (pre-tax) — 4.7 4.7 Other interest expense (pre-tax) — 0.5 0.5 Realized (gain) loss on interest rate swap termination (pre-tax) — (0.7) (0.7) Provision (benefit) for income taxes — (1.2) (1.2) Net current period other comprehensive income (loss) (24.2) 9.8 (14.4) Tax effects reclassified from accumulated other comprehensive income (loss) — (0.2) (0.2) Balance, December 31, 2018 $ (146.7) $ 8.9 $ (137.8) |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
CASH FLOW INFORMATION | CASH FLOW INFORMATION Cash, Cash Equivalents and Restricted Cash The cash flows presented within the Consolidated Statements of Cash Flows reflect cash and cash equivalents of $87.3 million as of December 31, 2020, and cash and cash equivalents of $23.8 million and restricted cash of $4.3 million included in Other long-term assets in the Consolidated Balance Sheets as of December 31, 2019. Non-cash Activities The accrual for capital expenditures decreased $1.7 million and $4.1 million from year-end for the years ended December 31, 2020 and 2019, respectively. Additionally, the Company obtained ROU assets in exchange for lease obligations during the years ended December 31, 2020 and 2019. Refer to Note 10. Leases for further discussion on lease liabilities. Interest and Income Taxes Paid Cash paid for interest, including the monthly settlement of the Company’s interest rate derivatives, was $92.5 million , $125.3 million and $128.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. Cash paid for income taxes, net of refunds, was $64.0 million , $48.3 million and $40.8 million fo r the years ended December 31, 2020, 2019 and 2018, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION As of December 31, 2020, the Company had three reportable segments: the U.S., U.K. and Brazil. The U.S. and Brazil segments are led by the President, U.S. and Brazilian Operations, and the U.K. segment is led by an Operations Director, each reporting directly to the Company's Chief Executive Officer, who is the CODM. The President, U.S. and Brazilian Operations, and the U.K. Operations Director are responsible for the overall performance of their respective regions, as well as for overseeing field level management. Each region engages in business activities and their respective operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the region and to assess performance. Each segment is comprised of retail automotive franchises that sell new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts. Selected reportable segment data is as follows (in millions): Year Ended December 31, 2020 U.S. U.K. Brazil Total Total revenues $ 8,503.4 $ 2,096.8 $ 251.6 $ 10,851.8 Gross profit $ 1,486.0 $ 248.1 $ 34.8 $ 1,769.0 SG&A expenses (1) $ 947.0 $ 191.2 $ 31.1 $ 1,169.3 Depreciation and amortization expense $ 57.7 $ 15.8 $ 2.3 $ 75.8 Floorplan interest expense $ 32.2 $ 7.1 $ 0.3 $ 39.5 Other interest expense, net $ 55.0 $ 6.9 $ 0.7 $ 62.6 Income (loss) before income taxes (2) $ 366.6 $ 14.2 $ (10.5) $ 370.3 Capital expenditures: Real estate related capital expenditures $ 12.9 $ 11.2 $ — $ 24.1 Non-real estate related capital expenditures (3) 60.9 10.6 7.6 79.1 Total capital expenditures $ 73.8 $ 21.8 $ 7.6 $ 103.2 Year Ended December 31, 2019 U.S. U.K. Brazil Total Total revenues $ 9,184.2 $ 2,413.7 $ 445.9 $ 12,043.8 Gross profit $ 1,494.8 $ 267.7 $ 53.5 $ 1,816.0 SG&A expenses (4) $ 1,075.6 $ 236.9 $ 46.0 $ 1,358.4 Depreciation and amortization expense $ 55.4 $ 14.6 $ 1.6 $ 71.6 Floorplan interest expense $ 53.7 $ 7.2 $ 0.7 $ 61.6 Other interest expense, net $ 67.5 $ 7.3 $ 0.1 $ 74.9 Income (loss) before income taxes (5) $ 227.9 $ (5.3) $ 4.6 $ 227.3 Capital expenditures: Real estate related capital expenditures $ 63.8 $ 25.7 $ 3.1 $ 92.5 Non-real estate related capital expenditures (3) 70.7 25.9 2.6 99.3 Total capital expenditures $ 134.5 $ 51.6 $ 5.7 $ 191.8 Year Ended December 31, 2018 U.S. U.K. Brazil Total Total revenues $ 8,723.3 $ 2,437.4 $ 440.7 $ 11,601.4 Gross profit $ 1,391.3 $ 279.9 $ 53.9 $ 1,725.1 SG&A expenses (6) $ 982.1 $ 240.4 $ 50.6 $ 1,273.1 Depreciation and amortization expense $ 52.9 $ 12.6 $ 1.6 $ 67.1 Floorplan interest expense $ 52.8 $ 6.3 $ 0.8 $ 59.9 Other interest expense, net $ 68.1 $ 6.8 $ 0.9 $ 75.8 Income (loss) before income taxes (7) $ 192.1 $ 13.3 $ — $ 205.4 Capital expenditures: Real estate related capital expenditures $ 20.5 $ 5.0 $ 5.8 $ 31.4 Non-real estate related capital expenditures (3) 80.2 27.5 2.0 109.6 Total capital expenditures $ 100.7 $ 32.5 $ 7.8 $ 141.0 (1) SG&A expenses for the year ended December 31, 2020 includes the following: in the U.S. segment, $10.6 million in stock-based compensation expense related to an out-of-period adjustment, $3.1 million net gain on disposition of real estate and dealership transactions and $2.7 million net gain on legal matters; in the U.K. segment, $2.2 million net gain on disposition of real estate and dealership transactions and $1.2 million in severance expense; and in the Brazil segment, $0.9 million in severance expense. (2) Income (loss) before taxes for the year ended December 31, 2020 includes the SG&A expenses described in note 1 above and additionally includes the following: in the U.S. segment, $13.8 million in asset impairments and $13.7 million loss on debt extinguishment; in the U.K. segment, $12.8 million in asset impairments; and in the Brazil segment, $11.1 million in asset impairments. (3) Non-real estate related capital expenditures exclude the net decrease (increase) in the accrual for capital expenditures from year-end of $1.7 million , $4.1 million and ($0.5 million) for the years ended December 31, 2020, 2019 and 2018, respectively. (4) SG&A expenses for the year ended December 31, 2019 includes the following: in the U.S. segment, $17.8 million in expenses related to flood damage from Tropical Storm Imelda and hail storm damages primarily in Texas. (5) Income (loss) before taxes for the year ended December 31, 2019 includes the SG&A expenses described in note 4 above and additionally includes the following: in the U.S. segment, $14.7 million in asset impairments; in the U.K. segment, $7.0 million in asset impairments; and in the Brazil segment, $0.5 million in asset impairments. (6) SG&A expenses for the year ended December 31, 2018 includes the following: in the U.S. segment, $25.2 million net gain on disposition of real estate and dealership transactions and $6.4 million of expenses related to catastrophic events mainly as a result of hail storms. (7) Income (loss) before taxes for the year ended December 31, 2018 includes the SG&A expenses described in note 6 above and additionally includes the following: in the U.S. segment, $43.4 million in asset impairments; in the U.K. segment, $0.5 million in asset impairments. December 31, 2020 U.S. U.K. Brazil Total Property and equipment, net $ 1,303.1 $ 281.3 $ 23.9 $ 1,608.2 Operating lease assets $ 117.4 $ 89.6 $ 2.8 $ 209.9 Total assets $ 3,942.8 $ 1,116.8 $ 29.9 $ 5,089.4 December 31, 2019 U.S. U.K. Brazil Total Property and equipment, net $ 1,251.4 $ 271.0 $ 24.7 $ 1,547.1 Operating lease assets $ 114.8 $ 100.1 $ 5.2 $ 220.1 Total assets $ 4,256.1 $ 1,225.6 $ 88.6 $ 5,570.2 |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and reflect the consolidated accounts of the parent company, Group 1 Automotive, Inc., and its subsidiaries, all of which are wholly owned. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances, however, actual results could differ materially from such estimates. The significant estimates made by management in the accompanying Consolidated Financial Statements include, but are not limited to, inventory valuation adjustments, reserves for future chargebacks on finance, insurance and vehicle service contract fees, self-insured property and casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation. Additionally, while the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include demand deposits and various other short-term investments with original maturities of three months or less at the date of purchase. |
Inventories | Inventories New and used retail vehicles are initially valued in inventory at cost, which consists of the amount paid to acquire the inventory, plus the cost of reconditioning, cost of equipment added and transportation cost. All vehicles are carried at the lower of specific cost or net realizable value and are removed from inventory using the specific identification method in the Consolidated Balance Sheets. In determining the lower of specific cost or net realizable value of new and used vehicles, the Company considers historical loss experience and current market trends. Parts and accessories inventories are valued at lower of cost or net realizable value and determined on a first-in, first-out basis in the Consolidated Balance Sheets. The Company incurs shipping costs in connection with selling parts to customers which is included in Cost of Sales in the Consolidated Statements of Operations. Impairments of inventory, net of insurance proceeds, related to catastrophic events are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. During the year ended December 31, 2020, the Company recorded $0.9 million of impairment charges as a result of hail storms and flood damage from Hurricane Sally and Hurricane Zeta. During the years ended December 31, 2019 and 2018, impairments of inventory were $16.1 million and $6.1 million, respectively. Certain manufacturers offer rebates that result in purchase discounts once the incentives are met, providing the Company with volume incentives to order and/or sell certain models and/or volumes of inventory over designated periods of time. The Company also receives dealer rebates and incentive payments on parts purchases from the automobile manufacturers on new vehicle retail sales. Additionally, the Company receives interest assistance from certain automobile manufacturers that is reflected as a vehicle purchase price discount. The rebates, interest assistance and other dealer incentives reduce inventory costs in the Consolidated Balance Sheets and are reflected as a reduction to Cost of Sales in the Consolidated Statements of Operations as the vehicles are sold. |
Property and Equipment | Property and Equipment, Net Property and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the estimated term of the lease or the estimated useful life of the asset. Expenditures for major additions or improvements, which improve or extend the useful lives of the assets are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of the assets, are expensed as incurred. Disposals are removed at cost less accumulated depreciation, and any resulting gain or loss is reflected in Selling, general and administrative expenses in the Consolidated Statements of Operations. The Company reviews property and equipment for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). This review consists of comparing the carrying amount of the asset group with its expected future undiscounted cash flows. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. If the asset group’s carrying amount exceeds its future undiscounted cash flows, an impairment charge is measured as the amount by which its carrying amount exceeds its fair value. The fair value of property is typically based on a third appraisal which requires adjustments to market-based valuation inputs to reflect the different characteristics between the property being measured and comparable properties, which are considered level 3 inputs within the fair value hierarchy described further in Note 6. Financial Instruments and Fair Value Measurements. |
Business Combinations | Business Combinations Business acquisitions are accounted for under the acquisition method of accounting. The allocations of purchase price to the assets acquired and liabilities assumed are assigned and recorded based on estimates of fair value as of the acquisition date, and are subject to change within the one year purchase price allocation period. The fair values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions. The most significant assumptions, and those requiring the most judgment, involve the estimated fair values of property and intangible franchise rights. The Company typically utilizes third-party experts to determine the fair values of property acquired. The Company utilizes the fair value model as discussed under the “Intangible Franchise Rights” section of this footnote to determine the fair value of intangible franchise rights acquired, supplemented with assistance from third-party experts as needed. |
Goodwill and Intangible Franchise Rights | Goodwill and Intangible Franchise Rights Goodwill represents the excess, at the date of acquisition, of the purchase price of an acquired business over the fair value of the net tangible and intangible assets acquired. The Company is organized into three geographic regions, the U.S. region, the U.K. region and the Brazil region. The Company has determined that each region represents a reporting unit for the purpose of assessing goodwill for impairment. The Company’s only recognized identifiable intangible assets, other than goodwill, are rights under franchise agreements with manufacturers, which are recorded at the dealership level. The franchise agreements consist of terms that are definite as well as terms that do not expire. For the terms that are definite, the Company believes that these agreements can be renewed without substantial cost based on the history with the manufacturer. As such, none of the Company’s franchise rights are amortized as the Company believes that its franchise arrangements will contribute to cash flows for an indefinite period of time. The Company evaluates goodwill and intangible franchise rights for impairment annually in the fourth quarter as of October 31, or more frequently if events or circumstances indicate possible impairment has occurred. In evaluating goodwill and intangibles for impairment, an optional qualitative assessment may be initially performed to determine whether it is more- likely-than-not (i.e., a likelihood of greater than 50%) that an impairment exists. If it is concluded that it is more-likely-than-not that an impairment exists, a quantitative test is required to measure the amount of impairment which, for goodwill, consists of comparing the fair value of the reporting unit to its carrying amount and, for intangibles, consists of comparing the fair value of the intangible asset to its carrying amount. When a quantitative impairment test is performed, the Company estimates fair value of goodwill using a combination of the discounted cash flow, or income approach, and the market approach. The Company weights the income approach and market approach 80% and 20%, respectively, in the fair value model. For intangible franchise rights, the fair value of the respective franchise right is estimated using a discounted cash flow, or income approach. The income approach measures fair value by discounting expected future cash flows at a WACC that proportionately weights the cost of debt and equity. Significant assumptions in the model include revenue growth rates, future gross margins, future SG&A expenses, the WACC and terminal growth rates. The Company applies a five year projection period which aligns with the Company’s strategic plan. Key considerations in the assumed growth rates include industry SAAR projections, macroeconomic conditions including consumer confidence levels, unemployment rates and gross domestic product growth, and internal measures such as historical financial performance, cost control and planned capital expenditures. The revenue growth rates assume a significant increase in 2021 as the business recovers from the pandemic and limited increases in the next four years corresponding with the industry SAAR projections plus a return to more normal vehicle gross margins as inventories recover. Beyond the five forecasted years, the terminal value is determined using a perpetuity growth rate based on long-term inflation projections for each reporting unit. Significant inputs to the WACC include the risk free rate, an adjustment for stock market risk, an adjustment for company size risk and country risk adjustments for U.K. and Brazil. In 2020, the WACC applied in the impairment tests for the U.S., the U.K. and Brazil was 11%, 13% and 16%, respectively. For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pre-tax net income weighted as appropriate by reporting unit. Each of the significant assumptions to the fair value model are considered level 3 inputs within the fair value hierarchy described further in Note 6. Financial Instruments and Fair Value Measurements. Developing these assumptions requires applying management’s knowledge of the industry, recent transactions and reasonable performance expectations for its operations. |
Income Taxes | Income Taxes The Company is subject to income taxes at the federal level and in 15 states in the U.S., as well as in the U.K. and Brazil, each of which has unique tax rates and payment calculations. As the amount of income generated in each jurisdiction varies from period to period, the Company’s estimated effective tax rate can vary based on the proportion of taxable income generated in each jurisdiction. |
Derivative Financial Instruments | Derivative Financial InstrumentsThe Company holds derivative financial instruments consisting of interest rate swaps that are designated as cash flow hedges. |
Foreign Currency Translation | Foreign Currency Translation The functional currency for the Company’s U.K. subsidiaries is GBP and for the Brazil subsidiaries is BRL. All assets and liabilities of foreign subsidiaries are translated into USD using period-end exchange rates and all revenues and expenses are translated at average rates during the respective period. The gains and losses resulting from translation adjustments are recorded in accumulated other comprehensive income (loss) in stockholders’ equity. |
Advertising | Advertising The Company expenses the costs of advertising as incurred. Advertising expense is included in Selling, general and administrative expenses in the Consolidated Statements of Operations and totaled $49.9 million for the year ended December 31, 2020, and $75.2 million for both years ended December 31, 2019 and 2018, respectively. The Company receives advertising assistance from certain automobile manufacturers, which the Company is required to spend on qualified advertising and which is subject to audit and chargeback by the manufacturer. The assistance is accounted for as a reduction to SG&A expenses as earned and amounted to $13.0 million, $15.4 million and $14.8 million for |
Business and Credit Risk Concentrations | Business and Credit Risk ConcentrationsThe Company owns and operates franchised automotive dealerships in the U.S., U.K. and Brazil. Automotive dealerships operate pursuant to franchise agreements with vehicle manufacturers. Franchise agreements generally provide the manufacturers or distributors with considerable influence over the operations of the dealership. The success of any franchised automotive dealership is dependent, to a large extent, on the financial condition, management, marketing, production and distribution capabilities of the vehicle manufacturers or distributors of which the Company holds franchises. The Company purchases substantially all of its new vehicles from various manufacturers or distributors at the prevailing prices to all franchised dealers. The Company’s sales volume could be adversely impacted by the manufacturers’ or distributors’ inability to supply the dealerships with an adequate supply of vehicles. |
Statements of Cash Flows | Statements of Cash Flows With respect to all new vehicle floorplan borrowings, the vehicle manufacturers draft the funds directly from the Company’s credit facilities with no cash flow to or from the Company. With respect to borrowings for used vehicle financing in the U.S., the Company finances up to 85% of the value of the used vehicle inventory and the borrowed funds flow from the lender directly to the Company. In the U.K. and Brazil, the Company chooses which used vehicles to finance and the borrowings flow directly to the Company from the lender. |
Self-Insured Medical, Property and Casualty Reserves | Self-Insured Medical, Property and Casualty Reserves The Company purchases insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks and maintains reserves for liabilities related to its self-insured portions. |
Recently Accounting Pronouncements | Recent Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The Company adopted this ASU on January 1, 2020. Refer to the discussion of the adoption in Note 7. Receivables, Net and Contract Assets. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The ASU provides optional expedients and exceptions for companies that have contracts, hedging relationships and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform. The optional expedients and exceptions apply during the transition period and are intended to ease the financial reporting burdens mainly related to contract modification accounting, hedge accounting and lease accounting. The transition period is effective as of March 12, 2020 and will apply through December 31, 2022. LIBOR is used as an interest rate “benchmark” in the majority of the Company’s floorplan notes payable, as well as its mortgages, other debt and lease contracts. Additionally, the Company’s derivative instruments are benchmarked to LIBOR. The Company will apply the relief described as its arrangements are modified and does not expect the adoption will have an impact on the Company’s consolidated financial statements due to the relief provided. |
Revenue Recognition | New and Used Retail Vehicle Sales Revenues from the sale of new and used vehicles is recognized upon delivery of the vehicle to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. In some cases, the Company uses a third-party transport company to facilitate delivery of used vehicles to the customer. The transaction price for new and used vehicle sales is the stand-alone sales price of each individual vehicle and is generally settled within 30 days of the satisfaction of the performance obligation. Used Vehicle Wholesale Sales When the Company uses a third-party auction to facilitate the delivery of used vehicles to the customer, the Company has determined that the auction acts as an agent under the arrangement. Therefore, the Company recognizes revenues and cost of sales on a gross basis upon delivery of the vehicle by the auction to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. The transaction price for wholesale vehicle sales is established by the winning bid under the auction process and is generally settled within 30 days of the satisfaction of the performance obligation. Parts Sales Revenues from the sale of vehicle parts is recognized upon delivery of the parts to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. The transaction price for vehicle parts sales is the stand-alone sales price of each individual part and is generally settled within 30 days of the satisfaction of the performance obligation. Service Sales The Company performs maintenance and repair services, including collision restoration. In certain jurisdictions, the Company has an enforceable right to payment for performance completed to date on open work orders and as such, the transfer of control of vehicle maintenance and repair services and satisfaction of the performance obligation to its customer occurs over time. For these contracts that qualify for revenue recognition over time, the Company uses the input method for the measurement of progress and recognition of revenues, utilizing labor cost incurred to estimate the services performed for which the Company has an enforceable right to payment. The Company believes this method is the most objective measure of progress and provides a faithful depiction of the Company’s transfer of services to the customer. The transaction price for maintenance and repair services is the total of the labor and, if applicable, vehicle parts used in the performance of the service, as well as the margin above cost charged to the customer. Arrangement of Vehicle Financing and the Sale of Service and Other Insurance Contracts The Company receives commissions from F&I providers for the arrangement of vehicle financing and the sale of service and other insurance products. Within the context of these contracts with the F&I providers, the Company has determined that it is an agent for the F&I providers. The Company has a single performance obligation associated with the F&I contracts, which is the facilitation of the financing of the vehicle or sale of the insurance product. Revenues from these contracts is recognized when the facilitated contract between the F&I provider and the customer is executed, which is when the performance obligation is satisfied. With regards to the upfront commission for these contracts, the transaction price is the amount earned for each individual contract executed and is generally collected within 30 days of the satisfaction of the performance Charge Backs The Company may be charged back in the future for commissions received on F&I contract or vehicle service contract fees in the event of early termination of the contracts by customers. A reserve for future amounts estimated to be charged back, representing variable consideration, is recorded as a reduction to Finance, insurance and other, net in the Consolidated Statements of Operations. The reserve is estimated based on the Company’s historical charge back results and the termination provisions of the applicable contracts, and was $47.1 million a nd $49.7 million at December 31, 2020 and 2019, respectively. Retrospective Commissions and Associated Contract Assets In some cases, the Company also earns retrospective commission income by participating in the future profitability of the portfolio of product contracts sold by the Company. This contingent consideration is variable and is generally settled over five to seven years from the satisfaction of the performance obligation. The Company utilizes the “expected value” method to predict the amount of consideration to which the Company will be entitled, subject to constraint in the estimate. The estimated amount under the expected value method is accrued upfront when the facilitated contract between the F&I provider and the customer is executed, which is when the performance obligation is satisfied. The estimated amount is reflected as a contract asset within Other current assets and Other long-term assets |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The cash flows presented within the Consolidated Statements of Cash Flows reflect cash and cash equivalents of $87.3 million as of December 31, 2020, and cash and cash equivalents of $23.8 million and restricted cash of $4.3 million included in Other long-term assets in the Consolidated Balance Sheets as of December 31, 2019. |
Business Segment Information | As of December 31, 2020, the Company had three reportable segments: the U.S., U.K. and Brazil. The U.S. and Brazil segments are led by the President, U.S. and Brazilian Operations, and the U.K. segment is led by an Operations Director, each reporting directly to the Company's Chief Executive Officer, who is the CODM. The President, U.S. and Brazilian Operations, and the U.K. Operations Director are responsible for the overall performance of their respective regions, as well as for overseeing field level management. Each region engages in business activities and their respective operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the region and to assess performance. Each segment is comprised of retail automotive franchises that sell new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Property and Equipment | Property and equipment estimated useful lives are as follows: Estimated Buildings and leasehold improvements 25 to 50 Machinery and dealership equipment 7 to 20 Office equipment, furniture and fixtures 3 to 20 Company vehicles 3 to 5 The Company’s property and equipment consisted of the following (in millions): December 31, 2020 2019 Land $ 619.8 $ 571.3 Buildings and leasehold improvements 1,107.1 1,067.6 Machinery and dealership equipment 145.8 138.2 Office equipment, furniture and fixtures 124.1 118.5 Company vehicles 15.0 15.1 Construction in progress 56.6 36.5 Total 2,068.4 1,947.3 Less: accumulated depreciation and amortization 460.2 400.2 Property and equipment, net $ 1,608.2 $ 1,547.1 |
Schedules of Concentration of Risk | The following table sets forth sales of manufacturers that comprised 10% or greater of the Company’s total new vehicle unit sales during the year ended December 31, 2020: Manufacturer Percentage of New Vehicle Retail Units Sold Toyota/Lexus 23.9 % Volkswagen/Audi/Porsche/SEAT/SKODA 14.9 % BMW/MINI 11.4 % Ford/Lincoln 10.5 % |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues Disaggregated by Revenue Source and Geographical Segment | The following tables present the Company's revenues disaggregated by its geographical segments (in millions): Year Ended December 31, 2020 U.S. U.K. Brazil Total New vehicle retail sales $ 4,406.6 $ 1,021.8 $ 152.4 $ 5,580.8 Used vehicle retail sales 2,348.5 707.2 50.0 3,105.7 Used vehicle wholesale sales 169.4 126.4 12.3 308.1 Total new and used vehicle sales 6,924.5 1,855.3 214.7 8,994.6 Parts and service sales (1) 1,162.6 194.8 31.9 1,389.3 Finance, insurance and other, net (2) 416.3 46.6 5.0 467.9 Total revenues $ 8,503.4 $ 2,096.8 $ 251.6 $ 10,851.8 Year Ended December 31, 2019 U.S. U.K. Brazil Total New vehicle retail sales $ 4,832.2 $ 1,195.1 $ 286.8 $ 6,314.1 Used vehicle retail sales 2,509.9 771.3 85.4 3,366.6 Used vehicle wholesale sales 174.5 162.3 18.3 355.2 Total new and used vehicle sales 7,516.6 2,128.7 390.6 10,035.9 Parts and service sales (1) 1,234.4 227.9 47.6 1,510.0 Finance, insurance and other, net (2) 433.2 57.0 7.6 497.9 Total revenues $ 9,184.2 $ 2,413.7 $ 445.9 $ 12,043.8 Year Ended December 31, 2018 U.S. U.K. Brazil Total New vehicle retail sales $ 4,682.8 $ 1,217.1 $ 281.4 $ 6,181.4 Used vehicle retail sales 2,307.0 771.7 87.4 3,166.1 Used vehicle wholesale sales 178.9 173.8 16.9 369.6 Total new and used vehicle sales 7,168.7 2,162.6 385.7 9,717.0 Parts and service sales (1) 1,153.3 217.6 46.0 1,416.9 Finance, insurance and other, net (2) 401.3 57.2 9.0 467.5 Total revenues $ 8,723.3 $ 2,437.4 $ 440.7 $ 11,601.4 (1) The Company has applied the optional exemption not to disclose revenues related to remaining performance obligations on its maintenance and repair services as the duration of these contracts is less than one year. (2) Includes variable consideration recognized of $27.6 million , $19.5 million and $18.7 million during |
Changes in Contract Assets | The change in contract assets during the year ended December 31, 2020 is reflected in the table below (in millions): F&I, Net Contract Assets, January 1, 2020 $ 21.6 Changes related to revenue recognition during the period 27.6 Amounts invoiced during the period (13.9) Contract Assets, December 31, 2020 $ 35.3 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the Restricted Stock Awards and Units | The following table summarizes RSA activity and related information for 2020: Awards Weighted Average Nonvested at January 1, 2020 674,206 $ 70.19 Granted 180,925 $ 95.10 Vested (214,635) $ 73.65 Forfeited (19,953) $ 68.86 Nonvested at December 31, 2020 620,543 $ 76.22 The following table summarizes cash-settled RSU activity and related information for 2020: Awards Weighted Average Unsettled at January 1, 2020 10,689 $ 53.33 Granted 5,982 $ 100.26 Unsettled at December 31, 2020 16,671 $ 130.30 |
Summary of Performance Shares | The following table summarizes performance awards activity and related information for 2020: Awards Weighted Average Nonvested at January 1, 2020 30,555 $ 65.83 Granted 20,992 $ 103.29 Forfeited (6,444) $ 80.62 Nonvested at December 31, 2020 45,103 $ 81.15 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Calculation of Earnings Per Share | The following table sets forth the calculation of EPS for the years ended December 31, 2020, 2019 and 2018 (in millions, except share and per share data): Years Ended December 31, 2020 2019 2018 Weighted average basic common shares outstanding 17,754,666 17,917,195 19,452,560 Dilutive effect of stock-based awards and employee stock purchases 51,912 18,879 8,492 Weighted average dilutive common shares outstanding 17,806,578 17,936,074 19,461,052 Basic: Net income (loss) $ 286.5 $ 174.0 $ 157.8 Less: Earnings (loss) allocated to participating securities 10.3 6.4 5.4 Net income (loss) available to basic common shares $ 276.2 $ 167.6 $ 152.4 Basic earnings (loss) per common share $ 15.55 $ 9.35 $ 7.83 Diluted: Net income (loss) $ 286.5 $ 174.0 $ 157.8 Less: Earnings (loss) allocated to participating securities 10.3 6.4 5.4 Net income (loss) available to diluted common shares $ 276.2 $ 167.6 $ 152.4 Diluted earnings (loss) per common share $ 15.51 $ 9.34 $ 7.83 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and fair value of the Company’s fixed rate long-term debt | The carrying value and fair value of the Company’s 4.00% Senior Notes and fixed-rate mortgages were as follows (in millions): December 31, 2020 December 31, 2019 Carrying Value (1) Fair Value Carrying Value (1) Fair Value 4.00% Senior Notes $ 550.0 $ 567.0 $ — $ — Real estate related 84.3 77.0 40.7 41.1 Total $ 634.3 $ 644.0 $ 40.7 $ 41.1 (1) Carrying value excludes unamortized debt issuance costs. |
Asset and liabilities recorded at fair value | Assets and liabilities associated with the Company’s interest rate swaps as reflected in the Consolidated Balance Sheets were as follows (in millions): December 31, 2020 2019 Assets: Other current assets $ 1.9 $ — Other long-term assets 0.3 1.9 Total assets $ 2.3 $ 1.9 Liabilities: Accrued expenses and other current liabilities $ 4.2 $ 2.8 Long-term interest rate swap liabilities 40.6 4.4 Total liabilities $ 44.8 $ 7.2 |
Impact of interest rate derivative instruments | The following tables present the impact of the Company’s interest rate swaps (in millions): Amount of Unrealized Income (Loss), Net of Tax, Recognized in Other Comprehensive Income (Loss) Years Ended December 31, Derivatives in Cash Flow Hedging Relationship 2020 2019 2018 Interest rate swaps $ (36.7) $ (13.3) $ 6.5 Amount of Income (Loss) Reclassified from Other Comprehensive Income (Loss) into Statements of Operations Income Statement Classification Years Ended December 31, 2020 2019 2018 Floorplan interest expense, net $ (7.9) $ (0.4) $ (4.7) Other interest expense, net $ (2.9) $ 0.1 $ (0.5) |
Receivables, Net and Contract_2
Receivables, Net and Contract Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts and Notes Receivable | The Company’s receivables and contract assets consisted of the following (in millions): December 31, 2020 2019 Contracts-in-transit and vehicle receivables, net: Contracts-in-transit $ 147.1 $ 169.9 Vehicle receivables 64.5 84.3 Total contracts-in-transit and vehicle receivables 211.5 254.1 Less: allowance for doubtful accounts (1) 0.3 0.3 Total contracts-in-transit and vehicle receivables, net $ 211.2 $ 253.8 Accounts and notes receivables, net: Manufacturer receivables $ 108.7 $ 123.9 Parts and service receivables 53.2 57.0 F&I receivables 27.4 28.3 Other 13.8 18.7 Total accounts and notes receivables 203.1 227.9 Less: allowance for doubtful accounts (1) 3.2 2.8 Total accounts and notes receivables, net $ 200.0 $ 225.1 Within Other current assets and Other long-term assets: Total contract assets (1), (2) $ 35.3 $ 21.6 (1) The allowance for doubtful accounts as of December 31, 2020 is calculated under the current expected credit loss (“CECL”) model described below, which was introduced under ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), that became effective for the Company on January 1, 2020. The adoption of ASC 326 did not materially change the calculation of the allowance for doubtful accounts. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The Company’s inventories consisted of the following (in millions): December 31, 2020 2019 New vehicles $ 902.5 $ 1,328.6 Used vehicles 374.8 346.7 Rental vehicles 110.7 140.9 Parts, accessories and other 80.1 85.5 Total inventories $ 1,468.0 $ 1,901.7 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment estimated useful lives are as follows: Estimated Buildings and leasehold improvements 25 to 50 Machinery and dealership equipment 7 to 20 Office equipment, furniture and fixtures 3 to 20 Company vehicles 3 to 5 The Company’s property and equipment consisted of the following (in millions): December 31, 2020 2019 Land $ 619.8 $ 571.3 Buildings and leasehold improvements 1,107.1 1,067.6 Machinery and dealership equipment 145.8 138.2 Office equipment, furniture and fixtures 124.1 118.5 Company vehicles 15.0 15.1 Construction in progress 56.6 36.5 Total 2,068.4 1,947.3 Less: accumulated depreciation and amortization 460.2 400.2 Property and equipment, net $ 1,608.2 $ 1,547.1 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Components of operating and finance leases | Additional information regarding the Company’s operating and finance leases is as follows (in millions, except for lease term and discount rate information): Leases Balance Sheet Classification December 31, 2020 December 31, 2019 Assets: Operating Operating lease assets $ 209.9 $ 220.1 Finance Property and equipment, net 117.8 75.5 Total $ 327.7 $ 295.5 Liabilities: Current: Operating Current operating lease liabilities $ 21.5 $ 24.6 Finance Current maturities of long-term debt 9.4 6.6 Noncurrent: Operating Operating lease liabilities, net of current portion 207.6 210.7 Finance Long-term debt, net of current maturities 115.5 76.3 Total $ 353.9 $ 318.3 |
Components of lease expense | Lease Expense Income Statement Classification Year Ended December 31, 2020 Year Ended December 31, 2019 Operating Selling, general and administrative expenses $ 35.3 $ 40.1 Operating Asset impairments 2.0 1.4 Variable Selling, general and administrative expenses 2.8 2.3 Sublease income Selling, general and administrative expenses (1.3) (1.5) Finance: Amortization of lease assets Depreciation and amortization expense 6.3 5.5 Interest on lease liabilities Other interest expense, net 7.0 4.8 Net lease expense $ 52.1 $ 52.6 |
Maturities of operating lease liabilities | December 31, 2020 Maturities of Lease Liabilities Operating Leases Finance Leases 2021 $ 33.4 $ 16.2 2022 33.3 12.8 2023 31.0 11.5 2024 26.6 25.2 2025 24.1 33.9 Thereafter 182.0 71.2 Total lease payments 330.3 170.8 Less: lease payments representing interest (101.2) (45.9) Present value of lease liabilities $ 229.1 $ 124.9 |
Maturities of finance lease liabilities | December 31, 2020 Maturities of Lease Liabilities Operating Leases Finance Leases 2021 $ 33.4 $ 16.2 2022 33.3 12.8 2023 31.0 11.5 2024 26.6 25.2 2025 24.1 33.9 Thereafter 182.0 71.2 Total lease payments 330.3 170.8 Less: lease payments representing interest (101.2) (45.9) Present value of lease liabilities $ 229.1 $ 124.9 |
Supplemental cash flow information related to leases | Weighted-Average Lease Term and Discount Rate December 31, 2020 December 31, 2019 Weighted-average remaining lease terms: Operating 12.8 11.0 Finance 15.9 11.8 Weighted-average discount rates: Operating 5.6 % 6.1 % Finance 6.2 % 7.2 % Other Information December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 35.2 $ 41.6 Operating cash flows used in finance leases $ 7.0 $ 4.8 Financing cash flows used in finance leases $ 6.3 $ 3.8 ROU assets obtained in exchange for lease obligations: Operating leases, initial recognition $ 4.3 $ 34.0 Operating leases, modifications and remeasurements $ 9.7 $ (9.1) Finance leases, initial recognition $ 15.7 $ 29.6 Finance leases, modifications and remeasurements $ 31.8 $ 8.2 |
Intangible Franchise Rights a_2
Intangible Franchise Rights and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Roll-Forward of Intangible Franchise Rights and Goodwill by Reportable Segment | The following table presents the Company’s intangible franchise rights balances by reportable segment as of December 31, 2020 and 2019 (in millions): Intangible Franchise Rights U.S. U.K. Brazil Total Balance, December 31, 2019 $ 223.1 $ 30.4 $ 0.1 $ 253.5 Balance, December 31, 2020 $ 213.4 $ 19.4 $ — $ 232.8 The following is a roll-forward of the Company’s goodwill accounts by reporting unit (in millions): Goodwill U.S. U.K. Brazil Total Balance, December 31, 2018 (1) $ 861.6 $ 87.6 $ 14.7 $ 963.9 Additions through acquisitions 42.0 1.3 — 43.3 Disposals (1.3) — (0.3) (1.6) Currency translation — 3.2 (0.5) 2.7 Balance, December 31, 2019 (1) $ 902.3 $ 92.1 $ 13.9 $ 1,008.3 Additions through acquisitions 1.4 — — 1.4 Disposals (2.0) — — (2.0) Impairments — — (10.7) (10.7) Currency translation — 3.2 (3.1) 0.1 Balance, December 31, 2020 $ 901.7 $ 95.4 $ — $ 997.1 (1) Net of accumulated impairments of $97.8 million, comprised of $40.6 million in the U.S. reporting unit and $57.2 million in the Brazil reporting unit. |
Floorplan Notes Payable (Tables
Floorplan Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
Schedule of Floorplan Notes Payable | The Company’s floorplan notes payable consisted of the following (in millions): December 31, 2020 2019 Revolving credit facility — floorplan notes payable $ 901.6 $ 1,206.0 Revolving credit facility — floorplan notes payable offset account (160.4) (106.8) Revolving credit facility — floorplan notes payable, net 741.2 1,099.1 Other non-manufacturer facilities 26.4 45.3 Floorplan notes payable — credit facility and other, net $ 767.6 $ 1,144.4 FMCC facility $ 111.2 $ 208.5 FMCC facility offset account (16.0) (4.1) FMCC facility, net 95.2 204.5 Other manufacturer affiliate facilities 232.3 255.4 Floorplan notes payable — manufacturer affiliates, net $ 327.5 $ 459.9 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Composition of Long-Term Debt | Long-term debt consisted of the following (in millions): December 31, 2020 2019 4.00% Senior Notes due August 15, 2028 $ 550.0 $ — 5.00% Senior Notes aggregate principal redeemed September 2, 2020 — 550.0 5.25% Senior Notes aggregate principal redeemed April 2, 2020 — 300.0 Acquisition Line 47.8 72.5 Other debt: Real estate related 619.8 453.3 Finance leases 124.8 83.0 Other 20.0 42.8 Total other debt 764.6 579.1 Total debt 1,362.4 1,501.6 Less: unamortized discount — 5.6 Less: unamortized debt issuance costs 11.0 4.8 Less: current maturities 56.7 59.1 Total long-term debt $ 1,294.7 $ 1,432.1 The Company has the following Senior Notes outstanding as of December 31, 2020: Description Principal Amount Maturity Date Effective Interest Rate (1) Interest Payment Dates 4.00% Senior Notes $550.0 August 15, 2028 4.21% February 15 th , August 15 th (1) The effective interest rate is after the impact of associated debt issuance costs. |
Aggregate Annual Maturities of Long-Term Debt | The aggregate annual maturities of debt for the next five years, excluding debt issuance costs, are as follows (in millions): Total Years Ended December 31, 2021 $ 57.3 2022 70.1 2023 94.9 2024 144.9 2025 93.1 Thereafter 902.2 Total $ 1,362.4 |
Debt Redemption | The Company, at its option, may redeem some or all of the Senior Notes at the redemption prices (expressed as percentages of principal amount of the notes) set forth below, plus accrued and unpaid interest. Redemption Period Redemption Price August 15, 2023 102.000% August 15, 2024 101.333% August 15, 2025 100.667% August 15, 2026 and thereafter 100.000% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income/(Loss) before Income Taxes by Geographic Area | Income (loss) before income taxes by geographic area was as follows (in millions): Years Ended December 31, 2020 2019 2018 Domestic $ 366.6 $ 227.9 $ 192.1 Foreign 3.7 (0.6) 13.3 Total income (loss) before income taxes $ 370.3 $ 227.3 $ 205.4 |
Federal, State and Foreign Income Tax Provisions/(Benefits) | Federal, state and foreign income tax (benefits) provisions were as follows (in millions): Years Ended December 31, 2020 2019 2018 Federal: Current $ 70.8 $ 30.9 $ 35.9 Deferred 5.4 16.5 2.6 State: Current 7.0 3.8 4.3 Deferred (1.3) 4.0 0.9 Foreign: Current 7.0 2.3 3.9 Deferred (5.1) (4.3) — (Benefit) provision for income taxes $ 83.8 $ 53.3 $ 47.6 |
Reconciliation of Income Tax Expense due to the U.S. Federal Statutory Corporate Tax Rate | Actual income tax expense differed from income tax expense computed by applying the applicable U.S. federal statutory corporate tax rate of 21.0% to income before income taxes, as follows (in millions): Years Ended December 31, 2020 2019 2018 Provision at the U.S. federal statutory rate $ 77.7 $ 47.7 $ 43.1 Increase (decrease) resulting from: State income tax, net of benefit for federal deduction 5.8 5.2 3.6 Foreign income tax rate differential (1.4) 0.9 (0.3) Tax Credits (0.3) (1.1) (1.3) Changes in valuation allowances 2.3 (1.7) 3.4 Tax Act — Enactment date effect — — (0.6) Stock-based compensation (0.8) — (0.1) Uncertain tax benefits (0.3) 0.7 0.4 Other 0.8 1.6 (0.7) (Benefit) provision for income taxes $ 83.8 $ 53.3 $ 47.6 |
Tax Effects of Temporary Differences Representing Deferred Tax Assets/Liabilities | The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following (in millions): December 31, 2020 2019 Deferred tax assets: Loss reserves and accruals $ 52.9 $ 42.8 Interest rate swaps 10.0 1.3 U.S. state net operating loss (“NOL”) carryforwards 34.5 38.2 Foreign NOL carryforwards 28.9 37.6 Operating lease liabilities 56.9 55.5 Goodwill and intangible franchise rights 2.6 — Other 2.2 1.5 Deferred tax assets 188.0 176.9 Less: valuation allowance on deferred tax assets 60.5 69.7 Net deferred tax assets $ 127.5 $ 107.2 Deferred tax liabilities: Goodwill and intangible franchise rights $ 142.0 $ 135.1 Depreciation expense 71.1 68.0 Operating lease ROU assets 45.0 45.4 Other 2.0 — Deferred tax liabilities 260.1 248.5 Net deferred tax liability $ 132.6 $ 141.3 The classification of the Company’s net deferred tax liability within the Consolidated Balance Sheets is as follows (in millions): December 31, 2020 2019 Deferred tax asset, included in Other long-term assets $ 8.4 $ 4.4 Deferred tax liability, included in Deferred income taxes 141.0 145.7 Net deferred tax liability $ 132.6 $ 141.3 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the Company’s unrecognized tax benefits is as follows (in millions): 2020 2019 2018 Balance at January 1 $ 2.4 $ 1.6 $ 1.2 Additions for current tax 0.5 1.0 0.6 Additions based on tax positions in prior years — — — Reductions for tax positions (0.4) — — Settlements with tax authorities — — — Reductions due to lapse of statutes of limitations (0.5) (0.2) (0.1) Balance at December 31 $ 2.0 $ 2.4 $ 1.6 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Changes in the balances of each component of accumulated other comprehensive loss | Changes in the balances of each component of Accumulated other comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018 were as follows (in millions): Year Ended December 31, 2020 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2019 $ (142.9) $ (4.1) $ (147.0) Other comprehensive income (loss) before reclassifications: Pre-tax (8.7) (45.5) (54.2) Tax effect — 8.8 8.8 Amounts reclassified from accumulated other comprehensive income (loss): Floorplan interest expense (pre-tax) — 7.9 7.9 Other interest expense, net (pre-tax) — 2.8 2.8 Realized (gain) loss on interest rate swap termination (pre-tax) — 0.1 0.1 Provision (benefit) for income taxes — (2.6) (2.6) Net current period other comprehensive income (loss) (8.7) (28.4) (37.1) Balance, December 31, 2020 $ (151.6) $ (32.5) $ (184.0) Year Ended December 31, 2019 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2018 $ (146.7) $ 8.9 $ (137.8) Other comprehensive income (loss) before reclassifications: Pre-tax 3.9 (17.4) (13.5) Tax effect — 4.1 4.1 Amounts reclassified from accumulated other comprehensive income (loss) to: Floorplan interest expense (pre-tax) — 0.4 0.4 Other interest expense (pre-tax) — (0.2) (0.2) Provision (benefit) for income taxes — (0.1) (0.1) Net current period other comprehensive income (loss) 3.9 (13.0) (9.2) Balance, December 31, 2019 $ (142.9) $ (4.1) $ (147.0) Year Ended December 31, 2018 Accumulated income (loss) on foreign currency translation Accumulated income (loss) on interest rate swaps Total Balance, December 31, 2017 $ (122.6) $ (0.7) $ (123.2) Other comprehensive income (loss) before reclassifications: Pre-tax (24.2) 8.6 (15.5) Tax effect — (2.1) (2.1) Amounts reclassified from accumulated other comprehensive income (loss) to: Floorplan interest expense (pre-tax) — 4.7 4.7 Other interest expense (pre-tax) — 0.5 0.5 Realized (gain) loss on interest rate swap termination (pre-tax) — (0.7) (0.7) Provision (benefit) for income taxes — (1.2) (1.2) Net current period other comprehensive income (loss) (24.2) 9.8 (14.4) Tax effects reclassified from accumulated other comprehensive income (loss) — (0.2) (0.2) Balance, December 31, 2018 $ (146.7) $ 8.9 $ (137.8) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Selected reportable segment data is as follows (in millions): Year Ended December 31, 2020 U.S. U.K. Brazil Total Total revenues $ 8,503.4 $ 2,096.8 $ 251.6 $ 10,851.8 Gross profit $ 1,486.0 $ 248.1 $ 34.8 $ 1,769.0 SG&A expenses (1) $ 947.0 $ 191.2 $ 31.1 $ 1,169.3 Depreciation and amortization expense $ 57.7 $ 15.8 $ 2.3 $ 75.8 Floorplan interest expense $ 32.2 $ 7.1 $ 0.3 $ 39.5 Other interest expense, net $ 55.0 $ 6.9 $ 0.7 $ 62.6 Income (loss) before income taxes (2) $ 366.6 $ 14.2 $ (10.5) $ 370.3 Capital expenditures: Real estate related capital expenditures $ 12.9 $ 11.2 $ — $ 24.1 Non-real estate related capital expenditures (3) 60.9 10.6 7.6 79.1 Total capital expenditures $ 73.8 $ 21.8 $ 7.6 $ 103.2 Year Ended December 31, 2019 U.S. U.K. Brazil Total Total revenues $ 9,184.2 $ 2,413.7 $ 445.9 $ 12,043.8 Gross profit $ 1,494.8 $ 267.7 $ 53.5 $ 1,816.0 SG&A expenses (4) $ 1,075.6 $ 236.9 $ 46.0 $ 1,358.4 Depreciation and amortization expense $ 55.4 $ 14.6 $ 1.6 $ 71.6 Floorplan interest expense $ 53.7 $ 7.2 $ 0.7 $ 61.6 Other interest expense, net $ 67.5 $ 7.3 $ 0.1 $ 74.9 Income (loss) before income taxes (5) $ 227.9 $ (5.3) $ 4.6 $ 227.3 Capital expenditures: Real estate related capital expenditures $ 63.8 $ 25.7 $ 3.1 $ 92.5 Non-real estate related capital expenditures (3) 70.7 25.9 2.6 99.3 Total capital expenditures $ 134.5 $ 51.6 $ 5.7 $ 191.8 Year Ended December 31, 2018 U.S. U.K. Brazil Total Total revenues $ 8,723.3 $ 2,437.4 $ 440.7 $ 11,601.4 Gross profit $ 1,391.3 $ 279.9 $ 53.9 $ 1,725.1 SG&A expenses (6) $ 982.1 $ 240.4 $ 50.6 $ 1,273.1 Depreciation and amortization expense $ 52.9 $ 12.6 $ 1.6 $ 67.1 Floorplan interest expense $ 52.8 $ 6.3 $ 0.8 $ 59.9 Other interest expense, net $ 68.1 $ 6.8 $ 0.9 $ 75.8 Income (loss) before income taxes (7) $ 192.1 $ 13.3 $ — $ 205.4 Capital expenditures: Real estate related capital expenditures $ 20.5 $ 5.0 $ 5.8 $ 31.4 Non-real estate related capital expenditures (3) 80.2 27.5 2.0 109.6 Total capital expenditures $ 100.7 $ 32.5 $ 7.8 $ 141.0 (1) SG&A expenses for the year ended December 31, 2020 includes the following: in the U.S. segment, $10.6 million in stock-based compensation expense related to an out-of-period adjustment, $3.1 million net gain on disposition of real estate and dealership transactions and $2.7 million net gain on legal matters; in the U.K. segment, $2.2 million net gain on disposition of real estate and dealership transactions and $1.2 million in severance expense; and in the Brazil segment, $0.9 million in severance expense. (2) Income (loss) before taxes for the year ended December 31, 2020 includes the SG&A expenses described in note 1 above and additionally includes the following: in the U.S. segment, $13.8 million in asset impairments and $13.7 million loss on debt extinguishment; in the U.K. segment, $12.8 million in asset impairments; and in the Brazil segment, $11.1 million in asset impairments. (3) Non-real estate related capital expenditures exclude the net decrease (increase) in the accrual for capital expenditures from year-end of $1.7 million , $4.1 million and ($0.5 million) for the years ended December 31, 2020, 2019 and 2018, respectively. (4) SG&A expenses for the year ended December 31, 2019 includes the following: in the U.S. segment, $17.8 million in expenses related to flood damage from Tropical Storm Imelda and hail storm damages primarily in Texas. (5) Income (loss) before taxes for the year ended December 31, 2019 includes the SG&A expenses described in note 4 above and additionally includes the following: in the U.S. segment, $14.7 million in asset impairments; in the U.K. segment, $7.0 million in asset impairments; and in the Brazil segment, $0.5 million in asset impairments. (6) SG&A expenses for the year ended December 31, 2018 includes the following: in the U.S. segment, $25.2 million net gain on disposition of real estate and dealership transactions and $6.4 million of expenses related to catastrophic events mainly as a result of hail storms. (7) Income (loss) before taxes for the year ended December 31, 2018 includes the SG&A expenses described in note 6 above and additionally includes |
Goodwill and Intangible Franchise Rights and Total Assets by Reportable Segment | December 31, 2020 U.S. U.K. Brazil Total Property and equipment, net $ 1,303.1 $ 281.3 $ 23.9 $ 1,608.2 Operating lease assets $ 117.4 $ 89.6 $ 2.8 $ 209.9 Total assets $ 3,942.8 $ 1,116.8 $ 29.9 $ 5,089.4 December 31, 2019 U.S. U.K. Brazil Total Property and equipment, net $ 1,251.4 $ 271.0 $ 24.7 $ 1,547.1 Operating lease assets $ 114.8 $ 100.1 $ 5.2 $ 220.1 Total assets $ 4,256.1 $ 1,225.6 $ 88.6 $ 5,570.2 |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Business (Details) | Dec. 31, 2020dealershipstatetown |
U.S. | |
Business And Organization [Line Items] | |
Number of states in which the entity operates | state | 15 |
Number of dealerships | 117 |
U.K. | |
Business And Organization [Line Items] | |
Number of towns in which the entity operates | town | 33 |
Number of dealerships | 50 |
Brazil | |
Business And Organization [Line Items] | |
Number of states in which the entity operates | state | 3 |
Number of dealerships | 17 |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business And Organization [Line Items] | |||
Net income (loss) | $ 286.5 | $ 174 | $ 157.8 |
Decrease in diluted earnings (loss) per common share (in dollars per share) | $ (15.51) | $ (9.34) | $ (7.83) |
Restatement Adjustment | |||
Business And Organization [Line Items] | |||
Out-of-period adjustment | $ 10.6 | ||
Net income (loss) | $ (9.7) | ||
Decrease in diluted earnings (loss) per common share (in dollars per share) | $ 0.53 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Impairment of inventory | $ 0.9 | $ 16.1 | $ 6.1 |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Property and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment impairment charges | $ 4.2 | $ 1.8 | $ 5.1 |
Buildings and leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 25 years | ||
Buildings and leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 50 years | ||
Machinery and dealership equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 7 years | ||
Machinery and dealership equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 20 years | ||
Office equipment, furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Office equipment, furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 20 years | ||
Company vehicles | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Company vehicles | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years |
Business and Summary of Signi_8
Business and Summary of Significant Accounting Policies - Goodwill and Intangible Franchise Rights (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)geographic_region | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||||
Number of geographic regions | geographic_region | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Goodwill impairment | $ 0 | $ 10,700,000 | |||
Valuation, Income Approach [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill fair value approach | 0.80 | 0.80 | |||
Valuation, Market Approach [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill fair value approach | 0.20 | 0.20 | |||
Brazil | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill impairment | $ 10,700,000 | $ 10,700,000 | $ 0 | $ 0 | |
Franchise Rights | |||||
Segment Reporting Information [Line Items] | |||||
Impairment of intangibles | $ 20,800,000 | $ 19,000,000 | $ 38,700,000 | ||
Measurement Input, Discount Rate [Member] | U.S. | |||||
Segment Reporting Information [Line Items] | |||||
WACC applied | 0.11 | 0.11 | |||
Measurement Input, Discount Rate [Member] | Brazil | |||||
Segment Reporting Information [Line Items] | |||||
WACC applied | 0.16 | 0.16 | |||
Measurement Input, Discount Rate [Member] | U.K. | |||||
Segment Reporting Information [Line Items] | |||||
WACC applied | 0.13 | 0.13 |
Business and Summary of Signi_9
Business and Summary of Significant Accounting Policies - Income Taxes (Details) | Dec. 31, 2020state |
U.S. | |
Income Taxes [Line Items] | |
Number of states in which the entity operates | 15 |
Business and Summary of Sign_10
Business and Summary of Significant Accounting Policies - Advertising (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 49.9 | $ 75.2 | $ 75.2 |
Reduction in advertising expense for advertising assistance earned related to vehicles sold | $ 13 | $ 15.4 | $ 14.8 |
Business and Summary of Sign_11
Business and Summary of Significant Accounting Policies - Business and Credit Risk Concentrations (Details) - Due from Manufacturers | 12 Months Ended |
Dec. 31, 2020 | |
Toyota/Lexus | |
Concentration Risk [Line Items] | |
Percentage of Company's new vehicle sales volume more than which no other manufacturer accounted for | 23.90% |
Volkswagen/Audi/Porsche/SEAT/SKODA | |
Concentration Risk [Line Items] | |
Percentage of Company's new vehicle sales volume more than which no other manufacturer accounted for | 14.90% |
BMW/MINI | |
Concentration Risk [Line Items] | |
Percentage of Company's new vehicle sales volume more than which no other manufacturer accounted for | 11.40% |
Ford/Lincoln | |
Concentration Risk [Line Items] | |
Percentage of Company's new vehicle sales volume more than which no other manufacturer accounted for | 10.50% |
Business and Summary of Sign_12
Business and Summary of Significant Accounting Policies - Statements of Cash Flows (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Percent of value of the vehicle financed by the company (up to) | 85.00% |
Business and Summary of Sign_13
Business and Summary of Significant Accounting Policies - Self-Insured Medical, Property and Casualty Reserves (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Estimated liability on incurred worker’s compensation and general liability claims | $ 24 | $ 24.4 |
Business and Summary of Sign_14
Business and Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Right-of-use asset impairment charge | $ 2 | $ 1.4 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Stockholders’ equity | $ 1,449,600 | $ 1,255,700 | $ 1,095,700 | $ 1,124,300 | |
Charge back reserve | $ 47,100 | $ 49,700 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Stockholders’ equity | $ (6,100) | $ 11,400 | |||
Adjustment due to Topic 606 | Maintenance and Repair Services | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Stockholders’ equity | $ 4,800 | ||||
Adjustment due to Topic 606 | Vehicle Financing, Sale of Service and Insurance Contracts | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Stockholders’ equity | $ 6,600 |
Revenues - Revenues Disaggregat
Revenues - Revenues Disaggregated by Revenue Source and Geographical Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 10,851.8 | $ 12,043.8 | $ 11,601.4 |
Variable consideration recognized | 27.6 | 19.5 | 18.7 |
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 8,503.4 | 9,184.2 | 8,723.3 |
U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,096.8 | 2,413.7 | 2,437.4 |
Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 251.6 | 445.9 | 440.7 |
Total new and used vehicle sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 8,994.6 | 10,035.9 | 9,717 |
Total new and used vehicle sales | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,924.5 | 7,516.6 | 7,168.7 |
Total new and used vehicle sales | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,855.3 | 2,128.7 | 2,162.6 |
Total new and used vehicle sales | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 214.7 | 390.6 | 385.7 |
New vehicle retail sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 5,580.8 | 6,314.1 | 6,181.4 |
New vehicle retail sales | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4,406.6 | 4,832.2 | 4,682.8 |
New vehicle retail sales | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,021.8 | 1,195.1 | 1,217.1 |
New vehicle retail sales | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 152.4 | 286.8 | 281.4 |
Used vehicle retail sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,105.7 | 3,366.6 | 3,166.1 |
Used vehicle retail sales | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,348.5 | 2,509.9 | 2,307 |
Used vehicle retail sales | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 707.2 | 771.3 | 771.7 |
Used vehicle retail sales | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 50 | 85.4 | 87.4 |
Used vehicle wholesale sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 308.1 | 355.2 | 369.6 |
Used vehicle wholesale sales | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 169.4 | 174.5 | 178.9 |
Used vehicle wholesale sales | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 126.4 | 162.3 | 173.8 |
Used vehicle wholesale sales | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 12.3 | 18.3 | 16.9 |
Parts and service sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,389.3 | 1,510 | 1,416.9 |
Parts and service sales | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,162.6 | 1,234.4 | 1,153.3 |
Parts and service sales | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 194.8 | 227.9 | 217.6 |
Parts and service sales | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 31.9 | 47.6 | 46 |
Finance, insurance and other, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 467.9 | 497.9 | 467.5 |
Finance, insurance and other, net | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 416.3 | 433.2 | 401.3 |
Finance, insurance and other, net | U.K. | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 46.6 | 57 | 57.2 |
Finance, insurance and other, net | Brazil | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 5 | $ 7.6 | $ 9 |
Revenues - Changes in Contract
Revenues - Changes in Contract Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in Contract with Customer, Asset [Roll Forward] | |||
Contract Assets, January 1, 2020 | $ 21.6 | ||
Changes related to revenue recognition during the period | 27.6 | $ 19.5 | $ 18.7 |
Amounts invoiced during the period | (13.9) | ||
Contract Assets, December 31 | $ 35.3 | $ 21.6 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)franchisedealership | Dec. 31, 2019USD ($)dealershipfranchise | Dec. 31, 2018USD ($)dealershipfranchise | |
Business Acquisition [Line Items] | |||
Aggregate consideration paid for dealerships | $ | $ 1.3 | $ 143.2 | $ 140.4 |
Cash received in acquisition | $ | 5.1 | ||
Net pre-tax gain (loss) on dealership dispositions | $ | $ (3.1) | $ 5 | $ 24.4 |
U.S. | |||
Business Acquisition [Line Items] | |||
Number of dealerships acquired | 4 | 4 | |
Number of franchises acquired | franchise | 6 | 4 | |
Number of dealerships opened | 1 | 1 | |
Number of franchises awarded | franchise | 1 | 1 | |
Number of dealerships disposed | 2 | 4 | 2 |
Number of franchises disposed | franchise | 3 | 7 | 3 |
Number of franchises terminated | 2 | 1 | |
Net pre-tax gain (loss) on dealership dispositions | $ | $ 3.1 | $ 25.2 | |
U.K. | |||
Business Acquisition [Line Items] | |||
Number of dealerships acquired | 4 | 5 | |
Number of franchises acquired | franchise | 5 | 8 | |
Number of dealerships opened | 2 | 1 | |
Number of franchises awarded | franchise | 3 | 1 | |
Number of franchises added | franchise | 1 | ||
Number of dealerships disposed | 3 | 1 | |
Number of franchises disposed | 1 | ||
Number of franchises terminated | 4 | 1 | |
Net pre-tax gain (loss) on dealership dispositions | $ | $ 2.2 | ||
Brazil | |||
Business Acquisition [Line Items] | |||
Number of dealerships acquired | 1 | ||
Number of franchises acquired | franchise | 1 | ||
Number of dealerships opened | 1 | ||
Number of franchises awarded | franchise | 1 | ||
Number of dealerships disposed | 1 | ||
Number of franchises disposed | franchise | 1 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based Compensation Plans (Textual) [Abstract] | |||
Cash received from purchase plan purchases | $ 9,600,000 | $ 8,600,000 | $ 7,600,000 |
Stock-based compensation related to equity-settled RSUs | 32,300,000 | 18,800,000 | 18,700,000 |
Stock-based compensation related to cash-settled RSUs | 1,100,000 | 1,100,000 | |
Tax benefits related to total stock-based compensation | 5,000,000 | 3,500,000 | 3,400,000 |
Restricted Stock Awards | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Fair value of shares vested during period | $ 15,800,000 | $ 15,800,000 | $ 15,200,000 |
Granted (in shares) | 180,925 | ||
Weighted average grant date fair value (in dollars per share) | $ 95.10 | ||
Unrecognized compensation cost related to stock-based compensation arrangements | $ 23,100,000 | ||
Weighted average period for recognition of cost | 3 years 2 months 12 days | ||
Restricted Stock Awards | Maximum | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Vesting period upon issuance (up to) | 5 years | ||
Performance Awards | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Granted (in shares) | 20,992 | ||
Weighted average grant date fair value (in dollars per share) | $ 103.29 | ||
Unrecognized compensation cost related to stock-based compensation arrangements | $ 1,000,000 | ||
Weighted average period for recognition of cost | 1 year 7 months 6 days | ||
Employee Stock Purchase Plan | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Aggregate maximum shares to be issued or transferred (in shares) | 4,500,000 | ||
Shares available for issuance (in shares) | 646,118 | ||
Employee stock purchase price in percentage of fair market value | 85.00% | ||
Shares issued to employees (in shares) | 202,393 | 142,576 | 148,007 |
Weighted average per share fair value of employee stock purchase rights issued (in dollars per share) | $ 19.51 | $ 16 | $ 15.15 |
Employee maximum contribution rate (as a percentage) | 10.00% | ||
Employee maximum contribution | $ 25,000 | ||
Restricted Stock Units (RSUs) | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Granted (in shares) | 5,982 | ||
Weighted average grant date fair value (in dollars per share) | $ 100.26 | ||
Unrecognized compensation cost related to stock-based compensation arrangements | $ 2,200,000 | ||
Incentive Plan | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Aggregate maximum shares to be issued or transferred (in shares) | 2,200,000 | ||
Shares available for issuance (in shares) | 1,400,000 | ||
Incentive Plan | Restricted Stock Awards | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Vest percentage | 100.00% | ||
Incentive Plan | Performance Awards | |||
Stock-based Compensation Plans (Textual) [Abstract] | |||
Performance period | 2 years | ||
Vesting service period | 3 years | ||
Granted shares earned (up to) | 200.00% |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Summary of the Restricted Stock Awards (Details) - Restricted Stock Awards | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Awards | |
Unsettled, beginning balance (in shares) | shares | 674,206 |
Granted (in shares) | shares | 180,925 |
Vested (in shares) | shares | (214,635) |
Forfeited (in shares) | shares | (19,953) |
Unsettled, ending balance (in shares) | shares | 620,543 |
Weighted Average Grant Date Fair Value | |
Nonvested (in dollars per share) | $ / shares | $ 70.19 |
Granted (in dollars per share) | $ / shares | 95.10 |
Vested (in dollars per share) | $ / shares | 73.65 |
Forfeited (in dollars per share) | $ / shares | 68.86 |
Nonvested (in dollars per share) | $ / shares | $ 76.22 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Summary of the Restricted Stock Units (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Awards | |
Unsettled, beginning balance (in shares) | shares | 10,689 |
Granted (in shares) | shares | 5,982 |
Unsettled, ending balance (in shares) | shares | 16,671 |
Weighted Average Grant Date Fair Value | |
Nonvested (in dollars per share) | $ / shares | $ 53.33 |
Granted (in dollars per share) | $ / shares | 100.26 |
Nonvested (in dollars per share) | $ / shares | $ 130.30 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Summary of the Performance Awards (Details) - Performance Awards | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Awards | |
Unsettled, beginning balance (in shares) | shares | 30,555 |
Granted (in shares) | shares | 20,992 |
Forfeited (in shares) | shares | (6,444) |
Unsettled, ending balance (in shares) | shares | 45,103 |
Weighted Average Grant Date Fair Value | |
Nonvested (in dollars per share) | $ / shares | $ 65.83 |
Granted (in dollars per share) | $ / shares | 103.29 |
Forfeited (in dollars per share) | $ / shares | 80.62 |
Nonvested (in dollars per share) | $ / shares | $ 81.15 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Weighted average common shares outstanding (in shares) | 17,754,666 | 17,917,195 | 19,452,560 |
Dilutive effect of employee stock purchases, net of assumed repurchase of treasury stock (in shares) | 51,912 | 18,879 | 8,492 |
Weighted average dilutive common shares outstanding (in shares) | 17,806,578 | 17,936,074 | 19,461,052 |
Basic: | |||
Net income (loss) | $ 286.5 | $ 174 | $ 157.8 |
Less: Earnings (loss) allocated to participating securities | 10.3 | 6.4 | 5.4 |
Net income (loss) available to basic common shares | $ 276.2 | $ 167.6 | $ 152.4 |
Basic earnings (loss) per common share (in dollars per share) | $ 15.55 | $ 9.35 | $ 7.83 |
Diluted: | |||
Net income (loss) | $ 286.5 | $ 174 | $ 157.8 |
Less: Earnings (loss) allocated to participating securities | 10.3 | 6.4 | 5.4 |
Net income (loss) available to diluted common shares | $ 276.2 | $ 167.6 | $ 152.4 |
Diluted earnings (loss) per common share (in dollars per share) | $ 15.51 | $ 9.34 | $ 7.83 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Narrative (Details) | 12 Months Ended | |||||
Dec. 31, 2020USD ($)swap | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 02, 2020USD ($) | Aug. 17, 2020USD ($) | Apr. 02, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gain (loss) related to hedge ineffectiveness | $ 0 | $ 0 | $ 0 | |||
Amount expected to be reclassified from other comprehensive loss into earnings | $ 2,300,000 | |||||
5.25% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 5.25% | 5.25% | ||||
Redeemed aggregate principal amount | $ 300,000,000 | |||||
5.00% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 5.00% | 5.00% | ||||
Redeemed aggregate principal amount | $ 550,000,000 | |||||
4.00% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 4.00% | |||||
4.00% Senior Notes | Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Aggregate principal amount | $ 550,000,000 | |||||
Interest rate | 4.00% | |||||
Demand Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Carrying value | $ 60,000,000 | $ 0 | ||||
Interest Rate Swaps | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of additional forward interest rate swaps | swap | 36 | |||||
Notional value | $ 798,700,000 | |||||
Weighted average derivative interest rate | 1.40% | |||||
Forward Interest Rate Swaps | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of additional forward interest rate swaps | swap | 10 | |||||
Notional value | $ 575,000,000 | |||||
Weighted average derivative interest rate | 1.40% |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Schedule of Long-term Debt Carrying Value and Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Debt, fair value | $ 634.3 | $ 40.7 |
Carrying Value | 4.00% Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, fair value | 550 | 0 |
Carrying Value | Real estate related | ||
Debt Instrument [Line Items] | ||
Debt, fair value | 84.3 | 40.7 |
Fair Value | ||
Debt Instrument [Line Items] | ||
Debt, fair value | 644 | 41.1 |
Fair Value | 4.00% Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, fair value | 567 | 0 |
Fair Value | Real estate related | ||
Debt Instrument [Line Items] | ||
Debt, fair value | $ 77 | $ 41.1 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Assets and Liabilities Associated with Interest Rate Derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Other current assets | $ 1.9 | $ 0 |
Other long-term assets | 0.3 | 1.9 |
Total | 2.3 | 1.9 |
Liabilities from interest rate risk management activities | ||
Accrued expenses and other current liabilities | 4.2 | 2.8 |
Long-term interest rate swap liabilities | 40.6 | 4.4 |
Total | $ 44.8 | $ 7.2 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Impact of Interest Rate Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Amount of unrealized income (loss), net of tax, recognized in other comprehensive (loss) income | $ (36.7) | $ (13.3) | |
Amount of unrealized income (loss), net of tax, recognized in other comprehensive (loss) income | $ 6.5 | ||
Floorplan interest expense, net | |||
Derivative [Line Items] | |||
Amount of income (loss) reclassified from other comprehensive (loss) income into statements of operations | (7.9) | (0.4) | |
Amount of income (loss) reclassified from other comprehensive (loss) income into statements of operations | (4.7) | ||
Other interest expense, net | |||
Derivative [Line Items] | |||
Amount of income (loss) reclassified from other comprehensive (loss) income into statements of operations | $ (2.9) | $ 0.1 | |
Amount of income (loss) reclassified from other comprehensive (loss) income into statements of operations | $ (0.5) |
Receivables, Net and Contract_3
Receivables, Net and Contract Assets - Financial Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contracts-in-transit | $ 147,100,000 | $ 169,900,000 |
Vehicle receivables | 64,500,000 | 84,300,000 |
Total contracts-in-transit and vehicle receivables | 211,500,000 | 254,100,000 |
Less: allowance for doubtful accounts | 300,000 | 300,000 |
Total contracts-in-transit and vehicle receivables, net | 211,200,000 | 253,800,000 |
Accounts and notes receivable | ||
Accounts and notes receivable | 203,100,000 | 227,900,000 |
Less: allowance for doubtful accounts | 3,200,000 | 2,800,000 |
Total accounts and notes receivables, net | 200,000,000 | 225,100,000 |
Total contract assets | 35,300,000 | 21,600,000 |
Allowance for doubtful accounts | 0 | 0 |
Manufacturer receivables | ||
Accounts and notes receivable | ||
Accounts and notes receivable | 108,700,000 | 123,900,000 |
Parts and service receivables | ||
Accounts and notes receivable | ||
Accounts and notes receivable | 53,200,000 | 57,000,000 |
F&I receivables | ||
Accounts and notes receivable | ||
Accounts and notes receivable | 27,400,000 | 28,300,000 |
Other | ||
Accounts and notes receivable | ||
Accounts and notes receivable | $ 13,800,000 | $ 18,700,000 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
New vehicles | $ 902.5 | $ 1,328.6 |
Used vehicles | 374.8 | 346.7 |
Rental vehicles | 110.7 | 140.9 |
Parts, accessories and other | 80.1 | 85.5 |
Total inventories | $ 1,468 | $ 1,901.7 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |||
Lower of cost or net realizable value reserves | $ 8.8 | $ 9.7 | |
Reduction in inventory cost for interest received from manufacturers | 7.4 | 10.7 | |
Reduction in new vehicle cost of sales for interest assistance received related to vehicles sold | $ 47.3 | $ 49.1 | $ 47.3 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,068.4 | $ 1,947.3 |
Less: accumulated depreciation and amortization | 460.2 | 400.2 |
Property and equipment, net | 1,608.2 | 1,547.1 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 619.8 | 571.3 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,107.1 | 1,067.6 |
Machinery and dealership equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 145.8 | 138.2 |
Office equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 124.1 | 118.5 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15 | 15.1 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 56.6 | $ 36.5 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Asset impairments related to property and equipment | $ 4.2 | $ 1.8 | $ 5.1 |
Depreciation and amortization expense, including amortization of capital leases | 71.6 | 67.1 | |
Capitalized interest costs | 1.1 | 1.3 | 1.3 |
U.S. | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairments related to property and equipment | $ 4.2 | 1.3 | $ 5.1 |
Brazil | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairments related to property and equipment | $ 0.5 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Segment Reporting Information [Line Items] | |||
Operating lease assets | $ 209.9 | $ 220.1 | |
Operating liabilities | 229.1 | ||
Right-of-use asset impairment charge | 2 | 1.4 | |
ASU 2016-02 | |||
Segment Reporting Information [Line Items] | |||
Operating lease assets | $ 222.6 | ||
Operating liabilities | 236.7 | ||
ASU 2016-02 | Retained Earnings | |||
Segment Reporting Information [Line Items] | |||
Cumulative effect adjustments to retained earnings | $ 6.1 | ||
U.K. | |||
Segment Reporting Information [Line Items] | |||
Operating lease assets | 89.6 | 100.1 | |
Right-of-use asset impairment charge | 1.8 | 1.4 | |
Brazil | |||
Segment Reporting Information [Line Items] | |||
Operating lease assets | 2.8 | $ 5.2 | |
Right-of-use asset impairment charge | $ 0.2 |
Leases - Components of Operatin
Leases - Components of Operating and Finance Leases (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Operating | $ 209.9 | $ 220.1 |
Finance | 117.8 | 75.5 |
Total | 327.7 | 295.5 |
Current | ||
Operating | 21.5 | 24.6 |
Finance | 9.4 | 6.6 |
Noncurrent | ||
Operating | 207.6 | 210.7 |
Finance | 115.5 | 76.3 |
Total | $ 353.9 | $ 318.3 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Expense | ||
Operating, selling, general and administrative expenses | $ 35.3 | $ 40.1 |
Operating, asset impairments | 2 | 1.4 |
Variable | 2.8 | 2.3 |
Sublease income | (1.3) | (1.5) |
Finance: | ||
Amortization of lease assets | 6.3 | 5.5 |
Interest on lease liabilities | 7 | 4.8 |
Net lease expense | $ 52.1 | $ 52.6 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 33.4 |
2022 | 33.3 |
2023 | 31 |
2024 | 26.6 |
2025 | 24.1 |
Thereafter | 182 |
Total lease payments | 330.3 |
Less: lease payments representing interest | (101.2) |
Present value of lease liabilities | 229.1 |
Finance Leases | |
2021 | 16.2 |
2022 | 12.8 |
2023 | 11.5 |
2024 | 25.2 |
2025 | 33.9 |
Thereafter | 71.2 |
Total lease payments | 170.8 |
Less: lease payments representing interest | (45.9) |
Present value of lease liabilities | $ 124.9 |
Leases - Weighted-Average Lease
Leases - Weighted-Average Lease Term and Discount Rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease terms for operating leases | 12 years 9 months 18 days | |
Weighted-average remaining lease terms for finance leases | 15 years 10 months 24 days | |
Weighted-average discount rates used to determine operating lease liabilities | 5.60% | 6.10% |
Weighted-average discount rates used to determine finance lease liabilities | 6.20% | 7.20% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 35.2 | $ 41.6 |
Operating cash flows from finance leases | 7 | 4.8 |
Financing cash flows from finance leases | 6.3 | 3.8 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases, initial recognition | 4.3 | 34 |
Operating leases, modifications and remeasurements | 9.7 | (9.1) |
Finance leases, initial recognition | 15.7 | 29.6 |
Finance leases, modifications and remeasurements | $ 31.8 | $ 8.2 |
Intangible Franchise Rights a_3
Intangible Franchise Rights and Goodwill - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Countries and States [Line Items] | |||||
Goodwill impairment | $ 0 | $ 10,700,000 | |||
Brazil | |||||
Countries and States [Line Items] | |||||
Goodwill impairment | $ 10,700,000 | 10,700,000 | $ 0 | $ 0 | |
Franchise Rights | |||||
Countries and States [Line Items] | |||||
Impairment of intangibles | 20,800,000 | 19,000,000 | 38,700,000 | ||
U.S. | |||||
Countries and States [Line Items] | |||||
Goodwill impairment | 0 | ||||
Impairment charges | 9,700,000 | ||||
Additions through acquisitions | 13,400,000 | 38,300,000 | |||
U.S. | Franchise Rights | |||||
Countries and States [Line Items] | |||||
Additions through acquisitions | 12,100,000 | ||||
U.K. | |||||
Countries and States [Line Items] | |||||
Goodwill impairment | 0 | ||||
Additions through acquisitions | $ 5,600,000 | $ 500,000 | |||
U.K. | Franchise Rights | |||||
Countries and States [Line Items] | |||||
Impairment of intangibles | 11,100,000 | ||||
Brazil | |||||
Countries and States [Line Items] | |||||
Goodwill impairment | 10,700,000 | ||||
Brazil | Franchise Rights | |||||
Countries and States [Line Items] | |||||
Impairment of intangibles | $ 100,000 | ||||
Intangible assets balance | $ 0 | $ 0 |
Intangible Franchise Rights a_4
Intangible Franchise Rights and Goodwill - Roll-Forward of Intangible Franchise Rights by Reportable Segment (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Indefinite-lived Intangible Assets [Line Items] | ||
BALANCE | $ 232.8 | $ 253.5 |
U.S. | ||
Indefinite-lived Intangible Assets [Line Items] | ||
BALANCE | 213.4 | 223.1 |
U.K. | ||
Indefinite-lived Intangible Assets [Line Items] | ||
BALANCE | 19.4 | 30.4 |
Brazil | ||
Indefinite-lived Intangible Assets [Line Items] | ||
BALANCE | $ 0 | $ 0.1 |
Intangible Franchise Rights a_5
Intangible Franchise Rights and Goodwill - Roll-Forward of Goodwill by Reportable Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||
BALANCE | $ 1,008,300,000 | $ 963,900,000 | |
Additions through acquisitions | 1,400,000 | 43,300,000 | |
Disposals | (2,000,000) | (1,600,000) | |
Impairments | $ 0 | (10,700,000) | |
Currency translation | 100,000 | 2,700,000 | |
BALANCE | 997,100,000 | 997,100,000 | 1,008,300,000 |
Accumulated impairment | 97,800,000 | 97,800,000 | |
U.S. | |||
Goodwill [Roll Forward] | |||
BALANCE | 902,300,000 | 861,600,000 | |
Additions through acquisitions | 1,400,000 | 42,000,000 | |
Disposals | (2,000,000) | (1,300,000) | |
Impairments | 0 | ||
Currency translation | 0 | 0 | |
BALANCE | 901,700,000 | 901,700,000 | 902,300,000 |
Accumulated impairment | 40,600,000 | 40,600,000 | |
U.K. | |||
Goodwill [Roll Forward] | |||
BALANCE | 92,100,000 | 87,600,000 | |
Additions through acquisitions | 0 | 1,300,000 | |
Disposals | 0 | 0 | |
Impairments | 0 | ||
Currency translation | 3,200,000 | 3,200,000 | |
BALANCE | 95,400,000 | 95,400,000 | 92,100,000 |
Brazil | |||
Goodwill [Roll Forward] | |||
BALANCE | 13,900,000 | 14,700,000 | |
Additions through acquisitions | 0 | 0 | |
Disposals | 0 | (300,000) | |
Impairments | (10,700,000) | ||
Currency translation | (3,100,000) | (500,000) | |
BALANCE | 0 | 0 | $ 13,900,000 |
Accumulated impairment | $ 57,200,000 | $ 57,200,000 |
Floorplan Notes Payable - Sched
Floorplan Notes Payable - Schedule of Floorplan Notes Payable (Details) - Line of credit - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Revolving credit facility - floorplan notes payable | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 901.6 | $ 1,206 |
Long-term debt, offset | (160.4) | (106.8) |
Long-term debt | 741.2 | 1,099.1 |
Other non-manufacturer facilities | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | 26.4 | 45.3 |
Floorplan notes payable - credit facility and other, net | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | 767.6 | 1,144.4 |
FMCC facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 111.2 | 208.5 |
Long-term debt, offset | (16) | (4.1) |
Long-term debt | 95.2 | 204.5 |
Other manufacturer affiliate facilities | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | 232.3 | 255.4 |
Floorplan notes payable - manufacturer affiliates, net | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | $ 327.5 | $ 459.9 |
Floorplan Notes Payable - Narra
Floorplan Notes Payable - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Sep. 02, 2020 | Apr. 02, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||
Outstanding letters of credit | $ 17,800,000 | $ 23,600,000 | ||
Unamortized discount | $ 2,600,000 | $ 1,900,000 | ||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 1,750,000,000 | |||
Unamortized discount | 3,600,000 | 4,700,000 | ||
Restrictions limit | 235,300,000 | |||
Floorplan Line | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 1,700,000,000 | |||
Commitment fee (as a percentage) | 0.15% | |||
Weighted average interest rate (as a percentage) | 1.20% | |||
FMCC facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | |||
Interest rate (as a percentage) | 5.50% | |||
Acquisition Line | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 349,000,000 | |||
Minimum borrowing capacity | 50,000,000 | |||
Sub-limit for letters of credit | $ 100,000,000 | |||
Interest rate (as a percentage) | 1.29% | |||
Outstanding balance | $ 47,800,000 | $ 72,500,000 | ||
Acquisition Line | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee (as a percentage) | 0.15% | |||
Acquisition Line | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee (as a percentage) | 0.40% | |||
Other Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding balance | $ 232,300,000 | |||
UK Credit Facilities | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding balance | $ 131,200,000 | |||
UK Credit Facilities | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 1.00% | |||
UK Credit Facilities | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 4.00% | |||
Rental Vehicles Financed through Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding balance | $ 94,400,000 | |||
Rental Vehicles Financed through Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 1.00% | |||
Rental Vehicles Financed through Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 6.00% | |||
Brazilian Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding balance | $ 6,700,000 | |||
Brazilian Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 2.00% | |||
Brazilian Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percentage) | 10.00% | |||
LIBOR | Acquisition Line | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percentage) | 1.00% | |||
LIBOR | Acquisition Line | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percentage) | 2.00% | |||
LIBOR | New vehicles | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percentage) | 1.10% | |||
LIBOR | Used vehicles | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percentage) | 1.40% | |||
Prime Rate | FMCC facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percentage) | 1.50% | |||
4.00% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 4.00% |
Debt - Composition of Long-term
Debt - Composition of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 02, 2020 | Apr. 02, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Other long-term debt | $ 764,600 | $ 579,100 | ||
Finance leases | 124,900 | |||
Total Debt | 1,362,400 | 1,501,600 | ||
Less: unamortized discount | 0 | 5,600 | ||
Less: unamortized debt issuance costs | 11,000 | 4,800 | ||
Less current maturities of long-term debt | 56,700 | 59,100 | ||
Long-term debt and capital lease obligations | 1,294,700 | 1,432,100 | ||
Acquisition Line | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowing balance | $ 47,800 | 72,500 | ||
4.00% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.00% | |||
Long-term debt | $ 550,000 | 0 | ||
5.00% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.00% | 5.00% | ||
Long-term debt | $ 0 | 550,000 | ||
5.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.25% | 5.25% | ||
Long-term debt | $ 0 | 300,000 | ||
Real estate related | ||||
Debt Instrument [Line Items] | ||||
Other long-term debt | 619,800 | 453,300 | ||
Finance Lease | ||||
Debt Instrument [Line Items] | ||||
Other | 124,800 | 83,000 | ||
Other Debt | ||||
Debt Instrument [Line Items] | ||||
Other | $ 20,000 | $ 42,800 |
Debt - Aggregate Annual Maturit
Debt - Aggregate Annual Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 57.3 | |
2022 | 70.1 | |
2023 | 94.9 | |
2024 | 144.9 | |
2025 | 93.1 | |
Thereafter | 902.2 | |
Total Debt | $ 1,362.4 | $ 1,501.6 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - 4.00% Senior Notes | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
Interest rate | 4.00% |
Aggregate principal amount | $ 550,000,000 |
Effective interest rate | 4.21% |
Debt - Redemptions (Details)
Debt - Redemptions (Details) - USD ($) $ in Thousands | Sep. 02, 2020 | Apr. 02, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument, Redemption [Line Items] | |||||
Redemption percentage | 102.625% | ||||
(Gain) loss on extinguishment of debt | $ 3,300 | $ 10,400 | $ 13,700 | $ 0 | $ 0 |
Unamortized discount | 2,600 | 1,900 | |||
Unamortized premium | 700 | 600 | |||
Accrued interest paid | $ 6,900 | $ 4,600 | |||
4.00% Senior Notes | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate | 4.00% | ||||
5.00% Senior Notes | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate | 5.00% | 5.00% | |||
Redeemed aggregate principal amount | $ 550,000 | ||||
5.00% Senior Notes | August 15, 2023 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Redemption percentage | 102.00% | ||||
5.00% Senior Notes | August 15, 2024 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Redemption percentage | 101.333% | ||||
5.00% Senior Notes | August 15, 2025 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Redemption percentage | 100.667% | ||||
5.00% Senior Notes | August 15, 2026 and thereafter | |||||
Debt Instrument, Redemption [Line Items] | |||||
Redemption percentage | 100.00% | ||||
5.25% Senior Notes | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate | 5.25% | 5.25% | |||
Redeemed aggregate principal amount | $ 300,000 | ||||
Principal amount of notes redeemed plus associated premium | $ 307,900 |
Debt - Acquisition Line (Detail
Debt - Acquisition Line (Details) - Acquisition Line - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Outstanding borrowing balance | $ 47.8 | $ 72.5 |
Interest rate (as a percentage) | 1.29% |
Debt - Real Estate Related (Det
Debt - Real Estate Related (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Carrying values of the related collateralized real estate | $ 893.6 | $ 436.2 |
Real Estate Related and Other Long-Term Debt | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | 619.8 | |
Real Estate Related and Other Long-Term Debt | U.S. Notes | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | 514.9 | |
Real Estate Related and Other Long-Term Debt | U.K. Notes | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | 92.9 | |
Real Estate Related and Other Long-Term Debt | Brazil Note | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 12 |
Income Taxes - Income_(Loss) be
Income Taxes - Income/(Loss) before Income Taxes by Geographic Area (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 366.6 | $ 227.9 | $ 192.1 |
Foreign | 3.7 | (0.6) | 13.3 |
INCOME (LOSS) BEFORE INCOME TAXES | $ 370.3 | $ 227.3 | $ 205.4 |
Income Taxes - Federal, State a
Income Taxes - Federal, State and Foreign Income Tax Provisions/(Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Federal: | |||
Current | $ 70.8 | $ 30.9 | $ 35.9 |
Deferred | 5.4 | 16.5 | 2.6 |
State: | |||
Current | 7 | 3.8 | 4.3 |
Deferred | (1.3) | 4 | 0.9 |
Foreign: | |||
Current | 7 | 2.3 | 3.9 |
Deferred | (5.1) | (4.3) | 0 |
(Benefit) provision for income taxes | $ 83.8 | $ 53.3 | $ 47.6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)subsidiary | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Valuation Allowance [Line Items] | |||
U.S. federal statutory corporate tax rate | 21.00% | 21.00% | |
Provision for income taxes | $ 83.8 | $ 53.3 | $ 47.6 |
Effective tax rate | 22.60% | 23.40% | 23.20% |
Number of foreign subsidiaries | subsidiary | 2 | ||
Deferred tax liabilities, net | $ 13.1 | ||
Unrecognized tax benefits that would affect the effective tax rate if recognized | 1.7 | $ 2.1 | $ 1.4 |
Interest and penalties related to uncertain tax positions | 0.3 | $ 0.3 | $ 0.2 |
State | |||
Valuation Allowance [Line Items] | |||
NOL carryforwards | 564.8 | ||
Foreign | |||
Valuation Allowance [Line Items] | |||
NOL carryforwards | $ 85.1 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense due to the U.S. Federal Statutory Corporate Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Provision at the U.S. federal statutory rate | $ 77.7 | $ 47.7 | $ 43.1 |
Increase (decrease) resulting from: | |||
State income tax, net of benefit for federal deduction | 5.8 | 5.2 | 3.6 |
Foreign income tax rate differential | (1.4) | 0.9 | (0.3) |
Tax Credits | (0.3) | (1.1) | (1.3) |
Changes in valuation allowances | 2.3 | (1.7) | 3.4 |
Tax Act — Enactment date effect | 0 | 0 | (0.6) |
Stock-based compensation | (0.8) | 0 | (0.1) |
Uncertain tax benefits | (0.3) | 0.7 | 0.4 |
Other | 0.8 | 1.6 | (0.7) |
(Benefit) provision for income taxes | $ 83.8 | $ 53.3 | $ 47.6 |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences Representing Deferred Tax Assets/Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Loss reserves and accruals | $ 52.9 | $ 42.8 |
Interest rate swaps | 10 | 1.3 |
U.S. state net operating loss (“NOL”) carryforwards | 34.5 | 38.2 |
Foreign NOL carryforwards | 28.9 | 37.6 |
Operating lease liabilities | 56.9 | 55.5 |
Goodwill and intangible franchise rights | 2.6 | 0 |
Other | 2.2 | 1.5 |
Deferred tax assets | 188 | 176.9 |
Less: valuation allowance on deferred tax assets | 60.5 | 69.7 |
Net deferred tax assets | 127.5 | 107.2 |
Deferred tax liabilities: | ||
Goodwill and intangible franchise rights | 142 | 135.1 |
Depreciation expense | 71.1 | 68 |
Operating lease ROU assets | 45 | 45.4 |
Other | 2 | 0 |
Deferred tax liabilities | 260.1 | 248.5 |
Net deferred tax liability | $ 132.6 | $ 141.3 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
BALANCE | $ 2.4 | $ 1.6 | $ 1.2 |
Additions for current tax | 0.5 | 1 | 0.6 |
Additions based on tax positions in prior years | 0 | 0 | 0 |
Reductions for tax positions | (0.4) | 0 | 0 |
Settlements with tax authorities | 0 | 0 | 0 |
Reductions due to lapse of statutes of limitations | (0.5) | (0.2) | (0.1) |
BALANCE | $ 2 | $ 2.4 | $ 1.6 |
Income Taxes - Classification o
Income Taxes - Classification of Net Deferred Tax Liability (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset, included in Other long-term assets | $ 8.4 | $ 4.4 |
Deferred tax liability, included in Deferred income taxes | 141 | 145.7 |
Net deferred tax liability | $ 132.6 | $ 141.3 |
Employee Savings Plans (Details
Employee Savings Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation liability | $ 78.4 | $ 72.3 | |
Deferred compensation liability, current | 5.3 | 3.3 | |
UNITED STATES | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Matching contributions paid | 3.6 | 6.6 | $ 6.2 |
UNITED KINGDOM | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Matching contributions paid | $ 2.9 | $ 3.7 | $ 2.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee rental payment obligations during remaining terms of leases under guarantee agreement | $ 28.5 |
Letters of credit issued on behalf of lessee | $ 5.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increase (Decrease) in AOCI [Roll Forward] | |||
BALANCE | $ 1,255.7 | $ 1,095.7 | $ 1,124.3 |
Other comprehensive income (loss) before reclassifications | |||
Pre-tax | (54.2) | (13.5) | (15.5) |
Tax effect | 8.8 | 4.1 | (2.1) |
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Provision (benefit) for income taxes | (2.6) | (0.1) | (1.2) |
Net current period other comprehensive income (loss) | (37.1) | (9.2) | (14.4) |
Tax effects reclassified from accumulated other comprehensive income (loss) | (0.2) | ||
BALANCE | 1,449.6 | 1,255.7 | 1,095.7 |
Floorplan interest expense (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 7.9 | 0.4 | 4.7 |
Other interest expense, net (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 2.8 | (0.2) | 0.5 |
Realized (gain) loss on interest rate swap termination (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 0.1 | (0.7) | |
Accumulated Other Comprehensive Income (Loss) | |||
Increase (Decrease) in AOCI [Roll Forward] | |||
BALANCE | (147) | (137.8) | (123.2) |
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Net current period other comprehensive income (loss) | (37.1) | (9.2) | (14.4) |
BALANCE | (184) | (147) | (137.8) |
Accumulated income (loss) on foreign currency translation | |||
Increase (Decrease) in AOCI [Roll Forward] | |||
BALANCE | (142.9) | (146.7) | (122.6) |
Other comprehensive income (loss) before reclassifications | |||
Pre-tax | (8.7) | 3.9 | (24.2) |
Tax effect | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Provision (benefit) for income taxes | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | (8.7) | 3.9 | (24.2) |
Tax effects reclassified from accumulated other comprehensive income (loss) | 0 | ||
BALANCE | (151.6) | (142.9) | (146.7) |
Accumulated income (loss) on foreign currency translation | Floorplan interest expense (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 0 | 0 | 0 |
Accumulated income (loss) on foreign currency translation | Other interest expense, net (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 0 | 0 | 0 |
Accumulated income (loss) on foreign currency translation | Realized (gain) loss on interest rate swap termination (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 0 | 0 | |
Accumulated income (loss) on interest rate swaps | |||
Increase (Decrease) in AOCI [Roll Forward] | |||
BALANCE | (4.1) | 8.9 | |
Other comprehensive income (loss) before reclassifications | |||
Pre-tax | (45.5) | (17.4) | |
Tax effect | 8.8 | 4.1 | |
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Provision (benefit) for income taxes | (2.6) | (0.1) | |
Net current period other comprehensive income (loss) | (28.4) | (13) | |
BALANCE | (32.5) | (4.1) | 8.9 |
Accumulated income (loss) on interest rate swaps | Floorplan interest expense (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 7.9 | 0.4 | |
Accumulated income (loss) on interest rate swaps | Other interest expense, net (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 2.8 | (0.2) | |
Accumulated income (loss) on interest rate swaps | Realized (gain) loss on interest rate swap termination (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | $ 0.1 | (0.7) | |
Accumulated income (loss) on interest rate swaps | |||
Increase (Decrease) in AOCI [Roll Forward] | |||
BALANCE | $ 8.9 | (0.7) | |
Other comprehensive income (loss) before reclassifications | |||
Pre-tax | 8.6 | ||
Tax effect | (2.1) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Provision (benefit) for income taxes | (1.2) | ||
Net current period other comprehensive income (loss) | 9.8 | ||
Tax effects reclassified from accumulated other comprehensive income (loss) | (0.2) | ||
BALANCE | 8.9 | ||
Accumulated income (loss) on interest rate swaps | Floorplan interest expense (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | 4.7 | ||
Accumulated income (loss) on interest rate swaps | Other interest expense, net (pre-tax) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | |||
Pre-tax | $ 0.5 |
Cash Flow Information - Narrati
Cash Flow Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash and cash equivalents | $ 87.3 | $ 23.8 | |
Restricted cash, included in other assets | 4.3 | ||
Decrease (increase) in accrual for capital expenditures | 1.7 | 4.1 | $ (0.5) |
Cash paid for interest | 92.5 | 125.3 | 128.6 |
Cash paid for taxes, net of refunds | $ 64 | $ 48.3 | $ 40.8 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Reportabl
Segment Information - Reportable Segment Information (Details) - USD ($) $ in Thousands | Sep. 02, 2020 | Apr. 02, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 10,851,800 | $ 12,043,800 | $ 11,601,400 | ||
Gross profit | 1,769,000 | 1,816,000 | 1,725,100 | ||
SG&A expense | 1,169,300 | 1,358,400 | 1,273,100 | ||
Depreciation and amortization | 75,800 | 71,600 | 67,100 | ||
Floorplan interest expense | 39,500 | 61,600 | 59,900 | ||
Other interest expense, net | 62,600 | 74,900 | 75,800 | ||
Income (loss) before income taxes | 370,300 | 227,300 | 205,400 | ||
Real estate related capital expenditures | 24,100 | 92,500 | 31,400 | ||
Non-real estate related capital expenditures | 79,100 | 99,300 | 109,600 | ||
Total capital expenditures | 103,200 | 191,800 | 141,000 | ||
(Gain) loss on extinguishment of debt | $ (3,300) | $ (10,400) | (13,700) | 0 | 0 |
Asset impairments | 37,700 | 22,200 | 43,900 | ||
Decrease (increase) in accrual for capital expenditures | 1,700 | 4,100 | (500) | ||
Loss due to catastrophic events | 900 | 16,100 | 6,100 | ||
Gain (loss) on disposition on real estate and dealership transactions | (3,100) | 5,000 | 24,400 | ||
U.S. | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 8,503,400 | 9,184,200 | 8,723,300 | ||
Gross profit | 1,486,000 | 1,494,800 | 1,391,300 | ||
SG&A expense | 947,000 | 1,075,600 | 982,100 | ||
Depreciation and amortization | 57,700 | 55,400 | 52,900 | ||
Floorplan interest expense | 32,200 | 53,700 | 52,800 | ||
Other interest expense, net | 55,000 | 67,500 | 68,100 | ||
Income (loss) before income taxes | 366,600 | 227,900 | 192,100 | ||
Real estate related capital expenditures | 12,900 | 63,800 | 20,500 | ||
Non-real estate related capital expenditures | 60,900 | 70,700 | 80,200 | ||
Total capital expenditures | 73,800 | 134,500 | 100,700 | ||
Stock-based compensation expense | (10,600) | ||||
(Gain) loss on extinguishment of debt | 13,700 | ||||
Asset impairments | 13,800 | 14,700 | 43,400 | ||
Loss due to catastrophic events | (17,800) | 6,400 | |||
Gain (loss) on disposition on real estate and dealership transactions | 3,100 | 25,200 | |||
U.K. | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 2,096,800 | 2,413,700 | 2,437,400 | ||
Gross profit | 248,100 | 267,700 | 279,900 | ||
SG&A expense | 191,200 | 236,900 | 240,400 | ||
Depreciation and amortization | 15,800 | 14,600 | 12,600 | ||
Floorplan interest expense | 7,100 | 7,200 | 6,300 | ||
Other interest expense, net | 6,900 | 7,300 | 6,800 | ||
Income (loss) before income taxes | 14,200 | (5,300) | 13,300 | ||
Real estate related capital expenditures | 11,200 | 25,700 | 5,000 | ||
Non-real estate related capital expenditures | 10,600 | 25,900 | 27,500 | ||
Total capital expenditures | 21,800 | 51,600 | 32,500 | ||
Severance expense | (1,200) | ||||
Asset impairments | 12,800 | 7,000 | |||
Gain (loss) on disposition on real estate and dealership transactions | 2,200 | ||||
Gain (loss) on legal settlements | 2,700 | ||||
Brazil | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 251,600 | 445,900 | 440,700 | ||
Gross profit | 34,800 | 53,500 | 53,900 | ||
SG&A expense | 31,100 | 46,000 | 50,600 | ||
Depreciation and amortization | 2,300 | 1,600 | 1,600 | ||
Floorplan interest expense | 300 | 700 | 800 | ||
Other interest expense, net | 700 | 100 | 900 | ||
Income (loss) before income taxes | (10,500) | 4,600 | 0 | ||
Real estate related capital expenditures | 0 | 3,100 | 5,800 | ||
Non-real estate related capital expenditures | 7,600 | 2,600 | 2,000 | ||
Total capital expenditures | 7,600 | 5,700 | 7,800 | ||
Severance expense | (900) | ||||
Asset impairments | $ 11,100 | $ 500 | $ 500 |
Segment Information - Goodwill
Segment Information - Goodwill and Intangible Franchise Rights and Total Assets by Reportable Segment (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 1,608.2 | $ 1,547.1 |
Operating lease assets | 209.9 | 220.1 |
Total assets | 5,089.4 | 5,570.2 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 1,303.1 | 1,251.4 |
Operating lease assets | 117.4 | 114.8 |
Total assets | 3,942.8 | 4,256.1 |
U.K. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 281.3 | 271 |
Operating lease assets | 89.6 | 100.1 |
Total assets | 1,116.8 | 1,225.6 |
Brazil | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 23.9 | 24.7 |
Operating lease assets | 2.8 | 5.2 |
Total assets | $ 29.9 | $ 88.6 |
Uncategorized Items - gpi-20201
Label | Element | Value |
Proceeds From Termination Of Mortgage Swap | gpi_ProceedsFromTerminationOfMortgageSwap | $ 0 |
Proceeds From Termination Of Mortgage Swap | gpi_ProceedsFromTerminationOfMortgageSwap | $ 900,000 |