Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 22, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ASBURY AUTOMOTIVE GROUP INC | ||
Entity Central Index Key | 1,144,980 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 21,146,186 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,145.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 3.4 | $ 2.8 |
Contracts-in-transit, net | 182.6 | 175.7 |
Accounts receivable, net | 138.4 | 119.5 |
Inventories, net | 894.9 | 917.2 |
Assets held for sale | 16.1 | 27.6 |
Other current assets | 97 | 88.4 |
Total current assets | 1,332.4 | 1,331.2 |
PROPERTY AND EQUIPMENT, net | 815.4 | 772.8 |
GOODWILL | 128.1 | 130.2 |
INTANGIBLE FRANCHISE RIGHTS | 48.5 | 48.5 |
OTHER LONG-TERM ASSETS | 11.7 | 11.4 |
Total assets | 2,336.1 | 2,294.1 |
CURRENT LIABILITIES: | ||
Floor plan notes payable—trade, net | 108.3 | 138.8 |
Floor plan notes payable—non-trade, net | 673.5 | 573.4 |
Current maturities of long-term debt | 14 | 13.9 |
Accounts payable and accrued liabilities | 309.1 | 281.7 |
Total current liabilities | 1,104.9 | 1,007.8 |
LONG-TERM DEBT | 912.7 | 940.4 |
DEFERRED INCOME TAXES | 8.9 | 1.9 |
OTHER LONG-TERM LIABILITIES | 29.9 | 29.5 |
COMMITMENTS AND CONTINGENCIES (Note 18) | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $.01 par value, 90,000,000 shares authorized; 40,750,765 and 40,507,313 shares issued, including shares held in treasury, respectively | 0.4 | 0.4 |
Additional paid-in capital | 549.4 | 537.2 |
Retained earnings | 611.5 | 444.3 |
Treasury stock, at cost; 19,497,596 and 15,696,543 shares, respectively | (879.5) | (663.9) |
Accumulated other comprehensive loss | (2.1) | (3.5) |
Total shareholders' equity | 279.7 | 314.5 |
Total liabilities and shareholders' equity | $ 2,336.1 | $ 2,294.1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 40,750,765 | 40,507,313 |
Treasury stock, shares (in shares) | 19,497,596 | 15,696,543 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUE: | |||
New vehicle | $ 3,611.9 | $ 3,652.5 | $ 3,230.6 |
Used vehicle | 1,876.4 | 1,931.7 | 1,741.5 |
Parts and service | 778.5 | 740.7 | 666.6 |
Finance and insurance, net | 261 | 263.4 | 229 |
TOTAL REVENUE | 6,527.8 | 6,588.3 | 5,867.7 |
COST OF SALES: | |||
New vehicle | 3,424.8 | 3,449.5 | 3,032.3 |
Used vehicle | 1,749.1 | 1,799.9 | 1,613.8 |
Parts and service | 295.2 | 278.1 | 254.4 |
TOTAL COST OF SALES | 5,469.1 | 5,527.5 | 4,900.5 |
GROSS PROFIT | 1,058.7 | 1,060.8 | 967.2 |
OPERATING EXPENSES (INCOME): | |||
Selling, general, and administrative | 732.5 | 729.9 | 671.6 |
Depreciation and amortization | 30.7 | 29.5 | 26.4 |
Other operating (income) expense, net | (2.3) | (0.2) | 1 |
INCOME FROM OPERATIONS | 297.8 | 301.6 | 268.2 |
OTHER EXPENSES (INCOME): | |||
Floor plan interest expense | 19.3 | 16.1 | 12.4 |
Other interest expense, net | 53.1 | 44 | 38.9 |
Swap interest expense | 3.1 | 3 | 2 |
Loss on extinguishment of long-term debt, net | 0 | 0 | 31.9 |
Gain on divestitures | (45.5) | (34.9) | 0 |
Total other expenses, net | 30 | 28.2 | 85.2 |
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 267.8 | 273.4 | 183 |
Income tax expense | 100.6 | 104 | 71 |
INCOME FROM CONTINUING OPERATIONS | 167.2 | 169.4 | 112 |
Discontinued operations, net of tax | 0 | (0.2) | (0.4) |
NET INCOME | $ 167.2 | $ 169.2 | $ 111.6 |
Basic— | |||
Continuing operations (in dollars per share) | $ 7.43 | $ 6.44 | $ 3.75 |
Discontinued operations (in dollars per share) | 0 | (0.01) | (0.02) |
Net income (in dollars per share) | 7.43 | 6.43 | 3.73 |
Diluted— | |||
Continuing operations (in dollars per share) | 7.40 | 6.42 | 3.72 |
Discontinued operations (in dollars per share) | 0 | (0.01) | (0.01) |
Net income (in dollars per share) | $ 7.40 | $ 6.41 | $ 3.71 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||
Basic (in shares) | 22.5 | 26.3 | 29.9 |
Restricted stock (in shares) | 0 | 0 | 0.1 |
Performance share units (in shares) | 0.1 | 0.1 | 0.1 |
Diluted (in shares) | 22.6 | 26.4 | 30.1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 167.2 | $ 169.2 | $ 111.6 |
Other comprehensive income (loss): | |||
Change in fair value of cash flow swaps | 2.3 | (3.1) | (2.9) |
Income tax (expense) benefit associated with cash flow swaps | (0.9) | 1.1 | 1.2 |
Comprehensive income (loss) | $ 168.6 | $ 167.2 | $ 109.9 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance, shares at Dec. 31, 2013 | 40,095,557 | 9,330,443 | ||||
Balance at Dec. 31, 2013 | $ 490.6 | $ 0.4 | $ 510.5 | $ 163.5 | $ (184) | $ 0.2 |
Comprehensive Income (Loss): | ||||||
Net income | 111.6 | 111.6 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment and tax benefit/expense | (1.7) | (1.7) | ||||
Comprehensive income (loss) | 109.9 | 111.6 | (1.7) | |||
Share-based compensation | 8.6 | 8.6 | ||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit, shares | 232,068 | |||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit | 3.5 | 3.5 | ||||
Repurchase of common stock associated with net share settlement of employee share-based awards, shares | 123,774 | |||||
Repurchase of common stock associated with net share settlement of employee share-based awards | (6.3) | $ (6.3) | ||||
Purchase of treasury shares, shares | 2,349,494 | |||||
Purchase of treasury shares | (161.4) | $ (161.4) | ||||
Balance, shares at Dec. 31, 2014 | 40,327,625 | 11,803,711 | ||||
Balance at Dec. 31, 2014 | 444.9 | $ 0.4 | 522.6 | 275.1 | $ (351.7) | (1.5) |
Comprehensive Income (Loss): | ||||||
Net income | 169.2 | 169.2 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment and tax benefit/expense | (2) | (2) | ||||
Comprehensive income (loss) | 167.2 | 169.2 | (2) | |||
Share-based compensation | 10 | 10 | ||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit, shares | 179,688 | |||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit | 4.6 | 4.6 | ||||
Repurchase of common stock associated with net share settlement of employee share-based awards, shares | 99,646 | |||||
Repurchase of common stock associated with net share settlement of employee share-based awards | (8) | $ (8) | ||||
Purchase of treasury shares, shares | 3,793,186 | |||||
Purchase of treasury shares | (304.2) | $ (304.2) | ||||
Balance, shares at Dec. 31, 2015 | 40,507,313 | 15,696,543 | ||||
Balance at Dec. 31, 2015 | 314.5 | $ 0.4 | 537.2 | 444.3 | $ (663.9) | (3.5) |
Comprehensive Income (Loss): | ||||||
Net income | 167.2 | 167.2 | ||||
Change in fair value of cash flow swaps, net of reclassification adjustment and tax benefit/expense | 1.4 | 1.4 | ||||
Comprehensive income (loss) | 168.6 | 167.2 | 1.4 | |||
Share-based compensation | 12 | 12 | ||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit, shares | 243,452 | |||||
Issuance of common stock in connection with share-based payment arrangements, including tax (deficit) benefit | 0.2 | 0.2 | ||||
Repurchase of common stock associated with net share settlement of employee share-based awards, shares | 70,411 | |||||
Repurchase of common stock associated with net share settlement of employee share-based awards | (3.7) | $ (3.7) | ||||
Purchase of treasury shares, shares | 3,730,642 | |||||
Purchase of treasury shares | (211.9) | $ (211.9) | ||||
Balance, shares at Dec. 31, 2016 | 40,750,765 | 19,497,596 | ||||
Balance at Dec. 31, 2016 | $ 279.7 | $ 0.4 | $ 549.4 | $ 611.5 | $ (879.5) | $ (2.1) |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Change in fair value of cash flow swaps, tax | $ (0.9) | $ (1.1) | $ (1.2) |
Issuance of common stock in connection with share-based payment arrangements, tax | $ 0.2 | $ 4.6 | $ 3.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES: | |||
Net income | $ 167.2 | $ 169.2 | $ 111.6 |
Adjustments to reconcile net income to net cash provided by operating activities— | |||
Depreciation and amortization | 30.7 | 29.5 | 26.4 |
Share-based compensation | 12 | 10 | 8.6 |
Deferred income taxes | 6.1 | 9.5 | 17.3 |
Impairment expenses | 3.6 | 0 | 0.9 |
Loss on extinguishment of debt | 0 | 0 | 31.9 |
Loaner vehicle amortization | 21.5 | 19 | 14 |
Excess tax benefit on share-based arrangements | (0.2) | (4.6) | (3.5) |
Gain on divestitures | (45.5) | (34.9) | 0 |
Other adjustments, net | 4.1 | 4.2 | 3.1 |
Changes in operating assets and liabilities, net of acquisitions and divestitures— | |||
Contracts-in-transit | (6.9) | (20.1) | (14.7) |
Accounts receivable | (19.5) | (11.2) | (14) |
Proceeds from the sale of accounts receivable | 0 | 0 | 2.5 |
Inventories | 105.3 | 50.1 | 10.6 |
Other current assets | (152.2) | (118.4) | (110.7) |
Floor plan notes payable—trade, net | (17.2) | 11.2 | 2.6 |
Accounts payable and accrued liabilities | 31.4 | 37.7 | (2.6) |
Other long-term assets and liabilities, net | 1.9 | 4.2 | 0.2 |
Net cash provided by operating activities | 142.3 | 155.4 | 84.2 |
CASH FLOW FROM INVESTING ACTIVITIES: | |||
Capital expenditures—excluding real estate | (81.4) | (71.7) | (58.3) |
Capital expenditures—real estate | (10.6) | (30.3) | (15.9) |
Purchases of previously leased real estate | (19.6) | 0 | (5) |
Acquisitions | 0 | (69.4) | (152.2) |
Divestitures | 114.3 | 105.9 | 0 |
Proceeds from the sale of assets | 2.2 | 3.6 | 0.6 |
Net cash used in investing activities | 4.9 | (61.9) | (230.8) |
CASH FLOW FROM FINANCING ACTIVITIES: | |||
Floor plan borrowings—non-trade | 3,866.3 | 4,130.3 | 3,721.3 |
Floor plan borrowings—acquisitions | 0 | 16.7 | 45.7 |
Floor plan repayments—non-trade | (3,748.3) | (4,168.8) | (3,612.3) |
Floor plan repayments—divestitures | (31.2) | (44) | 0 |
Proceeds from borrowings | 0 | 293.1 | 473.2 |
Repayments of borrowings | (15.2) | (11.3) | (311) |
Payment of debt issuance costs | (2.8) | (2) | (8.7) |
Repurchases of common stock, including amounts associated with net share settlements of employee share-based awards | (215.6) | (312.2) | (167.7) |
Excess tax benefit on share-based arrangements | 0.2 | 4.6 | 3.5 |
Proceeds from the exercise of stock options | 0 | 0 | 0.1 |
Net cash (used in) provided by financing activities | (146.6) | (93.6) | 144.1 |
Net decrease in cash and cash equivalents | 0.6 | (0.1) | (2.5) |
CASH AND CASH EQUIVALENTS, beginning of period | 2.8 | 2.9 | 5.4 |
CASH AND CASH EQUIVALENTS, end of period | $ 3.4 | $ 2.8 | $ 2.9 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS We are one of the largest automotive retailers in the United States. As of December 31, 2016 we owned and operated 93 new vehicle franchises ( 77 dealership locations), representing 28 brands of automobiles, and 23 collision centers, in 16 metropolitan markets, within eight states. Our stores offer an extensive range of automotive products and services, including new and used vehicles, repair and maintenance services, collision repair services, and finance and insurance products. As of December 31, 2016 , our new vehicle revenue brand mix consisted of 45% imports, 34% luxury, and 21% domestic brands. In addition, as of December 31, 2016 we owned and operated two stand-alone used vehicle stores in Florida. Our operating results are generally subject to seasonal variations. Demand for new vehicles is generally highest during the second and third quarters of each year and, accordingly, we expect our revenues to generally be higher during these periods. We typically experience higher sales of luxury vehicles in the fourth quarter, which have higher average selling prices and gross profit per vehicle retailed. Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, vehicle manufacturer incentive programs, or adverse weather events. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and reflect the consolidated accounts of Asbury Automotive Group, Inc. and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements in order to conform to current presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for insurance programs, certain assumptions related to intangible and long-lived assets, and reserves for certain legal or similar proceedings relating to our business operations. Cash and Cash Equivalents Cash and cash equivalents include investments in money market accounts and short-term certificates of deposit, which have maturity dates of less than 90 days when purchased. Contracts-In-Transit Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us. Inventories Inventories are stated at the lower of cost or market. We use the specific identification method to value vehicle inventories and the "first-in, first-out" method ("FIFO") to account for our parts inventories. Our new vehicle sales histories have indicated that the vast majority of the new vehicles we sell are sold for, or in excess of, our cost to purchase those vehicles. Therefore, we generally do not maintain a reserve for new vehicle inventory. We maintain a reserve for used vehicle inventory where cost basis exceeds market value. In assessing lower of cost or market for used vehicles, we consider (i) the aging of our used vehicles, (ii) historical sales experience of used vehicles, and (iii) current market conditions and trends in used vehicle sales. We also review and consider the following metrics related to used vehicle sales (both on a recent and longer-term historical basis): (i) days of supply in our used vehicle inventory, (ii) used vehicle units sold at less than original cost as a percentage of total used vehicles sold, and (iii) average vehicle selling price of used vehicle units sold at less than original cost. We then determine the appropriate level of reserve required to reduce our used vehicle inventory to the lower of cost or market, and record the resulting adjustment in the period in which we determine a loss has occurred. The level of reserve determined to be appropriate for each reporting period is considered to be a permanent inventory write-down, and therefore is only released upon the sale of the related inventory. We receive assistance from certain automobile manufacturers in the form of advertising and floor plan interest credits. Manufacturer advertising credits that are reimbursements of costs associated with specific advertising programs are recognized as a reduction of advertising expense in the period they are earned. All other manufacturer advertising and floor plan interest credits are accounted for as purchase discounts, and are recorded as a reduction of inventory and recognized as a reduction to New Vehicle Cost of Sales in the accompanying Consolidated Statements of Income in the period the related vehicle is sold. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Depreciation is included in Depreciation and Amortization on the accompanying Consolidated Statements of Income. Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the useful life of the related asset. The ranges of estimated useful lives are as follows (in years): Buildings and improvements 10-40 Machinery and equipment 5-10 Furniture and fixtures 3-10 Company vehicles 3-5 Expenditures for major additions or improvements, which extend the useful lives of assets, are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of such assets, are expensed as incurred. We capitalize interest on borrowings during the active construction period of capital projects. Capitalized interest is added to the cost of the assets and is depreciated over the estimated useful lives of the assets. We review property and equipment for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When we test our long-lived assets for impairment, we first compare the carrying amount of the underlying assets to their net recoverable value by reviewing the undiscounted cash flows expected to result from the use and eventual disposition of the underlying assets. If the carrying amount of the underlying assets is less than their net recoverable value, then we calculate an impairment equal to the excess of the carrying amount over the fair market value, and the impairment loss would be charged to operations in the period identified. As a result of impairment tests conducted in 2016 , 2015 , and 2014 , we did not record an impairment of our property and equipment. Acquisitions Acquisitions are accounted for under the acquisition method of accounting, and the assets acquired and liabilities assumed are recorded at their fair value, at the acquisition date. The results of operations of acquired dealerships are included in the accompanying Consolidated Statements of Income, commencing on the date of acquisition. Goodwill and Other Intangible Assets Goodwill represents the excess cost of an acquired business over the fair market value of its identifiable net assets. We have determined that, based on how we integrate acquisitions into our business, how the components of our business share resources and interact with one another, and how we review the results of our operations, that we have several geographic market-based operating segments. We have determined that the dealerships in each of our operating segments are components that are aggregated into several geographic market-based reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our dealerships offer new and used vehicles, service, parts and third-party finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. Our only significant identifiable intangible assets, other than goodwill, are our rights under franchise agreements with manufacturers, which are recorded at an individual franchise level. The fair value of our manufacturer franchise rights are determined at the acquisition date, by discounting the projected cash flows specific to each franchise. We have determined that manufacturer franchise rights have an indefinite life, as there are no economic, contractual or other factors that limit their useful lives, and they are expected to generate cash flows indefinitely due to the historically long lives of the manufacturers' brand names. Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business. We do not amortize goodwill and other intangible assets that are deemed to have indefinite lives. We review goodwill and manufacturer franchise rights for impairment annually as of October 1 st , or more often if events or circumstances indicate that impairment may have occurred. We are subject to financial statement risk to the extent that goodwill becomes impaired due to decreases in the fair value of our automotive retail business or manufacturer franchise rights become impaired due to decreases in the fair value of our individual franchises. We completed our annual impairment tests as of October 1, 2016 . Based on our qualitative assessment regarding goodwill impairment, we determined that it was more likely than not that the fair value exceeded the carrying value. Based on our qualitative assessment regarding manufacturer franchise rights impairment, we determined that we should perform a quantitative test regarding certain franchises. Based on our quantitative assessment regarding these franchises, we determined that it was more likely than not that the fair value exceeded the carrying value. For the remainder of our manufacturer franchise rights, we determined that it was more likely than not that the fair value exceeded the carrying value, based on our qualitative assessment and we were therefore not required to perform a quantitative test. As such, there were no impairment charges related to goodwill or manufacturer franchise rights recorded for the year ended December 31, 2016 . Debt Issuance Costs Debt issuance costs are presented as a contra-liability within Current Maturities of Long-Term Debt or Long-Term Debt on our Consolidated Balance Sheets, except for debt issuance costs associated with our line-of-credit arrangements, which are presented as an asset within Other Current Assets or Other Long-Term Assets on our Consolidated Balance Sheets. Debt issuance costs are amortized to Floor Plan Interest Expense and Other Interest Expense, net in the accompanying Consolidated Statements of Income through maturity using the effective interest method. Derivative Instruments and Hedging Activities From time to time, we utilize derivative financial instruments to manage our interest rate risk. The types of risks hedged are those relating to the variability of cash flows caused by fluctuations in interest rates. We document our risk management strategy and assess hedge effectiveness at each interest rate swaps inception and during the term of each hedge. Derivatives are reported at fair value on the accompanying Consolidated Balance Sheets. The effective portion of the gain or loss on our hedges is reported as a component of Accumulated Other Comprehensive Loss on the accompanying Consolidated Balance Sheets, and reclassified to Swap Interest Expense in the accompanying Consolidated Statements of Income in the period during which the hedged transaction affects earnings. Measurements of hedge effectiveness are based on comparisons between the gains or losses of the actual interest rate swaps and the gains or losses of hypothetical interest rate swaps, which have the same critical terms of the defined hedged items. Ineffective portions of these interest rate swaps are reported as a component of Swap Interest Expense in the accompanying Consolidated Statements of Income, in the period during which any ineffectiveness is identified. Insurance We are self-insured for employee medical claims and maintain stop loss insurance for large-dollar individual claims. We have high deductible insurance programs for workers compensation, property and general liability claims. We maintain and review our claim and loss history to assist in assessing our expected future liability for these claims. We also use professional service providers, such as account administrators and actuaries, to help us accumulate and assess this information. Provisions for retained losses and deductibles are made by charges to expense based upon periodic evaluations of the estimated ultimate liabilities on reported and unreported claims. Revenue Recognition Revenue from the sale of new and used vehicles (which excludes sales tax) is recognized upon the latest of delivery, signing of the sales contract or approval of financing. Revenue from the sale of parts, service and collision repair work (which excludes sales tax) is recognized upon delivery of parts to the customer or at the time vehicle service or repair work is completed, as applicable. Manufacturer incentives and rebates, including manufacturer holdbacks, floor plan interest assistance and certain advertising assistance, are recognized as a reduction of New Vehicle Cost of Sales at the time the related vehicles are sold, in the accompanying Consolidated Statements of Income. We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed auto protection (known as "GAP") insurance, and other insurance, to customers (collectively "F&I"). We may be charged back for F&I commissions in the event a contract is prepaid, defaulted upon, or terminated ("chargebacks"). F&I commissions are recorded at the time a vehicle is sold and a reserve for future chargebacks is established based on historical chargeback experience and the termination provisions of the applicable contract. F&I commissions, net of estimated future chargebacks, are included in Finance and Insurance, net in the accompanying Consolidated Statements of Income. Additionally, we participate in future profits associated with the performance of the third-party held underlying portfolio for certain products, pursuant to retrospective commission arrangements. Our retrospective portfolio income is recorded as revenue at the time it is received from our third-party providers. Internal Profit Revenues and expenses associated with internal work performed by our parts and service departments on new and used vehicle inventory are eliminated in consolidation. The gross profit earned by our parts and service departments for internal work performed is included as a reduction of Parts and Service Cost of Sales on the accompanying Consolidated Statements of Income upon the sale of the vehicle. The costs incurred by our new and used vehicle departments for work performed by our parts and service departments is included in either New Vehicle Cost of Sales or Used Vehicle Cost of Sales on the accompanying Consolidated Statements of Income, depending on the classification of the vehicle serviced. We maintain a reserve to eliminate the internal profit on vehicles that have not been sold. Share-Based Compensation We record share-based compensation expense under the fair value method on a straight-line basis over the vesting period, unless the awards are subject to performance conditions, in which case we recognize the expense over the requisite service period of each separate vesting tranche. Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. Advertising We expense costs of advertising as incurred and production costs when the advertising initially takes place, net of certain advertising credits and other discounts. Advertising expense from continuing operations totaled $34.0 million , $40.1 million and $34.0 million for the years ended December 31, 2016 , 2015 and 2014 , which was net of earned advertising credits of $16.8 million , $17.1 million , and $16.2 million , respectively, and is included in Selling, General, and Administrative expense in the accompanying Consolidated Statements of Income. Income Taxes We use the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the classification of deferred taxes on the balance sheet. The guidance requires that deferred taxes be classified as non-current assets and liabilities based on the tax paying jurisdiction. We adopted this standard as of December 31, 2016 with retrospective application. In accordance with the retrospective application of this standard, we have reclassified $11.8 million of deferred tax assets from Deferred Income Taxes (current assets) to Deferred Income Taxes (non-current liabilities) as of December 31, 2015. Discontinued Operations We evaluated our dealership divestitures in 2015 and 2016 to determine whether they would be considered discontinued operations. Based on our evaluation, we determined that none of our dealership divestitures would be considered discontinued operations. Assets Held for Sale and Liabilities Associated with Assets Held for Sale Certain amounts have been classified as Assets Held for Sale as of December 31, 2016 and 2015 in the accompanying Consolidated Balance Sheets. Assets and liabilities classified as held for sale include assets and liabilities associated with pending dealership disposals, real estate not currently used in our operations that we are actively marketing to sell, and any related mortgage notes payable, if applicable. Classification as held for sale begins on the date that we have met all of the criteria for classification as held for sale. At the time of classifying assets as held for sale, we compare the carrying value of these assets to estimates of fair value to assess for impairment. We compare the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value and third-party desktop appraisals to assist in our fair value estimates related to real estate properties. Statements of Cash Flows Borrowings and repayments of floor plan notes payable to a lender unaffiliated with the manufacturer from which we purchase a particular new vehicle ("Non-Trade") and all floor plan notes payable relating to pre-owned vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities on the accompanying Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "Floor Plan Notes Payable—Trade") is classified as an operating activity on the accompanying Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activity in the accompanying Consolidated Statement of Cash Flows. Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to a lender not affiliated with the manufacturer from which we purchased the related inventory. Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowings from either our manufacturer affiliated lenders or through our senior secured credit agreement with Bank of America, as administrative agent, and the other agents and lenders party thereto (the "2016 Senior Credit Facility"). Loaner vehicles are initially used by our service department for only a short period of time (typically 6 to 12 months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles in Other Current Assets and the borrowings and repayments of loaner vehicle notes payable in Accounts Payable and Accrued Liabilities in the accompanying Consolidated Statements of Cash Flows. Loaner vehicles are depreciated over the service period to their estimated value. At the end of the loaner service period, loaner vehicles are transferred from Other Current Assets to used vehicle inventory. These transfers are reflected as non-cash transfers between Other Current Assets and Inventory in the accompanying Consolidated Statements of Cash Flows. Business and Credit Concentration Risk Financial instruments, which potentially subject us to a concentration of credit risk, consist principally of cash deposits. We maintain cash balances at financial institutions with strong credit ratings. Generally, amounts maintained with these financial institutions are in excess of FDIC insurance limits. We have substantial debt service obligations. As of December 31, 2016 , we had total debt of $931.3 million , excluding floor plan notes payable, the debt premium on the 6.0% Senior Subordinated Notes due 2024 ("6.0% Notes" ) , and debt issuance costs. In addition, we and our subsidiaries have the ability to obtain additional debt from time to time to finance acquisitions, real property purchases, capital expenditures, share repurchases or for other purposes, although such borrowings are subject to the restrictions contained in the second amended and restated senior secured credit agreement with Bank of America, N.A. ("Bank of America"), as administrative agent, and the other lenders party thereto (the "2016 Senior Credit Facility") and the indenture governing our 6.0% Senior Subordinated Notes due 2024 (the "Indenture"). We will have substantial debt service obligations, consisting of required cash payments of principal and interest, for the foreseeable future. We are subject to operating and financial restrictions and covenants in certain of our leases and in our debt instruments, including the 2016 Senior Credit Facility, the Indenture, and the credit agreements covering our mortgage obligations. These agreements contain restrictions on, among other things, our ability to incur additional indebtedness, to create liens or other encumbrances, and to make certain payments (including dividends and repurchases of our shares and investments). These agreements may also require us to maintain compliance with certain financial and other ratios. Our failure to comply with any of these covenants in the future would constitute a default under the relevant agreement, which would, depending on the relevant agreement, (i) entitle the creditors under such agreement to terminate our ability to borrow under the relevant agreement and accelerate our obligations to repay outstanding borrowings; (ii) require us to apply our available cash to repay these borrowings; (iii) entitle the creditors under such agreement to foreclose on the property securing the relevant indebtedness; and/or (iv) prevent us from making debt service payments on certain of our other indebtedness, any of which would have a material adverse effect on our business, financial condition or results of operations. In many cases, a default under one of our debt or mortgage, agreements could trigger cross-default provisions in one or more of our other debt or mortgages. A number of our dealerships are located on properties that we lease. Each of the leases governing such properties has certain covenants with which we must comply. If we fail to comply with the covenants under our leases, the respective landlords could terminate the leases and seek damages from us. Concentrations of credit risk with respect to contracts-in-transit and accounts receivable are limited primarily to automotive manufacturers and financial institutions. Credit risk arising from receivables from commercial customers is minimal due to the large number of customers comprising our customer base. A significant portion of our new vehicle sales are derived from a limited number of automotive manufacturers. For the year ended December 31, 2016 , manufacturers representing 5% or more of our revenues from new vehicle sales were as follows: Manufacturer (Vehicle Brands): % of Total New Vehicle Revenues American Honda Motor Co., Inc. (Honda and Acura) 21 % Toyota Motor Sales, U.S.A., Inc. (Toyota and Lexus) 19 % Ford Motor Company (Ford and Lincoln) 15 % Nissan North America, Inc. (Nissan and Infiniti) 14 % Mercedes-Benz USA, LLC ( Mercedes-Benz, Smart and Sprinter ) 8 % BMW of North America, LLC (BMW and Mini) 7 % No other manufacturers individually accounted for more than 5% of our total new vehicle revenue for the year ended December 31, 2016 . Segment Reporting Our operations are organized by management into geographic market-based dealership groups. Our Chief Operating Decision Maker is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic market level. The geographic operating segments have been aggregated into one reportable segment as their operations (i) have similar economic characteristics (our markets all have similar long-term average gross margins), (ii) offer similar products and services (all of our markets offer new and used vehicles, parts and service, and third-party finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our markets distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), a new standard on revenue recognition. Further, the FASB has issued a number of additional ASU's regarding the new revenue recognition standard. The new standard, as amended, will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. The guidance also addresses the measurement and recognition of gains and losses on the sale of certain non-financial assets, such as real estate, property, and equipment. The new standard will become effective for annual reporting periods beginning on or after December 15, 2017 and interim periods within that year. The standard can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the standard is permitted, but not before annual reporting periods beginning on or after December 15, 2016. We have performed a preliminary evaluation of this standard and plan to adopt it effective January 1, 2018. We cannot currently estimate the impact of this change upon adoption of this standard and will continue to review the impact of this standard on potential disclosure changes in our financial statements, as well as which transition approach will be applied. Our evaluation of this standard will continue through the date of adoption. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, to simplify the measurement of inventory by changing the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value. Application of the standard, which is required to be applied prospectively, is required for fiscal years beginning on or after December 15, 2016 and for interim periods within that year. We do not expect the adoption of this new guidance to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), a new standard on lease accounting. The new standard will supersede the existing lease accounting guidance and apply to all entities. The guidance defines new principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. The new standard will become effective for annual reporting periods beginning on or after December 15, 2018 and for interim periods within that year. A modified retrospective approach is required and early adoption of this standard is permitted. While we are still evaluating the impact of this standard, we expect that the right-of-use assets and the associated lease liabilities will be material to our financial statements. We plan to adopt this standard effective January 1, 2019. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Application of the standard is required for fiscal years beginning on or after December 15, 2016 and for interim periods within that year. Further, application can be either prospective or retrospective depending on each of the provisions in the guidance. We are currently evaluating the expected impact of adopting this new guidance on our consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations and Divestitures [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Results of acquired dealerships are included in our accompanying Consolidated Statements of Income commencing on the date of acquisition. Our acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. We did not acquire any dealerships during the year ended December 31, 2016 . During the year ended December 31, 2015 , we acquired the assets of two franchises ( two dealership locations) in our existing markets of Jacksonville, FL and Atlanta, GA for a combined purchase price of $69.4 million . We financed these acquisitions with $52.7 million of cash and $16.7 million of floor plan borrowings for the purchase of the related new vehicle inventory. Below is the allocation of purchase price for these acquisitions. Goodwill and manufacturer franchise rights associated with our acquisitions will be deductible for federal and state income tax purposes ratably over a 15 -year period. 2015 (In millions) Inventory $ 19.0 Real estate 15.2 Property and equipment 0.9 Goodwill 28.3 Manufacturer franchise rights 6.3 Liabilities assumed (0.3 ) Total purchase price $ 69.4 During the year ended December 31, 2016 , we sold the remaining five franchises ( four dealership locations) and two collision centers in the Little Rock, AR market. We recorded a gain associated with the sale of the franchises totaling $45.5 million ( $28.4 million net of tax) in our accompanying Consolidated Statements of Income. During the year ended December 31, 2015 , we sold two franchises ( two dealership locations) in Princeton, NJ; one franchise in the St. Louis, MO market; one collision center in Austin, TX; and four franchises ( three dealership locations) in the Little Rock, AR market. We recorded a gain associated with the sale of the franchises totaling $34.9 million ( $21.6 million net of tax) in our accompanying Consolidated Statements of Income. None of our divestitures during the years ended December 31, 2016 or 2015 , are considered significant subsidiaries as defined in Rule 1-02(w) of Regulation S-X. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: As of December 31, 2016 2015 (In millions) Vehicle receivables $ 53.2 $ 46.3 Manufacturer receivables 45.5 43.1 Other receivables 41.6 31.4 Total accounts receivable 140.3 120.8 Less—Allowance for doubtful accounts (1.9 ) (1.3 ) Accounts receivable, net $ 138.4 $ 119.5 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: As of December 31, 2016 2015 (In millions) New vehicles $ 720.6 $ 739.2 Used vehicles 132.7 134.1 Parts and accessories 41.6 43.9 Total inventories $ 894.9 $ 917.2 The lower of cost or market reserves reduced total inventory cost by $6.5 million and $6.2 million as of December 31, 2016 and December 31, 2015 , respectively. As of December 31, 2016 and December 31, 2015 , certain automobile manufacturer incentives reduced new vehicle inventory cost by $8.2 million and $9.6 million , respectively, and reduced new vehicle cost of sales from continuing operations for the years ended December 31, 2016 , 2015 , and 2014 by $40.6 million , $38.8 million , and $30.3 million , respectively. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE Assets held for sale, comprising real estate not currently used in our operations and that we are actively marketing to sell, totaled $16.1 million and $27.6 million as of December 31, 2016 and 2015 , respectively, and there were no liabilities associated with the real estate assets held for sale. Additionally, during the years ended December 31, 2016 and 2015 , we sold one vacant property with a net book value of $2.3 million and four vacant properties with a combined net book value of $3.7 million , respectively. During the years ended December 31, 2016 and 2014, we recorded $2.7 million and $0.9 million , respectively, of impairment expense related to real estate properties we were actively marketing to sell, based on offers received from prospective buyers and third-party brokers' opinion of value. We did not record any impairment expense associated with real estate properties we were actively marketing to sell during the year ended December 31, 2015. These impairment expenses were included in Other Operating (Income) Expense, net in our Consolidated Statements of Income. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
OTHER CURRENT ASSETS | OTHER CURRENT ASSETS Other current assets consisted of the following: As of December 31, 2016 2015 (In millions) Service loaner vehicles $ 82.2 $ 78.5 Prepaid expenses 4.5 5.0 Prepaid taxes 4.0 3.4 Other 6.3 1.5 Other current assets $ 97.0 $ 88.4 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: As of December 31, 2016 2015 (In millions) Land $ 307.7 $ 294.1 Buildings and leasehold improvements 530.2 503.0 Machinery and equipment 84.0 82.1 Furniture and fixtures 57.7 55.9 Company vehicles 8.8 9.8 Construction in progress 37.8 33.2 Gross property and equipment 1,026.2 978.1 Less—Accumulated depreciation (210.8 ) (205.3 ) Property and equipment, net $ 815.4 $ 772.8 During the years ended December 31, 2016 , 2015 , and 2014 , we capitalized $1.1 million , $0.2 million , and $0.8 million , respectively, of interest in connection with various capital projects to upgrade or remodel our facilities. Depreciation expense was $30.7 million , $29.5 million , and $26.4 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
GOODWILL AND INTANGIBLE FRANCHI
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | GOODWILL AND INTANGIBLE FRANCHISE RIGHTS Our acquisitions have resulted in the recording of goodwill and intangible franchise rights. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible franchise rights is an asset representing our rights under franchise agreements with vehicle manufacturers. The changes in goodwill and intangible franchise rights for the years ended December 31, 2016 and 2015 are as follows: Goodwill (In millions) Balance as of December 31, 2014 (a) $ 104.0 Acquisitions 28.3 Divestitures (2.1 ) Balance as of December 31, 2015 (a) 130.2 Divestitures (2.1 ) Balance as of December 31, 2016 (a) $ 128.1 ______________________________ (a) Net of accumulated impairment losses of $537.7 million recorded prior to the year ended December 31, 2014. Intangible Franchise Rights (In millions) Balance as of December 31, 2014 $ 48.6 Acquisitions 6.3 Divestitures (6.4 ) Balance as of December 31, 2015 and December 31, 2016 $ 48.5 |
FLOOR PLAN NOTES PAYABLE_TRADE
FLOOR PLAN NOTES PAYABLE—TRADE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
FLOOR PLAN NOTES PAYABLE—TRADE | FLOOR PLAN NOTES PAYABLE—TRADE We consider floor plan notes payable to a party that is affiliated with the entity from which we purchase our new vehicle inventory as Floor Plan Notes Payable—Trade on our Consolidated Balance Sheets. Floor plan notes payable—trade, net consisted of the following: As of December 31, 2016 2015 (In millions) Floor plan notes payable—trade $ 120.0 $ 138.8 Floor plan notes payable offset account (11.7 ) — Total floor plan notes payable—trade, net $ 108.3 $ 138.8 We have a floor plan facility with the Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory. Our floor plan facility with Ford Credit matures on December 5, 2019 and does not have a stated borrowing limitation. During August 2016, we established a floor plan offset account with Ford Credit, that allows us to transfer cash as an offset to floor plan notes payable. These transfers reduce the amount of outstanding new vehicle floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts within one to two days. As a result of using our floor plan offset account, we experience a reduction in Floor Plan Interest Expense on our Consolidated Statements of Income. The representations and covenants contained in the agreement governing our floor plan facility with Ford Credit are customary for financing transactions of this nature. Further, the agreement governing our floor plan facility with Ford Credit also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. Upon the occurrence of an event of default, the Company could be required to immediately repay all outstanding amounts under our floor plan facility with Ford Credit. |
FLOOR PLAN NOTES PAYABLE_NON-TR
FLOOR PLAN NOTES PAYABLE—NON-TRADE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
FLOOR PLAN NOTES PAYABLE—NON-TRADE | FLOOR PLAN NOTES PAYABLE—NON-TRADE We consider floor plan notes payable to a party that is not affiliated with the entity from which we purchase our new vehicle inventory as Floor Plan Notes Payable—Non-Trade on our Consolidated Balance Sheets. Floor plan notes payable—non-trade, net consisted of the following: As of December 31, 2016 2015 (In millions) Floor plan notes payable—non-trade $ 732.7 $ 710.8 Floor plan notes payable offset account (59.2 ) (137.4 ) Total floor plan notes payable—non-trade, net $ 673.5 $ 573.4 On July 25 , 2016, the Company and certain of its subsidiaries entered into a second amended and restated senior secured credit agreement with Bank of America, as administrative agent, and the other lenders party thereto. The 2016 Senior Credit Facility amended and restated the Company's pre-existing senior secured credit agreement, dated as of August 8, 2013, by and among the Company and certain of its subsidiaries and Bank of America, as administrative agent, and the other agents and lenders party thereto (the "Restated Credit Agreement"). The 2016 Senior Credit Facility provides for the following, in each case subject to limitations on availability as set forth therein: • a $250.0 million revolving credit facility (the "Revolving Credit Facility") with a $50.0 million sublimit for letters of credit; • a $900.0 million new vehicle revolving floor plan facility (the "New Vehicle Floor Plan Facility"); and • a $150.0 million used vehicle revolving floor plan facility (the "Used Vehicle Floor Plan Facility"). Subject to compliance with certain conditions, the agreement governing the 2016 Senior Credit Facility provides that the Company and its subsidiaries that are borrowers under the 2016 Senior Credit Facility (collectively, the "Borrowers") have the ability, at their option and subject to the receipt of additional commitments from existing or new lenders, to increase the size of the facilities by up to $325.0 million in the aggregate without lender consent. At our option, we have the ability to re-designate a portion of our availability under our revolving credit facility to the new vehicle floor plan facility or the used vehicle floor plan facility. The maximum amount we are allowed to re-designate is determined based on our current borrowing availability, less $50.0 million . In addition, we are able to re-designate any amounts moved to the new vehicle floor plan facility or used vehicle floor plan facility back to the revolving credit facility. As of December 31, 2016 , we re-designated $190.0 million of availability under our Revolving Credit Facility to our New Vehicle Floor Plan Facility. We re-designated this amount to take advantage of the lower commitment fee rates on our new vehicle floor plan facility when compared to our revolving credit facility. In connection, with the new vehicle floor plan facility, we established an account with Bank of America that allows us to transfer cash as an offset to floor plan notes payable. These transfers reduce the amount of outstanding new vehicle floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts within one to two days. As a result of the use of our floor plan offset account, we experience a reduction in Floor Plan Interest Expense on our Consolidated Statements of Income. In addition to using proceeds from borrowings under the 2016 Senior Credit Facility to repay amounts outstanding under the Restated Credit Agreement, proceeds from borrowings from time to time under the (i) Revolving Credit Facility may be used for, among other things, acquisitions, working capital and capital expenditures; (ii) New Vehicle Floor Plan Facility may be used to finance the acquisition of new vehicle inventory and to refinance new vehicle inventory at acquired dealerships; and (iii) Used Vehicle Floor Plan Facility may be used to finance the acquisition of used vehicle inventory and for, among other things, other working capital and capital expenditures. Borrowings under the 2016 Senior Credit Facility bear interest, at the option of the Company, based on the London Interbank Offered Rate ("LIBOR") or the Base Rate, in each case plus an Applicable Margin. The Base Rate is the highest of the (i) Bank of America prime rate, (ii) Federal Funds rate plus 0.50% , and (iii) one month LIBOR plus 1.00% . Borrowings under the New Vehicle Floor Plan Facility bear interest, at the option of the Company, based on LIBOR plus 1.25% or the Base Rate plus 0.25% . Borrowings under the Used Vehicle Floor Plan Facility bear interest, at the option of the Company, based on LIBOR plus 1.50% or the Base Rate plus 0.50% . In addition to the payment of interest on borrowings outstanding under the 2016 Senior Credit Facility, we are required to pay a quarterly commitment fee of 0.15% per year on both the New Vehicle Facility Floor Plan and the Used Vehicle Facility Floor Plan Facility. The 2016 Senior Credit Facility is guaranteed by each existing, and will be guaranteed by each future, direct and indirect domestic subsidiary of the Company, other than, at the option of the Company, certain immaterial subsidiaries. The 2016 Senior Credit Facility is also guaranteed by the Company. The obligations under each of the Revolving Credit Facility and the Used Vehicle Floor Plan Facility are collateralized by liens on substantially all of the present and future assets, other than real property, of the Company and the guarantors. The obligations under the New Vehicle Floor Plan Facility are collateralized by liens on substantially all of the present and future assets, other than real property, of the Borrowers under the New Vehicle Floor Plan Facility. Each of the above provisions is subject to limitations on borrowing availability as set out in the 2016 Senior Credit Facility. Based on these borrowing base limitations, as of December 31, 2016 we had $90.6 million of borrowing availability under our used vehicle revolving floor plan facility. The 2016 Senior Credit Facility matures, and all amounts outstanding thereunder will be due and payable, on July 25 , 2021. See the "Representations and Covenants" section below under our "Long-Term Debt" footnote for a description of the representations, covenants and events of default contained in the 2016 Senior Credit Facility. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consisted of the following: As of December 31, 2016 2015 (In millions) Accounts payable $ 81.9 $ 85.5 Loaner vehicle notes payable 80.9 76.6 Accrued compensation 24.5 26.1 Taxes payable 41.2 27.3 Accrued finance and insurance chargebacks 22.9 19.9 Accrued insurance 19.9 13.3 Accrued advertising 7.6 4.0 Accrued interest 4.9 4.8 Other 25.3 24.2 Accounts payable and accrued liabilities $ 309.1 $ 281.7 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: As of December 31, 2016 2015 (In millions) 6.0% Senior Subordinated Notes due 2024 $ 600.0 $ 600.0 Mortgage notes payable bearing interest at fixed rates (the weighted average interest rate was 5.4% for the years ended December 31, 2016 and 2015) 182.8 194.3 Real estate credit agreement 51.5 64.0 Restated master loan agreement 93.6 97.9 Capital lease obligations 3.4 3.5 Total debt outstanding 931.3 959.7 Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024 7.6 8.4 Less—debt issuance costs (12.2 ) (13.8 ) Long-term debt, including current portion 926.7 954.3 Less—current portion, net of current portion of debt issuance costs (14.0 ) (13.9 ) Long-term debt $ 912.7 $ 940.4 The aggregate maturities of long-term debt as of December 31, 2016 are as follows (in millions): 2017 $ 15.4 2018 16.8 2019 41.4 2020 32.1 2021 15.1 Thereafter 810.5 Total maturities of long-term debt $ 931.3 6.0% Senior Subordinated Notes due 2024 In December 2014, we completed a refinancing of certain of our long-term debt, which included the issuance of $400.0 million of 6.0% Notes, the proceeds of which were used to redeem the $300.0 million in outstanding aggregate principal of our 8.375% Senior Subordinated Notes due 2020 (the " 8.375% Notes"). We recognized a $31.9 million loss for the year ended December 31, 2014 in connection with this refinancing, which is included in Loss on Extinguishment of Long-Term Debt, net in the accompanying Consolidated Statements of Income and consisted of $33.9 million of premiums in connection with the redemption of the 8.375% Notes, a $6.1 million write-off of unamortized debt issuance costs associated with the 8.375% Notes and $0.1 million of third-party costs associated with the redemption of the 8.375% Notes, partially offset by $8.2 million in unamortized premium associated with our 8.375% Notes. In October 2015, we completed an add-on issuance of $200.0 million aggregate principal amount of our 6.0% Notes at a price of 104.25% of par, plus accrued interest from June 15, 2015 (the "October 2015 Offering"). After deducting the initial purchasers' discounts and expenses we received net proceeds of approximately $210.2 million from this offering. The $ 8.5 million premium paid by the initial purchasers of the 6.0% Notes was recorded as a component of Long-Term Debt on our Consolidated Balance Sheet and is being amortized as a reduction of interest expense over the remaining term of the 6.0% Notes. Based on the amortization of the debt premium, the effective interest rate on the October 2015 Offering is 5.41% . In addition, we capitalized $3.8 million of costs associated with the issuance and sale of the 6.0% Notes, of which $2.8 million of underwriters fees were withheld from the proceeds received from the issuance. These costs are being amortized to interest expense over the remaining term of the 6.0% Notes using the effective interest method. We are a holding company with no independent assets or operations. For all relevant periods presented, our 6.0% Notes have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries. Any subsidiaries which have not guaranteed such notes are "minor" (as defined in Rule 3-10(h) of Regulation S-X). As of December 31, 2016 , there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or our guarantor subsidiaries. Mortgage Notes Payable We have multiple mortgage agreements with finance companies affiliated with our vehicle manufacturers ("captive mortgages") and other lenders. As of December 31, 2016 and 2015 , we had total mortgage notes payable outstanding of $182.8 million and $194.3 million , respectively, which are collateralized by the associated real estate. Real Estate Credit Agreement We are currently party to a real estate term loan credit agreement with Bank of America, as the lender. The real estate credit agreement provides for term loans in an aggregate amount not to exceed $75.0 million , subject to customary terms and conditions. Term loans under the real estate credit agreement bear interest, at our option, based on the LIBOR plus 2.50% or the Base Rate (as described below) plus 1.50% . The Base Rate is the highest of (i) the Federal Funds rate plus 0.50% , (ii) the Bank of America prime rate, and (iii) one month LIBOR plus 1.00% . We are required to make quarterly principal payments of 1.25% of the initial amount of each loan on a twenty year repayment schedule, with a balloon repayment of the outstanding principal amount of loans due on September 26, 2023, subject to an earlier maturity if our existing revolving credit facility matures or is not otherwise refinanced by certain dates. Borrowings under the real estate credit agreement are guaranteed by each operating dealership subsidiary of ours whose real estate is financed under the real estate credit agreement, and collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder. Restated Master Loan Agreement On February 3, 2015, certain of our subsidiaries entered into an amended and restated master loan agreement (the "Restated Master Loan Agreement") with Wells Fargo. In June 2015, we made additional borrowings under the Restated Master Loan Agreement with Wells Fargo, resulting in our having drawn the full $100.0 million (the "Restated Master Loan Facility") of availability thereunder. In connection with our final draw under the Restated Master Loan Agreement, in June 2015 we entered into a cash flow interest rate swap with Wells Fargo, effectively fixing the interest rate at 4.80% . We paid a total of $1.2 million in debt issuance costs associated with the Master Loan Agreement. Below is a summary of our outstanding mortgage notes payable, the carrying values of the related collateralized real estate, and years of maturity as of December 31, 2016 and 2015 : As of December 31, 2016 As of December 31, 2015 Mortgage Agreement Aggregate Principal Outstanding Carrying Value of Collateralized Related Real Estate Maturity Dates Aggregate Principal Outstanding Carrying Value of Collateralized Related Real Estate Maturity Dates Captive mortgages $ 159.7 $ 225.5 2018-2024 $ 170.3 $ 241.1 2018-2024 Other mortgage debt 23.1 46.2 2018-2022 24.0 45.7 2018-2022 Real estate credit agreement 51.5 91.5 2023 64.0 131.7 2023 Restated master loan agreement 93.6 134.2 2025 97.9 134.7 2025 Total mortgage debt $ 327.9 $ 497.4 $ 356.2 $ 553.2 Revolving Credit Facility As discussed above under our "Floor Plan Notes Payable—Non-Trade" footnote, the 2016 Senior Credit Facility includes a $250.0 million Revolving Credit Facility. We may request Bank of America to issue letters of credit on our behalf thereunder up to $50.0 million . Availability under the Revolving Credit Facility is limited by borrowing base calculations. Availability is reduced on a dollar-for-dollar basis by the aggregate face amount of any outstanding letters of credit. As of December 31, 2016 , we re-designated $190.0 million of borrowing capacity from our Revolving Credit Facility to our New Vehicle Revolving Floor Plan Facility, resulting in $60.0 million of borrowing capacity. In addition, we had $8.9 million in outstanding letters of credit, resulting in $51.1 million of borrowing availability as of December 31, 2016 . Proceeds from borrowings from time to time under the revolving credit facility may be used for among other things, acquisitions, working capital and capital expenditures. Borrowings under the 2016 Senior Credit Facility bear interest, at the option of the Company, based on the London Interbank Offered Rate ("LIBOR") or the Base Rate, in each case plus an Applicable Margin. The Base Rate is the highest of the (i) Bank of America prime rate, (ii) Federal Funds rate plus 0.50% , and (iii) one month LIBOR plus 1.00% . The Applicable Margin, for borrowings under the Revolving Credit Facility, ranges from 1.25% to 2.50% for LIBOR loans and 0.25% to 1.50% for Base Rate loans, in each case based on the Company's total lease adjusted leverage ratio. In addition to the payment of interest on borrowings outstanding under the 2016 Senior Credit Facility, we are required to pay a quarterly commitment fee between 0.20% and 0.45% per year, based on the Company's total lease adjusted leverage ratio on the Revolving Credit Facility. Stock Repurchase and Dividend Restrictions The 2016 Senior Credit Facility and the Indenture currently allow for restricted payments without limit so long as our consolidated total leverage ratio (as defined in the 2016 Senior Credit Facility and the Indenture) is not greater than 3.0 to 1.0 after giving effect to such proposed restricted payments. Restricted payments generally include items such as dividends, share repurchases, unscheduled repayments of subordinated debt, or purchases of certain investments. In the event that our consolidated total leverage ratio does (or would) exceed 3.0 to 1.0, the 2016 Senior Credit Facility and the Indenture would then also allow for restricted payments under the following mutually exclusive parameters, subject to certain exclusions: • Restricted payments in an aggregate amount not to exceed $20.0 million in any fiscal year; • General restricted payments allowance of $150.0 million ; and • Subject to our continued compliance with a fixed charge coverage ratio as set out in the Indenture, restricted payments capacity additions (or subtractions if negative) equal to (i) 50% of our net income (as defined in the 2016 Senior Credit Facility and the Indenture) beginning on October 1, 2014 and ending on the date of the most recently completed fiscal quarter (the "Measurement Period"), plus (ii) 100% of any cash proceeds we receive from the sale of equity interests during the Measurement Period, minus (iii) the dollar amount of share repurchases made and dividends paid on or after December 4, 2014. Representations and Covenants We are subject to a number of covenants in our various debt and lease agreements, including those described below. We were in compliance with all of our covenants throughout 2016 . Failure to comply with any of our debt covenants would constitute a default under the relevant debt agreements, which would entitle the lenders under such agreements to terminate our ability to borrow under the relevant agreements and accelerate our obligations to repay outstanding borrowings, if any, unless compliance with the covenants is waived. In many cases, defaults under one of our agreements could trigger cross-default provisions in our other agreements. If we are unable to remain in compliance with our financial or other covenants, we would be required to seek waivers or modifications of our covenants from our lenders, or we would need to raise debt and/or equity financing or sell assets to generate proceeds sufficient to repay such debt. We cannot give any assurance that we would be able to successfully take any of these actions on terms, or at times, that may be necessary or desirable. The representations and covenants contained in the Real Estate Credit Agreement are customary for financing transactions of this nature including, among others, a requirement to comply with a minimum consolidated current ratio, minimum consolidated fixed charge coverage ratio, and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Real Estate Credit Agreement. In addition, certain other covenants could restrict our ability to incur additional debt, pay dividends or acquire or dispose of assets. Our guarantees under the Restated Master Loan Agreement also require compliance with certain financial covenants, including a consolidated current ratio, consolidated fixed charge coverage ratio, and an adjusted net worth calculation. Further, the Restated Master Loan Agreement contains customary representations and warranties and the guarantees under such agreements contain negative covenants, including, among other things, covenants not to, with permitted exceptions, (i) incur any additional debt; (ii) create any additional liens on the Property, as defined in the Restated Master Loan Agreement; and (iii) enter into any sale-leaseback transactions in connection with the underlying properties. The representations and covenants contained in the agreement governing the 2016 Senior Credit Facility are customary for financing transactions of this nature including, among others, a requirement to comply with a minimum consolidated current ratio, minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the agreement governing the 2016 Senior Credit Facility. In addition, certain other covenants could restrict the Company's ability to incur additional debt, pay dividends or acquire or dispose of assets. The agreement governing the 2016 Senior Credit Facility also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. In certain instances, an event of default under either the Revolving Credit Facility or the Used Vehicle Floor Plan Facility could be, or result in, an event of default under the New Vehicle Floor Plan Facility, and vice versa. Upon the occurrence of an event of default, the Company could be required to immediately repay all amounts outstanding under the applicable facility. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE | 12 Months Ended |
Dec. 31, 2016 | |
Derivatives and Fair Value [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE | FINANCIAL INSTRUMENTS AND FAIR VALUE In determining fair value, we use various valuation approaches, including market and income approaches. Accounting standards establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include interest rate swap instruments, exchange-traded debt securities that are not actively traded or do not have a high trading volume, mortgage notes payable, and certain real estate properties on a non-recurring basis. Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating the fair value of certain non-financial assets and non-financial liabilities in purchase acquisitions and those used in the assessment of impairment for manufacturer franchise rights. The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required to determine fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. Fair value is a market-based exit price measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. We use inputs that are current as of the measurement date, including during periods of significant market fluctuations. Financial instruments consist primarily of cash and cash equivalents, contracts-in-transit, accounts receivable, cash surrender value of corporate-owned life insurance policies, accounts payable, floor plan notes payable, subordinated long-term debt, mortgage notes payable, and interest rate swap instruments. The carrying values of our financial instruments, with the exception of subordinated long-term debt and mortgage notes payable, approximate fair value due to (i) their short-term nature, (ii) recently completed market transactions, or (iii) existence of variable interest rates, which approximate market rates. The fair value of our subordinated long-term debt is based on reported market prices in an inactive market which reflects Level 2 inputs. We estimate the fair value of our mortgage notes payable using a present value technique based on current market interest rates for similar types of financial instruments which reflect Level 2 inputs. A summary of the carrying values and fair values of our 6.0% Notes and our mortgage notes payable is as follows: As of December 31, 2016 2015 (In millions) Carrying Value: 6.0% Senior Subordinated Notes due 2024 $ 607.6 $ 608.4 Mortgage notes payable 327.9 356.2 Total carrying value $ 935.5 $ 964.6 Fair Value: 6.0% Senior Subordinated Notes due 2024 $ 613.5 $ 618.0 Mortgage notes payable 339.5 362.6 Total fair value $ 953.0 $ 980.6 Interest Rate Swap Agreements In June 2015, we entered into a new interest rate swap agreement with a notional principal amount of $100.0 million . This swap was designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month LIBOR rate, through maturity in February 2025. The notional values of this swap as of December 31, 2016 and 2015 , were $95.6 million and $100.0 million , respectively, and the notional value will reduce over its remaining term to $53.1 million at maturity. In November 2013, we entered into an interest rate swap agreement with a notional principal amount of $75.0 million . This swap was designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the one month LIBOR rate, through maturity in September 2023. The notional values of this swap as of December 31, 2016 and 2015 , were $64.0 million and $67.7 million , respectively, and the notional value will reduce over its remaining term to $38.7 million at maturity. The fair value of cash flow swaps is calculated as the present value of expected future cash flows, determined on the basis of forward interest rates and present value factors. Fair value estimates reflect a credit adjustment to the discount rate applied to all expected cash flows under the swaps. Other than this input, all other inputs used in the valuation for these swaps are designated to be Level 2 fair values. The fair value liabilities recorded related to the swaps for the years ended December 31, 2016 and 2015 , are $3.6 million and $6.0 million , respectively. The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the Consolidated Balance Sheets: As of December 31, 2016 2015 (In millions) Accounts payable and accrued liabilities $ 2.2 $ 2.8 Other long-term liabilities 1.4 3.2 Total fair value $ 3.6 $ 6.0 All of our interest rate swaps qualify for cash flow hedge accounting treatment. For the years ended December 31, 2016 , 2015 , and 2014 , neither of our cash flow swaps contained any ineffectiveness, nor was any ineffectiveness recognized in earnings. Information about the effect of our interest rate swap agreements on the accompanying Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, are as follows (in millions): For the Year Ended December 31, Results Recognized in Accumulated Other Comprehensive Loss (Effective Portion) Location of Results Reclassified from Accumulated Other Comprehensive Loss to Earnings Results Reclassified from Accumulated Other Comprehensive Loss to Earnings 2016 $ (0.8 ) Swap interest expense $ (3.1 ) 2015 $ (6.1 ) Swap interest expense $ (3.0 ) 2014 $ (4.9 ) Swap interest expense $ (2.0 ) On the basis of yield curve conditions as of December 31, 2016 and including assumptions about future changes in fair value, we expect the amount to be reclassified out of Accumulated Other Comprehensive Loss into earnings within the next 12 months will be losses of $2.2 million . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income tax expense from continuing operations are as follows: For the Years Ended December 31, 2016 2015 2014 (In millions) Current: Federal $ 83.8 $ 84.9 $ 47.1 State 10.7 10.2 7.0 Total current income tax expense 94.5 95.1 54.1 Deferred: Federal 4.9 6.8 15.0 State 1.2 2.1 1.9 Total deferred income tax expense 6.1 8.9 16.9 Total income tax expense $ 100.6 $ 104.0 $ 71.0 A reconciliation of the statutory federal rate to the effective tax rate from continuing operations is as follows (dollar amounts shown in millions) : For the Years Ended December 31, 2016 % 2015 % 2014 % Income tax provision at the statutory rate $ 93.7 35.0 $ 95.7 35.0 $ 64.1 35.0 State income tax expense, net of federal benefit 7.8 2.9 8.0 2.9 5.8 3.2 Non-deductible expenses, net 0.2 0.1 0.3 0.1 1.2 0.7 Adjustments and settlements (0.8 ) (0.3 ) — — (0.5 ) (0.3 ) Other, net (0.3 ) (0.1 ) — — 0.4 0.2 Income tax expense $ 100.6 37.6 $ 104.0 38.0 $ 71.0 38.8 Deferred income tax asset and liability components consisted of the following: As of December 31, 2016 2015 (In millions) Deferred income tax assets: F&I chargeback liabilities $ 16.5 $ 14.8 Other accrued liabilities 4.7 4.4 Stock-based compensation 5.2 4.5 Intangible asset amortization — 0.3 Other, net 8.4 9.2 Total deferred income tax assets 34.8 33.2 Deferred income tax liabilities: Intangible asset amortization (7.3 ) — Depreciation (34.9 ) (33.4 ) Other, net (1.5 ) (1.7 ) Total deferred income tax liabilities (43.7 ) (35.1 ) Net deferred income tax liabilities $ (8.9 ) $ (1.9 ) There were no valuation allowances recorded against the deferred tax assets as of December 31, 2016 or 2015 . Additionally, there were income taxes payable included in Accounts Payable and Accrued Liabilities of $19.8 million and $5.7 million as of December 31, 2016 and 2015 , respectively. As of December 31, 2016 , the net amount of our unrecognized tax benefits was $0.8 million , which if recognized, would not impact our effective tax rate. There were no unrecognized tax benefits as of December 31, 2015 . As of December 31, 2014 , the net amount of our unrecognized tax benefits was $0.3 million , which if recognized, would impact our effective tax rate. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. It is reasonably possible that the $0.8 million in unrecognized tax benefits as of December 31, 2016 will reverse within the next 12 months. The statutes of limitations related to our consolidated Federal income tax returns are closed for all tax years up to and including 2012. The expiration of the statutes of limitations related to the various state income tax returns that we and our subsidiaries file varies by state. The 2011 through 2015 tax years generally remain subject to examination by most state tax authorities. We believe that our tax positions comply with applicable tax law and that we have adequately provided for these matters. |
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following: As of December 31, 2016 2015 (In millions) Accrued finance and insurance chargebacks $ 20.1 $ 18.2 Deferred rent 5.8 5.8 Swap fair value 1.4 3.2 Other 2.6 2.3 Other long-term liabilities $ 29.9 $ 29.5 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION During the years ended December 31, 2016 , 2015 , and 2014 , we made interest payments, including amounts capitalized, totaling $73.8 million , $60.6 million , and $52.5 million , respectively. Included in these interest payments are $19.1 million , $15.7 million , and $12.1 million , of floor plan interest payments for the years ended December 31, 2016 , 2015 , and 2014 , respectively. During the years ended December 31, 2016 , 2015 , and 2014 we made income tax payments, net of refunds received, totaling $79.6 million , $73.2 million , and $55.8 million , respectively. During the years ended December 31, 2016 , 2015 , and 2014 , we transferred $121.9 million , $110.3 million , and $79.5 million , respectively, of loaner vehicles from Other Current Assets to Inventory on our Consolidated Balance Sheets. During the years ended December 31, 2016 and 2015 , we received $114.3 million and $105.9 million , respectively, of proceeds from the sale of dealerships, and $13.1 million and $19.3 million , respectively, of mortgage note repayments were paid directly by the buyer as part of these divestitures. There were no divestitures during the year ended December 31, 2014 . The following items are included in Other Adjustments, net to reconcile net income to net cash provided by operating activities: For the Years Ended December 31, 2016 2015 2014 Amortization of deferred financing fees $ 2.6 $ 2.5 $ 2.4 Loss on disposal of fixed assets 0.4 1.2 1.2 Other individually immaterial items 1.1 0.5 (0.5 ) Other adjustments, net $ 4.1 $ 4.2 $ 3.1 |
LEASE OBLIGATIONS
LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases Obligations | LEASE OBLIGATIONS We lease various facilities, real estate, and equipment primarily under operating lease agreements, most of which have terms from one to twenty years. Certain of our leases contain renewal options and rent escalation clauses. We record rent expense on a straight-line basis over the life of the lease for lease agreements where the rent escalates at fixed rates over time. Rent expense from continuing operations totaled $29.9 million , $31.3 million , and $30.8 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. As of December 31, 2016 and 2015 , we had one significant capital lease obligation totaling $3.4 million and $3.5 million , respectively. The capital lease agreement was entered into in 2011 and has a term of 20 years. During the year ended December 31, 2016, we entered into three transactions in which we purchased previously leased real estate for an aggregate purchase price of $19.6 million . These transactions included the termination of the related lease obligations, resulting in $2.1 million of lease termination charges and $0.9 million of real estate impairment charges, which were based on the associated property appraisals. Both the lease termination charges and the real estate impairment charges were included in Other Operating (Income) Expense, net in our Consolidated Statement of Income for the year ended December 31, 2016. We did not purchase any previously leased real estate during the year ended December 31, 2015. During the year ended December 31, 2014, we entered into two transactions in which we purchased previously leased real estate for an aggregate purchase price of $5.4 million . These transactions included the termination of the related lease obligations, resulting in $0.1 million of lease termination charges, which were included in Other Operating (Income) Expense, net in our Consolidated Statement of Income for the year ended December 31, 2014. Future minimum payments under long-term, non-cancellable operating leases as of December 31, 2016 , are as follows: Total (In millions) 2017 $ 27.7 2018 25.9 2019 23.9 2020 21.4 2021 18.3 Thereafter 35.2 Total minimum lease payments $ 152.4 Certain of our lease agreements include financial covenants and incorporate by reference the financial covenants set forth in the 2016 Senior Credit Facility. A breach of any of these covenants could immediately give rise to certain landlord remedies under our various lease agreements, the most severe of which include the following: (i) termination of the applicable lease and/or other leases with the same or an affiliated landlord under a cross-default provision, (ii) eviction from the premises; and (iii) the landlord having a claim for various damages. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Our dealerships are party to dealer and framework agreements with applicable vehicle manufacturers. In accordance with these agreements, each dealership has certain rights and is subject to restrictions typical in the industry. The ability of these manufacturers to influence the operations of the dealerships or the loss of any of these agreements could have a materially negative impact on our operating results. In some instances, manufacturers may have the right, and may direct us, to implement costly capital improvements to dealerships as a condition to entering into, renewing, or extending franchise agreements with them. Manufacturers also typically require that their franchises meet specific standards of appearance. These factors, either alone or in combination, could cause us to use our financial resources on capital projects that we might not have planned for or otherwise determined to undertake. From time to time, we and our dealerships are or may become involved in various claims relating to, and arising out of, our business and our operations. These claims may involve, but not be limited to, financial and other audits by vehicle manufacturers or lenders and certain federal, state, and local government authorities, which have historically related primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants, and (iii) payments made to government authorities relating to federal, state, and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings, and other dispute resolution processes. Such claims, including class actions, could relate to, but may not be limited to, the practice of charging administrative fees and other fees and commissions, employment-related matters, truth-in-lending and other dealer assisted financing obligations, contractual disputes, actions brought by governmental authorities, and other matters. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. We believe we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Based on our review of the various types of claims currently known to us, there is no indication of material reasonably possible losses in excess of amounts accrued in the aggregate. We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity, or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity, or results of operations. A significant portion of our business involves the sale of vehicles, parts, or vehicles composed of parts that are manufactured outside the United States. As a result, our operations are subject to customary risks of importing merchandise, including fluctuations in the relative values of currencies, import duties, exchange controls, trade restrictions, work stoppages, and general political and socio-economic conditions in foreign countries. The United States or the countries from which our products are imported may, from time to time, impose new quotas, duties, tariffs, or other restrictions; or adjust presently prevailing quotas, duties, or tariffs, which may affect our operations, and our ability to purchase imported vehicles and/or parts at reasonable prices. Substantially all of our facilities are subject to federal, state and local provisions regarding the discharge of materials into the environment. Compliance with these provisions has not had, nor do we expect such compliance to have, any material effect upon our capital expenditures, net earnings, financial condition, liquidity or competitive position. We believe that our current practices and procedures for the control and disposition of such materials comply with applicable federal, state, and local requirements. No assurances can be provided, however, that future laws or regulations, or changes in existing laws or regulations, would not require us to expend significant resources in order to comply therewith. We had $8.9 million of letters of credit outstanding as of December 31, 2016 , which are required by certain of our insurance providers. In addition, as of December 31, 2016 , we maintained a $5.0 million surety bond line in the ordinary course of our business. Our letters of credit and surety bond line are considered to be off balance sheet arrangements. Our other material commitments include (i) floor plan notes payable, (ii) operating leases, (iii) long-term debt and (iv) interest on long-term debt, as described elsewhere herein. |
SHARE-BASED COMPENSATION AND EM
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS On March 13, 2012, our Board of Directors, upon the recommendation of our Compensation and Human Resources Committee, approved the 2012 Equity Incentive Plan (the "Plan"). On April 18, 2012, our shareholders approved the Plan, which replaced our previous equity incentive plan. The Plan expires on March 13, 2022 and provides for the grant of options, performance share units, restricted share units, and shares of restricted stock to our directors, officers, and employees in the total amount of 1.5 million shares. Since the inception of the Plan, we have granted 0.6 million performance share units and 0.5 million shares of restricted stock. There have been 0.6 million shares that have either been forfeited or repurchased in association with the net share settlement of employee's share-based awards, both of which are added back to shares available for grant. As such, there were approximately 1.0 million shares available for grant in accordance with the Plan as of December 31, 2016 . We issue shares of our common stock upon the vesting of performance share units or restricted stock. These shares are issued from our authorized and not outstanding common stock. In addition, in connection with the vesting of performance share units or restricted stock, we expect to repurchase a portion of the shares issued equal to the amount of employee income tax withholding. We have recognized $12.0 million ( $4.5 million tax benefit), $10.0 million ( $3.8 million tax benefit), and $8.6 million ( $3.3 million tax benefit) in share-based compensation expense for the years ended December 31, 2016 , 2015 , and 2014 , respectively. As of December 31, 2016 , there was $12.6 million of total unrecognized share-based compensation expense related to non-vested share-based awards granted under the Plan, and the weighted average period over which it is expected to be recognized is 2.23 years. Further, we expect to recognize $7.4 million of this expense in 2017, $4.0 million in 2018, and $1.2 million in 2019. Performance Share Units During the year ended December 31, 2016 , the Compensation and Human Resources Committee of the Board of Directors approved the grant of up to 214,297 performance share units, which represents 150% of the target award. Performance share units provide an opportunity for the employee-recipient to receive a number of shares of our common stock based on our performance during a specified year period following the grant as measured against objective performance goals as determined by the Compensation and Human Resources Committee of our Board of Directors. The actual number of units earned may range from 0% to 150% of the target number of units depending upon achievement of the performance goals. Performance share units vest in three equal annual installments with one-third of the award vesting on each of the (i) later of the first anniversary of the grant date, or the date the Compensation and Human Resources Committee determines the actual award, (ii) second anniversary of the grant date and (iii) third anniversary of the grant date. Upon vesting, each performance share unit equals one share of common stock of the Company. Compensation cost for performance share units is based on the closing price of our common stock on the date of grant and the ultimate performance level achieved, and is recognized on a graded basis, net of estimated forfeitures, over the three-year vesting period. The following table summarizes information about performance share units for 2016 : Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2016 191,853 $ 54.89 Granted 214,297 46.70 Vested (115,753 ) 46.79 Forfeited or unearned (13,554 ) 60.61 Non-vested at December 31, 2016 276,843 $ 51.66 The weighted average grant-date fair value of performance share units and total fair value of performance share units vested are summarized in the following table: For the Years Ended December 31, 2016 2015 2014 Weighted average grant-date fair value of performance share units granted $ 46.70 $ 77.92 $ 49.50 Total fair value of performance share units vested (in millions) $ 6.0 $ 9.3 $ 7.1 Restricted Stock Awards During the year ended December 31, 2016 , the Compensation and Human Resources Committee of the Board of Directors approved the grant of 136,356 shares of restricted stock. Restricted stock awards vest in three equal annual installments commencing on the first anniversary of the grant date. Compensation cost for restricted stock awards is based on the closing price of our common stock on the date of grant and is recognized on a straight-line basis, net of estimated forfeitures, over the three-year vesting period. The following table summarizes information about restricted stock awards for 2016 : Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2016 158,845 $ 63.82 Granted 136,356 47.07 Vested (72,397 ) 54.03 Forfeited (19,604 ) 64.05 Non-vested at December 31, 2016 203,200 $ 56.05 The weighted average grant-date fair value of restricted stock awards and total fair value of restricted stock awards vested are summarized in the following table: For the Years Ended December 31, 2016 2015 2014 Weighted average grant-date fair value of restricted stock granted $ 47.07 $ 82.17 $ 52.82 Total fair value of restricted stock awards vested (in millions) $ 3.7 $ 11.1 $ 9.1 Employee Retirement Plan We sponsor the Asbury Automotive Retirement Savings Plan (the "Retirement Savings Plan"), a 401(k) plan, for eligible employees. Employees are eligible to participate in the Retirement Savings Plan on or after 60 days of service with us. Employees electing to participate in the Retirement Savings Plan may contribute up to 75% of their annual eligible compensation. IRS rules limited total participant contributions during 2016 to $18,000 , or $24,000 if age 50 or more; however, we limit participant contributions for employees considered Highly Compensated Employees with an annual salary or base salary equal to or greater than $120,000 to $13,000 per year, or $19,000 if age 50 or more. For non-highly compensated employees, after one year of employment we match 50% of employees' contributions up to 4% of their eligible compensation, with a maximum match of $3,000 per participant. Employer contributions vest by graded schedule over 4 years after the date of hire. Expenses from continuing operations related to employer matching contributions totaled $2.7 million , $2.2 million , and $1.3 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
CONDENSED QUARTERLY REVENUES AN
CONDENSED QUARTERLY REVENUES AND EARNINGS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
CONDENSED QUARTERLY REVENUES AND EARNINGS (UNAUDITED) | CONDENSED QUARTERLY REVENUES AND EARNINGS (UNAUDITED): For the Three Months Ended March 31, June 30, September 30, December 31, (In millions, except per share data) 2015: Revenues $ 1,541.8 $ 1,689.6 $ 1,716.4 $ 1,640.5 Gross profit $ 256.4 $ 271.3 $ 272.7 $ 260.4 Net income (2)(3) $ 35.9 $ 41.1 $ 51.1 $ 41.1 Net income per common share: Basic (1)(2)(3) $ 1.31 $ 1.53 $ 1.97 $ 1.65 Diluted (1)(2)(3) $ 1.30 $ 1.52 $ 1.96 $ 1.64 2016: Revenues $ 1,550.8 $ 1,627.4 $ 1,683.1 $ 1,666.5 Gross profit $ 260.8 $ 267.6 $ 265.7 $ 264.6 Net income (4)(5)(6) $ 31.0 $ 36.7 $ 32.4 $ 67.1 Net income per common share: Basic (1)(4)(5)(6) $ 1.28 $ 1.66 $ 1.47 $ 3.11 Diluted (1)(4)(5)(6) $ 1.27 $ 1.65 $ 1.47 $ 3.08 ____________________________ (1) The sum of income per common share for the four quarters does not equal total income per common share due to changes in the average number of shares outstanding during the respective periods. (2) Results for the three months ended September 30, 2015 were increased by $ 13.1 million from gains on divestitures, net of tax, and a $0.8 income tax benefit, or $0.54 and $0.53 per basic and diluted share, respectively, in the aggregate. (3) Results for the three months ended December 31, 2015 were increased by $8.4 million from gains on divestitures, net of tax, or $0.34 per basic and diluted share. (4) Results for the three months ended March 31, 2016 were decreased by $2.1 million as a result of real estate-related charges, net of tax, or $0.09 per basic and diluted share. (5) Results for the three months ended September 31, 2016 were decreased by $1.1 million as a result of real estate-related charges, net of tax, or $0.05 per basic and diluted share. (6) Results for the three months ended December 31, 2016 were increased by $28.4 million from gains on divestitures, $4.1 million from gains on legal settlements, partially offset by a $0.3 million loss on real estate-related charges, all previous items were net of tax, and a $0.9 income tax benefit, or $1.53 and $1.52 per basic and diluted share, respectively, in the aggregate. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In January 2017, we acquired the assets of two franchises ( two dealership locations) and one collision center in the Indianapolis, Indiana market. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and reflect the consolidated accounts of Asbury Automotive Group, Inc. and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements in order to conform to current presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for insurance programs, certain assumptions related to intangible and long-lived assets, and reserves for certain legal or similar proceedings relating to our business operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include investments in money market accounts and short-term certificates of deposit, which have maturity dates of less than 90 days when purchased. |
Contracts-In-Transit | Contracts-In-Transit Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us. |
Inventories | Inventories Inventories are stated at the lower of cost or market. We use the specific identification method to value vehicle inventories and the "first-in, first-out" method ("FIFO") to account for our parts inventories. Our new vehicle sales histories have indicated that the vast majority of the new vehicles we sell are sold for, or in excess of, our cost to purchase those vehicles. Therefore, we generally do not maintain a reserve for new vehicle inventory. We maintain a reserve for used vehicle inventory where cost basis exceeds market value. In assessing lower of cost or market for used vehicles, we consider (i) the aging of our used vehicles, (ii) historical sales experience of used vehicles, and (iii) current market conditions and trends in used vehicle sales. We also review and consider the following metrics related to used vehicle sales (both on a recent and longer-term historical basis): (i) days of supply in our used vehicle inventory, (ii) used vehicle units sold at less than original cost as a percentage of total used vehicles sold, and (iii) average vehicle selling price of used vehicle units sold at less than original cost. We then determine the appropriate level of reserve required to reduce our used vehicle inventory to the lower of cost or market, and record the resulting adjustment in the period in which we determine a loss has occurred. The level of reserve determined to be appropriate for each reporting period is considered to be a permanent inventory write-down, and therefore is only released upon the sale of the related inventory. We receive assistance from certain automobile manufacturers in the form of advertising and floor plan interest credits. Manufacturer advertising credits that are reimbursements of costs associated with specific advertising programs are recognized as a reduction of advertising expense in the period they are earned. All other manufacturer advertising and floor plan interest credits are accounted for as purchase discounts, and are recorded as a reduction of inventory and recognized as a reduction to New Vehicle Cost of Sales in the accompanying Consolidated Statements of Income in the period the related vehicle is sold. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Depreciation is included in Depreciation and Amortization on the accompanying Consolidated Statements of Income. Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the useful life of the related asset. The ranges of estimated useful lives are as follows (in years): Buildings and improvements 10-40 Machinery and equipment 5-10 Furniture and fixtures 3-10 Company vehicles 3-5 Expenditures for major additions or improvements, which extend the useful lives of assets, are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of such assets, are expensed as incurred. We capitalize interest on borrowings during the active construction period of capital projects. Capitalized interest is added to the cost of the assets and is depreciated over the estimated useful lives of the assets. We review property and equipment for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When we test our long-lived assets for impairment, we first compare the carrying amount of the underlying assets to their net recoverable value by reviewing the undiscounted cash flows expected to result from the use and eventual disposition of the underlying assets. If the carrying amount of the underlying assets is less than their net recoverable value, then we calculate an impairment equal to the excess of the carrying amount over the fair market value, and the impairment loss would be charged to operations in the period identified. As a result of impairment tests conducted in 2016 , 2015 , and 2014 , we did not record an impairment of our property and equipment. |
Acquisitions | Acquisitions Acquisitions are accounted for under the acquisition method of accounting, and the assets acquired and liabilities assumed are recorded at their fair value, at the acquisition date. The results of operations of acquired dealerships are included in the accompanying Consolidated Statements of Income, commencing on the date of acquisition. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess cost of an acquired business over the fair market value of its identifiable net assets. We have determined that, based on how we integrate acquisitions into our business, how the components of our business share resources and interact with one another, and how we review the results of our operations, that we have several geographic market-based operating segments. We have determined that the dealerships in each of our operating segments are components that are aggregated into several geographic market-based reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our dealerships offer new and used vehicles, service, parts and third-party finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. Our only significant identifiable intangible assets, other than goodwill, are our rights under franchise agreements with manufacturers, which are recorded at an individual franchise level. The fair value of our manufacturer franchise rights are determined at the acquisition date, by discounting the projected cash flows specific to each franchise. We have determined that manufacturer franchise rights have an indefinite life, as there are no economic, contractual or other factors that limit their useful lives, and they are expected to generate cash flows indefinitely due to the historically long lives of the manufacturers' brand names. Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business. We do not amortize goodwill and other intangible assets that are deemed to have indefinite lives. We review goodwill and manufacturer franchise rights for impairment annually as of October 1 st , or more often if events or circumstances indicate that impairment may have occurred. We are subject to financial statement risk to the extent that goodwill becomes impaired due to decreases in the fair value of our automotive retail business or manufacturer franchise rights become impaired due to decreases in the fair value of our individual franchises. We completed our annual impairment tests as of October 1, 2016 . Based on our qualitative assessment regarding goodwill impairment, we determined that it was more likely than not that the fair value exceeded the carrying value. Based on our qualitative assessment regarding manufacturer franchise rights impairment, we determined that we should perform a quantitative test regarding certain franchises. Based on our quantitative assessment regarding these franchises, we determined that it was more likely than not that the fair value exceeded the carrying value. For the remainder of our manufacturer franchise rights, we determined that it was more likely than not that the fair value exceeded the carrying value, based on our qualitative assessment and we were therefore not required to perform a quantitative test. As such, there were no impairment charges related to goodwill or manufacturer franchise rights recorded for the year ended December 31, 2016 . |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are presented as a contra-liability within Current Maturities of Long-Term Debt or Long-Term Debt on our Consolidated Balance Sheets, except for debt issuance costs associated with our line-of-credit arrangements, which are presented as an asset within Other Current Assets or Other Long-Term Assets on our Consolidated Balance Sheets. Debt issuance costs are amortized to Floor Plan Interest Expense and Other Interest Expense, net in the accompanying Consolidated Statements of Income through maturity using the effective interest method. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities From time to time, we utilize derivative financial instruments to manage our interest rate risk. The types of risks hedged are those relating to the variability of cash flows caused by fluctuations in interest rates. We document our risk management strategy and assess hedge effectiveness at each interest rate swaps inception and during the term of each hedge. Derivatives are reported at fair value on the accompanying Consolidated Balance Sheets. The effective portion of the gain or loss on our hedges is reported as a component of Accumulated Other Comprehensive Loss on the accompanying Consolidated Balance Sheets, and reclassified to Swap Interest Expense in the accompanying Consolidated Statements of Income in the period during which the hedged transaction affects earnings. Measurements of hedge effectiveness are based on comparisons between the gains or losses of the actual interest rate swaps and the gains or losses of hypothetical interest rate swaps, which have the same critical terms of the defined hedged items. Ineffective portions of these interest rate swaps are reported as a component of Swap Interest Expense in the accompanying Consolidated Statements of Income |
Insurance | Insurance We are self-insured for employee medical claims and maintain stop loss insurance for large-dollar individual claims. We have high deductible insurance programs for workers compensation, property and general liability claims. We maintain and review our claim and loss history to assist in assessing our expected future liability for these claims. We also use professional service providers, such as account administrators and actuaries, to help us accumulate and assess this information. Provisions for retained losses and deductibles are made by charges to expense based upon periodic evaluations of the estimated ultimate liabilities on reported and unreported claims. |
Revenue Recognition | Revenue Recognition Revenue from the sale of new and used vehicles (which excludes sales tax) is recognized upon the latest of delivery, signing of the sales contract or approval of financing. Revenue from the sale of parts, service and collision repair work (which excludes sales tax) is recognized upon delivery of parts to the customer or at the time vehicle service or repair work is completed, as applicable. Manufacturer incentives and rebates, including manufacturer holdbacks, floor plan interest assistance and certain advertising assistance, are recognized as a reduction of New Vehicle Cost of Sales at the time the related vehicles are sold, in the accompanying Consolidated Statements of Income. We receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed auto protection (known as "GAP") insurance, and other insurance, to customers (collectively "F&I"). We may be charged back for F&I commissions in the event a contract is prepaid, defaulted upon, or terminated ("chargebacks"). F&I commissions are recorded at the time a vehicle is sold and a reserve for future chargebacks is established based on historical chargeback experience and the termination provisions of the applicable contract. F&I commissions, net of estimated future chargebacks, are included in Finance and Insurance, net in the accompanying Consolidated Statements of Income. Additionally, we participate in future profits associated with the performance of the third-party held underlying portfolio for certain products, pursuant to retrospective commission arrangements. Our retrospective portfolio income is recorded as revenue at the time it is received from our third-party providers. |
Internal Profit | Internal Profit Revenues and expenses associated with internal work performed by our parts and service departments on new and used vehicle inventory are eliminated in consolidation. The gross profit earned by our parts and service departments for internal work performed is included as a reduction of Parts and Service Cost of Sales on the accompanying Consolidated Statements of Income upon the sale of the vehicle. The costs incurred by our new and used vehicle departments for work performed by our parts and service departments is included in either New Vehicle Cost of Sales or Used Vehicle Cost of Sales on the accompanying Consolidated Statements of Income, depending on the classification of the vehicle serviced. We maintain a reserve to eliminate the internal profit on vehicles that have not been sold. |
Share-based Compensation | Share-Based Compensation We record share-based compensation expense under the fair value method on a straight-line basis over the vesting period, unless the awards are subject to performance conditions, in which case we recognize the expense over the requisite service period of each separate vesting tranche. |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share. |
Advertising | Advertising We expense costs of advertising as incurred and production costs when the advertising initially takes place, net of certain advertising credits and other discounts. Advertising expense from continuing operations totaled $34.0 million , $40.1 million and $34.0 million for the years ended December 31, 2016 , 2015 and 2014 , which was net of earned advertising credits of $16.8 million , $17.1 million , and $16.2 million , respectively, and is included in Selling, General, and Administrative expense in the accompanying Consolidated Statements of Income. |
Income Taxes | Income Taxes We use the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the classification of deferred taxes on the balance sheet. The guidance requires that deferred taxes be classified as non-current assets and liabilities based on the tax paying jurisdiction. We adopted this standard as of December 31, 2016 with retrospective application. In accordance with the retrospective application of this standard, we have reclassified $11.8 million of deferred tax assets from Deferred Income Taxes (current assets) to Deferred Income Taxes (non-current liabilities) as of December 31, 2015. |
Discontinued Operations | Discontinued Operations We evaluated our dealership divestitures in 2015 and 2016 to determine whether they would be considered discontinued operations. Based on our evaluation, we determined that none of our dealership divestitures would be considered discontinued operations. |
Assets Held for Sale and Liabilities Associated with Assets Held for Sale | Assets Held for Sale and Liabilities Associated with Assets Held for Sale Certain amounts have been classified as Assets Held for Sale as of December 31, 2016 and 2015 in the accompanying Consolidated Balance Sheets. Assets and liabilities classified as held for sale include assets and liabilities associated with pending dealership disposals, real estate not currently used in our operations that we are actively marketing to sell, and any related mortgage notes payable, if applicable. Classification as held for sale begins on the date that we have met all of the criteria for classification as held for sale. At the time of classifying assets as held for sale, we compare the carrying value of these assets to estimates of fair value to assess for impairment. We compare the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value and third-party desktop appraisals to assist in our fair value estimates related to real estate properties. |
Statements of Cash Flows | Statements of Cash Flows Borrowings and repayments of floor plan notes payable to a lender unaffiliated with the manufacturer from which we purchase a particular new vehicle ("Non-Trade") and all floor plan notes payable relating to pre-owned vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities on the accompanying Consolidated Statements of Cash Flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "Floor Plan Notes Payable—Trade") is classified as an operating activity on the accompanying Consolidated Statements of Cash Flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activity in the accompanying Consolidated Statement of Cash Flows. Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to a lender not affiliated with the manufacturer from which we purchased the related inventory. Loaner vehicles account for a significant portion of Other Current Assets. We acquire loaner vehicles either with available cash or through borrowings from either our manufacturer affiliated lenders or through our senior secured credit agreement with Bank of America, as administrative agent, and the other agents and lenders party thereto (the "2016 Senior Credit Facility"). Loaner vehicles are initially used by our service department for only a short period of time (typically 6 to 12 months) before we seek to sell them. Therefore, we classify the acquisition of loaner vehicles in Other Current Assets and the borrowings and repayments of loaner vehicle notes payable in Accounts Payable and Accrued Liabilities in the accompanying Consolidated Statements of Cash Flows. Loaner vehicles are depreciated over the service period to their estimated value. At the end of the loaner service period, loaner vehicles are transferred from Other Current Assets to used vehicle inventory. These transfers are reflected as non-cash transfers between Other Current Assets and Inventory in the accompanying Consolidated Statements of Cash Flows. |
Business and Credit Concentration Risk | Business and Credit Concentration Risk Financial instruments, which potentially subject us to a concentration of credit risk, consist principally of cash deposits. We maintain cash balances at financial institutions with strong credit ratings. Generally, amounts maintained with these financial institutions are in excess of FDIC insurance limits. We have substantial debt service obligations. As of December 31, 2016 , we had total debt of $931.3 million , excluding floor plan notes payable, the debt premium on the 6.0% Senior Subordinated Notes due 2024 ("6.0% Notes" ) , and debt issuance costs. In addition, we and our subsidiaries have the ability to obtain additional debt from time to time to finance acquisitions, real property purchases, capital expenditures, share repurchases or for other purposes, although such borrowings are subject to the restrictions contained in the second amended and restated senior secured credit agreement with Bank of America, N.A. ("Bank of America"), as administrative agent, and the other lenders party thereto (the "2016 Senior Credit Facility") and the indenture governing our 6.0% Senior Subordinated Notes due 2024 (the "Indenture"). We will have substantial debt service obligations, consisting of required cash payments of principal and interest, for the foreseeable future. We are subject to operating and financial restrictions and covenants in certain of our leases and in our debt instruments, including the 2016 Senior Credit Facility, the Indenture, and the credit agreements covering our mortgage obligations. These agreements contain restrictions on, among other things, our ability to incur additional indebtedness, to create liens or other encumbrances, and to make certain payments (including dividends and repurchases of our shares and investments). These agreements may also require us to maintain compliance with certain financial and other ratios. Our failure to comply with any of these covenants in the future would constitute a default under the relevant agreement, which would, depending on the relevant agreement, (i) entitle the creditors under such agreement to terminate our ability to borrow under the relevant agreement and accelerate our obligations to repay outstanding borrowings; (ii) require us to apply our available cash to repay these borrowings; (iii) entitle the creditors under such agreement to foreclose on the property securing the relevant indebtedness; and/or (iv) prevent us from making debt service payments on certain of our other indebtedness, any of which would have a material adverse effect on our business, financial condition or results of operations. In many cases, a default under one of our debt or mortgage, agreements could trigger cross-default provisions in one or more of our other debt or mortgages. A number of our dealerships are located on properties that we lease. Each of the leases governing such properties has certain covenants with which we must comply. If we fail to comply with the covenants under our leases, the respective landlords could terminate the leases and seek damages from us. Concentrations of credit risk with respect to contracts-in-transit and accounts receivable are limited primarily to automotive manufacturers and financial institutions. Credit risk arising from receivables from commercial customers is minimal due to the large number of customers comprising our customer base. A significant portion of our new vehicle sales are derived from a limited number of automotive manufacturers. For the year ended December 31, 2016 , manufacturers representing 5% or more of our revenues from new vehicle sales were as follows: Manufacturer (Vehicle Brands): % of Total New Vehicle Revenues American Honda Motor Co., Inc. (Honda and Acura) 21 % Toyota Motor Sales, U.S.A., Inc. (Toyota and Lexus) 19 % Ford Motor Company (Ford and Lincoln) 15 % Nissan North America, Inc. (Nissan and Infiniti) 14 % Mercedes-Benz USA, LLC ( Mercedes-Benz, Smart and Sprinter ) 8 % BMW of North America, LLC (BMW and Mini) 7 % No other manufacturers individually accounted for more than 5% of our total new vehicle revenue for the year ended December 31, 2016 . |
Segment Reporting | Segment Reporting Our operations are organized by management into geographic market-based dealership groups. Our Chief Operating Decision Maker is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic market level. The geographic operating segments have been aggregated into one reportable segment as their operations (i) have similar economic characteristics (our markets all have similar long-term average gross margins), (ii) offer similar products and services (all of our markets offer new and used vehicles, parts and service, and third-party finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our markets distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standard Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), a new standard on revenue recognition. Further, the FASB has issued a number of additional ASU's regarding the new revenue recognition standard. The new standard, as amended, will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. The guidance also addresses the measurement and recognition of gains and losses on the sale of certain non-financial assets, such as real estate, property, and equipment. The new standard will become effective for annual reporting periods beginning on or after December 15, 2017 and interim periods within that year. The standard can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the standard is permitted, but not before annual reporting periods beginning on or after December 15, 2016. We have performed a preliminary evaluation of this standard and plan to adopt it effective January 1, 2018. We cannot currently estimate the impact of this change upon adoption of this standard and will continue to review the impact of this standard on potential disclosure changes in our financial statements, as well as which transition approach will be applied. Our evaluation of this standard will continue through the date of adoption. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, to simplify the measurement of inventory by changing the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value. Application of the standard, which is required to be applied prospectively, is required for fiscal years beginning on or after December 15, 2016 and for interim periods within that year. We do not expect the adoption of this new guidance to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), a new standard on lease accounting. The new standard will supersede the existing lease accounting guidance and apply to all entities. The guidance defines new principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. The new standard will become effective for annual reporting periods beginning on or after December 15, 2018 and for interim periods within that year. A modified retrospective approach is required and early adoption of this standard is permitted. While we are still evaluating the impact of this standard, we expect that the right-of-use assets and the associated lease liabilities will be material to our financial statements. We plan to adopt this standard effective January 1, 2019. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Application of the standard is required for fiscal years beginning on or after December 15, 2016 and for interim periods within that year. Further, application can be either prospective or retrospective depending on each of the provisions in the guidance. We are currently evaluating the expected impact of adopting this new guidance on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | The ranges of estimated useful lives are as follows (in years): Buildings and improvements 10-40 Machinery and equipment 5-10 Furniture and fixtures 3-10 Company vehicles 3-5 Property and equipment, net consisted of the following: As of December 31, 2016 2015 (In millions) Land $ 307.7 $ 294.1 Buildings and leasehold improvements 530.2 503.0 Machinery and equipment 84.0 82.1 Furniture and fixtures 57.7 55.9 Company vehicles 8.8 9.8 Construction in progress 37.8 33.2 Gross property and equipment 1,026.2 978.1 Less—Accumulated depreciation (210.8 ) (205.3 ) Property and equipment, net $ 815.4 $ 772.8 |
Schedule of Revenue by Major Brand | For the year ended December 31, 2016 , manufacturers representing 5% or more of our revenues from new vehicle sales were as follows: Manufacturer (Vehicle Brands): % of Total New Vehicle Revenues American Honda Motor Co., Inc. (Honda and Acura) 21 % Toyota Motor Sales, U.S.A., Inc. (Toyota and Lexus) 19 % Ford Motor Company (Ford and Lincoln) 15 % Nissan North America, Inc. (Nissan and Infiniti) 14 % Mercedes-Benz USA, LLC ( Mercedes-Benz, Smart and Sprinter ) 8 % BMW of North America, LLC (BMW and Mini) 7 % |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations and Divestitures [Abstract] | |
Schedule of Business Acquisitions | Below is the allocation of purchase price for these acquisitions. Goodwill and manufacturer franchise rights associated with our acquisitions will be deductible for federal and state income tax purposes ratably over a 15 -year period. 2015 (In millions) Inventory $ 19.0 Real estate 15.2 Property and equipment 0.9 Goodwill 28.3 Manufacturer franchise rights 6.3 Liabilities assumed (0.3 ) Total purchase price $ 69.4 |
ACCOUNTS RECEIVABLE ACCOUNTS RE
ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: As of December 31, 2016 2015 (In millions) Vehicle receivables $ 53.2 $ 46.3 Manufacturer receivables 45.5 43.1 Other receivables 41.6 31.4 Total accounts receivable 140.3 120.8 Less—Allowance for doubtful accounts (1.9 ) (1.3 ) Accounts receivable, net $ 138.4 $ 119.5 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: As of December 31, 2016 2015 (In millions) New vehicles $ 720.6 $ 739.2 Used vehicles 132.7 134.1 Parts and accessories 41.6 43.9 Total inventories $ 894.9 $ 917.2 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: As of December 31, 2016 2015 (In millions) Service loaner vehicles $ 82.2 $ 78.5 Prepaid expenses 4.5 5.0 Prepaid taxes 4.0 3.4 Other 6.3 1.5 Other current assets $ 97.0 $ 88.4 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The ranges of estimated useful lives are as follows (in years): Buildings and improvements 10-40 Machinery and equipment 5-10 Furniture and fixtures 3-10 Company vehicles 3-5 Property and equipment, net consisted of the following: As of December 31, 2016 2015 (In millions) Land $ 307.7 $ 294.1 Buildings and leasehold improvements 530.2 503.0 Machinery and equipment 84.0 82.1 Furniture and fixtures 57.7 55.9 Company vehicles 8.8 9.8 Construction in progress 37.8 33.2 Gross property and equipment 1,026.2 978.1 Less—Accumulated depreciation (210.8 ) (205.3 ) Property and equipment, net $ 815.4 $ 772.8 |
GOODWILL AND INTANGIBLE FRANC38
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangibles | The changes in goodwill and intangible franchise rights for the years ended December 31, 2016 and 2015 are as follows: Goodwill (In millions) Balance as of December 31, 2014 (a) $ 104.0 Acquisitions 28.3 Divestitures (2.1 ) Balance as of December 31, 2015 (a) 130.2 Divestitures (2.1 ) Balance as of December 31, 2016 (a) $ 128.1 ______________________________ (a) Net of accumulated impairment losses of $537.7 million recorded prior to the year ended December 31, 2014. Intangible Franchise Rights (In millions) Balance as of December 31, 2014 $ 48.6 Acquisitions 6.3 Divestitures (6.4 ) Balance as of December 31, 2015 and December 31, 2016 $ 48.5 |
FLOOR PLAN NOTES PAYABLE_TRADE
FLOOR PLAN NOTES PAYABLE—TRADE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Floor Plan Notes Payable - Trade | Floor plan notes payable—trade, net consisted of the following: As of December 31, 2016 2015 (In millions) Floor plan notes payable—trade $ 120.0 $ 138.8 Floor plan notes payable offset account (11.7 ) — Total floor plan notes payable—trade, net $ 108.3 $ 138.8 |
FLOOR PLAN NOTES PAYABLE_NON-40
FLOOR PLAN NOTES PAYABLE—NON-TRADE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Floor Plan Notes Payable - Non-Trade | Floor plan notes payable—non-trade, net consisted of the following: As of December 31, 2016 2015 (In millions) Floor plan notes payable—non-trade $ 732.7 $ 710.8 Floor plan notes payable offset account (59.2 ) (137.4 ) Total floor plan notes payable—non-trade, net $ 673.5 $ 573.4 |
ACCOUNTS PAYABLE AND ACCRUED 41
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: As of December 31, 2016 2015 (In millions) Accounts payable $ 81.9 $ 85.5 Loaner vehicle notes payable 80.9 76.6 Accrued compensation 24.5 26.1 Taxes payable 41.2 27.3 Accrued finance and insurance chargebacks 22.9 19.9 Accrued insurance 19.9 13.3 Accrued advertising 7.6 4.0 Accrued interest 4.9 4.8 Other 25.3 24.2 Accounts payable and accrued liabilities $ 309.1 $ 281.7 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: As of December 31, 2016 2015 (In millions) 6.0% Senior Subordinated Notes due 2024 $ 600.0 $ 600.0 Mortgage notes payable bearing interest at fixed rates (the weighted average interest rate was 5.4% for the years ended December 31, 2016 and 2015) 182.8 194.3 Real estate credit agreement 51.5 64.0 Restated master loan agreement 93.6 97.9 Capital lease obligations 3.4 3.5 Total debt outstanding 931.3 959.7 Add—unamortized premium on 6.0% Senior Subordinated Notes due 2024 7.6 8.4 Less—debt issuance costs (12.2 ) (13.8 ) Long-term debt, including current portion 926.7 954.3 Less—current portion, net of current portion of debt issuance costs (14.0 ) (13.9 ) Long-term debt $ 912.7 $ 940.4 |
Schedule of Aggregate Maturities | The aggregate maturities of long-term debt as of December 31, 2016 are as follows (in millions): 2017 $ 15.4 2018 16.8 2019 41.4 2020 32.1 2021 15.1 Thereafter 810.5 Total maturities of long-term debt $ 931.3 |
Schedule of Mortgage Notes Payable | Below is a summary of our outstanding mortgage notes payable, the carrying values of the related collateralized real estate, and years of maturity as of December 31, 2016 and 2015 : As of December 31, 2016 As of December 31, 2015 Mortgage Agreement Aggregate Principal Outstanding Carrying Value of Collateralized Related Real Estate Maturity Dates Aggregate Principal Outstanding Carrying Value of Collateralized Related Real Estate Maturity Dates Captive mortgages $ 159.7 $ 225.5 2018-2024 $ 170.3 $ 241.1 2018-2024 Other mortgage debt 23.1 46.2 2018-2022 24.0 45.7 2018-2022 Real estate credit agreement 51.5 91.5 2023 64.0 131.7 2023 Restated master loan agreement 93.6 134.2 2025 97.9 134.7 2025 Total mortgage debt $ 327.9 $ 497.4 $ 356.2 $ 553.2 |
FINANCIAL INSTRUMENTS AND FAI43
FINANCIAL INSTRUMENTS AND FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivatives and Fair Value [Abstract] | |
Schedule of Carrying Values and Fair Values of Liabilities | A summary of the carrying values and fair values of our 6.0% Notes and our mortgage notes payable is as follows: As of December 31, 2016 2015 (In millions) Carrying Value: 6.0% Senior Subordinated Notes due 2024 $ 607.6 $ 608.4 Mortgage notes payable 327.9 356.2 Total carrying value $ 935.5 $ 964.6 Fair Value: 6.0% Senior Subordinated Notes due 2024 $ 613.5 $ 618.0 Mortgage notes payable 339.5 362.6 Total fair value $ 953.0 $ 980.6 |
Schedule of Derivative Instruments Fair Value | The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the Consolidated Balance Sheets: As of December 31, 2016 2015 (In millions) Accounts payable and accrued liabilities $ 2.2 $ 2.8 Other long-term liabilities 1.4 3.2 Total fair value $ 3.6 $ 6.0 |
Schedule of Derivative Instruments Effect on Accumulated Other Comprehensive Income | Information about the effect of our interest rate swap agreements on the accompanying Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, are as follows (in millions): For the Year Ended December 31, Results Recognized in Accumulated Other Comprehensive Loss (Effective Portion) Location of Results Reclassified from Accumulated Other Comprehensive Loss to Earnings Results Reclassified from Accumulated Other Comprehensive Loss to Earnings 2016 $ (0.8 ) Swap interest expense $ (3.1 ) 2015 $ (6.1 ) Swap interest expense $ (3.0 ) 2014 $ (4.9 ) Swap interest expense $ (2.0 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of income tax expense from continuing operations are as follows: For the Years Ended December 31, 2016 2015 2014 (In millions) Current: Federal $ 83.8 $ 84.9 $ 47.1 State 10.7 10.2 7.0 Total current income tax expense 94.5 95.1 54.1 Deferred: Federal 4.9 6.8 15.0 State 1.2 2.1 1.9 Total deferred income tax expense 6.1 8.9 16.9 Total income tax expense $ 100.6 $ 104.0 $ 71.0 |
Reconciliation of the Statutory Federal Rate to the Effective Rate | A reconciliation of the statutory federal rate to the effective tax rate from continuing operations is as follows (dollar amounts shown in millions) : For the Years Ended December 31, 2016 % 2015 % 2014 % Income tax provision at the statutory rate $ 93.7 35.0 $ 95.7 35.0 $ 64.1 35.0 State income tax expense, net of federal benefit 7.8 2.9 8.0 2.9 5.8 3.2 Non-deductible expenses, net 0.2 0.1 0.3 0.1 1.2 0.7 Adjustments and settlements (0.8 ) (0.3 ) — — (0.5 ) (0.3 ) Other, net (0.3 ) (0.1 ) — — 0.4 0.2 Income tax expense $ 100.6 37.6 $ 104.0 38.0 $ 71.0 38.8 |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax asset and liability components consisted of the following: As of December 31, 2016 2015 (In millions) Deferred income tax assets: F&I chargeback liabilities $ 16.5 $ 14.8 Other accrued liabilities 4.7 4.4 Stock-based compensation 5.2 4.5 Intangible asset amortization — 0.3 Other, net 8.4 9.2 Total deferred income tax assets 34.8 33.2 Deferred income tax liabilities: Intangible asset amortization (7.3 ) — Depreciation (34.9 ) (33.4 ) Other, net (1.5 ) (1.7 ) Total deferred income tax liabilities (43.7 ) (35.1 ) Net deferred income tax liabilities $ (8.9 ) $ (1.9 ) |
OTHER LONG-TERM LIABILITIES (Ta
OTHER LONG-TERM LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following: As of December 31, 2016 2015 (In millions) Accrued finance and insurance chargebacks $ 20.1 $ 18.2 Deferred rent 5.8 5.8 Swap fair value 1.4 3.2 Other 2.6 2.3 Other long-term liabilities $ 29.9 $ 29.5 |
SUPPLEMENTAL CASH FLOW INFORM46
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following items are included in Other Adjustments, net to reconcile net income to net cash provided by operating activities: For the Years Ended December 31, 2016 2015 2014 Amortization of deferred financing fees $ 2.6 $ 2.5 $ 2.4 Loss on disposal of fixed assets 0.4 1.2 1.2 Other individually immaterial items 1.1 0.5 (0.5 ) Other adjustments, net $ 4.1 $ 4.2 $ 3.1 |
LEASE OBLIGATIONS (Tables)
LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Payments for Operating Leases | Future minimum payments under long-term, non-cancellable operating leases as of December 31, 2016 , are as follows: Total (In millions) 2017 $ 27.7 2018 25.9 2019 23.9 2020 21.4 2021 18.3 Thereafter 35.2 Total minimum lease payments $ 152.4 |
SHARE-BASED COMPENSATION AND 48
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
Schedule of Performance Share Units | The following table summarizes information about performance share units for 2016 : Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2016 191,853 $ 54.89 Granted 214,297 46.70 Vested (115,753 ) 46.79 Forfeited or unearned (13,554 ) 60.61 Non-vested at December 31, 2016 276,843 $ 51.66 The weighted average grant-date fair value of performance share units and total fair value of performance share units vested are summarized in the following table: For the Years Ended December 31, 2016 2015 2014 Weighted average grant-date fair value of performance share units granted $ 46.70 $ 77.92 $ 49.50 Total fair value of performance share units vested (in millions) $ 6.0 $ 9.3 $ 7.1 |
Schedule of Restricted Stock | The following table summarizes information about restricted stock awards for 2016 : Shares Weighted Average Grant Date Fair Value Non-vested at January 1, 2016 158,845 $ 63.82 Granted 136,356 47.07 Vested (72,397 ) 54.03 Forfeited (19,604 ) 64.05 Non-vested at December 31, 2016 203,200 $ 56.05 The weighted average grant-date fair value of restricted stock awards and total fair value of restricted stock awards vested are summarized in the following table: For the Years Ended December 31, 2016 2015 2014 Weighted average grant-date fair value of restricted stock granted $ 47.07 $ 82.17 $ 52.82 Total fair value of restricted stock awards vested (in millions) $ 3.7 $ 11.1 $ 9.1 |
CONDENSED QUARTERLY REVENUES 49
CONDENSED QUARTERLY REVENUES AND EARNINGS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | For the Three Months Ended March 31, June 30, September 30, December 31, (In millions, except per share data) 2015: Revenues $ 1,541.8 $ 1,689.6 $ 1,716.4 $ 1,640.5 Gross profit $ 256.4 $ 271.3 $ 272.7 $ 260.4 Net income (2)(3) $ 35.9 $ 41.1 $ 51.1 $ 41.1 Net income per common share: Basic (1)(2)(3) $ 1.31 $ 1.53 $ 1.97 $ 1.65 Diluted (1)(2)(3) $ 1.30 $ 1.52 $ 1.96 $ 1.64 2016: Revenues $ 1,550.8 $ 1,627.4 $ 1,683.1 $ 1,666.5 Gross profit $ 260.8 $ 267.6 $ 265.7 $ 264.6 Net income (4)(5)(6) $ 31.0 $ 36.7 $ 32.4 $ 67.1 Net income per common share: Basic (1)(4)(5)(6) $ 1.28 $ 1.66 $ 1.47 $ 3.11 Diluted (1)(4)(5)(6) $ 1.27 $ 1.65 $ 1.47 $ 3.08 ____________________________ (1) The sum of income per common share for the four quarters does not equal total income per common share due to changes in the average number of shares outstanding during the respective periods. (2) Results for the three months ended September 30, 2015 were increased by $ 13.1 million from gains on divestitures, net of tax, and a $0.8 income tax benefit, or $0.54 and $0.53 per basic and diluted share, respectively, in the aggregate. (3) Results for the three months ended December 31, 2015 were increased by $8.4 million from gains on divestitures, net of tax, or $0.34 per basic and diluted share. (4) Results for the three months ended March 31, 2016 were decreased by $2.1 million as a result of real estate-related charges, net of tax, or $0.09 per basic and diluted share. (5) Results for the three months ended September 31, 2016 were decreased by $1.1 million as a result of real estate-related charges, net of tax, or $0.05 per basic and diluted share. (6) Results for the three months ended December 31, 2016 were increased by $28.4 million from gains on divestitures, $4.1 million from gains on legal settlements, partially offset by a $0.3 million loss on real estate-related charges, all previous items were net of tax, and a $0.9 income tax benefit, or $1.53 and $1.52 per basic and diluted share, respectively, in the aggregate. |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | Dec. 31, 2016storeVehicleBrandsMetropolitanMarketsstatesDealershipLocationsCollisionRepairCentersFranchises |
Business Organization [Line Items] | |
Number of franchises (in franchises) | Franchises | 93 |
Number of dealership locations (in dealership locations) | DealershipLocations | 77 |
Number of vehicle brands (in vehicle brands) | VehicleBrands | 28 |
Number of collision repair centers (in collision repair centers) | CollisionRepairCenters | 23 |
Number of metropolitan markets (in metropolitan markets) | MetropolitanMarkets | 16 |
Number of states (in states) | states | 8 |
Number of stand-alone used vehicle stores | store | 2 |
Mid-line Import Brands [Member] | |
Business Organization [Line Items] | |
Weighted brand mix | 45.00% |
Luxury Brands [Member] | |
Business Organization [Line Items] | |
Weighted brand mix | 34.00% |
Domestic Brands [Member] | |
Business Organization [Line Items] | |
Weighted brand mix | 21.00% |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 180 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Oct. 31, 2015 | Dec. 04, 2014 | |
Accounting Policies [Line Items] | |||||||
Impairment of real estate | $ 0.3 | $ 0 | $ 0 | $ 0 | |||
Goodwill, impairment | $ 537.7 | ||||||
Advertising expense | 34 | 40.1 | 34 | ||||
Advertising credits and volume discounts | 16.8 | 17.1 | $ 16.2 | ||||
Total debt outstanding | $ 931.3 | $ 931.3 | $ 959.7 | $ 931.3 | |||
Revenues by major brand, disclosure percentage threshold | 5.00% | ||||||
Senior Subordinated Notes [Member] | 6.0% Senior Subordinated Notes due 2024 [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Stated interest rate of debt instrument | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | |
Minimum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Loaner vehicle period of use before sale (in months) | 6 months | ||||||
Maximum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Loaner vehicle period of use before sale (in months) | 12 months | ||||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Updates 2015-17 [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Deferred tax liabilities, net, current | $ 11.8 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings and Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 10 years |
Buildings and Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 40 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 10 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 10 years |
Company Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Company Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Revenues by Major Brand) (Details) - New Vehicles [Member] | 12 Months Ended |
Dec. 31, 2016 | |
American Honda Motor Co., Inc. (Honda and Acura) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 21.00% |
Toyota Motor Sales, U.S.A., Inc. (Toyota and Lexus) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 19.00% |
Ford Motor Company (Ford and Lincoln) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 15.00% |
Nissan North America, Inc. (Nissan and Infiniti) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 14.00% |
Mercedes-Benz USA, LLC (Mercedes-Benz, Smart and Sprinter) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 8.00% |
BMW of North America, LLC (BMW and Mini) [Member] | |
Schedule of Revenues by Major Brand [Line Items] | |
Revenues by major brand, percentage | 7.00% |
ACQUISITIONS AND DIVESTITURES54
ACQUISITIONS AND DIVESTITURES (Acquisitions- Narrative) (Details) - Series of Individually Immaterial Business Acquisitions [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)DealershipLocationsFranchises | |
Business Acquisition [Line Items] | |
Number of franchises acquired (in franchises) | Franchises | 2 |
Number of dealership locations acquired (in dealership locations) | DealershipLocations | 2 |
Aggregate purchase price | $ 69.4 |
Cash paid for acquisition | 52.7 |
Floor plan borrowings for puchase of related inventory | $ 16.7 |
Goodwill and manufacturer franchise rights, period for federal and state tax deductions | 15 years |
ACQUISITIONS AND DIVESTITURES55
ACQUISITIONS AND DIVESTITURES (Schedule of Business Acquisitions) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 128.1 | $ 130.2 | $ 104 |
Series of Individually Immaterial Business Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Inventory | 19 | ||
Real estate | 15.2 | ||
Property and equipment | 0.9 | ||
Goodwill | 28.3 | ||
Manufacturer franchise rights | 6.3 | ||
Liabilities assumed | (0.3) | ||
Total purchase price | $ 69.4 |
ACQUISITIONS AND DIVESTITURES56
ACQUISITIONS AND DIVESTITURES (Divestitures- Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($)DealershipLocationsFranchises | Dec. 31, 2015USD ($)DealershipLocationsCollisionRepairCentersFranchises | Dec. 31, 2014USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on disposition of business, gross | $ | $ 45.5 | $ 34.9 | $ 0 | |
Gain on divestitures | $ | $ 28.4 | $ 28.4 | $ 21.6 | |
ARKANSAS [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of franchises, sold (in franchises) | 5 | 4 | ||
Number of dealership locations, sold (in dealership locations) | DealershipLocations | 4 | 3 | ||
NEW JERSEY [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of franchises, sold (in franchises) | 2 | |||
Number of dealership locations, sold (in dealership locations) | DealershipLocations | 2 | |||
MISSOURI [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of franchises, sold (in franchises) | 1 | |||
TEXAS [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of collision centers, sold (in collision centers) | CollisionRepairCenters | 1 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 140.3 | $ 120.8 |
Less—Allowance for doubtful accounts | (1.9) | (1.3) |
Accounts receivable, net | 138.4 | 119.5 |
Vehicle Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 53.2 | 46.3 |
Manufacturer Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 45.5 | 43.1 |
Other Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 41.6 | $ 31.4 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of Inventory [Line Items] | |||
Inventories, net | $ 894.9 | $ 917.2 | |
Lower of cost or market inventory reserves | 6.5 | 6.2 | |
New Vehicles [Member] | |||
Components of Inventory [Line Items] | |||
Inventories, net | 720.6 | 739.2 | |
Reduction of new vehicle inventory cost by automobile manufacturer incentives | 8.2 | 9.6 | |
Reduction to new vehicle cost of sales by automobile manufacturer incentives | 40.6 | 38.8 | $ 30.3 |
Used Vehicles [Member] | |||
Components of Inventory [Line Items] | |||
Inventories, net | 132.7 | 134.1 | |
Parts and Accessories [Member] | |||
Components of Inventory [Line Items] | |||
Inventories, net | $ 41.6 | $ 43.9 |
ASSETS HELD FOR SALE (Narrative
ASSETS HELD FOR SALE (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Long Lived Assets Held-for-sale [Line Items] | ||||
Impairment of real estate | $ 0.3 | $ 0 | $ 0 | $ 0 |
Held-for-sale [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Real estate held-for-sale | 16.1 | 16.1 | 27.6 | |
Impairment of real estate | $ 2.7 | $ 0.9 | ||
Disposed of by Sale [Member] | Vacant Property [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Number of real estate properties sold | property | 1 | |||
Real estate held-for-sale | $ 2.3 | $ 2.3 | $ 3.7 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Service loaner vehicles | $ 82.2 | $ 78.5 |
Prepaid expenses | 4.5 | 5 |
Prepaid taxes | 4 | 3.4 |
Other | 6.3 | 1.5 |
Other current assets | $ 97 | $ 88.4 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Interest costs capitalized | $ 1.1 | $ 0.2 | $ 0.8 |
Depreciation and capital lease obligation amortization | $ 30.7 | $ 29.5 | $ 26.4 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,026.2 | $ 978.1 |
Less - Accumulated depreciation | (210.8) | (205.3) |
Property and equipment, net | 815.4 | 772.8 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 307.7 | 294.1 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 530.2 | 503 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 84 | 82.1 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 57.7 | 55.9 |
Company Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8.8 | 9.8 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 37.8 | $ 33.2 |
GOODWILL AND INTANGIBLE FRANC63
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS (Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | 180 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||
Net, beginning balance | $ 130.2 | $ 104 | |
Acquisitions | 28.3 | ||
Divestitures | (2.1) | (2.1) | |
Net, ending balance | $ 128.1 | $ 130.2 | $ 128.1 |
Goodwill, impairment | $ 537.7 |
GOODWILL AND INTANGIBLE FRANC64
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS (Franchise Rights) (Details) - Franchise Rights [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 48.6 |
Acquisitions | 6.3 |
Divestitures | (6.4) |
Ending balance | $ 48.5 |
FLOOR PLAN NOTES PAYABLE_TRAD65
FLOOR PLAN NOTES PAYABLE—TRADE (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Floor plan notes payable—trade | $ 120 | $ 138.8 |
Floor plan notes payable offset account | (11.7) | 0 |
Total floor plan notes payable—trade, net | $ 108.3 | $ 138.8 |
FLOOR PLAN NOTES PAYABLE_NON-66
FLOOR PLAN NOTES PAYABLE—NON-TRADE (Consist of) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Floor plan notes payable—non-trade | $ 732.7 | $ 710.8 |
Floor plan notes payable offset account | (59.2) | (137.4) |
Total floor plan notes payable—non-trade, net | $ 673.5 | $ 573.4 |
FLOOR PLAN NOTES PAYABLE_NON-67
FLOOR PLAN NOTES PAYABLE—NON-TRADE (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Oct. 16, 2014 | |
New Vehicle Revolving Floor Plan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.15% | |
New Vehicle Revolving Floor Plan Facility [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.25% | |
New Vehicle Revolving Floor Plan Facility [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.25% | |
Used Vehicle Revolving Floor Plan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.15% | |
Used Vehicle Revolving Floor Plan Facility [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.50% | |
Used Vehicle Revolving Floor Plan Facility [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.50% | |
Senior Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 325,000,000 | |
Senior Credit Facility [Member] | Federal Funds [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.50% | |
Senior Credit Facility [Member] | One-Month LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.00% | |
Bank of America, N.A. [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 250,000,000 | |
Bank of America, N.A. [Member] | Standby Letters of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Face amount | 50,000,000 | $ 50,000,000 |
Bank of America, N.A. [Member] | New Vehicle Revolving Floor Plan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Current borrowing capacity | 60,000,000 | |
Maximum borrowing capacity | 900,000,000 | |
Remaining borrowing capacity | 190,000,000 | |
Bank of America, N.A. [Member] | Used Vehicle Revolving Floor Plan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 150,000,000 | |
Unused borrowing capacity | $ 90,600,000 |
ACCOUNTS PAYABLE AND ACCRUED 68
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 81.9 | $ 85.5 |
Loaner vehicle notes payable | 80.9 | 76.6 |
Accrued compensation | 24.5 | 26.1 |
Taxes payable | 41.2 | 27.3 |
Accrued finance and insurance chargebacks | 22.9 | 19.9 |
Accrued insurance | 19.9 | 13.3 |
Accrued advertising | 7.6 | 4 |
Accrued interest | 4.9 | 4.8 |
Other | 25.3 | 24.2 |
Accounts payable and accrued liabilities | $ 309.1 | $ 281.7 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Dec. 04, 2014 | Oct. 16, 2014 | |
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of long-term debt, net | $ 0 | $ 0 | $ (31,900,000) | ||||||
Unamortized premium | 7,600,000 | 8,400,000 | |||||||
Reastated Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
General restricted payments allowance | $ 150,000,000 | ||||||||
Restricted payments capacity additions as percent of net income | 50.00% | ||||||||
Restricted payments capacity additions as percent of cash proceeds from sale of equity | 100.00% | ||||||||
New Vehicle Revolving Floor Plan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage | 0.15% | ||||||||
Minimum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage | 0.20% | ||||||||
Maximum [Member] | Reastated Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Consolidated leverage ratio | 300.00% | ||||||||
Annual principal payment | $ 20,000,000 | ||||||||
Maximum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage | 0.45% | ||||||||
Wells Fargo Mortgage [Member] | Interest Rate Swap [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed interest rate | 4.80% | ||||||||
Wells Fargo Mortgage [Member] | Master Loan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from lines of credit | $ 100,000,000 | ||||||||
Bank of America, N.A. [Member] | Reastated Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 250,000,000 | ||||||||
Remaining borrowing capacity | $ 51,100,000 | ||||||||
Bank of America, N.A. [Member] | Reastated Credit Agreement [Member] | Guarantee Obligations [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount of letters of credit outstanding | 8,900,000 | ||||||||
Bank of America, N.A. [Member] | Standby Letters of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | 50,000,000 | $ 50,000,000 | |||||||
Bank of America, N.A. [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 250,000,000 | ||||||||
Bank of America, N.A. [Member] | New Vehicle Revolving Floor Plan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 900,000,000 | ||||||||
Current borrowing capacity | 60,000,000 | ||||||||
Remaining borrowing capacity | $ 190,000,000 | ||||||||
Federal Funds [Member] | Bank of America, N.A. [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 0.50% | ||||||||
One-Month LIBOR [Member] | Bank of America, N.A. [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.00% | ||||||||
LIBOR [Member] | Bank of America, N.A. [Member] | Minimum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.25% | ||||||||
LIBOR [Member] | Bank of America, N.A. [Member] | Maximum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 2.50% | ||||||||
Base Rate [Member] | Bank of America, N.A. [Member] | Minimum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 0.25% | ||||||||
Base Rate [Member] | Bank of America, N.A. [Member] | Maximum [Member] | Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.50% | ||||||||
Mortgages [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 182,800,000 | 194,300,000 | |||||||
Real Estate Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 51,500,000 | $ 64,000,000 | |||||||
Maximum borrowing capacity | $ 75,000,000 | $ 75,000,000 | |||||||
Periodic payment, principal, percent | 1.25% | 1.25% | |||||||
Real Estate Credit Agreement [Member] | Federal Funds [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate of debt instrument | 0.50% | 0.50% | |||||||
Real Estate Credit Agreement [Member] | One-Month LIBOR [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate of debt instrument | 1.00% | 1.00% | |||||||
Real Estate Credit Agreement [Member] | LIBOR [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate of debt instrument | 2.50% | 2.50% | |||||||
Real Estate Credit Agreement [Member] | Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate of debt instrument | 1.50% | 1.50% | |||||||
6.0% Senior Subordinated Notes due 2024 [Member] | Senior Subordinated Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 200,000,000 | $ 400 | $ 400 | ||||||
Stated interest rate of debt instrument | 6.00% | 6.00% | 6.00% | 6.00% | |||||
Unamortized debt issuance expense | $ 3,800,000 | ||||||||
Redemption price | 104.25% | ||||||||
Proceeds from issuance of debt | $ 210,200,000 | ||||||||
Effective percentage | 5.41% | ||||||||
Underwriting fees | $ 2,800,000 | ||||||||
Long-term debt, gross | $ 600,000,000 | $ 600,000,000 | |||||||
Debt issuance cost | $ 1,200,000 | ||||||||
6.0% Senior Subordinated Notes due 2024 [Member] | Purchaser [Member] | Senior Subordinated Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Premiums paid pursuant to terms of redemption notice | $ 0 | ||||||||
8.375% Senior Subordinated Notes due 2020 [Member] | Senior Subordinated Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 300,000,000 | ||||||||
Stated interest rate of debt instrument | 8.375% | 8.375% | |||||||
Loss on extinguishment of long-term debt, net | $ 31,900,000 | ||||||||
Premiums paid pursuant to terms of redemption notice | 33,900,000 | ||||||||
Unamortized debt issuance expense | 6,100,000 | $ 6,100,000 | |||||||
Third-party costs associated with redemption | 100,000 | ||||||||
Unamortized premium | $ 8,200,000 | $ 8,200,000 |
LONG-TERM DEBT (Schedule of Lon
LONG-TERM DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | Dec. 04, 2014 |
Debt Instrument [Line Items] | |||||
Capital lease obligations | $ 3.4 | $ 3.4 | $ 3.5 | ||
Total debt outstanding | 931.3 | 959.7 | |||
Add: unamortized premium on 6.0% Senior Subordinated Notes due 2024 | 7.6 | 8.4 | |||
Less: debt issuance costs | (12.2) | (13.8) | |||
Long-term debt, including current portion | 926.7 | 954.3 | |||
Less—current portion, net of current portion of debt issuance costs | (14) | (13.9) | |||
Long-term debt | $ 912.7 | $ 940.4 | |||
Weighted average interest rate | 5.40% | 5.40% | |||
Mortgages [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 182.8 | $ 194.3 | |||
Real Estate Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 51.5 | 64 | |||
Restated Master Loan Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 93.6 | 97.9 | |||
6.0% Senior Subordinated Notes due 2024 [Member] | Senior Subordinated Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 600 | $ 600 | |||
Stated interest rate of debt instrument | 6.00% | 6.00% | 6.00% | 6.00% |
LONG-TERM DEBT (Schedule of Agg
LONG-TERM DEBT (Schedule of Aggregate Maturities of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 15.4 | |
2,018 | 16.8 | |
2,019 | 41.4 | |
2,020 | 32.1 | |
2,021 | 15.1 | |
Thereafter | 810.5 | |
Total debt | $ 931.3 | $ 959.7 |
LONG-TERM DEBT (Schedule of Mor
LONG-TERM DEBT (Schedule of Mortgage Notes Payable) (Details) - Mortgages [Member] - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Aggregate Principal Outstanding | $ 327.9 | $ 356.2 |
Carrying Value of Collateralized Related Real Estate | 497.4 | 553.2 |
Captive Mortgage [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Outstanding | 159.7 | 170.3 |
Carrying Value of Collateralized Related Real Estate | 225.5 | 241.1 |
Other Mortgage Debt [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Outstanding | 23.1 | 24 |
Carrying Value of Collateralized Related Real Estate | 46.2 | 45.7 |
Real Estate Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Outstanding | 51.5 | 64 |
Carrying Value of Collateralized Related Real Estate | 91.5 | 131.7 |
Restated Master Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Outstanding | 93.6 | 97.9 |
Carrying Value of Collateralized Related Real Estate | $ 134.2 | $ 134.7 |
FINANCIAL INSTRUMENTS AND FAI73
FINANCIAL INSTRUMENTS AND FAIR VALUE (Narrative) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Nov. 30, 2013 |
Fair Value, Inputs, Level 2 [Member] | Other Long-term Liabilities and Current Liabilities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of interest rate swaps | $ (3,600,000) | $ (6,000,000) | ||
New Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional principal amount of derivative liability | 95,600,000 | 100,000,000 | $ 100,000,000 | |
Notional principal amount of derivative liability, at maturity | $ 53,100,000 | |||
Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional principal amount of derivative liability | 64,000,000 | 67,700,000 | $ 75,000,000 | |
Notional principal amount of derivative liability, at maturity | $ 38,700,000 | |||
Fair value of interest rate swaps | 3,600,000 | $ 6,000,000 | ||
Interest rate swap, net loss amount expected to be reclassified in the next twelve months | $ (2,200,000) |
FINANCIAL INSTRUMENTS AND FAI74
FINANCIAL INSTRUMENTS AND FAIR VALUE (Summary of Carrying Values and Fair Values of Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | Dec. 04, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total carrying value | $ 935.5 | $ 964.6 | ||
Total fair value | 953 | 980.6 | ||
Mortgages Notes Payable [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total carrying value | 327.9 | 356.2 | ||
Total fair value | 339.5 | 362.6 | ||
6.0% Senior Subordinated Notes due 2024 [Member] | Senior Subordinated Notes [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total carrying value | 607.6 | 608.4 | ||
Total fair value | $ 613.5 | $ 618 | ||
Stated interest rate of debt instrument | 6.00% | 6.00% | 6.00% | 6.00% |
FINANCIAL INSTRUMENTS AND FAI75
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Fair value of Interest Rate Swaps) (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 3.6 | $ 6 |
Accounts Payable and Accrued Liabilities [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | 2.2 | 2.8 |
Other Long-Term Liabilities [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of interest rate swaps | $ 1.4 | $ 3.2 |
FINANCIAL INSTRUMENTS AND FAI76
FINANCIAL INSTRUMENTS AND FAIR VALUE (Schedule of Derivative Instruments Effect on the Consolidated Income Statement, Including Accumulated Other Comprehensive Income) (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Results Recognized in AOCI (Effective Portion) | $ (0.8) | $ (6.1) | $ (4.9) |
Interest Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount Reclassified from AOCI to Earnings | $ (3.1) | $ (3) | $ (2) |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | $ 800,000 | $ 0 | |
Unrecognized tax benefits that would impact effective rate | $ 300,000 | ||
Increase in unrecognized tax benefits is reasonably possible | 800,000 | ||
Other Current Liabilities [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Taxes payable | $ 19,800,000 | ||
Other Current Assets [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Taxes receivable | $ 5,700,000 |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Income Tax Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 83.8 | $ 84.9 | $ 47.1 |
State | 10.7 | 10.2 | 7 |
Total Current Income Tax Expense | 94.5 | 95.1 | 54.1 |
Deferred: | |||
Federal | 4.9 | 6.8 | 15 |
State | 1.2 | 2.1 | 1.9 |
Total Deferred Income Tax Expense | 6.1 | 8.9 | 16.9 |
Total Income Tax Expense | $ 100.6 | $ 104 | $ 71 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amount | |||
Income tax provision at the statutory rate | $ 93.7 | $ 95.7 | $ 64.1 |
State income tax expense, net | 7.8 | 8 | 5.8 |
Non-deductible expenses, net | 0.2 | 0.3 | 1.2 |
Adjustments and settlements | (0.8) | 0 | (0.5) |
Other, net | (0.3) | 0 | 0.4 |
Total Income Tax Expense | $ 100.6 | $ 104 | $ 71 |
Percent | |||
Income tax provision at the statutory rate | 35.00% | 35.00% | 35.00% |
State income tax expense, net | 2.90% | 2.90% | 3.20% |
Non-deductible expenses, net | 0.10% | 0.10% | 0.70% |
Adjustments and settlements | (0.30%) | 0.00% | (0.30%) |
Other, net | (0.10%) | 0.00% | 0.20% |
Income tax provision | 37.60% | 38.00% | 38.80% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Income Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred income tax assets: | ||
F&I chargeback liabilities | $ 16.5 | $ 14.8 |
Other accrued liabilities | 4.7 | 4.4 |
Stock-based compensation | 5.2 | 4.5 |
Intangible asset amortization | 0 | 0.3 |
Other, net | 8.4 | 9.2 |
Total deferred income tax assets | 34.8 | 33.2 |
Deferred income tax liabilities: | ||
Intangible asset amortization | (7.3) | 0 |
Depreciation | (34.9) | (33.4) |
Other, net | (1.5) | (1.7) |
Total deferred income tax liabilities | (43.7) | (35.1) |
Net deferred income tax (liabilities) assets | $ (8.9) | $ (1.9) |
OTHER LONG-TERM LIABILITIES (De
OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Accrued finance and insurance chargebacks | $ 20.1 | $ 18.2 |
Deferred rent | 5.8 | 5.8 |
Swap fair value | 1.4 | 3.2 |
Other | 2.6 | 2.3 |
Other long-term liabilities | $ 29.9 | $ 29.5 |
SUPPLEMENTAL CASH FLOW INFORM82
SUPPLEMENTAL CASH FLOW INFORMATION (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Interest payments made including amounts capitalized | $ 73.8 | $ 60.6 | $ 52.5 |
Cash paid during the period related to floor plan interest | 19.1 | 15.7 | 12.1 |
Income taxes paid | 79.6 | 73.2 | 55.8 |
Loaner vehicles transferred from other current assets to inventory | 121.9 | 110.3 | 79.5 |
Proceeds from divestiture | 114.3 | 105.9 | $ 0 |
Mortgages [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from divestiture | $ 13.1 | $ 19.3 |
SUPPLEMENTAL CASH FLOW INFORM83
SUPPLEMENTAL CASH FLOW INFORMATION (Schedule of Other Adjustments to Reconcile Net Income to Cash Flow from Operating Activities) (Details) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Amortization of deferred financing fees | $ 2.6 | $ 2.5 | $ 2.4 |
Loss on disposal of fixed assets | 0.4 | 1.2 | 1.2 |
Other individually immaterial items | 1.1 | 0.5 | (0.5) |
Other adjustments, net | $ 4.1 | $ 4.2 | $ 3.1 |
LEASE OBLIGATIONS (Narrative) (
LEASE OBLIGATIONS (Narrative) (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016USD ($)transactioncapital_lease_obligation | Dec. 31, 2015USD ($)capital_lease_obligation | Dec. 31, 2014USD ($)transactioncapital_lease_obligation | Dec. 31, 2013transaction | Sep. 30, 2016USD ($) | |
Operating Leased Assets [Line Items] | |||||
Operating lease rent expense | $ 29.9 | $ 31.3 | $ 30.8 | ||
Number of capital lease obligations | capital_lease_obligation | 1 | 1 | 1 | ||
Capital lease obligations | $ 3.4 | $ 3.5 | $ 3.4 | ||
Capital lease obligations, amortization period (in years) | 20 years | ||||
Previously leased real estate purchased, number of purchases | transaction | 3 | 2 | 2 | ||
Previously leased real estate purchased, purchase price | $ 19.6 | $ 5.4 | |||
Previously leased real estate purchased, loss due to termination of related lease obligations | 2.1 | $ 0.1 | |||
Previously leased real estate purchased, real estate impairment charges | $ 0.9 | ||||
Minimum [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Operating leases, remaining term | 1 year | ||||
Maximum [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Operating leases, remaining term | 20 years |
LEASE OBLIGATIONS (Schedule of
LEASE OBLIGATIONS (Schedule of Minimum Lease Payments) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Future Minimum Payments under Long-term, Non-cancelable Operating Leases | |
2,017 | $ 27.7 |
2,018 | 25.9 |
2,019 | 23.9 |
2,020 | 21.4 |
2,021 | 18.3 |
Thereafter | 35.2 |
Total minimum lease payments | $ 152.4 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Guarantee Obligations [Member] $ in Millions | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | |
Amount of surety bond line maintained | $ 5 |
Reastated Credit Agreement [Member] | Bank of America, N.A. [Member] | |
Loss Contingencies [Line Items] | |
Amount of letters of credit outstanding | $ 8.9 |
SHARE-BASED COMPENSATION AND 87
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | 56 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of instruments provided for grant | 1,500,000 | 1,500,000 | ||
Number of shares still available for grant across all plans (in shares) | 1,000,000 | 1,000,000 | ||
Share-based compensation expense | $ 12 | $ 10 | $ 8.6 | |
Share-based compensation expense, tax benefit | 4.5 | $ 3.8 | $ 3.3 | |
Total unrecognized share-based compensation expense related to nonvested awards | 12.6 | $ 12.6 | ||
Expected future recognition of unrecognized compensation expense related to nonvested share-based awards, 2017 | 7.4 | |||
Expected future recognition of unrecognized compensation expense related to nonvested share-based awards, 2018 | 4 | |||
Expected future recognition of unrecognized compensation expense related to nonvested share-based awards, 2019 | $ 1.2 | |||
Performance Share Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cumulative shares granted to date (in shares) | 600,000 | |||
Number of shares forfeited or repurchased (in shares) | 13,554 | 600,000 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cumulative shares granted to date (in shares) | 500,000 | |||
Number of shares forfeited or repurchased (in shares) | 19,604 |
SHARE-BASED COMPENSATION AND 88
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Schedule of Performance Share Units) (Details) - Performance Share Units [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 56 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum percent of target earned | 150.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outsanding, beginning balance (in shares) | 191,853 | |||
Granted (in shares) | 214,297 | |||
Vested (in shares) | (115,753) | |||
Forfeited (in shares) | (13,554) | (600,000) | ||
Outsanding, ending balance (in shares) | 276,843 | 191,853 | 276,843 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Outstanding, beginning balance, weighted average grant date fair value (in dollars per share) | $ 54.89 | |||
Granted, weighted average grant date fair value (in dollars per share) | 46.70 | $ 77.92 | $ 49.50 | |
Vested, weighted average grant date fair value (in dollars per share) | 46.79 | |||
Forfeited, weighted average grant date fair value (in dollars per share) | 60.61 | |||
Outstanding, ending balance, weighted average grant date fair value (in dollars per share) | $ 51.66 | $ 54.89 | $ 51.66 | |
Total fair value of performance share units vested (in millions) | $ 6 | $ 9.3 | $ 7.1 | |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares that could be earned, range | 0.00% | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares that could be earned, range | 150.00% |
SHARE-BASED COMPENSATION AND 89
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Schedule of Restricted Stock) (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outsanding, beginning balance (in shares) | 158,845 | ||
Granted (in shares) | 136,356 | ||
Vested (in shares) | (72,397) | ||
Forfeited (in shares) | (19,604) | ||
Outsanding, ending balance (in shares) | 203,200 | 158,845 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding, beginning balance, weighted average grant date fair value (in dollars per share) | $ 63.82 | ||
Granted, weighted average grant date fair value (in dollars per share) | 47.07 | $ 82.17 | $ 52.82 |
Vested, weighted average grant date fair value (in dollars per share) | 54.03 | ||
Forfeited, weighted average grant date fair value (in dollars per share) | 64.05 | ||
Outstanding, ending balance, weighted average grant date fair value (in dollars per share) | $ 56.05 | $ 63.82 | |
Total fair value of restricted stock awards vested | $ 3.7 | $ 11.1 | $ 9.1 |
SHARE-BASED COMPENSATION AND 90
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Employee Benefit Plans) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Retirement Plan: | |||
Period of eligibility to participate in benefit plan (in days) | 60 days | ||
Maximum annual contributions per employee, percent | 75.00% | ||
Maximum annual contribution per employee | $ 18,000 | ||
Minimum salary threshold designating highly compensated employees | $ 120,000 | ||
Employer matching contribution, employment requirement period for matching eligibility, minimum | 1 year | ||
Employer matching contribution after one year of employment, percent | 50.00% | ||
Employer matching contribution, percent of employees' gross pay | 4.00% | ||
Maximum employer annual matching contribution of employee's gross salary | $ 3,000 | ||
Employers matching contribution, vesting period after date of hire (in years) | 4 years | ||
Employer matching contributions | $ 2,700,000 | $ 2,200,000 | $ 1,300,000 |
Age 50 or More [Member] | |||
Employee Retirement Plan: | |||
Maximum annual contribution per employee | 24,000 | ||
Highly Compensated Employees [Member] | |||
Employee Retirement Plan: | |||
Maximum annual contribution per employee | 13,000 | ||
Highly Compensated Employees, Age 50 or More [Member] | |||
Employee Retirement Plan: | |||
Maximum annual contribution per employee | $ 19,000 |
CONDENSED QUARTERLY REVENUES 91
CONDENSED QUARTERLY REVENUES AND EARNINGS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income per share: | |||||||||||
Revenues | $ 1,666.5 | $ 1,683.1 | $ 1,627.4 | $ 1,550.8 | $ 1,640.5 | $ 1,716.4 | $ 1,689.6 | $ 1,541.8 | $ 6,527.8 | $ 6,588.3 | $ 5,867.7 |
Gross profit | 264.6 | 265.7 | 267.6 | 260.8 | 260.4 | 272.7 | 271.3 | 256.4 | 1,058.7 | 1,060.8 | 967.2 |
Net income | $ 67.1 | $ 32.4 | $ 36.7 | $ 31 | $ 41.1 | $ 51.1 | $ 41.1 | $ 35.9 | $ 167.2 | $ 169.2 | $ 111.6 |
Basic (in dollars per share) | $ 3.11 | $ 1.47 | $ 1.66 | $ 1.28 | $ 1.65 | $ 1.97 | $ 1.53 | $ 1.31 | $ 7.43 | $ 6.43 | $ 3.73 |
Diluted (in dollars per share) | $ 3.08 | $ 1.47 | $ 1.65 | $ 1.27 | $ 1.64 | $ 1.96 | $ 1.52 | $ 1.30 | $ 7.40 | $ 6.41 | $ 3.71 |
Gain (loss) on sale of business | $ (1.1) | $ (2.1) | $ 8.4 | $ 13.1 | |||||||
Income tax benefit | $ 0.9 | $ 0.8 | |||||||||
Sale on business component, gain (loss) per basic share (in dollars per share) | $ 1.53 | $ (0.05) | $ (0.09) | $ 0.34 | $ 0.54 | ||||||
Sale on business component, gain (loss) per diluted share (in dollars per share) | $ 1.52 | $ (0.05) | $ (0.09) | $ 0.34 | $ 0.53 | ||||||
Impairment of real estate | $ 0.3 | $ 0 | $ 0 | $ 0 | |||||||
Gain on divestitures | 28.4 | $ 28.4 | $ 21.6 | ||||||||
Gain on litigation settlement | $ 4.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Series of Individually Immaterial Business Acquisitions [Member] | 1 Months Ended | 12 Months Ended |
Jan. 31, 2017DealershipLocationsCollisionRepairCentersFranchises | Dec. 31, 2015DealershipLocationsFranchises | |
Subsequent Event [Line Items] | ||
Number of franchises acquired (in franchises) | Franchises | 2 | |
Number of dealership locations acquired (in dealership locations) | DealershipLocations | 2 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Number of franchises acquired (in franchises) | Franchises | 2 | |
Number of dealership locations acquired (in dealership locations) | DealershipLocations | 2 | |
Number of collision centers acquired (in collision centers) | CollisionRepairCenters | 1 |