Actionable news
0
All posts from Actionable news
Actionable news in AN: AUTONATION Inc,

Quarterly report [Sections 13 or 15(d)]

style="font-family:Times New Roman;font-size:10pt;">

Delaware 73-1105145
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
200 SW 1st Avenue, Fort Lauderdale, Florida 33301
(Address of principal executive offices) (Zip Code)
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of
March 31, 2016, and December 31, 2015
1
Unaudited Condensed Consolidated Statements of Income for the
Three Months ended March 31, 2016 and 2015
2
Unaudited Condensed Consolidated Statement of Shareholders’
Equity for the Three Months Ended March 31, 2016
3
Unaudited Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2016 and 2015
4
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 44
Item 4. Controls and Procedures 44
PART II. OTHER INFORMATION
Item 1A. Risk Factors 45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45
Item 6. Exhibits 46
March 31,
2016
December 31,
2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 47.8
$ 74.1
Receivables, net 767.6
908.2
Inventory 3,927.8
3,612.0
Other current assets 129.5
115.4
Total Current Assets 4,872.7
4,709.7
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $1.0 billion and $1.0 billion, respectively 2,768.1
2,667.4
GOODWILL 1,437.4
1,394.5
OTHER INTANGIBLE ASSETS, NET 554.7
439.9
OTHER ASSETS 364.7
336.7
Total Assets $ 9,997.6
$ 9,548.2
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Vehicle floorplan payable - trade $ 2,572.1
$ 2,565.8
Vehicle floorplan payable - non-trade 1,467.3
1,161.3
Accounts payable 310.5
299.9
Commercial paper 926.0
599.5
Current maturities of long-term debt 11.9
11.7
Other current liabilities 572.7
529.2
Total Current Liabilities 5,860.5
5,167.4
LONG-TERM DEBT, NET OF CURRENT MATURITIES 1,742.6
1,745.3
DEFERRED INCOME TAXES 91.5
78.6
OTHER LIABILITIES 212.4
207.6
COMMITMENTS AND CONTINGENCIES (Note 11)

SHAREHOLDERS’ EQUITY:
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized; none issued

Common stock, par value $0.01 per share; 1,500,000,000 shares authorized; 120,562,149 shares issued at March 31, 2016, and December 31, 2015, including shares held in treasury 1.2
1.2
Additional paid-in capital 15.2
5.2
Retained earnings 2,798.7
2,702.8
Treasury stock, at cost; 17,461,420 and 9,758,091 shares held, respectively (724.5 ) (359.9 )
Total Shareholders’ Equity 2,090.6
2,349.3
Total Liabilities and Shareholders’ Equity $ 9,997.6
$ 9,548.2
Three Months Ended
March 31,
2016 2015
Revenue:
New vehicle $ 2,800.2
$ 2,769.6
Used vehicle 1,241.6
1,193.2
Parts and service 820.4
743.4
Finance and insurance, net 223.1
207.6
Other 34.3
30.4
TOTAL REVENUE 5,119.6
4,944.2
Cost of sales:
New vehicle 2,651.0
2,608.1
Used vehicle 1,150.6
1,089.5
Parts and service 465.7
423.4
Other 26.4
23.3
TOTAL COST OF SALES (excluding depreciation shown below) 4,293.7
4,144.3
Gross Profit:
New vehicle 149.2
161.5
Used vehicle 91.0
103.7
Parts and service 354.7
320.0
Finance and insurance 223.1
207.6
Other 7.9
7.1
TOTAL GROSS PROFIT 825.9
799.9
Selling, general, and administrative expenses 588.7
557.6
Depreciation and amortization 34.8
28.7
Other income, net (5.0 ) (1.3 )
OPERATING INCOME 207.4
214.9
Non-operating income (expense) items:
Floorplan interest expense (18.9 ) (13.2 )
Other interest expense (28.3 ) (21.4 )
Interest income 0.1
0.1
Other income (loss), net (3.4 ) 1.1
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 156.9
181.5
Income tax provision 60.7
69.8
NET INCOME FROM CONTINUING OPERATIONS 96.2
111.7
Loss from discontinued operations, net of income taxes (0.3 ) (0.2 )
NET INCOME $ 95.9
$ 111.5
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.90
$ 0.98
Discontinued operations $
$
Net income $ 0.90
$ 0.98
Weighted average common shares outstanding 106.7
113.6
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations $ 0.90
$ 0.97
Discontinued operations $
$
Net income $ 0.89
$ 0.97
Weighted average common shares outstanding 107.4
115.1
COMMON SHARES OUTSTANDING, net of treasury stock, at period end 103.1
113.9
Common Stock Additional
Paid-In Capital
Retained Earnings Treasury Stock Total
Shares Amount
BALANCE AT DECEMBER 31, 2015 120,562,149
$ 1.2
$ 5.2
$ 2,702.8
$ (359.9 ) $ 2,349.3
Net income


95.9

95.9
Repurchases of common stock



(371.1 ) (371.1 )
Stock-based compensation expense

15.3


15.3
Shares awarded under stock-based compensation plans, including income tax benefit of $0.6

(5.3 )
6.5
1.2
BALANCE AT MARCH 31, 2016 120,562,149
$ 1.2
$ 15.2
$ 2,798.7
$ (724.5 ) $ 2,090.6
Three Months Ended
March 31,
2016 2015
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income $ 95.9
$ 111.5
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 0.3
0.2
Depreciation and amortization 34.8
28.7
Amortization of debt issuance costs and accretion of debt discounts 1.3
1.1
Stock-based compensation expense 15.3
11.1
Deferred income tax provision 4.8
2.7
Net gain related to business/property dispositions (6.1 ) (1.5 )
Non-cash impairment charges 0.9
0.2
Excess tax benefit from stock-based awards (0.6 ) (8.1 )
Other 3.8
(0.8 )
(Increase) decrease, net of effects from business combinations and divestitures:
Receivables 161.2
38.5
Inventory (146.5 ) (23.0 )
Other assets (23.7 ) 1.4
Increase (decrease), net of effects from business combinations and divestitures:
Vehicle floorplan payable - trade, net 13.7
(43.6 )
Accounts payable 2.5
26.6
Other liabilities 40.8
54.8
Net cash provided by continuing operations 198.4
199.8
Net cash used in discontinued operations (0.2 ) (0.2 )
Net cash provided by operating activities 198.2
199.6
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment (54.7 ) (66.4 )
Property operating lease buy-outs (5.0 )
Proceeds from the sale of property and equipment
0.2
Cash received from business divestitures, net of cash relinquished 6.1
15.7
Cash used in business acquisitions, net of cash acquired (256.6 ) (27.7 )
Other (0.5 ) (1.4 )
Net cash used in continuing operations (310.7 ) (79.6 )
Net cash used in discontinued operations

Net cash used in investing activities (310.7 ) (79.6 )
Three Months Ended
March 31,
2016 2015
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Repurchases of common stock (371.1 ) (9.6 )
Proceeds from revolving credit facility 440.0
540.0
Payments of revolving credit facility (440.0 ) (615.0 )
Net proceeds from commercial paper 326.5

Net proceeds from (payments of) vehicle floorplan payable - non-trade 132.8
(54.1 )
Payments of mortgage facility (2.5 ) (2.4 )
Payments of capital leases and other debt obligations (0.7 ) (0.7 )
Proceeds from the exercise of stock options 0.6
12.4
Excess tax benefit from stock-based awards 0.6
8.1
Net cash provided by (used in) continuing operations 86.2
(121.3 )
Net cash used in discontinued operations

Net cash provided by (used in) financing activities 86.2
(121.3 )
DECREASE IN CASH AND CASH EQUIVALENTS (26.3 ) (1.3 )
CASH AND CASH EQUIVALENTS at beginning of period 74.1
75.4
CASH AND CASH EQUIVALENTS at end of period $ 47.8
$ 74.1
March 31,
2016
December 31,
2015
Trade receivables $ 137.2
$ 133.6
Manufacturer receivables 189.4
221.4
Other 50.0
38.0
376.6
393.0
Less: allowances for doubtful accounts (4.1 ) (4.5 )
372.5
388.5
Contracts-in-transit and vehicle receivables 395.1
508.0
Income tax refundable (see Note 6)
11.7
Receivables, net $ 767.6
$ 908.2
March 31,
2016
December 31,
2015
New vehicles $ 3,186.1
$ 2,888.1
Used vehicles 551.3
539.7
Parts, accessories, and other 190.4
184.2
Inventory $ 3,927.8
$ 3,612.0
March 31,
2016
December 31,
2015
Vehicle floorplan payable - trade $ 2,572.1
$ 2,565.8
Vehicle floorplan payable - non-trade 1,467.3
1,161.3
Vehicle floorplan payable $ 4,039.4
$ 3,727.1
March 31,
2016
December 31,
2015
Goodwill $ 1,437.4
$ 1,394.5
Franchise rights - indefinite-lived $ 546.8
$ 432.4
Other intangibles 14.9
14.3
561.7
446.7
Less: accumulated amortization (7.0 ) (6.8 )
Other intangible assets, net $ 554.7
$ 439.9
March 31,
2016
December 31,
2015
6.75% Senior Notes due 2018 $ 397.8
$ 397.5
5.5% Senior Notes due 2020 346.7
346.5
3.35% Senior Notes due 2021 297.7
297.6
4.5% Senior Notes due 2025 444.8
444.7
Revolving credit facility due 2019

Mortgage facility (1) 173.2
175.7
Capital leases and other debt 94.3
95.0
1,754.5
1,757.0
Less: current maturities (11.9 ) (11.7 )
Long-term debt, net of current maturities $ 1,742.6
$ 1,745.3
(1) The mortgage facility requires monthly principal and interest payments of $1.7 million based on a fixed amortization schedule with a balloon payment of $155.4 million due November 2017.
March 31, 2016
Requirement Actual
Leverage ratio ≤ 3.75x 2.60x
Capitalization ratio ≤ 70.0% 64.9%
Three Months Ended
March 31,
2016 2015
Shares repurchased 7.9
0.2
Aggregate purchase price $ 370.6
$ 9.1
Average purchase price per share $ 47.20
$ 60.46
Three Months Ended
March 31,
2016 2015
Shares issued (in actual number of shares) 26,261
617,760
Proceeds from the exercise of stock options $ 0.6
$ 12.4
Average exercise price per share $ 22.94
$ 20.15
Three Months Ended
March 31,
2016 2015
Shares issued 138,424
155,328
Shares surrendered to AutoNation to satisfy tax withholding obligations in connection with the vesting of restricted stock 8,760
8,999
Three Months Ended
March 31,
2016 2015
Net income from continuing operations $ 96.2
$ 111.7
Loss from discontinued operations, net of income taxes (0.3 ) (0.2 )
Net income $ 95.9
$ 111.5
Weighted average common shares outstanding used in calculating basic EPS 106.7
113.6
Effect of dilutive stock options 0.7
1.5
Weighted average common shares outstanding used in calculating diluted EPS 107.4
115.1
Basic EPS amounts (1) :
Continuing operations $ 0.90
$ 0.98
Discontinued operations $
$
Net income $ 0.90
$ 0.98
Diluted EPS amounts (1) :
Continuing operations $ 0.90
$ 0.97
Discontinued operations $
$
Net income $ 0.89
$ 0.97
(1) Earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding.
Three Months Ended
March 31,
2016 2015
Anti-dilutive options excluded from the computation of diluted earnings per share 2.5
0.5
Three Months Ended
March 31,
2016 2015
Revenue:
Domestic $ 1,848.2
$ 1,665.7
Import 1,675.0
1,678.7
Premium Luxury 1,540.3
1,563.2
Total 5,063.5
4,907.6
Corporate and other 56.1
36.6
Total consolidated revenue $ 5,119.6
$ 4,944.2
Three Months Ended
March 31,
2016 2015
Segment income (1) :
Domestic $ 77.4
$ 79.3
Import 76.1
75.0
Premium Luxury 83.0
94.1
Total 236.5
248.4
Corporate and other (48.0 ) (46.7 )
Other interest expense (28.3 ) (21.4 )
Interest income 0.1
0.1
Other income (loss), net (3.4 ) 1.1
Income from continuing operations before income taxes $ 156.9
$ 181.5
(1) Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense.
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
Cash and cash equivalents, accounts receivable, other current assets, vehicle floorplan payable, accounts payable, other current liabilities, commercial paper, and variable rate debt : The amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.
Fixed rate long-term debt : Our fixed rate long-term debt primarily consists of amounts outstanding under our senior unsecured notes and mortgages. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 1). We estimate the fair value of our mortgages using a present value technique based on our current market interest rates for similar types of financial instruments (Level 2). A summary of the aggregate carrying values and fair values of our fixed rate long-term debt is as follows:
March 31,
2016
December 31,
2015
Carrying value $ 1,764.1
$ 1,767.1
Fair value $ 1,856.5
$ 1,858.6
2016 2015
Description Fair Value
Measurements Using
Significant
Unobservable Inputs
(Level 3)
Gain/(Loss) Fair Value
Measurements Using
Significant
Unobservable Inputs
(Level 3)
Gain/(Loss)
Long-lived assets held for sale:
Continuing operations $ 5.0
$ (0.9 ) $ 6.2
$ (0.2 )
Discontinued operations 13.2
(0.2 )

Total long-lived assets held for sale $ 18.2
$ (1.1 ) $ 6.2
$ (0.2 )
($ in millions, except per vehicle data) Three Months Ended March 31,
2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue:
New vehicle $ 2,800.2
$ 2,769.6
$ 30.6
1.1
Retail used vehicle 1,119.9
1,094.1
25.8
2.4
Wholesale 121.7
99.1
22.6
22.8
Used vehicle 1,241.6
1,193.2
48.4
4.1
Finance and insurance, net 223.1
207.6
15.5
7.5
Total variable operations (1) 4,264.9
4,170.4
94.5
2.3
Parts and service 820.4
743.4
77.0
10.4
Other 34.3
30.4
3.9
Total revenue $ 5,119.6
$ 4,944.2
$ 175.4
3.5
Gross profit:
New vehicle $ 149.2
$ 161.5
$ (12.3 ) (7.6 )
Retail used vehicle 93.7
102.5
(8.8 ) (8.6 )
Wholesale (2.7 ) 1.2
(3.9 )
Used vehicle 91.0
103.7
(12.7 ) (12.2 )
Finance and insurance 223.1
207.6
15.5
7.5
Total variable operations (1) 463.3
472.8
(9.5 ) (2.0 )
Parts and service 354.7
320.0
34.7
10.8
Other 7.9
7.1
0.8
Total gross profit 825.9
799.9
26.0
3.3
Selling, general, and administrative expenses 588.7
557.6
(31.1 ) (5.6 )
Depreciation and amortization 34.8
28.7
(6.1 )
Other income, net (5.0 ) (1.3 ) 3.7
Operating income 207.4
214.9
(7.5 ) (3.5 )
Non-operating income (expense) items:
Floorplan interest expense (18.9 ) (13.2 ) (5.7 )
Other interest expense (28.3 ) (21.4 ) (6.9 )
Interest income 0.1
0.1

Other income (loss), net (3.4 ) 1.1
(4.5 )
Income from continuing operations before income taxes $ 156.9
$ 181.5
$ (24.6 ) (13.6 )
Retail vehicle unit sales:
New vehicle 79,007
78,560
447
0.6
Used vehicle 58,103
58,624
(521 ) (0.9 )
137,110
137,184
(74 ) (0.1 )
Revenue per vehicle retailed:
New vehicle $ 35,442
$ 35,255
$ 187
0.5
Used vehicle $ 19,274
$ 18,663
$ 611
3.3
Gross profit per vehicle retailed:
New vehicle $ 1,888
$ 2,056
$ (168 ) (8.2 )
Used vehicle $ 1,613
$ 1,748
$ (135 ) (7.7 )
Finance and insurance $ 1,627
$ 1,513
$ 114
7.5
Total variable operations (2) $ 3,399
$ 3,438
$ (39 ) (1.1 )
(1) Total variable operations includes new vehicle, used vehicle (retail and wholesale), and finance and insurance results.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales.
Three Months Ended
March 31,
2016 (%) 2015 (%)
Revenue mix percentages:
New vehicle 54.7 56.0
Used vehicle 24.3 24.1
Parts and service 16.0 15.0
Finance and insurance, net 4.4 4.2
Other 0.6 0.7
Total 100.0 100.0
Gross profit mix percentages:
New vehicle 18.1 20.2
Used vehicle 11.0 13.0
Parts and service 42.9 40.0
Finance and insurance 27.0 26.0
Other 1.0 0.8
Total 100.0 100.0
Operating items as a percentage of revenue:
Gross profit:
New vehicle 5.3 5.8
Used vehicle - retail 8.4 9.4
Parts and service 43.2 43.0
Total 16.1 16.2
Selling, general, and administrative expenses 11.5 11.3
Operating income 4.1 4.3
Operating items as a percentage of total gross profit:
Selling, general, and administrative expenses 71.3 69.7
Operating income 25.1 26.9
March 31,
2016 2015
Days supply:
New vehicle (industry standard of selling days) 81 days 52 days
Used vehicle (trailing calendar month days) 39 days 34 days
Three Months Ended March 31,
($ in millions, except per vehicle data) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue:
New vehicle $ 2,634.1
$ 2,755.5
$ (121.4 ) (4.4 )
Retail used vehicle 1,045.9
1,085.2
(39.3 ) (3.6 )
Wholesale 118.1
98.7
19.4
19.7
Used vehicle 1,164.0
1,183.9
(19.9 ) (1.7 )
Finance and insurance, net 211.8
206.6
5.2
2.5
Total variable operations (1) 4,009.9
4,146.0
(136.1 ) (3.3 )
Parts and service 770.1
736.2
33.9
4.6
Other 34.0
30.3
3.7
Total revenue $ 4,814.0
$ 4,912.5
$ (98.5 ) (2.0 )
Gross profit:
New vehicle $ 140.1
$ 160.6
$ (20.5 ) (12.8 )
Retail used vehicle 88.0
101.6
(13.6 ) (13.4 )
Wholesale (2.6 ) 1.2
(3.8 )
Used vehicle 85.4
102.8
(17.4 ) (16.9 )
Finance and insurance 211.8
206.6
5.2
2.5
Total variable operations (1) 437.3
470.0
(32.7 ) (7.0 )
Parts and service 333.5
316.6
16.9
5.3
Other 7.3
7.1
0.2
Total gross profit $ 778.1
$ 793.7
$ (15.6 ) (2.0 )
Retail vehicle unit sales:
New vehicle 74,323
78,027
(3,704 ) (4.7 )
Used vehicle 54,157
58,039
(3,882 ) (6.7 )
128,480
136,066
(7,586 ) (5.6 )
Revenue per vehicle retailed:
New vehicle $ 35,441
$ 35,315
$ 126
0.4
Used vehicle $ 19,312
$ 18,698
$ 614
3.3
Gross profit per vehicle retailed:
New vehicle $ 1,885
$ 2,058
$ (173 ) (8.4 )
Used vehicle $ 1,625
$ 1,751
$ (126 ) (7.2 )
Finance and insurance $ 1,649
$ 1,518
$ 131
8.6
Total variable operations (2) $ 3,424
$ 3,445
$ (21 ) (0.6 )
(1) Total variable operations includes new vehicle, used vehicle (retail and wholesale), and finance and insurance results.
(2) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales.
Three Months Ended
March 31,
2016 (%) 2015 (%)
Revenue mix percentages:
New vehicle 54.7 56.1
Used vehicle 24.2 24.1
Parts and service 16.0 15.0
Finance and insurance, net 4.4 4.2
Other 0.7 0.6
Total 100.0 100.0
Gross profit mix percentages:
New vehicle 18.0 20.2
Used vehicle 11.0 13.0
Parts and service 42.9 39.9
Finance and insurance 27.2 26.0
Other 0.9 0.9
Total 100.0 100.0
Operating items as a percentage of revenue:
Gross profit:
New vehicle 5.3 5.8
Used vehicle - retail 8.4 9.4
Parts and service 43.3 43.0
Total 16.2 16.2
Three Months Ended March 31,
($ in millions, except per vehicle data) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Reported:
Revenue $ 2,800.2
$ 2,769.6
$ 30.6
1.1
Gross profit $ 149.2
$ 161.5
$ (12.3 ) (7.6 )
Retail vehicle unit sales 79,007
78,560
447
0.6
Revenue per vehicle retailed $ 35,442
$ 35,255
$ 187
0.5
Gross profit per vehicle retailed $ 1,888
$ 2,056
$ (168 ) (8.2 )
Gross profit as a percentage of revenue 5.3 % 5.8 %
Days supply (industry standard of selling days) 81 days
52 days
Three Months Ended March 31,
2016 2015 Variance Favorable / (Unfavorable) % Variance
Same Store:
Revenue $ 2,634.1
$ 2,755.5
$ (121.4 ) (4.4 )
Gross profit $ 140.1
$ 160.6
$ (20.5 ) (12.8 )
Retail vehicle unit sales 74,323
78,027
(3,704 ) (4.7 )
Revenue per vehicle retailed $ 35,441
$ 35,315
$ 126
0.4
Gross profit per vehicle retailed $ 1,885
$ 2,058
$ (173 ) (8.4 )
Gross profit as a percentage of revenue 5.3 % 5.8 %
Three Months Ended March 31,
(In millions) 2016 2015 Variance
Floorplan assistance $ 29.3
$ 26.7
$ 2.6
New vehicle floorplan interest expense (17.9 ) (12.5 ) (5.4 )
Net new vehicle inventory carrying benefit $ 11.4
$ 14.2
$ (2.8 )
Three Months Ended March 31,
($ in millions, except per vehicle data) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Reported:
Retail revenue $ 1,119.9
$ 1,094.1
$ 25.8
2.4
Wholesale revenue 121.7
99.1
22.6
22.8
Total revenue $ 1,241.6
$ 1,193.2
$ 48.4
4.1
Retail gross profit $ 93.7
$ 102.5
$ (8.8 ) (8.6 )
Wholesale gross profit (2.7 ) 1.2
(3.9 )
Total gross profit $ 91.0
$ 103.7
$ (12.7 ) (12.2 )
Retail vehicle unit sales 58,103
58,624
(521 ) (0.9 )
Revenue per vehicle retailed $ 19,274
$ 18,663
$ 611
3.3
Gross profit per vehicle retailed $ 1,613
$ 1,748
$ (135 ) (7.7 )
Gross profit as a percentage of revenue 8.4 % 9.4 %
Days supply (trailing calendar month days) 39 days
34 days
Three Months Ended March 31,
2016 2015 Variance Favorable / (Unfavorable) % Variance
Same Store:
Retail revenue $ 1,045.9
$ 1,085.2
$ (39.3 ) (3.6 )
Wholesale revenue 118.1
98.7
19.4
19.7
Total revenue $ 1,164.0
$ 1,183.9
$ (19.9 ) (1.7 )
Retail gross profit $ 88.0
$ 101.6
$ (13.6 ) (13.4 )
Wholesale gross profit (2.6 ) 1.2
(3.8 )
Total gross profit $ 85.4
$ 102.8
$ (17.4 ) (16.9 )
Retail vehicle unit sales 54,157
58,039
(3,882 ) (6.7 )
Revenue per vehicle retailed $ 19,312
$ 18,698
$ 614
3.3
Gross profit per vehicle retailed $ 1,625
$ 1,751
$ (126 ) (7.2 )
Gross profit as a percentage of revenue 8.4 % 9.4 %
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Reported:
Revenue $ 820.4
$ 743.4
$ 77.0
10.4
Gross Profit $ 354.7
$ 320.0
$ 34.7
10.8
Gross profit as a percentage of revenue 43.2 % 43.0 %
Same Store:
Revenue $ 770.1
$ 736.2
$ 33.9
4.6
Gross Profit $ 333.5
$ 316.6
$ 16.9
5.3
Gross profit as a percentage of revenue 43.3 % 43.0 %
Three Months Ended March 31,
($ in millions, except per vehicle data) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Reported:
Revenue and gross profit $ 223.1
$ 207.6
$ 15.5
7.5
Gross profit per vehicle retailed $ 1,627
$ 1,513
$ 114
7.5
Same Store:
Revenue and gross profit $ 211.8
$ 206.6
$ 5.2
2.5
Gross profit per vehicle retailed $ 1,649
$ 1,518
$ 131
8.6
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue:
Domestic $ 1,848.2
$ 1,665.7
$ 182.5
11.0
Import 1,675.0
1,678.7
(3.7 ) (0.2 )
Premium Luxury 1,540.3
1,563.2
(22.9 ) (1.5 )
Total 5,063.5
4,907.6
155.9
3.2
Corporate and other 56.1
36.6
19.5
53.3
Total consolidated revenue $ 5,119.6
$ 4,944.2
$ 175.4
3.5
Segment income (1) :
Domestic $ 77.4
$ 79.3
$ (1.9 ) (2.4 )
Import 76.1
75.0
1.1
1.5
Premium Luxury 83.0
94.1
(11.1 ) (11.8 )
Total 236.5
248.4
(11.9 ) (4.8 )
Corporate and other (48.0 ) (46.7 ) (1.3 )
Floorplan interest expense 18.9
13.2
(5.7 )
Operating income $ 207.4
$ 214.9
$ (7.5 ) (3.5 )
(1) Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense.
Retail new vehicle unit sales:
Domestic 27,736
25,750
1,986
7.7
Import 35,781
36,914
(1,133 ) (3.1 )
Premium Luxury 15,490
15,896
(406 ) (2.6 )
79,007
78,560
447
0.6
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue $ 1,848.2
$ 1,665.7
$ 182.5
11.0
Segment income $ 77.4
$ 79.3
$ (1.9 ) (2.4 )
Retail new vehicle unit sales 27,736
25,750
1,986
7.7
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue $ 1,675.0
$ 1,678.7
$ (3.7 ) (0.2 )
Segment income $ 76.1
$ 75.0
$ 1.1
1.5
Retail new vehicle unit sales 35,781
36,914
(1,133 ) (3.1 )
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Revenue $ 1,540.3
$ 1,563.2
$ (22.9 ) (1.5 )
Segment income $ 83.0
$ 94.1
$ (11.1 ) (11.8 )
Retail new vehicle unit sales 15,490
15,896
(406 ) (2.6 )
Three Months Ended March 31,
($ in millions) 2016 2015 Variance Favorable / (Unfavorable) % Variance
Reported:
Compensation $ 373.1
$ 369.3
$ (3.8 ) (1.0 )
Advertising 42.7
42.0
(0.7 ) (1.7 )
Store and corporate overhead 172.9
146.3
(26.6 ) (18.2 )
Total $ 588.7
$ 557.6
$ (31.1 ) (5.6 )
SG&A as a % of total gross profit:
Compensation 45.2
46.2
100
bps
Advertising 5.2
5.3
10
bps
Store and corporate overhead 20.9
18.2
(270 ) bps
Total 71.3
69.7
(160 ) bps
(In millions) March 31,
2016
December 31,
2015
Cash and cash equivalents $ 47.8
$ 74.1
Revolving credit facility (1) $ 1,195.1
(2) $ 1,463.1
Secured used vehicle floorplan facilities (3) $ 0.4
$ 127.1
(2) At March 31, 2016 , we had $44.1 million of letters of credit outstanding. In addition, we use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under our commercial paper program. We had $926.0 million of commercial paper notes outstanding at March 31, 2016 , which in effect reduced the available liquidity under our revolving credit facility to $829.9 million at March 31, 2016 . See “Long-Term Debt and Commercial Paper” below for additional information.
Three Months Ended
March 31,
(In millions, except per share data) 2016 2015
Shares repurchased 7.9
0.2
Aggregate purchase price $ 370.6
$ 9.1
Average purchase price per share $ 47.20
$ 60.46
Three Months Ended
March 31,
(In millions) 2016 2015
Purchases of property and equipment, including operating lease buy-outs (1) $ 50.7
$ 62.9
Three Months Ended
March 31,
(In millions) 2016 2015
Cash received from (used in) business acquisitions, net $ (256.6 ) $ (27.7 )
Cash received from (used in) business divestitures, net $ 6.1
$ 15.7
(In millions) March 31,
2016
December 31,
2015
6.75% Senior Notes due 2018 $ 397.8
$ 397.5
5.5% Senior Notes due 2020 346.7
346.5
3.35% Senior Notes due 2021 297.7
297.6
4.5% Senior Notes due 2025 444.8
444.7
Revolving credit facility due 2019

Mortgage facility (1) 173.2
175.7
Capital leases and other debt 94.3
95.0
1,754.5
1,757.0
Less: current maturities (11.9 ) (11.7 )
Long-term debt, net of current maturities $ 1,742.6
$ 1,745.3
(1) The mortgage facility requires monthly principal and interest payments of $1.7 million based on a fixed amortization schedule with a balloon payment of $155.4 million due November 2017.
March 31, 2016
Requirement Actual
Leverage ratio ≤ 3.75x 2.60x
Capitalization ratio ≤ 70.0% 64.9%
March 31,
2016
December 31,
2015
Vehicle floorplan payable - trade $ 2,572.1
$ 2,565.8
Vehicle floorplan payable - non-trade 1,467.3
1,161.3
Vehicle floorplan payable $ 4,039.4
$ 3,727.1
Three Months Ended
March 31,
(In millions) 2016 2015
Net cash provided by operating activities $ 198.2
$ 199.6
Net cash used in investing activities $ (310.7 ) $ (79.6 )
Net cash provided by (used in) financing activities $ 86.2
$ (121.3 )
The automotive retail industry is sensitive to changing economic conditions and various other factors. Our business and results of operations are substantially dependent on new vehicle sales levels in the United States and in our particular geographic markets and the level of gross profit margins that we can achieve on our sales of new vehicles, all of which are very difficult to predict.
If we are not able to maintain and enhance our retail brands and reputation or to attract consumers to our own digital channels, or if events occur that damage our retail brands, reputation, or sales channels, our business and financial results may be harmed.
New laws, regulations, or governmental policies regarding fuel economy and greenhouse gas emission standards, or changes to existing standards, may affect vehicle manufacturers’ ability to produce cost-effective vehicles or vehicles that consumers demand, which could adversely impact our business, results of operations, financial condition, cash flow, and prospects.
We are subject to restrictions imposed by, and significant influence from, vehicle manufacturers that may adversely impact our business, financial condition, results of operations, cash flows, and prospects, including our ability to acquire additional stores.
We are subject to numerous legal and administrative proceedings, which, if the outcomes are adverse to us, could materially adversely affect our business, results of operations, financial condition, cash flows, and prospects.
Our operations are subject to extensive governmental laws and regulations. If we are found to be in purported violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect our operations, our business, operating results, and prospects could suffer.
A failure of our information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on our business.
Our debt agreements contain certain financial ratios and other restrictions on our ability to conduct our business, and our substantial indebtedness could adversely affect our financial condition and operations and prevent us from fulfilling our debt service obligations.
Goodwill and other intangible assets comprise a significant portion of our total assets. We must test our goodwill and other intangible assets for impairment at least annually, which could result in a material, non-cash write-down of goodwill or franchise rights and could have a material adverse impact on our results of operations and shareholders’ equity.
Our largest stockholders, as a result of their ownership stakes in us, may have the ability to exert substantial influence over actions to be taken or approved by our stockholders or Board of Directors. In addition, future share repurchases and fluctuations in the levels of ownership of our largest stockholders could impact the volume of trading, liquidity, and market price of our common stock.
Period Total Number of Shares Purchased (1) Avg. Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under The Programs (in millions) (1)
January 1, 2016 - January 31, 2016 442,384
$ 42.88
442,384
$ 276.6
February 1, 2016 - February 29, 2016 6,533,845
$ 46.92
6,533,845
$ 220.0
March 1, 2016 - March 31, 2016 883,469
$ 51.47
874,709
$ 175.0
Total 7,859,698
7,850,938
(1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. In February 2016, our Board of Directors authorized the repurchase of an additional $250.0 million of shares of our common stock. As of March 31, 2016 , $175.0 million remained available under our stock repurchase authorization limit. The Board’s authorization has no expiration date. During the first quarter of 2016 , all of the shares reflected in the table above were repurchased under our stock repurchase program, except for 8,760 shares surrendered to AutoNation to satisfy tax withholding obligations in connection with the vesting of restricted stock.
Exhibit No. Description
4.1 Supplemental Indenture, dated as February 29, 2016, relating to the Company’s 6.75% Senior Notes due 2018, to the Indenture, dated April 14, 2010 (the “2010 Indenture”), among AutoNation, Inc. and Wells Fargo Bank, National Association.
4.2 Supplemental Indenture to 2010 Indenture, dated as February 29, 2016, relating to the Company’s 5.5% Senior Notes due 2020.
4.3 Supplemental Indenture to 2010 Indenture, dated as February 29, 2016, relating to the Company’s 3.35% Senior Notes due 2021.
4.4 Supplemental Indenture to 2010 Indenture, dated as February 29, 2016, relating to the Company’s 4.5% Senior Notes due 2025.
10.1 Form of Stock Option Agreement under the AutoNation, Inc. 2008 Employee Equity and Incentive Plan (the “2008 Plan”) for grants in 2016.
10.2 Form of Restricted Stock Agreement under the 2008 Plan for grants in 2016.
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
32.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350.
32.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
AUTONATION, INC.
Date: April 22, 2016 By: /s/ Christopher Cade
Christopher Cade Vice President and Chief Accounting Officer
(Duly Authorized Officer and Principal Accounting Officer)

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever AutoNation makes a similar move, sign up!

Other recent filings from the company include the following:

Autonation Reports First Quarter 2016 Results - April 22, 2016
Additional definitive proxy soliciting materials and Rule 14(a)(12) material - March 29, 2016
AutoNation releases salary data. CEO sees compensation fall -4% - March 29, 2016