What changed in this filing

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Item 1. Business

2021-03-01 compared with 2020-03-02 · 140 added, 90 removed, 167 unchanged (58% of the section changed)

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Our store operations are conducted by our subsidiaries.

As of December 31, 2019 , we owned and operated 107 new vehicle franchises, representing 31 brands of automobiles at 88 dealership locations, and 25 collision centers in 17 metropolitan markets within 10 states.

As of December 31, 2020, we owned and operated 112 new vehicle franchises, representing 31 brands of automobiles at 91 dealership locations, 25 collision centers and one auto auction in 16 metropolitan markets within nine states.

Our stores offer an extensive range of automotive products and services, including new and used vehicles;

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Park Place Acquisition

On December 11, 2019, our wholly-owned subsidiary, Asbury Automotive Group, LLC ("Purchaser"), entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with certain members of the Park Place Dealership family of entities, Park Place Mid-Cities, Ltd., a Texas limited partnership, and the identified principal.

Also on December 11, 2019, Purchaser entered into a Real Estate Purchase Agreement (the "Real Estate Purchase Agreement" and, together with the Asset Purchase Agreement, the "Transaction Agreements") with certain members of the Park Place Dealership family of entities ("Park Place").

Pursuant to the Transaction Agreements, we will acquire substantially all of the assets of, and certain real property related to (collectively, the "Acquisition"), the businesses described in the Asset Purchase Agreement for a purchase price of approximately $1.0 billion (excluding vehicle inventory), reflecting $785.0 million of goodwill, approximately $215.0 million for real estate and leaseholds and approximately $30 million for parts and fixed assets, in each case subject to certain adjustments described in the Transaction Agreements.

Park Place, based in Dallas, Texas, is one of the country's largest luxury dealer groups, with an attractive portfolio of high volume, award-winning, luxury dealerships and high-quality real estate.

Park Place consists of a collection of:

ten luxury dealerships, including one dealership scheduled to open in the first quarter of 2020;

an auto auction business for wholesaling used cars;

a subscription service platform that offers customers access to a range of luxury vehicles for a monthly fee.

The operating assets expected to be acquired include 19 new vehicle franchises, 17 of which are located in the Dallas/Fort Worth market:

3 Mercedes-Benz, 2 Lexus, 1 Jaguar, 1 Land Rover, 1 Porsche, 1 Volvo, 1 Bentley, 1 Rolls Royce, 1 McLaren, 1 Maserati, 1 Koenigsegg and 3 Sprinter.

In addition to these 17 new vehicle franchises, Park Place has rights to 1 Jaguar and 1 Land Rover open point in Austin, Texas that are both expected to open under a single dealership facility late in the first quarter of 2020.

We believe the Acquisition strengthens our dual strategy of driving operational excellence and deploying capital to its highest return.

We believe Park Place is a highly efficient operator of luxury stores, with a strong base of loyal clients and approximately 2,100 team members throughout the growing Dallas/Fort Worth market.

We expect that our demonstrated success acquiring and integrating well-run businesses will provide us the opportunity to leverage the best practices of both businesses going forward.

As previously announced, on December 11, 2019, the Company entered into transaction agreements with certain members of the Park Place Dealership family of entities, Park Place Mid-Cities, Ltd., a Texas limited partnership, and the identified principal (collectively, "Park Place") to acquire substantially all of the assets of, and certain real property related to, the Park Place business including the purchase of 19 franchises, two collision centers and an auto auction.

On March 24, 2020, Asbury delivered notice to the sellers terminating the Transaction Agreements pursuant to the terms thereof in exchange for the payment of $10.0 million of liquidated damages.

Please refer to Liquidity and Capital Resources for additional details regarding the impact on financing transactions.

As a result of the Company's efforts to attempt to mitigate the financial impact of COVID-19, along with a strong May and June 2020 performance, the Company reengaged on the Park Place Dealership group acquisition under more favorable pricing and more flexible financing terms, including limiting the purchase of luxury dealership franchises to those most aligned with the Company's core strategic business.

On July 6, 2020, the Company entered into an Asset Purchase Agreement (the "Revised Asset Purchase Agreement") with Park Place to acquire substantially all of the assets of, and lease the real property related to, 12 new vehicle dealership franchises (3 Mercedes-Benz, 3 Sprinter, 2 Lexus, 1 Jaguar, 1 Land Rover, 1 Porsche, and 1 Volvo), two collision centers and an auto auction comprising the Park Place Dealership group (collectively, the "Revised Transaction") for a purchase price of $889.9 million.

The Revised Transaction was completed on August 24, 2020.

The purchase price was financed through a combination of cash, floor plan facilities and seller financing.

In addition to the Park Place Dealership group acquisition, during the year ended December 31, 2020, we acquired the assets of three franchises (one dealership location) in the Denver, Colorado market for a combined purchase price of $63.6 million.

During the year ended December 31, 2020, we sold two franchises (two dealership locations) in the Atlanta, Georgia market, we sold six franchises (five dealership locations) and one collision center in the Jackson, Mississippi market, and we sold one franchise (one dealership location) in the Greenville, South Carolina market.

In connection with these divestitures the Company recorded a pre-tax gain totaling $62.3 million, which is presented in our accompanying Consolidated Statements of Income as Gain on dealership divestitures, net.

Asbury Automotive

The following charts present the contribution to total revenue and gross profit by each line of business for the year ended December 31, 2020:

Our new vehicle franchise retail network is made up of dealerships located in 17 metropolitan markets in ten states operating primarily under 10 locally-branded dealership groups.

Our new vehicle franchise retail network is made up of dealerships located in 16 metropolitan markets in nine states operating primarily under 11 locally-branded dealership groups.

The following chart provides a detailed breakdown of our markets, brand names, and franchises as of December 31, 2020:

Dealership Group

Franchise Brand Name

Coggin Automotive Group

Fort Pierce, FL

Acura, BMW, Honda, Mercedes-Benz

Jacksonville, FL

Buick, Chevrolet, Ford, GMC, Honda(a), Nissan(a), Toyota

Ford, Honda(a), Hyundai, Lincoln

Courtesy Autogroup

Chrysler, Dodge, Genesis, Honda, Hyundai, Infiniti, Jeep, Kia, Mercedes-Benz, Nissan, smart(c), Sprinter, Toyota

Crown Automotive Company

Fayetteville, NC

Greensboro, NC

Acura, BMW, Chrysler, Dodge, Honda, Jeep, Nissan, Volvo

Greenville, SC

Jaguar, Land Rover, Lexus, Nissan, Porsche, Toyota, Volvo

Charlottesville, VA

Acura, BMW(a), MINI

David McDavid Auto Group

Dallas/Fort Worth, TX

Acura, Ford, Honda(a), Lincoln

Bill Estes & Hare Automotive Group

Indianapolis, IN

Buick, Chevrolet(b), Chrysler, Dodge, Ford, GMC, Honda, Isuzu, Jeep, Toyota

Gray-Daniels Auto Family

Chevrolet, Ford, Lincoln, Nissan(a), Toyota

Mike Shaw Subaru

Nalley Automotive Group

Acura, Audi, Bentley, BMW, Chevrolet, Ford, Honda, Hyundai, Infiniti(a), Kia, Lexus(a), Nissan(a), Toyota(b), Volkswagen

Plaza Motor Company

Audi, BMW, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz(a), smart(c), Sprinter(a)

Dealership Group Brand Name Market Franchise

Coggin Automotive Group Fort Pierce, FL Acura, BMW, Honda, Mercedes-Benz

Jacksonville, FL Buick, Chevrolet, Ford, GMC, Honda(a), Nissan(a), Toyota

Orlando, FL Ford, Honda(a), Hyundai

Courtesy Autogroup Tampa, FL Chrysler, Dodge, Genesis, Honda, Hyundai, Infiniti, Jeep, Kia, Mercedes-Benz, Nissan, Sprinter, Toyota

Crown Automotive Company Durham, NC Honda

Fayetteville, NC Dodge, Ford

Greensboro, NC Acura, BMW, Chrysler, Dodge, Honda, Jeep, Nissan, Volvo

Charlottesville, VA BMW

Richmond, VA Acura, BMW(a), MINI

David McDavid Auto Group Austin, TX Acura

Dallas/Fort Worth, TX Acura, Ford, Honda(a), Lincoln

Hare & Bill Estes Automotive Groups Indianapolis, IN Buick, Chevrolet(b), Chrysler, Dodge, Ford, GMC, Honda, Isuzu, Jeep, Toyota

Greenville Automotive Group Greenville, SC Jaguar, Land Rover, Nissan, Porsche, Toyota, Volvo

Mike Shaw Denver, CO Subaru, Chrysler, Dodge, Jeep

Nalley Automotive Group Atlanta, GA Acura, Audi, Bentley, BMW, Chevrolet, Honda, Hyundai, Infiniti(a), Kia, Lexus(a), Nissan, Toyota(b), Volkswagen

Park Place Automotive Dallas/Fort Worth, TX Jaguar, Lexus(a), Land Rover, Mercedes-Benz(b), Porsche, Volvo, Sprinter(b)

Plaza Motor Company St.

Louis, MO Audi, BMW, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz(a), Sprinter(a)

_____________________________

This market has two of these franchises.

This market has three of these franchises.

Parts and service operations only.

(a) This market has two of these franchises.

(b) This market has three of these franchises.

New Vehicle Sales

The following table reflects the number of franchises we owned as of December 31, 2020 and the percentage of new vehicle revenues represented by class and franchise for the year ended December 31, 2020:

Class/Franchise

Franchises Owned

Class/Franchise Number of

Franchises Owned % of New

Vehicle Revenues

Mercedes-Benz 7 10 %

Land Rover 3 2

Total Luxury 45 39 %

Honda 12 16 %

Volkswagen 1 1

Total Import 40 41 %

Chevrolet 5 5

Total Domestic 27 20 %

Total Franchises 112 100 %

(a) Other Luxury consists of Jaguar, Genesis, Porsche and Bentley.

(b) Two Franchise agreements pursuant to which we perform parts and service operations.

* Franchise accounted for less than 1% of new vehicle revenues for the year ended December 31, 2020.

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We believe our parts and service business is also well-positioned to benefit from the service work potentially generated through the sale of extended service contracts to customers who purchase new and used vehicles from us, as historically these customers tend to have their vehicles serviced at the location where they purchased the extended service contract.

In addition, our franchised dealerships benefit from manufacturer policies requiring warranty and recall related repairs be performed at a franchised dealership.

In addition, our franchised dealerships benefit from manufacturer policies requiring that warranty and recall related repairs be performed at a franchised dealership.

We believe our collision repair centers provide us with an attractive opportunity to grow our business due to the high margins provided by collision repair services and the fact we are able to source original equipment manufacturer parts from our franchised dealerships.

Finance and Insurance

We offer a wide variety of automotive finance and insurance ("F&I") products to our customers.

We offer a wide variety of automotive F&I products to our customers.

We arrange third-party financing for the sale or lease of vehicles to our customers in exchange for a fee paid to us by the third-party financial institution.

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To achieve these objectives, we employ the strategies described below.

Provide an exceptional customer experience in our stores and through our omni-channel strategy

We are focused on providing a high level of customer service and have designed our dealerships' services to meet the needs of an increasingly sophisticated and demanding automotive consumer.

We endeavor to establish relationships that we believe will result in both repeat business and additional business through customer referrals.

Furthermore, we provide our dealership managers with appropriate incentives to employ efficient selling approaches, engage in extensive follow-up to develop long-term relationships with customers, and extensively train our sales staff to meet customer needs.

As part of our omni-channel strategy, we implemented Clicklane TM , a communications technology ecosystem, which offers our customers an easy, convenient and seamless approach to purchase new and used vehicles completely online.

Our Clicklane platform provides our customers the ability to (i) select a new or used vehicle for lease or purchase, (ii) arrange for and obtain financing from a variety of lenders, (iii) obtain an offer on their trade-in vehicle, (iv) obtain an exact pay-off amount on any existing loan on a trade-in vehicle, (v) select and purchase finance and insurance products designed for the customer’s vehicle and then (vi) complete the vehicle purchase and financing or lease by signing the transaction documents and scheduling in-store pickup or home delivery with each step performed entirely online.

As of February 19, 2021, we have implemented Clicklane across approximately one-third of our stores and expect to complete the rollout across all of our stores by the end of the first quarter of 2021.

Although we developed our Clicklane platform together with a third-party vendor, certain technology elements of the platform were developed solely by us and are subject to trade secret protection.

In addition, our other omni-channel tools offer our customers the ability to arrange vehicle service appointments, receive service updates and pay for maintenance and repair services online.

We continue to invest in and develop omni-channel initiatives designed to deliver an exceptional customer experience.

Invest in and attract top talent to improve backend operations and front-line service

We believe the core of our business success lies in our talent pool, so we are focused on obtaining and retaining the best people.

We believe the core of our business success lies in our talent pool, so we are focused on attracting, hiring and retaining the best people.

We also invest in resources to train and develop our employees.

Our executive management team has extensive experience in the auto retail sector, and is able to leverage experience from all positions throughout the Company.

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In addition, a portion of management's compensation is variable-based in nature, including an annual cash bonus based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") targets and a component of equity compensation tied to our financial performance in comparison to our peer group.

Provide an exceptional customer experience

We are focused on providing a high level of customer service and have designed our dealerships' services to meet the needs of an increasingly sophisticated and demanding automotive consumer.

We endeavor to establish relationships that we believe will result in both repeat business and additional business through customer referrals.

Centralize, streamline, and automate processes

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DSC management and our market-based management teams continuously evaluate the financial and operating results of our dealerships, as well as each dealership's geographical location, and from time to time, make decisions to evaluate new technologies and/or processes to further refine our operational processes.

We also leverage our scale when implementing new technologies and processes.

Leverage our scale and cost structure to improve our operating efficiencies

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We have a well-defined integration plan for Park Place.

Park Place already performs at a high level and is operated by seasoned general managers, with an average tenure of approximately 20 years, who we expect to retain.

Park Place already performed at a high level and is operated by seasoned general managers, with an average tenure of approximately 20 years.

Our integration strategy is focused on achieving cost savings at a corporate level from duplicative functions and implementing our training programs and F&I product offerings at Park Place to achieve higher F&I income per vehicle sold.

Asbury and Park Place utilize the same operational, human resources and accounting information technology systems, which we expect to support as part of the integration process.

Park Place utilized the same operational, human resources and accounting information technology systems as Asbury prior to the acquisition, which supported the integration process.

Additionally, we have ample internal resources at Asbury to manage the integration process.

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Our capital allocation decisions are made within the context of maintaining sufficient liquidity and a prudent capital structure.

We target a 2.5x to 3.0x net leverage ratio, and our primary focus for capital allocation will be to decrease our debt levels;

however, we believe our cash position and borrowing capacity, combined with our current and expected future cash generation capability, provides us with financial flexibility to enhance shareholder value through capital deployment by reinvesting in our business, acquiring dealerships as well as repurchasing shares, when prudent.

We believe our cash position and borrowing capacity, combined with our current and expected future cash generation capability, provides us with financial flexibility to enhance shareholder value through capital deployment by reinvesting in our business, acquiring dealerships as well as repurchasing shares, when prudent while targeting a net leverage ratio of less than 3.0X.

Continue to invest in our business

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We also evaluate dealership acquisition opportunities based on market position and geography, brand representation and availability, key personnel and other factors.

Execute our five-year strategic plan to target an increase in our annual revenue to $20 billion by 2025

We continually evaluate additional opportunities to drive revenue growth while maintaining our disciplined approach to capital allocation.

In December 2020, we announced our five-year strategic plan, targeting an increase in our revenue to $20 billion by 2025.

We intend to execute on this strategic plan by focusing on a variety of growth efforts including, driving same-store revenue growth, acquiring additional revenue through strategic acquisitions and adding incremental revenue through our Clicklane platform.

The automotive retail and service industry is highly competitive with respect to price, service, location, and selection.

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State automotive franchise laws restrict competitors from relocating their stores or establishing new stores of a particular vehicle brand within a specified area that is served by our dealership of the same vehicle brand.

Recently, certain electric vehicle manufacturers have been permitted to circumvent the state automotive franchise laws of several states in the United States thereby permitting them to sell their new vehicles directly to consumers.

We rely on our advertising and merchandising, sales expertise, service reputation, strong local branding, and location of our dealerships to assist in the sale of new vehicles.

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We compete with other automobile dealers, service stores, and auto parts retailers in our parts operations.

We believe that we have a competitive advantage in parts and service sales due to our ability to use factory-approved replacement parts, our competitive prices, our familiarity with manufacturer brands and models, and the quality of our customer service.

We believe that we have a competitive advantage in parts and service sales due to our ability to use factory-approved replacement parts, our skilled manufacturer trained and certified technicians, our competitive prices, our familiarity with manufacturer brands and models, and the quality of our customer service.

We compete with a broad range of financial institutions in arranging financing for our customers vehicle purchases.

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The automobile industry has historically been subject to seasonal variations.

Demand for new vehicles is generally highest during the second, third, and fourth quarters of each year and, accordingly, we expect our revenues and operating results to

generally be higher during these periods.

In addition, we typically experience higher sales of luxury vehicles in the fourth quarter, which have higher average selling prices and gross profit per vehicle retailed.

Demand for new vehicles is generally highest during the second, third, and fourth quarters of each year and, accordingly, we expect our revenues and operating results to generally be higher during these periods.

In addition, we typically experience higher sales of luxury vehicles which have higher average selling prices and gross profit per vehicle retailed in the fourth quarter.

Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, vehicle manufacturer incentive programs, or adverse weather events.

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We expect that we will be able to renew expiring agreements in the ordinary course of business.

However, typical dealer agreements give the manufacturer the right to terminate or the option of non-renewal of the dealer agreement under certain circumstances, subject to applicable state franchise laws, including:

• insolvency or bankruptcy of the dealership;

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Our framework agreements with certain manufacturers contain provisions that, among other things, attempt to limit the protections available to dealers under these laws.

If these laws are repealed in the states in which we operate, manufacturers may be able to terminate our franchises without providing advance notice, an opportunity to cure or a showing of good cause.

If these laws are repealed in the states in which we operate, manufacturers may be able to terminate our franchises without providing us with advance notice, an opportunity to cure or a showing of good cause.

Without the protection of these laws, it may also be more difficult for us to renew our dealer agreements upon expiration.

Changes in laws that provide manufacturers the ability to terminate our dealer agreements could materially adversely affect our business, financial condition and results of operations.

Furthermore, if a manufacturer seeks protection from creditors in bankruptcy, courts have held that the federal bankruptcy laws may supersede these laws, resulting in either the termination, non-renewal or rejection of franchises by such manufacturers, which, in turn, could materially adversely affect our business, financial condition, and results of operations.

Furthermore, if a manufacturer seeks protection from creditors in bankruptcy, courts have held that the federal bankruptcy laws may supersede these laws, resulting in either the termination,

non-renewal or rejection of franchises by such manufacturers, which, in turn, could materially adversely affect our business, financial condition, and results of operations.

For additional information, please refer to the risk factor captioned "If state laws that protect automotive retailers are repealed, weakened, or superseded by our framework agreements with manufacturers, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their dealer agreements which could have a materially adverse effect on our business, financial condition, and results of operations."

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In every state in which we operate, we must obtain one or more licenses issued by state regulatory authorities in order to operate our business.

In addition, we are subject to numerous complex federal, state, and local laws regulating the conduct of our business, including those relating to our sales, operations, finance and insurance, advertising, and employment practices.

These laws and regulations include state franchise laws and regulations, consumer protection laws, privacy laws, anti-money laundering laws, and other extensive laws and regulations applicable to new and used motor vehicle dealers.

These laws and regulations include state franchise laws and regulations, product standards and recalls, consumer protection laws, privacy and data security laws, anti-money laundering laws, and other extensive laws and regulations applicable to new and used motor vehicle dealers.

These laws also include federal and state wage and hour, anti-discrimination, and other laws governing employment practices.

Industry Regulations

The Federal Trade Commission has regulatory authority over automotive dealers pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Gramm-Leach-Bliley Act, and other legislation, and has implemented enforcement initiatives relating to the marketing practices of automotive dealers.

Our operations are also subject to the National Traffic and Motor Vehicle Safety Act, Federal Motor Vehicle Safety Standards and other product standards promulgated by the United States Department of Transportation, and the rules and regulations of various state motor vehicle regulatory agencies.

Our financing activities with customers are subject to federal truth-in-lending, consumer leasing, and equal credit opportunity laws and regulations, as well as state and local motor vehicle finance laws, leasing laws, installment finance laws, usury laws, and other installment state and leasing laws and regulations.

states regulate fees and charges that may be

paid as a result of vehicle sales.

states regulate fees and charges that may be collected as a result of vehicle sales and service.

Claims arising out of actual or alleged violations of law may be asserted against us or our stores by individuals or governmental entities and may expose us to significant damages, fines or other penalties, including revocation or suspension of our license to conduct store operations.

The Consumer Financial Protection Bureau ("CFPB") has broad regulatory powers under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Although automotive dealers are generally excluded from the CFPB's regulatory authority, the CFPB has announced its intention to regulate automotive financing activities through its regulation of automotive finance companies and other financial institutions that service the automotive industry.

In addition, the CFPB has announced its intention to regulate the sale of finance and insurance products.

The Federal Trade Commission has certain regulatory authority over automotive dealers and has implemented an enforcement initiative relating to the advertising practices of automotive dealers.

Our financing activities, as well as our sale of finance and insurance products, may also be impacted indirectly by laws and regulations that govern automotive finance companies and other financial institutions, including regulations adopted by the Consumer Financial Protection Bureau (the "CFPB").

For additional information, please refer to the risk factor captioned "Our operations are subject to extensive governmental laws and regulations.

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The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and similar state statutes, can impose strict and joint and several liability for cleanup costs on those that are considered to have contributed to the release of a "hazardous substance." We also are subject to the Clean Water Act, analogous state statutes, and their implementing regulations which, among other things, prohibit discharges of pollutants into regulated waters without permits, require containment of potential discharges of oil or hazardous substances, and require preparation of spill contingency plans.

Currently, we are not aware of any non-compliance with these or any other environmental requirements applicable to our operations, nor are we aware of any material remedial liabilities to which we are subject.

We have incurred, and will continue to incur, costs and capital expenditures to comply with these laws and regulations and to obtain and maintain all necessary environmental permits.

We believe that our operations currently are being conducted in substantial compliance with all applicable environmental laws.

From time to time, we may experience incidents and encounter conditions that are not in compliance with environmental laws and regulations.

We occasionally receive notices from environmental agencies regarding potential violations of environmental laws or regulations.

In such cases, we work with the agencies to address any issues and to implement appropriate corrective action when necessary.

However, none of our dealerships have been subject to any material environmental liabilities in the past, nor do we know of any fact or condition that would result in any material environmental liabilities being incurred in the future.

In response to the COVID-19 global pandemic, various federal agencies issued mandates and recommendations intended to minimize the spread of infectious disease;

similar mandates and recommendations have been issued by several state and local governments where we conduct business.

Currently, we are not aware of any non-compliance with these or any other

environmental requirements applicable to our operations, nor are we aware of any material remedial liabilities to which we are subject.

We have incurred, and will continue to incur, costs and capital expenditures to comply with these laws and regulations.

We believe that our operations currently are being conducted in substantial compliance with all applicable regulations.

From time to time, we may experience incidents and encounter conditions that are not in compliance with regulations.

We may occasionally receive notices from governmental agencies regarding potential violations of these laws or regulations.

In such cases, we will work with the agencies to address any issues and to implement appropriate corrective action when necessary.

However, none of our dealerships have been subject to any material liabilities in the past, nor do we know of any fact or condition that would result in any material liabilities being incurred in the future.

Human Capital

Mission and Vision

At Asbury, our North Star and our mission is to be the most guest-centric automotive retailer.

Our success depends on our employees and their commitment to delivering a consistent and exceptional guest experience.

Our employees work at locations in Colorado, Florida, Georgia, Indiana, Missouri, North Carolina, South Carolina, Texas and Virginia.

We believe that our employees help to set us apart from our competitors, and, therefore, we understand they are our greatest asset.

As a result, a critical part of our business strategy is investing in supporting and developing our employees so that they are trained and incentivized to provide best-in-class service to our guests.

As of December 31, 2020, we employed approximately 7,600 full-time and 300 part-time employees, none of whom were covered by collective bargaining agreements.

We believe we have good relations with our employees.

Diversity, Equity and Inclusion

We strive to recruit new employees based on their diversity of thought, background and experience as well as diversity of personal characteristics to best reflect our guests and communities we serve.

With the help and guidance of an outside consulting firm, we developed a diversity and inclusion ("D&I") initiative and launched a company-wide effort in November 2020 to identify our strengths and areas of opportunity related to our D&I initiative.

The goal of our D&I initiative is to create more welcoming and inclusive workplaces throughout our dealerships and offices.

Based on the results of this effort, each store and support location is expected to develop action plans to drive improvements in both employee behaviors and corporate systems that support our D&I initiative.

Community Outreach

In 2020, we established the Asbury Cares program to support selected community partner organizations to focus on reducing social inequality.

To ensure widespread support for our outreach program, we awarded all of our employees with an additional 40 hours of paid time off per year that can only be used to volunteer with our community partners.

Recruitment and Talent Development

When recruiting for open positions, we search for people of varying backgrounds, perspectives, and experiences in order to support a diverse and inclusive culture.

We also partner with local colleges and trade schools to develop apprenticeship and internship programs.

This allows us to help provide valuable training to entry-level candidates while also growing our pipeline.

Our goal is to promote employees from within to career growth opportunities whenever possible.

In support of this goal, we invest resources to train and develop our employees to reach their career goals.

For example, our employees have access to an online career path tool, which helps them plan their desired career path and see the required performance goals and milestones to be considered for a promotion.

Our fixed operations organization encourages technicians to obtain and maintain certification status with our vehicle manufacturers, and in most cases, our dealership pays for the training.

Our employees also attend vehicle manufacturer-sponsored and industry training events.

We pride ourselves on rewarding and developing talented and tenured employees.

We also expect to make significant additional investments into building a training continuum for team members in every store position and preparing them for greater opportunities within our organization.

Compensation and Benefits

We offer competitive compensation and benefits to attract and retain the best people, including the following benefits for our full-time team employees:

• Health, dental, and vision benefits;

• Discount on healthcare premium for completing biometric screening and premium-free healthcare for frontline team members in certain positions;

• Up to 4 weeks paid time off;

• 401(k) match;

• Paid pregnancy leave;

• Short term disability and long term disability insurance;

• Accident insurance, hospital indemnity, employee critical illness insurance;

• Employer paid life insurance;

• Supplemental life insurance;

• Employee Assistance Program;

• Annual scholarship program.

We also lead the industry by offering equity awards to frontline employees because we want them to be owners of our Company and committed to our long-term success.

Health and Safety;

Proactive Covid-19 Actions

The health and safety of our team members and guests is of the utmost importance.

In 2020, as the Covid-19 global pandemic impacted our dealerships and business, Asbury implemented the following actions:

• Mandatory mask-wearing for team members, guests and vendors in all locations;

• Personal protective equipment such as steering wheel covers and seat covers for guest cars in for service;

• Additional hand sanitizing stations at our dealerships and offices;

• Remote work arrangements offered where appropriate;

• Guaranteed pay to commissioned team members;

• Free health benefits for furloughed team members.

Due to the inherent risk in the automotive retail industry, our operations expose us to a variety of liabilities.

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Further, the automobile retail industry is subject to substantial risk of real and personal property loss, due to the significant concentration of property values located at the various dealership locations.

Our insurance programs include multiple umbrella and excess policies with a total per occurrence and aggregate limit of $100.0 million.

Under our self-insurance programs, including property and casualty, workers’ compensation, and medical, the Company retains various levels of aggregate loss limits and per claim deductibles.

In addition, the Company maintains separate insurance policies to address potential cyber and directors and officers exposures.

We are self-insured for certain employee medical claims and maintain stop-loss insurance for individual claims.

We have large deductible insurance programs in place for workers compensation, property, and general liability claims.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business