What changed in this filing

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Item 1. Business

2021-03-31 compared with 2020-04-07 · 113 added, 56 removed, 232 unchanged (42% of the section changed)

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CNH Industrial is a leading manufacturer and supplier of agricultural and construction equipment, which includes the Case IH Agriculture, New Holland Agriculture, Case Construction and New Holland Construction brands.

Based upon information provided to us by CNH Industrial, we are the largest retail dealer of Case IH Agriculture equipment in the world, the largest retail dealer of Case Construction equipment in North America and a major retail dealer of New Holland Agriculture and New Holland Construction equipment in the U.S.

Based upon information provided to us by CNH Industrial, we are the largest retail dealer of Case IH Agriculture equipment in the world, one of the largest retail dealers of Case Construction equipment in North America and one of the largest retail dealers of New Holland Agriculture and New Holland Construction equipment in the United States.

In addition to the CNH Industrial brands, we sell and service equipment made by a variety of other manufacturers.

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• new and used equipment sales;

• parts sales;

• equipment repair and maintenance services;

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Our full service approach provides us with multiple points of customer contact and cross-selling opportunities.

We believe our mix of equipment sales and recurring parts and service sales, as well as our diverse geographic footprint, provide us with diversification, which we believe aids in reducing the risks we face associated with adverse economic cycles that affect particular geographic markets or segments.

We believe our mix of equipment sales and recurring parts and service sales, as well as our geographic footprint, provide us with diversification, lowering our overall exposure to adverse economic cycles that affect particular geographic markets or segments.

We also believe our scale, customer service, diverse and stable customer base, centralized resources, and experienced management team provide us with a competitive advantage in many of our local markets.

Throughout our 39 -year operating history, we have built an extensive, geographically contiguous network of 74 stores in the U.S.

and 33 stores in Europe.

Throughout our 40-year operating history, we have built an extensive, geographically contiguous network of 75 stores in the United States and 34 stores in Europe.

Our Agriculture stores in the U.S.

are located in Iowa, Minnesota, Nebraska, North Dakota and South Dakota and include several highly productive farming regions, such as the Red River Valley in eastern North Dakota and northwestern Minnesota, portions of the corn belt in Iowa, eastern South Dakota and southern Minnesota, and along the I-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer.

Our Construction stores are located in Arizona, Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

are located in Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming and include several highly productive farming regions, such as the Red River Valley in eastern North Dakota and northwestern Minnesota, portions of the corn belt in Iowa, eastern South Dakota and southern Minnesota, and along the I-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer.

Our Construction stores are located in Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

Our international stores are located in the European countries of Bulgaria, Germany, Romania, Serbia and Ukraine.

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Since January 1, 2003, we have completed the acquisition of over 50 dealerships located in 11 U.S.

states and four European countries, along with establishing new startup operations and a network of stores in Ukraine.

states and four European countries, along with establishing a new network of dealership stores in Ukraine.

We believe that there will continue to be opportunities for dealership consolidation in the future, and we expect that acquisitions will continue to be a component of our long-term growth strategy.

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The agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale farming to home and garden purposes.

The construction equipment we sell and service includes heavy construction machinery, light industrial machinery for commercial and residential construction, road and highway construction machinery, and mining operations equipment.

The construction equipment we sell and service includes heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery.

Equipment sales generate cross-selling opportunities by populating our markets with equipment in need of service and parts.

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We provide repair and maintenance services, including warranty repairs, for our customers' equipment.

All of our stores have service bays staffed by trained service technicians.

All of our stores have service shops staffed by trained service technicians.

In addition, our technicians are able to make off-site repairs at customer locations.

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In addition to the major manufacturers, several short-line manufacturers produce specialized equipment that satisfies various niche requirements of farmers.

Agricultural equipment manufacturers typically grant dealers in the U.S.

defined sales and marketing territories with designated store locations to distribute their products.

Agricultural equipment manufacturers typically grant dealers in the United States defined sales and marketing territories with designated store locations to distribute their products.

We believe there are many factors that influence demand for agricultural equipment, parts, and repair and maintenance services, including net farm income, commodity markets, production yields, tariffs and trade policies, interest rates, government policies, European Union subvention funds and individual European country subsidies, tax policies, local growing conditions, and general economic conditions.

Any of these conditions can change materially in a short time period, creating volatility in demand for our products and services.

Federal legislation, such as the Farm Bill, attempts to stabilize the agriculture industry through various policies including (i) commodity programs consisting of direct, counter-cyclical and price support payments to farmers;

U.S federal legislation, such as the Farm Bill, attempts to stabilize the agriculture industry through various policies including (i) commodity programs consisting of direct, counter-cyclical and price support payments to farmers;

(ii) conservation programs;

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For the past two growing seasons, the U.S.

Federal government has furnished market facilitation program payments to farmers or ranchers to compensate for the adverse impact of U.S.-China trade policies, which payments have assisted our customers.

federal government has furnished market facilitation program payments to farmers or ranchers to compensate for the adverse impact of U.S.-China trade policies, along with payments under the CARES Act, which payments have assisted our customers.

We believe that these various federal policies reduce financial volatility in the agriculture industry and assist farmers in continuing to operate their farms during economic down cycles and through the adverse headwinds caused by trade policies and tariffs.

Construction Equipment Industry

Construction equipment is purchased primarily for use in commercial, residential and infrastructure construction, as well as for agriculture, demolition, mining, energy production and forestry operations.

Caterpillar, Inc., Deere, Komatsu Ltd.,

the Volvo Group, Terex Corporation, Doosan, and CNH Industrial are some of the largest global manufacturers of construction and industrial equipment.

Construction equipment is purchased primarily for use in commercial, residential and infrastructure construction, as well as for agriculture, demolition, energy production and forestry operations.

Caterpillar, Inc., Deere, Komatsu Ltd., the Volvo Group, Terex Corporation, Doosan, and CNH Industrial are some of the largest global manufacturers of construction and industrial equipment.

The market for construction equipment is segmented across multiple categories including earth moving, lifting, light industrial, asphalt and paving, and concrete and aggregate equipment.

As with agricultural equipment, distribution of construction equipment in the U.S.

is accomplished primarily through manufacturer authorized dealers.

As with agricultural equipment, distribution of construction equipment in the United States is accomplished primarily through manufacturer authorized dealers.

CNH Industrial and industry reports show that demand for construction equipment in our markets is driven by several factors, including (i) public spending on roads, highways, sewer and water projects, and other public works projects;

(ii) public and private expenditures for the energy and mining industries, which are driven in part by demand for fossil fuels, metals and other commodities;

(ii) public and private expenditures for the energy industries, which are driven in part by demand for fossil fuels, metals and other commodities;

(iii) business conditions in the agriculture industry;

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Ability to Act on Acquisition Opportunities

We believe that our experienced management team and access to capital enables us to be opportunistic in responding to accretive growth opportunities, primarily arising from the continued consolidation of the dealer network.

Superior Centralized Marketing Systems

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We believe that our efforts in these areas will enable us to attract and retain superior employees, necessary for us to be successful in our industry.

See "Human Capital" at pp.

Diverse and Stable Customer Base Reduces Market Risk

Our large geographic footprint covering 11 U.S.

Our large geographic footprint covering nine U.S.

states and five European countries provides a diversified customer base.

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During fiscal 2021, none of our customers accounted for more than 1.0% of our total revenue.

Revenue from customers located outside of the United States is primarily included in our International segment, which represented 18.1% , 18.4% and 17.5% of total consolidated revenue during fiscal 2020 , 2019 and 2018 .

In addition, our large geographic footprint enables us to capitalize on crop diversification and disparate weather in growing regions, as well as local trends in residential, infrastructure and commercial construction.

Revenue from customers located outside of the United States is primarily included in our International segment, which represented 15.5%, 18.1% and 18.4% of total consolidated revenue during fiscal 2021, 2020 and 2019, respectively.

In addition, our large geographic footprint enables us to capitalize on crop diversification and disparate weather conditions in growing regions, as well as local trends in residential, infrastructure and commercial construction.

Experienced Management Team

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We compensate, develop and review our managers and sales employees based on an approach that aligns their incentives with the goals and objectives of our Company, including achievement of revenue, profitability, market share and balance sheet objectives.

We believe the strength of our management team will improve our success in the marketplace.

We believe the strength of our management team assists to improve our success in the marketplace.

Growth Strategy

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Increasing Same-Store Sales and Market Share

Increasing same-store sales and market share is one of our priorities.

Increasing same-store sales and market share is one of our top priorities.

This type of growth both enhances our current period revenue and increases our potential future revenue during the life of the sold equipment as a result of the potential for recurring parts and service business.

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• employing significant marketing and advertising programs, including targeted direct mailings, internet based marketing, advertising with targeted local media outlets, participation in and sponsorship of trade shows and industry events, our Titan Trader monthly magazine, and by hosting open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings;

supporting and providing customers with training on evolving technologies, such as precision farming and farm data management, which are difficult for small dealers to support;

• supporting and providing customers with training on evolving technologies, such as precision farming and farm data management, which can be difficult for small dealers to support;

• maintaining state-of-the-art service facilities, mobile service trucks and trained service technicians to maximize our customers' equipment uptime through preventative maintenance programs and seasonal 24/7 service support;

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In addition, we have added dealership locations in Ukraine through new start-up operations.

The agricultural and construction equipment industries are fragmented and consist of many relatively small, independent businesses serving discrete local markets.

The agricultural and construction equipment dealership industries are fragmented and consist of many relatively small, independent businesses serving discrete local markets.

We believe a favorable climate for dealership consolidation will continue to exist in the future due to several factors, including the competitiveness of our industry, increased dealer capitalization requirements, increased sophistication and complexity of equipment and related technologies, increased expectations from our customers and our equipment suppliers, and the lack of succession alternatives for many current owners.

We intend to pursue acquisitions with the objectives of entering new markets, consolidating distribution within our existing footprint, and strengthening our competitive position.

We expect that opportunistic acquisitions will continue to be a component of our long-term growth strategy.

We expect that strategic acquisitions will continue to be a component of our long-term growth strategy.

We regularly assess the acquisition landscape, evaluating potential acquisitions in terms of availability and alignment to our long-term growth strategy.

Typically, we have acquired only the working capital and fixed assets that we believe are necessary to run an efficient store and we do not generally assume any indebtedness.

Typically, we have acquired only the working capital and fixed assets that we believe are

necessary to run an efficient store and we do not generally assume any indebtedness.

On occasion, we have acquired all of the outstanding equity of a company.

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The consent of CNH Industrial is required to acquire any CNH Industrial dealership.

Additionally, the consent of our lender group, consisting of a number of national and regional banks (the "Bank Syndicate"), is required for acquisitions meeting certain thresholds or other criteria as defined in our credit agreement (which credit agreement was formerly referred to

as the "Wells Fargo Credit Agreement").

Effective as of April 3, 2020 , we amended and restated the Wells Fargo Credit Agreement, which we now refer to as the "Bank Syndicate Credit Facility."

CNH Industrial—Case IH Agriculture, Case Construction, New Holland Agriculture and New Holland Construction

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(ii) a sale of all or substantially all of our assets;

(iii) any transaction or series of transactions resulting in a person or affiliated group acquiring 30% or more of the combined voting power of our securities or, in the case of a competitor of CNH Industrial, 20% or more of the combined voting power of our securities;

(iii) any transaction or series of transactions resulting in a person or affiliated group acquiring 30% or more of the combined voting power of our securities or, in the case of a competitor of CNH Industrial, acquiring 20% or more of the combined voting power of our securities;

(iv) a substantial disposition of shares of our common stock by certain named executives;

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Our CNH Industrial Dealer Agreements require us to operate any material business activities not related to sales of CNH Industrial products or services to customers in agricultural, construction, industrial or similar markets separately from our CNH Industrial dealership business.

The CNH Industrial Dealer Agreements and industry practices generally provide that payment on equipment and parts purchased from CNH Industrial entities is due within 30 days, at which time the equipment inventory is then financed through one of our floorplan payable credit facilities.

The CNH Industrial Dealer Agreements and industry practices generally provide certain interest free terms on equipment purchased from CNH Industrial entities before being due for payment, at which time the equipment inventory is then financed through one of our floorplan payable credit facilities.

Generally, parts purchased from CNH Industrial entities is due within 30 days.

CNH Industrial makes available to us any floorplan programs, parts return programs, sales or incentive programs or similar plans or programs it offers to its other dealers, and provides us with promotional items and marketing materials.

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We are restricted in our ability to sell competing products in our assigned territories.

Our CNH Dealer Agreements of our European operations do not have a fixed term.

CNH Industrial can terminate these agreements immediately in certain circumstances constituting cause, and for any reason upon twenty-four (24) months' prior written notice.

Our CNH Dealer Agreements for our European operations do not have a fixed term.

CNH Industrial can terminate these agreements immediately in certain circumstances constituting cause, and for any reason upon 24 months' prior written notice.

Other Suppliers

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The terms of our arrangements with these other suppliers vary, but most of the dealership agreements contain termination provisions allowing the supplier to terminate the agreement after a specified notice period, which is typically 30 days.

Payment and financing practices with these other suppliers are similar to those practices described above with respect to the CNH Industrial entities.

Our North America agriculture customers vary from small, single machine owners to large farming operations, primarily in the states of Iowa, Minnesota, Nebraska, North Dakota and South Dakota.

Payment and financing practices with these other suppliers are similar to those practices described above with respect to CNH Industrial.

Our North America agriculture customers vary from small, single machine owners to large farming operations, primarily in the states of Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming.

In fiscal 2021, no single agriculture customer accounted for more than 1.0% of our Agriculture revenue.

Our Construction customers include a wide range of construction contractors, public utilities, mining, forestry, energy companies, farmers, municipalities and maintenance contractors, primarily in the states of Arizona, Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

Our Construction customers include a wide range of construction contractors, public utilities, forestry, energy companies, farmers, municipalities and maintenance contractors, primarily in the states of Colorado, Iowa, Minnesota,

Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

They vary in size from small, single machine owners to large firms.

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As of January 31, 2021, we had a $450.0 million floorplan credit facility with CNH Industrial Capital.

In addition to the CNH Industrial Capital floorplan line of credit, as of January 31, 2020 , we also had a $140.0 million wholesale floorplan line of credit under the Wells Fargo Credit Agreement, and a $60.0 million credit facility with DLL Finance LLC that can be used to finance inventory purchases.

Effective as of April 3, 2020 , we amended and restated the Wells Fargo Credit Agreement (hereafter referred to as the "Bank Syndicate Credit Facility"), under which we have total borrowing capacity of $250.0 million, $185.0 million allocated to a floorplan line and $65.0 million allocated to an operating line.

In addition to the CNH Industrial Capital floorplan line of credit, as of January 31, 2021, we also had a $185.0 million wholesale floorplan line of credit under the Bank Syndicate Agreement, and a $60.0 million credit facility with DLL Finance LLC that can be used to finance inventory purchases.

In addition, we have other lines of credit offered by various financial institutions as well as floorplan payable financing programs offered by manufacturers and suppliers, or their third party lenders, from which we purchase equipment inventory.

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• our area product support managers, and our store parts managers and service managers, who provide our customers with comprehensive after-market support;

• our website;

• local and regional advertising efforts, including broadcast, cable, print and web-based media;

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Parts Managers and Service Managers

Our parts managers and service managers are involved in our efforts to market parts and service, taking advantage of our seasonal marketing campaigns in parts and service sales.

Our parts managers and service managers at our stores are involved in our efforts to market our parts and service offerings, taking advantage of our seasonal marketing campaigns in parts and service sales.

As a group, they have won multiple awards from our suppliers for their efforts benefiting both our customers and our key suppliers.

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Other sales and financing programs are also marketed through our website.

Finally, our website provides dealer locater search functions and provides the contact information for the various departments at each of our stores.

Finally, our website provides dealer locator search functions and provides the contact information for the various departments at each of our stores.

Print, Broadcast and Web-Based Advertising Campaigns

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Our competitors range from multi-location, regional operators to single-location dealers and include dealers and distributors of competing equipment brands, including Deere, Caterpillar and the AGCO brands, as well as other dealers and distributors of the CNH Industrial family of brands.

Competition among equipment dealers, whether they offer agricultural or construction products or both, is primarily based on the price, value, reputation, quality and design of the products, customer service including repair and maintenance service provided by the dealer, the availability of equipment and parts, and the accessibility of stores.

Competition among equipment dealers, whether they offer agricultural or construction products or both, is primarily based on the price, value, reputation, quality and design of the products, technology, customer service including repair and maintenance service provided by the dealer, the availability of equipment and parts, and the accessibility of stores.

While we believe we compete favorably on each of these competitive factors, our sales and margins may be impacted by (i) aggressive pricing competition by equipment manufacturers or their dealers, (ii) our ability to obtain higher service margins based on our service quality and reputation, and (iii) our ability to attract new and maintain existing customers based on the availability and quality of the products we offer and our local relationships and reputation.

We are one of the established regional-scale agricultural and construction equipment dealers in the U.S.

We are one of the established regional-scale agricultural and construction equipment dealers in the United States and Europe.

The number of other agricultural and construction equipment dealers operating on a regional scale is limited.

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We have registered trademarks for certain names and designs used in our business and have trademark applications pending for certain others.

We generally operate each of our stores under the Titan Machinery name.

Case IH, Case and New Holland are registered trademarks of CNH Industrial, which we use in connection with advertisements and sales as authorized under our CNH Industrial Dealer Agreements.

We operate each of our stores under the Titan Machinery name.

Case IH, Case and New Holland are registered trademarks of CNH Industrial, which we are authorized to use pursuant to the terms of the CNH Industrial Dealer Agreements.

We also license trademarks and trade names from other suppliers of equipment to us.

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Our parts and service revenues are typically highest during our customers' busy seasons as well, due to the increased use of their equipment during this time, which generates the need for more parts and service work.

conditions impact the timing of our customers' busy times, which may cause our quarterly financial results to differ between fiscal years.

Weather conditions impact the timing of our customers' busy times, which may cause our quarterly financial results to differ between fiscal years.

In addition, the fourth quarter typically is a significant period for equipment sales in the U.S.

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In addition, numerous external factors such as credit markets, commodity prices, production yields, and other circumstances may disrupt normal purchasing practices and buyer sentiment, further contributing to the seasonal fluctuations.

As of January 31, 2020 , we employed 1,612 full-time and 118 part-time employees.

Human Capital

We recognize that our success is highly dependent upon the talents and dedication of our employees.

As a result, we are committed to attracting, developing and retaining a team of highly talented and motivated employees.

Employee Recruitment

We strive to attract the best talent from a variety of sources to meet the current and future needs of our business.

We have established relationships with multiple trade schools and colleges across our footprint, which we utilize as a source for entry-level talent.

Additionally, we believe it is incumbent upon all of our managers to continuously monitor their local markets for experienced individuals who might be successful additions to our organization.

We seek a workforce that reflects the communities in which we operate, and strive to create diverse, equal and inclusive workplaces where our employees have the opportunity to achieve their full potential.

Compensation Programs and Employee Benefits

We conduct regular assessments of our pay and benefit practices to help ensure that employees are compensated fairly and competitively.

Our compensation programs are designed to attract, retain, motivate and reward employees who must operate in a highly competitive, fast-paced environment.

In general, our compensation programs consist of a base salary or hourly rate, commissions for employees in front-line customer facing sales roles, cash performance bonuses, health, and dental insurance benefits, health savings and flexible spending accounts, a 401k plan, paid time off, family leave, an employee assistance program, tuition assistance, and other benefit programs.

Training and Development

We devote significant resources to staff training and development, including tuition assistance for career-enhancing academic programs.

Our training and development programs are designed to facilitate the development and advancement of talent from within our organization to ensure we continuously fill our ranks with qualified employees for critical positions in the organization.

Members of our training and development team collaborate with employees from our various operations teams to identify our strategic training needs and prioritize the development of appropriate training content.

Employee Engagement and Retention

We conduct periodic comprehensive employee engagement surveys designed to measure organizational culture and engagement.

The purposes of the survey are to monitor overall employee engagement, identify actions that can be taken to improve our employee engagement and motivation, and to continuously improve employee retention.

Data collected in each annual employee engagement survey is maintained and used to track our progress against our internal goals.

Management continually monitors employee turnover data, which is supplemented with additional data from exit surveys, to assist in determining the reasons for voluntary employee terminations.

The turnover rate of our service technicians is also monitored closely by management, as the retention of skilled service technicians is critical to our success.

Demand for service technicians across the country is very high, and turnover in this role is also traditionally high for all equipment dealers.

Health and Safety;

Employee Wellness Program

Employee health and safety is of paramount importance to us.

We believe it is our responsibility to maintain a safe and healthy workplace in each of our facilities and to make continuous improvements in this area.

We do this by embedding safety into every level of the organization as a top priority.

We ensure that safety performance data is tracked, aggregated, and reviewed on an ongoing basis across our organization.

Our corporate safety team collects data on recordable injury rates, serious injury rates, and near misses from each of our facilities, and engages in a root cause analysis and identifies corrective action to prevent future occurrences.

This data is reviewed monthly by the executive leadership team and shared with the Company's Board of Directors on a quarterly basis.

Safety meetings are also held at each of our facilities on a regular basis.

We are also committed to improving the health and well-being of our employees.

wellness program was established in 2017 and is continuously evolving to better educate, motivate and reward our employees for maintaining and achieving healthy measures.

Performance Management

We have developed an employee performance management program that is consistently applied throughout our U.S.

The core goal of our performance management process is to develop and maintain a high-performing organization that is positioned to meet our business objectives.

Our performance management program focuses on enabling staff employees and their managing supervisors to gain alignment through:

a structured annual goal-setting process where managers and associates work collaboratively to develop specific, measurable, achievable, relevant and time bound (SMART) goals that align with our overarching business objectives and our Company values;

clear, organization-wide expectations that managers and staff employees monitor progress toward completion of their SMART goals with regular coaching sessions and periodic evaluations;

an annual performance assessment that provides a direct link between the associate’s pay and performance, considering market compensation data.

Commitment to Core Values and Ethical Culture

In addition to our focus on performance, our employees are also guided by our corporate core values of:

“Our People”, “Integrity”, “Excellence”, and “Teamwork.” We continue to promote these values from the top down.

In addition, we promote a commitment to ethics and compliance among our global workforce through our Code of Ethics and related training programs.

Community Engagement

As a Company, we believe that our value of responsibility requires community engagement, and we encourage our employees to share in our commitment to the communities where we operate.

We offer paid time off for employees to volunteer their time to community efforts.

As of January 31, 2021, we employed 2,249 people on a full-time basis, 1,592 in the U.S.

and 657 in Europe, and an additional 134 part-time employees.

We do not regularly use independent contractors in our business operations.

To date, we have not experienced any work stoppages as a result of labor disputes, and we consider our relationship with our employees to be good.

Our employees are not covered by a collective bargaining agreement.

We believe our relations with our employees are good.

Governmental Regulation

We are subject to numerous federal, state, and local rules and regulations, including regulations promulgated by the Environmental Protection Agency and similar state agencies, with respect to storing, shipping, disposing, discharging and handling hazardous materials and hazardous and non-hazardous waste.

The environmental regulations applicable to us are associated with the repair and maintenance of equipment at our stores including the handling and disposal of oil, fluids, wastewater and solvent cleaners.

Currently, none of our stores or operations exceeds small quantity generation status.

Compliance with these rules and regulations has not had any material effect on our operations, nor do we expect it to in the future.

Further, we have not made, and do not anticipate making, any material capital expenditures related to compliance with environmental regulations.

Environmental and Other Governmental Regulation

We are subject to a wide range of environmental laws and regulations, including those governing discharges into water, air emissions, storage of petroleum substances and chemicals, handling and disposal of solid and hazardous wastes, remediation of various types of contamination, and otherwise relating to health, safety and protection of the environment.

Our business involves the generation, use, handling, and disposal of hazardous or toxic substances and wastes and the use of above ground and underground storage tanks (ASTs and USTs).

Operations involving the management of wastes and the use of ASTs and USTs are subject to requirements of the Resource Conservation and Recovery Act, analogous state statutes, and their implementing regulations.

Pursuant to these laws, federal and state environmental agencies have established approved methods for handling, storing, treating, transporting, and disposing of regulated substances and wastes with which we must comply.

We also are subject to laws and regulations governing responses to any releases of contamination at or from our facilities or at facilities that receive our hazardous wastes for treatment or disposal.

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.

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

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

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.

In addition to the environmental regulations discussed above, we are subject to numerous federal, state, and local laws regulating the conduct of our business, including those relating to sales and marketing, taxation, employment practices, working conditions, data privacy, and corruption.

The foreign countries and domestic states that we operate in, subject us to a significant number of regulatory jurisdictions.

We believe that we are currently in material compliance with laws and regulations applicable to our business operations.

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