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These risks include, without limitation: • failing to assimilate the operations and personnel of acquired dealerships; • straining our existing systems, procedures, structures and personnel; • failing to achieve predicted sales levels; • incurring significantly higher capital expenditures and operating expenses, which could substantially limit our operating or financial flexibility; • entering new, unfamiliar markets; • encountering undiscovered liabilities and operational difficulties at acquired dealerships; • disrupting our ongoing business; • diverting our management resources; • failing to maintain uniform standards, controls and policies; • impairing relationships with employees, manufacturers and customers as a result of changes in management; • incurring increased expenses for accounting and computer systems, as well as integration difficulties; • failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us; • incorrectly valuing entities to be acquired; and • incurring additional facility renovation costs or other expenses required by the manufacturer. |
These risks include, without limitation: • failing to assimilate the operations and personnel of acquired dealerships; • straining our existing systems, procedures, structures and personnel; • failing to achieve predicted sales levels; • incurring significantly higher capital expenditures and operating expenses, which could substantially limit our operating or financial flexibility; • entering new, unfamiliar markets; • encountering undiscovered liabilities and operational difficulties at acquired dealerships; • disrupting our ongoing business; • diverting our management resources; • failing to maintain uniform standards, controls and policies; • impairing relationships with employees, manufacturers and customers as a result of changes in management; • incurring increased expenses for accounting and computer systems, as well as integration difficulties; • failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us; • incorrectly valuing entities to be acquired; and • incurring additional facility renovation costs or other expenses required by the manufacturer. |
Exhibit Description 2.1 Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited dated June 14, 2014 (incorporated by reference to exhibit 2.1 to the Company’s Form 8-K filed October 3, 2014) 2.1.1 First Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective July 15, 2014 (incorporated by reference to exhibit 2.2 to the Company’s Form 10-Q for the quarter ended June 30, 2014) 2.1.2 Second Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective November 13, 2014 (incorporated by reference to exhibit 2.1.2 to the Company’s Form 10-K for the year ended December 31, 2014) 3.1 Restated Articles of Incorporation of Lithia Motors, Inc., as amended May 13, 1999 (incorporated by reference to exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 1999) 3.2 2013 Amended and Restated Bylaws of Lithia Motors, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed August 26, 2013) 10.1* 2009 Employee Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement for its 2009 annual meeting of shareholders filed on March 20, 2009) 10.1.1* Amendment 2014-1 to the Lithia Motors, Inc. 2009 Employee Stock Purchase Plan (incorporated by reference to exhibit 10.1.1 to the Company’s Form 10-K for the year ended December 31, 2014) 10.2* Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 2, 2013) 10.2.1* RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011) 10.2.2* Amendment to RSU Deferral Plan (incorporated by reference to exhibit 10.2.2 to the Company’s Form 10-K for the year ended December 31, 2014) 10.2.3* Restricted Stock Unit (RSU) Deferral Election Form (incorporated by reference to exhibit 10.2.3 to the Company’s Form 10-K for the year ended December 31, 2014) 10.3* Form of Restricted Stock Unit Agreement (2016 Performance- and Time-Vesting) (for Senior Executives) (incorporated by reference to exhibit 10.3.3 to the Company’s Form 10-K for the year ended December 31, 2015) 10.3.1* Form of Restricted Stock Unit Agreement (2017 Performance- and Time-Vesting) (for Senior Executives) 10.3.2* Form of Restricted Stock Unit Agreement (Time-Vesting) 10.3.3* Form of Restricted Stock Unit Agreement (Long-Term Performance-Vesting) 10.4* Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 2, 2013) 10.5* Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005) 10.6 Amended and Restated Loan Agreement among Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S. Bank National Association (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed October 3, 2014) 10.6.1 First Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2015) 10.6.2 Second Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 22, 2015) 10.6.3 Third Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2016) Exhibit Description 10.6.4 Fourth Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2016) 10.7* Amended and Restated Split-Dollar Agreement (incorporated by reference to exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2012) 10.8* Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009) 10.9* Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009) 10.10* Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31, 2016) 10.10.1* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.10.2* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.11* Transition Agreement dated September 14, 2015 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed September 17, 2015) 10.12* Director Service Agreement effective January 1, 2016 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed September 17, 2015) 10.13* Form of Employment and Change in Control Agreement dated February 4, 2016 between Lithia Motors, Inc. and Bryan DeBoer (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed February 5, 2016)(1) Ratio of Earnings to Combined Fixed Charges Subsidiaries of Lithia Motors, Inc. |
These risks include, without limitation: • failing to assimilate the operations and personnel of acquired dealerships; • straining our existing systems, procedures, structures and personnel; • failing to achieve predicted sales levels; • incurring significantly higher capital expenditures and operating expenses, which could substantially limit our operating or financial flexibility; • entering new, unfamiliar markets; • encountering undiscovered liabilities and operational difficulties at acquired dealerships; • disrupting our ongoing business; • diverting our management resources; • failing to maintain uniform standards, controls and policies; • impairing relationships with employees, manufacturers and customers as a result of changes in management; • incurring increased expenses for accounting and computer systems, as well as integration difficulties; • failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us; • incorrectly valuing entities to be acquired; and • Incurring additional facility renovation costs or other expenses required by the manufacturer. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: • reports by industry analysts; • changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; • actual or anticipated sales of common stock by existing shareholders or us; • capital commitments; • additions or departures of key personnel; • developments in our business or in our industry; • a prolonged downturn in our industry; • general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; • changes in global financial and economic markets; • armed conflict, war or terrorism; • regulatory changes affecting our industry generally or our business and operations in particular; • changes in market valuations of other companies in our industry; • the operating and securities price performance of companies that investors consider to be comparable to us; and • announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
Exhibit Description 2.1 Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited dated June 14, 2014 (incorporated by reference to exhibit 2.1 to the Company’s Form 8-K filed October 3, 2014) 2.1.1 First Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective July 15, 2014 (incorporated by reference to exhibit 2.2 to the Company’s Form 10-Q for the quarter ended June 30, 2014) 2.1.2 Second Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective November 13, 2014 (incorporated by reference to exhibit 2.1.2 to the Company’s Form 10-K for the year ended December 31, 2014) 3.1 Restated Articles of Incorporation of Lithia Motors, Inc., as amended May 13, 1999 (incorporated by reference to exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 1999) 3.2 2013 Amended and Restated Bylaws of Lithia Motors, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed August 26, 2013) 10.1* 2009 Employee Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement for its 2009 annual meeting of shareholders filed on March 20, 2009) 10.1.1* Amendment 2014-1 to the Lithia Motors, Inc. 2009 Employee Stock Purchase Plan (incorporated by reference to exhibit 10.1.1 to the Company’s Form 10-K for the year ended December 31, 2014) 10.2* Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 2, 2013) 10.2.1* RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011) 10.2.2* Amendment to RSU Deferral Plan (incorporated by reference to exhibit 10.2.2 to the Company’s Form 10-K for the year ended December 31, 2014) 10.2.3* Restricted Stock Unit (RSU) Deferral Election Form (incorporated by reference to exhibit 10.2.3 to the Company’s Form 10-K for the year ended December 31, 2014) 10.3* Form of Restricted Stock Unit Agreement (2015 Performance- and Time-Vesting) (for Senior Executives) (incorporated by reference to exhibit 10.3.7 to the Company’s Form 10-K for the year ended December 31, 2014) 10.3.1* Form of Restricted Stock Unit Agreement (2015 Long-Term Performance-Vesting) ($7.00 EPS award) (incorporated by reference to exhibit 10.3.8 to the Company’s Form 10-K for the year ended December 31, 2014) 10.3.2* Form of Restricted Stock Unit Agreement (2015 Time-Vesting) (incorporated by reference to exhibit 10.3.9 to the Company’s Form 10-K for the year ended December 31, 2014) 10.3.3* Form of Restricted Stock Unit Agreement (2016 Performance- and Time-Vesting) (for Senior Executives) 10.3.4* Form of Restricted Stock Units Agreement (2015 Long-term Performance-Vesting) ($8.00 EPS award) 10.3.5* Form of Restricted Stock Unit Agreement (2016 Time-Vesting) 10.4* Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 2, 2013) 10.5* Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005) 10.6 Amended and Restated Loan Agreement among Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S. Bank National Association (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed October 3, 2014) 10.6.1 First Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2015) Exhibit Description 10.6.2 Second Amendment to Amended and Restated Loan Agreement (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 22, 2015) 10.7* Amended and Restated Split-Dollar Agreement (incorporated by reference to exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2012) 10.8* Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009) 10.9* Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009) 10.10* Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2010) 10.10.1* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.10.2* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.11* Employment Agreement with Executive Vice President Brad Gray dated March 1, 2012 (incorporated by reference to exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2012) 10.11.1* Amendment to Terms of Employment Agreement with Brad Gray dated April 30, 2013 (incorporated by reference to exhibit 10.23 to the Company’s Form 10-K for the year ended December 31, 2013) 10.12* Brad Gray Incentive Arrangement (incorporated by reference to exhibit 10.5 to the Company’s Form 10-Q for the quarter ended March 31, 2015) 10.13* Transition Agreement dated September 14, 2015 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed September 17, 2015) 10.14* Director Service Agreement effective January 1, 2016 between Lithia Motors, Inc. and Sidney B. DeBoer (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed September 17, 2015) 10.15* Incentive Agreement effective August 1, 2014 between Lithia Motors, Inc. and Brad Gray (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed May 1, 2015) 10.16* Form of Employment and Change in Control Agreement dated February 4, 2016 between Lithia Motors, Inc. and Bryan DeBoer (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed February 5, 2016)(1) Ratio of Earnings to Combined Fixed Charges Subsidiaries of Lithia Motors, Inc. |
These risks include, without limitation: ● failing to assimilate the operations and personnel of acquired dealerships; ● strain on our existing systems, procedures, structures and personnel; ● failing to achieve predicted sales levels; ● incurring significantly higher capital expenditures and operating expenses, which could substantially limit our operating or financial flexibility; ● entering new, unfamiliar markets; ● encountering undiscovered liabilities and operational difficulties at acquired dealerships; ● disrupting our ongoing business; ● diverting our management resources; ● failing to maintain uniform standards, controls and policies; ● impairing relationships with employees, manufacturers and customers as a result of changes in management; ● incurring increased expenses for accounting and computer systems, as well as integration difficulties; ● failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us; ● incorrectly valuing entities to be acquired; and ● Incurring additional facility renovation costs or other expenses required by the manufacturer. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: ● reports by industry analysts; ● changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; ● actual or anticipated sales of common stock by existing shareholders or us; ● capital commitments; ● additions or departures of key personnel; ● developments in our business or in our industry; ● a prolonged downturn in our industry; ● general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; ● changes in global financial and economic markets; ● armed conflict, war or terrorism; ● regulatory changes affecting our industry generally or our business and operations in particular; ● changes in market valuations of other companies in our industry; ● the operating and securities price performance of companies that investors consider to be comparable to us; and ● announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
Exhibit Description 2.1 Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited dated June 14, 2014 (incorporated by reference to exhibit 2.1 to the Company’s Form 8-K filed October 3, 2014) 2.1.1 First Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective July 15, 2014 (incorporated by reference to exhibit 2.2 to the Company’s Form 10-Q for the quarter ended June 30, 2014) 2.1.2 Second Amendment to Stock Purchase Agreement between Lithia Motors, Inc. and DCH Auto Group (USA) Limited effective November 13, 2014 3.1 Restated Articles of Incorporation of Lithia Motors, Inc., as amended May 13, 1999 (incorporated by reference to exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 1999) 3.2 2013 Amended and Restated Bylaws of Lithia Motors, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed August 26, 2013) 10.1* 2009 Employee Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement for its 2009 annual meeting of shareholders filed on March 20, 2009) Exhibit Description 10.1.1* Amendment 2014-1 to the Lithia Motors, Inc. 2009 Employee Stock Purchase Plan 10.2* Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 2, 2013) 10.2.1* RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011) 10.2.2* Amendment to RSU Deferral Plan 10.2.3* Restricted Stock Unit (RSU) Deferral Election Form 10.3* Form of Restricted Stock Unit Agreement (Performance and Time Vesting) (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.3.1* Form of Restated Restricted Stock Unit Agreement (Long Term Performance Vesting) 10.3.2* Form of Restricted Stock Unit Agreement (Time Vesting) (for mid-level executives) (incorporated by reference to exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.3.3* Form of Restricted Stock Unit Agreement (Time Vesting) (for non-employee directors) (incorporated by reference to exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.3.4* Form of Restated Restricted Stock Unit Agreement (Performance and Time Vesting) 10.3.5* Form of Restricted Stock Unit Agreement (Time Vesting) (for non-employee directors) 10.3.6* Form of Restricted Stock Unit Agreement (Time Vesting) (non-executives, time-vesting) 10.3.7* Form of Restricted Stock Unit Agreement (2015 Performance- and Time-vesting) (for Senior Executives) 10.3.8* Form of Restricted Stock Unit Agreement (2015 Long-term Performance-vesting) 10.3.9* Form of Restricted Stock Unit Agreement (2015 Time-vesting) 10.4* Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 2, 2013) 10.5* Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005) 10.6* Executive Nonqualified Deferred Compensation Agreement between the Company and M. L. Dick Heimann dated December 31, 2009 (incorporated by reference to exhibit 99.2 to the Company’s Form 8-K filed January 5, 2010) 10.7 Amended and Restated Loan Agreement among Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S. Bank National Association (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed October 3, 2014) 10.8* Amended and Restated Split-Dollar Agreement (incorporated by reference to exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2012) 10.9* Terms of Amended Employment and Change in Control Agreement between Lithia Motors, Inc. and Sidney B. DeBoer dated January 15, 2009 (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2008) (1) 10.10* Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009) Exhibit Description 10.11* Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009) 10.12* Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2010) 10.12.1* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.12.2* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.13* Employment Agreement with Executive Vice President Brad Gray dated March 1, 2012 (incorporated by reference to exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2012) 10.13.1* Amendment to Terms of Employment Agreement with Brad Gray dated April 30, 2013 (incorporated by reference to exhibit 10.23 to the Company’s Form 10-K for the year ended December 31, 2013) 10.14* Form of Amended Employment and Change in Control Agreement dated February 22, 2013 between the Company and Bryan B. DeBoer (incorporated by reference to exhibit 10.24 to the Company’s Form 10-K for the year ended December 31, 2012) (2) 10.15* Real Estate Purchase and Sale Agreement between Lithia Real Estate, Inc. and Dick Heimann dated October 25, 2013 (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2013) Ratio of Earnings to Combined Fixed Charges Subsidiaries of Lithia Motors, Inc. |
These risks include, without limitation: ● failing to assimilate the operations and personnel of acquired dealerships; ● failing to achieve predicted sales levels; ● incurring significantly higher capital expenditures and operating expenses; ● entering new markets with which we are unfamiliar; ● encountering undiscovered liabilities and operational difficulties at acquired dealerships; ● disrupting our ongoing business; ● diverting our management resources; ● failing to maintain uniform standards, controls and policies; ● impairing relationships with employees, manufacturers and customers as a result of changes in management; ● incurring increased expenses for accounting and computer systems, as well as integration difficulties; ● failing to obtain a manufacturer’s consent to the acquisition of one or more of its dealership franchises or renew the franchise agreement on terms acceptable to us; ● incorrectly valuing entities to be acquired; and ● Incurring additional facility renovation costs or other expenses required by the manufacturer. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: ● reports by industry analysts; ● changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; ● actual or anticipated sales of common stock by existing shareholders or us; ● capital commitments; ● additions or departures of key personnel; ● developments in our business or in our industry; ● a prolonged downturn in our industry; ● general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; ● changes in global financial and economic markets; ● armed conflict, war or terrorism; ● regulatory changes affecting our industry generally or our business and operations in particular; ● changes in market valuations of other companies in our industry; ● the operating and securities price performance of companies that investors consider to be comparable to us; and ● announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
Exhibit Description 3.1 Restated Articles of Incorporation of Lithia Motors, Inc., as amended May 13, 1999 (incorporated by reference to exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 1999) 3.2 2013 Amended and Restated Bylaws of Lithia Motors, Inc. (incorporated by reference to exhibit 3.1 to the Company’s Form 8-K filed August 26, 2013) 10.1* 2009 Employee Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement for its 2009 annual meeting of shareholders filed on March 20, 2009) 10.2* Lithia Motors, Inc. 2001 Stock Option Plan (incorporated by reference to Appendix B to the Company’s Proxy Statement for its 2001 annual meeting of shareholders filed on May 8, 2001) 10.2.1* Form of Incentive Stock Option Agreement for 2001 Stock Option Plan (incorporated by reference to exhibit 10.6.1 to the Company’s Form 10-K for the year ended December 31, 2001) 10.2.2* Form of Non-Qualified Stock Option Agreement for 2001 Stock Option Plan (incorporated by reference to exhibit 10.6.2 to the Company’s Form 10-K for the year ended December 31, 2001) 10.3 Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 2, 2013) 10.3.1 RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011) 10.4* Form of Restricted Stock Unit Agreement (Performance and Time Vesting) (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.4.1* Form of Restricted Stock Unit Agreement (Long Term Performance Vesting) 10.4.2* Form of Restricted Stock Unit Agreement (Time Vesting) (for mid-level executives) (incorporated by reference to exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.4.3* Form of Restricted Stock Unit Agreement (Time Vesting) (for non-employee directors) (incorporated by reference to exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2013) 10.4.4* Form of Restricted Stock Unit Agreement (Performance and Time Vesting) 10.5* Lithia Motors, Inc. 2013 Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 2, 2013) 10.6 Chrysler Corporation Sales and Service Agreement Additional Terms and Provisions (incorporated by reference to exhibit 10.3.2 to the Company’s Registration Statement on Form S-1, Registration Statement No. |
333-14031) 10.7.1 Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997 (incorporated by reference to exhibit 10.7.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.7.2 Mercury Sales and Service Agreement, dated June 1, 1997, between Ford Motor Company and Lithia TLM, LLC dba Lithia Lincoln Mercury (incorporated by reference to exhibit 10.7.1 to the Company’s Form 10-K for the year ended December 31, 1997) (general provisions are in Exhibit 10.10) (2) Exhibit Description 10.8 Volkswagen Dealer Agreement Standard Provisions (incorporated by reference to exhibit 10.16.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.8.1 Volkswagen Dealer Agreement dated September 17, 1998, between Volkswagen of America, Inc. and Lithia HPI, Inc. dba Lithia Volkswagen (incorporated by reference to exhibit 10.17.1 to the Company’s Form 10-K for the year ended December 31, 1999 (standard provisions are in Exhibit 10.11) (3) 10.9 General Motors Dealer Sales and Service Agreement Standard Provisions (incorporated by reference to exhibit 10.7.2 to the Company’s Registration Statement on Form S-1, Reg. |
333-14031) 10.10.1 Toyota Dealer Agreement, between Toyota Motor Sales, USA, Inc. and Lithia Motors, Inc., dba Lithia Toyota, dated February 15, 1996 (incorporated by reference to exhibit 10.20.1 to the Company’s Form 10-K for the year ended December 31, 1999) (5) 10.11 Nissan Standard Provisions (incorporated by reference to exhibit 10.15.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.11.1 Nissan Public Ownership Addendum dated August 30, 1999 (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 1999) (6) 10.11.2 Nissan Dealer Term Sales and Service Agreement between Lithia Motors, Inc., Lithia NF, Inc., and the Nissan Division of Nissan Motor Corporation In USA dated January 2, 1998 (incorporated by reference to exhibit 10.15.1 to the Company’s Form 10-K for the year ended December 31, 1997) (standard provisions are in Exhibit 10.14) (7) 10.12 Lease Agreement between CAR LIT, LLC and Lithia Real Estate, Inc. relating to properties in Medford, Oregon (incorporated by reference to exhibit 10.36 to the Company’s Form 10-K for the year ended December 31, 1999) (8) 10.14* Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005) 10.15* Executive Nonqualified Deferred Compensation Agreement between the Company and M. L. Dick Heimann dated December 31, 2009 (incorporated by reference to exhibit 99.2 to the Company’s Form 8-K filed January 5, 2010) 10.16 Loan Agreement dated as of April 17, 2012 between Lithia Motors, Inc., and U.S. Bank National Association, as agent for the lenders, and U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, BMW Financial Services N.A., LLC, Nissan Motor Acceptance Corporation, Bank of America, N.A., Wells Fargo Bank, N.A., Bank of the West and Key Bank National Association, as lenders (incorporated by reference to exhibit 99.1 to the Company’s Form 8-K filed April 20, 2012) 10.16.1 Amendment to Loan Agreement dated December 19, 2012 with U.S. Bank National Association as agent for the lenders, and U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, BMW Financial Services N.A., LLC, Nissan Motor Acceptance Corporation, Bank of America, N.A., Wells Fargo Bank, N.A., Bank of the West and KeyBank National Association, as lenders (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 24, 2012) 10.16.2 Second Amendment to Loan Agreement dated December 16, 2013 with U.S. Bank National Association as agent for the lenders, and U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, BMW Financial Services NA, LLC, Bank of America, NA, Bank of the West, KeyBank National Association, Nissan Motor Acceptance Corporation, TD Bank, NA, VW Credit, Inc., Hyundai Capital America, American Honda Finance Corporation and Wells Fargo Bank, NA, as lenders (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 18, 2013) 10.17* Amended and Restated Split-Dollar Agreement (incorporated by reference to exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2012) Exhibit Description 10.18* Terms of Amended Employment and Change in Control Agreement between Lithia Motors, Inc. and Sidney B. DeBoer dated January 15, 2009 (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2008) (9) 10.19* Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009) 10.20* Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009) 10.21* Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2010) 10.21.1* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.21.2* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.23* Employment Agreement with Executive Vice President Brad Gray dated March 1, 2012 (incorporated by reference to exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2012); Amendment to Terms of Employment Agreement dated April 30, 2013. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: ● reports by industry analysts; ● changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; ● actual or anticipated sales of common stock by existing shareholders; ● capital commitments; ● additions or departures of key personnel; ● developments in our business or in our industry; ● a prolonged downturn in our industry; ● general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; ● changes in global financial and economic markets; ● armed conflict, war or terrorism; ● regulatory changes affecting our industry generally or our business and operations in particular; ● changes in market valuations of other companies in our industry; ● the operating and securities price performance of companies that investors consider to be comparable to us; and ● announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
Exhibit Description 3.1 Restated Articles of Incorporation of Lithia Motors, Inc., as amended May 13, 1999 (incorporated by reference to exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 1999) 3.2 Amended and Restated Bylaws of Lithia Motors, Inc. (Corrected) (incorporated by reference to exhibit 3.2 to the Company’s Form 10-K for the year ended December 31, 2008) 10.1* 2009 Employee Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement for its 2009 annual meeting of shareholders filed on March 20, 2009) 10.2* Lithia Motors, Inc. 2001 Stock Option Plan (incorporated by reference to Appendix B to the Company’s Proxy Statement for its 2001 annual meeting of shareholders filed on May 8, 2001) 10.2.1* Form of Incentive Stock Option Agreement for 2001 Stock Option Plan (incorporated by reference to exhibit 10.6.1 to the Company’s Form 10-K for the year ended December 31, 2001) 10.2.2* Form of Non-Qualified Stock Option Agreement for 2001 Stock Option Plan (incorporated by reference to exhibit 10.6.2 to the Company’s Form 10-K for the year ended December 31, 2001) 10.3 Lithia Motors, Inc. |
Amended and Restated 2003 Stock Incentive Plan (incorporated by reference to exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2011) 10.3.1 RSU Deferral Plan (incorporated by reference to exhibit 10.3.1 to the Company’s Form 10-K for the year ended December 31, 2011) 10.4* Form of Restricted Stock Unit Agreement for Senior Executives (incorporated by reference to exhibit 10.4 to the Company’s Form 10-K for the year ended December 31, 2010) 10.4.1* Form of Restricted Stock Unit Agreement for Non-Executive Officers (incorporated by reference to exhibit 10.4.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.4.2* Form of Restricted Stock Unit Agreement for Non-Executive Directors (incorporated by reference to exhibit 10.4.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.5* Written description of Discretionary Support Services Variable Performance Compensation Plan (incorporated by reference from the Company’s Proxy Statement for the 2013 Annual Meeting under the caption Compensation Discussion and Analysis - Elements of Compensation Program) 10.6 Chrysler Corporation Sales and Service Agreement Additional Terms and Provisions (incorporated by reference to exhibit 10.3.2 to the Company’s Registration Statement on Form S-1, Registration Statement No. |
333-14031) 10.7.1 Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997 (incorporated by reference to exhibit 10.7.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.7.2 Mercury Sales and Service Agreement, dated June 1, 1997, between Ford Motor Company and Lithia TLM, LLC dba Lithia Lincoln Mercury (incorporated by reference to exhibit 10.7.1 to the Company’s Form 10-K for the year ended December 31, 1997) (general provisions are in Exhibit 10.10) (2) 10.8 Volkswagen Dealer Agreement Standard Provisions (incorporated by reference to exhibit 10.16.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.8.1 Volkswagen Dealer Agreement dated September 17, 1998, between Volkswagen of America, Inc. and Lithia HPI, Inc. dba Lithia Volkswagen (incorporated by reference to exhibit 10.17.1 to the Company’s Form 10-K for the year ended December 31, 1999 (standard provisions are in Exhibit 10.11) (3) 10.9 General Motors Dealer Sales and Service Agreement Standard Provisions (incorporated by reference to exhibit 10.7.2 to the Company’s Registration Statement on Form S-1, Reg. |
333-14031) 10.10.1 Toyota Dealer Agreement, between Toyota Motor Sales, USA, Inc. and Lithia Motors, Inc., dba Lithia Toyota, dated February 15, 1996 (incorporated by reference to exhibit 10.20.1 to the Company’s Form 10-K for the year ended December 31, 1999) (5) 10.11 Nissan Standard Provisions (incorporated by reference to exhibit 10.15.2 to the Company’s Form 10-K for the year ended December 31, 1997) 10.11.1 Nissan Public Ownership Addendum dated August 30, 1999 (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 1999) (6) 10.11.2 Nissan Dealer Term Sales and Service Agreement between Lithia Motors, Inc., Lithia NF, Inc., and the Nissan Division of Nissan Motor Corporation In USA dated January 2, 1998 (incorporated by reference to exhibit 10.15.1 to the Company’s Form 10-K for the year ended December 31, 1997) (standard provisions are in Exhibit 10.14) (7) 10.12 Lease Agreement between CAR LIT, LLC and Lithia Real Estate, Inc. relating to properties in Medford, Oregon (incorporated by reference to exhibit 10.36 to the Company’s Form 10-K for the year ended December 31, 1999) (8) 10.13* Non Employee Director Compensation Plan 2010/2011 Service Year (incorporated by reference to exhibit 10.13 to the Company’s Form 10-K for the year ended December 31, 2011) 10.13.1* Non Employee Director Compensation Plan 2012/2013 Service Year 10.14* Form of Outside Director Nonqualified Deferred Compensation Agreement (incorporated by reference to exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2005) 10.15 Option Agreement between the Company and M. L. Dick Heimann dated December 31, 2009 (incorporated by reference to exhibit 99.1 to the Company’s Form 8-K filed January 5, 2010) 10.15.1* Executive Nonqualified Deferred Compensation Agreement between the Company and M. L. Dick Heimann dated December 31, 2009 (incorporated by reference to exhibit 99.2 to the Company’s Form 8-K filed January 5, 2010) Exhibit Description 10.16 Loan Agreement dated as of April 17, 2012 between Lithia Motors, Inc., and U.S. Bank National Association, as agent for the lenders, and U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, BMW Financial Services N.A., LLC, Nissan Motor Acceptance Corporation, Bank of America, N.A., Wells Fargo Bank, N.A., Bank of the West and Key Bank National Association, as lenders (incorporated by reference to exhibit 99.1 to the Company’s Form 8-K filed April 20, 2012) 10.16.1 Amendment to Loan Agreement dated December 19, 2012 with U.S. Bank National Association as agent for the lenders, and U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, BMW Financial Services N.A., LLC, Nissan Motor Acceptance Corporation, Bank of America, N.A., Wells Fargo Bank, N.A., Bank of the West and KeyBank National Association, as lenders (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed December 24, 2012) 10.17* Amended and Restated Split-Dollar Agreement 10.18* Terms of Amended Employment and Change in Control Agreement between Lithia Motors, Inc. and Sidney B. DeBoer dated January 15, 2009 (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2008) (9) 10.19* Form of Indemnity Agreement for each Named Executive Officer (incorporated by reference to exhibit 10.1 to the Company’s Form 8-K filed May 29, 2009) 10.20* Form of Indemnity Agreement for each non-management Director (incorporated by reference to exhibit 10.2 to the Company’s Form 8-K filed May 29, 2009) 10.21* Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (incorporated by reference to exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2010) 10.21.1* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award for Sidney DeBoer (incorporated by reference to exhibit 10.22.1 to the Company’s Form 10-K for the year ended December 31, 2010) 10.21.2* Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan - Notice of Discretionary Contribution Award (incorporated by reference to exhibit 10.22.2 to the Company’s Form 10-K for the year ended December 31, 2010) 10.22 Acquisition and Option Termination Agreement with M.L. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: · reports by industry analysts; · changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; · actual or anticipated sales of common stock by existing shareholders; · capital commitments; · additions or departures of key personnel; · developments in our business or in our industry; · a prolonged downturn in our industry; · general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; · changes in global financial and economic markets; · armed conflict, war or terrorism; · regulatory changes affecting our industry generally or our business and operations in particular; · changes in market valuations of other companies in our industry; · the operating and securities price performance of companies that investors consider to be comparable to us; and · announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
Amended and Restated 2003 Stock Incentive Plan 10.3.1 RSU Deferral Plan 10.4* (f) Form of Restricted Stock Unit Agreement for Senior Executives 10.4.1* (f) Form of Restricted Stock Unit Agreement for Non-Executive Officers 10.4.2* (f) Form of Restricted Stock Unit Agreement for Non-Executive Directors 10.5* (k) Summary 2011 Discretionary Support Services Bonus Program Exhibit Description 10.6 (a) Chrysler Corporation Sales and Service Agreement General Provisions 10.6.1 (a) Chrysler Corporation Chrysler Sales and Service Agreement, dated September 28, 1999, between Chrysler Corporation and Lithia Chrysler Plymouth Jeep Eagle, Inc. (Additional Terms and Provisions to the Sales and Service Agreements are in Exhibit 10.9) (1) 10.7 (b) Mercury Sales and Service Agreement General Provisions 10.7.1 (c) Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997 10.7.2 (c) Mercury Sales and Service Agreement, dated June 1, 1997, between Ford Motor Company and Lithia TLM, LLC dba Lithia Lincoln Mercury (general provisions are in Exhibit 10.10) (2) 10.8 (c) Volkswagen Dealer Agreement Standard Provisions 10.8.1 (a) Volkswagen Dealer Agreement dated September 17, 1998, between Volkswagen of America, Inc. and Lithia HPI, Inc. dba Lithia Volkswagen. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations over the last five years, could continue to fluctuate significantly for many reasons, including in response to the risks described herein or for reasons unrelated to our operations, such as: • reports by industry analysts; • changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; • actual or anticipated sales of common stock by existing shareholders; • capital commitments; • additions or departures of key personnel; • developments in our business or in our industry; • a prolonged downturn in our industry; • general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; • changes in global financial and economic markets; • armed conflict, war or terrorism; • regulatory changes affecting our industry generally or our business and operations in particular; • changes in market valuations of other companies in our industry; • the operating and securities price performance of companies that investors consider to be comparable to us; and • announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
The market price of our Class A common stock, which has experienced large price and volume fluctuations in recent months, could continue to fluctuate significantly for many reasons, including in response to the risks described herein for reasons unrelated to our operations, such as: • reports by industry analysts; • changes in financial estimates by securities analysts or us, or our inability to meet or exceed securities analysts’, investors’ or our own estimates or expectations; • actual or anticipated sales of common stock by existing shareholders; • capital commitments; • additions or departures of key personnel; • developments in our business or in our industry; • a prolonged downturn in our industry; • general market conditions, such as interest or foreign exchange rates, commodity and equity prices, availability of credit, asset valuations and volatility; • changes in global financial and economic markets; • armed conflict, war or terrorism; • regulatory changes affecting our industry generally or our business and operations in particular; • changes in market valuations of other companies in our industry; • the operating and securities price performance of companies that investors consider to be comparable to us; and • announcements of strategic developments, acquisitions and other material events by us, our competitors or our suppliers. |
As of December 31, 2008, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; • effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month; • effective January 26, 2008 - a five-year, $25 million interest rate swap at a fixed rate of 4.495% per annum, variable rate adjusted on the 26th of each month; • effective May 1, 2008 - a five year, $25 million interest rate swap at a fixed rate of 3.495% per annum, variable rate adjusted on the 1st and 16th of each month; and • effective May 1, 2008 - a five year, $25 million interest rate swap at a fixed rate of 3.495% per annum, variable rate adjusted on the 1st and 16th of each month. |
As of December 31, 2008, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; • effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month; • effective January 26, 2008 - a five-year, $25 million interest rate swap at a fixed rate of 4.495% per annum, variable rate adjusted on the 26th of each month; • effective May 1, 2008 - a five year, $25 million interest rate swap at a fixed rate of 3.495% per annum, variable rate adjusted on the 1st and 16th of each month; and • effective May 1, 2008 - a five year, $25 million interest rate swap at a fixed rate of 3.495% per annum, variable rate adjusted on the 1st and 16th of each month. |
Subsequent to our January 2008 dividend declaration, the notes are convertible into shares of our Class A common stock at a price of $36.78 per share upon the satisfaction of certain conditions and upon the occurrence of certain events as follows: • if, prior to May 1, 2009, and during any calendar quarter, the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter; • if, after May 1, 2009, the closing sale price of our common stock exceeds 120% of the conversion price; • if, during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each day of such period was less than 98% of the product of the closing sale price of our common stock and the number of shares issuable upon conversion of $1,000 principal amount of the notes; • if the notes have been called for redemption; or • upon certain specified corporate events. |
As of December 31, 2007, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; • effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month; and • effective January 26, 2008 - a five-year, $25 million interest rate swap at a fixed rate of 4.495% per annum, variable rate adjusted on the 26th of each month. |
Internal control over financial reporting is a process designed by, or under the supervision of, our chief executive officer and chief financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our board of directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. |
As of December 31, 2007, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month; • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month; • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month; • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month; • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; • effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month; and • effective January 26, 2008 - a five-year, $25 million interest rate swap at a fixed rate of 4.495% per annum, variable rate adjusted on the 26th of each month. |
As of December 31, 2006, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: · effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month · effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month · effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month · effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month · effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; · effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; and · effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month. |
1 to the Lithia Motors, Inc. 1996 Stock Incentive Plan 10.2.1* (b) Form of Incentive Stock Option Agreement (1) 10.3* (b) Form of Non-Qualified Stock Option Agreement (1) 10.4* (d) 1997 Non-Discretionary Stock Option Plan for Non-Employee Directors 10.5* (l) 1998 Employee Stock Purchase Plan, as amended 10.6* (f) Lithia Motors, Inc. 2001 Stock Option Plan 10.6.1* (g) Form of Incentive Stock Option Agreement for 2001 Stock Option Plan 10.6.2* (g) Form of Non-Qualified Stock Option Agreement for 2001 Stock Option Plan 10.7.1* (k) 2003 Stock Incentive Plan, as amended and restated 10.7.2* (k) Form of Restricted Share Grant for 2003 Stock Incentive Plan, as amended and restated Exhibit Description 10.8* (k) Summary 2006 Discretionary Support Services Bonus Program 10.9 (a) Chrysler Corporation Sales and Service Agreement General Provisions 10.9.1 (h) Chrysler Corporation Chrysler Sales and Service Agreement, dated September 28, 1999, between Chrysler Corporation and Lithia Chrysler Plymouth Jeep Eagle, Inc. (Additional Terms and Provisions to the Sales and Service Agreements are in Exhibit 10.9) (2) 10.10 (b) Mercury Sales and Service Agreement General Provisions 10.10.1 (e) Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997. |
As of December 31, 2006, we have outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: · effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month; · effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month; · effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month; · effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month; · effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; · effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month; and · effective June 16, 2006 - a ten year, $25 million interest rate swap at a fixed rate of 5.587% per annum, variable rate adjusted on the 1st and 16th of each month. |
As of December 31, 2005, we had outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month. |
1 to the Lithia Motors, Inc. 1996 Stock Incentive Plan 10.2.1* (b) Form of Incentive Stock Option Agreement (1) 10.3* (b) Form of Non-Qualified Stock Option Agreement (1) 10.4* (d) 1997 Non-Discretionary Stock Option Plan for Non-Employee Directors 10.5* (l) 1998 Employee Stock Purchase Plan, as amended 10.6* (f) Lithia Motors, Inc. 2001 Stock Option Plan 10.6.1* (g) Form of Incentive Stock Option Agreement for 2001 Stock Option Plan 10.6.2* (g) Form of Non-Qualified Stock Option Agreement for 2001 Stock Option Plan 10.7.1* 2003 Stock Incentive Plan, as amended and restated 10.7.2* Form of Restricted Share Grant for 2003 Stock Incentive Plan, as amended and restated 10.8* Summary 2006 Discretionary Support Services Bonus Program 10.9 (a) Chrysler Corporation Sales and Service Agreement General Provisions 10.9.1 (h) Chrysler Corporation Chrysler Sales and Service Agreement, dated September 28, 1999, between Chrysler Corporation and Lithia Chrysler Plymouth Jeep Eagle, Inc. (Additional Terms and Provisions to the Sales and Service Agreements are in Exhibit 10.9) (2) 10.10 (b) Mercury Sales and Service Agreement General Provisions 10.10.1 (e) Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997. |
10.15.1 (m) First Amendment to Credit Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., August 12, 2003 10.15.2 (n) Second Amendment to Credit Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., dated December 4, 2003 10.15.3 (o) Third Amendment to Credit Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., dated June 30, 2004 10.15.4 (p) Fourth Amendment to Credit Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., dated October 31, 2004 10.15.5 Fifth Amendment to Credit Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., dated February 15, 2006 10.15.6 Letter Agreement between DaimlerChrysler Services North America LLC, as agent, and Lithia Motors, Inc., dated April 26, 2005 10.16 (j) Amended and Restated Loan Agreement dated December 28, 2001 between Lithia Financial Corporation, Lithia Motors, Inc., Lithia Aircraft, Inc. and Lithia SALMIR, Inc. and U.S. Bank National Association. |
As of December 31, 2005, we have outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month; • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month; • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month; • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month; • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; and • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month. |
The Notes are convertible into shares of our Class A common stock at a price of $37.69 per share (or 26.53 shares per $1,000 of Notes) upon the satisfaction of certain conditions and upon the occurrence of certain events as follows: • if, prior to May 1, 2009, and during any calendar quarter, the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter; • if, after May 1, 2009, the closing sale price of our common stock exceeds 120% of the conversion price; • if, during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each day of such period was less than 98% of the product of the closing sale price of our common stock and the number of shares issuable upon conversion of $1,000 principal amount of the Notes; • if the Notes have been called for redemption; or • upon certain specified corporate events. |
As of December 31, 2004, we have outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective September 1, 2000 - a five year, $25 million interest rate swap at a fixed rate of 6.88% per annum, variable rate adjusted on the 1st and 16th of each month • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month. |
1 to the Lithia Motors, Inc. 1996 Stock Incentive Plan 10.2.1* (b) Form of Incentive Stock Option Agreement (1) 10.3* (b) Form of Non-Qualified Stock Option Agreement (1) 10.4* (d) Non-Discretionary Stock Option Plan for Non-Employee Directors 10.5* (l) Employee Stock Purchase Plan, as amended 10.6* (f) Lithia Motors, Inc. 2001 Stock Option Plan 10.6.1* (g) Form of Incentive Stock Option Agreement for 2001 Stock Option Plan 10.6.2* (g) Form of Non-Qualified Stock Option Agreement for 2001 Stock Option Plan 10.7* (m) Stock Incentive Plan 10.8* Summary 2005 Discretionary Executive Bonus Program 10.9 (a) Chrysler Corporation Sales and Service Agreement General Provisions 10.9.1 (h) Chrysler Corporation Chrysler Sales and Service Agreement, dated September 28, 1999, between Chrysler Corporation and Lithia Chrysler Plymouth Jeep Eagle, Inc. (Additional Terms and Provisions to the Sales and Service Agreements are in Exhibit 10.9) (2) 10.10 (b) Mercury Sales and Service Agreement General Provisions 10.10.1 (e) Supplemental Terms and Conditions agreement between Ford Motor Company and Lithia Motors, Inc. dated June 12, 1997. |
As of December 31, 2004, we have outstanding the following interest rate swaps with U.S. Bank Dealer Commercial Services: • effective September 1, 2000 - a five year, $25 million interest rate swap at a fixed rate of 6.88% per annum, variable rate adjusted on the 1st and 16th of each month • effective January 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.265% per annum, variable rate adjusted on the 26th of each month • effective February 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.30% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 18, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.65% per annum, variable rate adjusted on the 1st and 16th of each month • effective November 26, 2003 - a five year, $25 million interest rate swap at a fixed rate of 3.63% per annum, variable rate adjusted on the 26th of each month • effective March 9, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.25% per annum, variable rate adjusted on the 1st and 16th of each month; • effective March 18, 2004 - a five year, $25 million interest rate swap at a fixed rate of 3.10% per annum, variable rate adjusted on the 1st and 16th of each month. |
The Notes are convertible into shares of our Class A common stock at a price of $37.69 per share (or 26.53 shares per $1,000 of Notes) upon the satisfaction of certain conditions and upon the occurrence of certain events as follows: • if, prior to May 1, 2009, and during any calendar quarter, the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter; • if, after May 1, 2009, the closing sale price of our common stock exceeds 120% of the conversion price; • if, during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each day of such period was less than 98% of the product of the closing sale price of our common stock and the number of shares issuable upon conversion of $1,000 principal amount of the Notes; • if the Notes have been called for redemption; or • upon certain specified corporate events. |
STORE OPERATIONS Lithia's stores, brands sold and the approximate percentage of current annual revenues are as follows: --------------------------------------------------------------------------------------------- Oregon Stores (15) Franchises (41) 22% --------------------------------------------------------------------------------------------- Lithia Honda (Medford) Honda Lithia Volkswagen Isuzu (Medford) Volkswagen, Isuzu Lithia Lincoln Mercury Mazda Suzuki Lincoln/Mercury, Mazda, Suzuki (Medford) Lithia Toyota of Medford Toyota Lithia Dodge Chrysler Plymouth Jeep Dodge, Dodge Truck, Chrysler/Plymouth, (Medford) Jeep Saturn of Southwest Oregon (Medford) Saturn Lithia Nissan BMW (Medford) Nissan, BMW Lithia's Grants Pass Auto Center Dodge, Dodge Truck, Chrysler/Plymouth, Jeep Saturn of Eugene* Saturn Lithia Dodge of Eugene Dodge, Dodge Truck Lithia Toyota of Springfield Toyota Lithia Nissan of Eugene Nissan Lithia Ford Lincoln Mercury Nissan of Ford, Lincoln/Mercury, Nissan Roseburg Lithia Dodge Chrysler/Plymouth Jeep of Dodge, Dodge Truck, Chrysler/Plymouth, Roseburg Jeep Lithia Klamath Falls Auto Center Toyota, Dodge, Dodge Truck, Chrysler/Plymouth, Jeep --------------------------------------------------------------------------------------------- California Stores (14) Franchises (19) 21% --------------------------------------------------------------------------------------------- Lithia Toyota of Vacaville Toyota Lithia Dodge of Concord Dodge, Dodge Truck Lithia Volkswagen of Concord Volkswagen, Isuzu Lithia Ford of Concord Ford Lithia Ford Lincoln Mercury of Napa Ford, Lincoln/Mercury Lithia Chevrolet of Redding Chevrolet Lithia Toyota of Redding Toyota Lithia Nissan of Bakersfield Nissan Lithia BMW of Bakersfield BMW Acura of Bakersfield Acura Lithia Ford of Fresno Ford Lithia Mazda Suzuki of Fresno Mazda, Suzuki Lithia Nissan of Fresno Nissan Lithia Hyundai of Fresno Hyundai --------------------------------------------------------------------------------------------- Colorado Stores (6) Franchises (18) 20% --------------------------------------------------------------------------------------------- Lithia Centennial Chrysler Plymouth Chrysler/Plymouth, Jeep Jeep (Denver) Lithia Cherry Creek Dodge (Denver) Dodge, Dodge Truck Lithia Colorado Chrysler Plymouth Kia Chrysler/Plymouth, Kia (Denver) Lithia Foothills Chrysler Hyundai Dodge, Dodge Truck, Chrysler/Plymouth, (Fort Collins) Hyundai, Jeep Lithia Colorado Jeep (Denver) Jeep Lithia Colorado Springs Jeep Chrysler Jeep, Chrysler/Plymouth Plymouth --------------------------------------------------------------------------------------------- Washington Stores (7) Franchises (12) 12% --------------------------------------------------------------------------------------------- Lithia Camp Chevrolet (Spokane) Chevrolet Lithia Camp Imports (Spokane) Subaru, BMW, Volvo Lithia Dodge of Tri-Cities Dodge, Dodge Truck Lithia Ford of Tri-Cities* Ford Honda of Tri-Cities* Honda Lithia Dodge of Renton* Dodge, Dodge Truck Lithia Chrysler Jeep of Renton* Chrysler, Jeep --------------------------------------------------------------------------------------------- Idaho Stores (6) Franchises (12) 12% --------------------------------------------------------------------------------------------- Pocatello Dodge Chrysler Honda Hyundai* Dodge, Dodge Truck, Chrysler, Honda, Hyundai Roundtree Chevrolet (Boise) Chevrolet Roundtree Lincoln-Mercury Isuzu (Boise) Lincoln/Mercury, Isuzu Roundtree Daewoo of Boise Daewoo Lithia Ford Chrysler of Boise* Ford, Chrysler --------------------------------------------------------------------------------------------- Nevada Stores (5) Franchises (8) 7% --------------------------------------------------------------------------------------------- Lithia Reno Suzuki, Audi, Lincoln/Mercury, Isuzu Lithia Volkswagen of Reno Volkswagen Lithia Sparks (satellite of Lithia Suzuki, Lincoln/Mercury, Isuzu Reno) Lithia Reno Hyundai Hyundai Lithia Reno Subaru Subaru --------------------------------------------------------------------------------------------- South Dakota Stores (2) Franchises (2) 4% --------------------------------------------------------------------------------------------- Chevrolet of Sioux Falls* Chevrolet Lithia Subaru of Sioux Falls* Subaru --------------------------------------------------------------------------------------------- Alaska Store (1) Franchises (2) 2% --------------------------------------------------------------------------------------------- Lithia Chrysler Jeep of Anchorage* Chrysler, Jeep --------------------------------------------------------------------------------------------- 56 Stores 114 Franchises - 26 Brands 100% --------------------------------------------------------------------------------------------- *Store acquired in 2000 or 2001. |
In 2000 and 2001 the following changes were made to our franchises: o Two shared franchises in Reno, Nevada were split, creating two separate stores; Lithia Reno Subaru and Lithia Reno Hyundai; o The Daewoo franchise that was located in Twin Falls, Idaho, was closed in October 2000; o The Jeep franchise at our Lithia Jeep/Hyundai store in Fresno, California was exchanged in July 2000 for Dodge and Chrysler/Jeep franchises that remain to be opened in other markets; o The Lithia Jeep of Bakersfield store and franchise was exchanged in September 2000 for two new store locations for Chrysler/Dodge/Jeep and Dodge that remain to be opened in other markets; o The Suzuki franchise at our Lithia Foothills Auto Plaza in Colorado was sold, leaving Chrysler/Plymouth, Dodge, Dodge Truck, Jeep and Hyundai brands; o The Jeep, Mitsubishi and Kia franchises in Sioux Falls, South Dakota were sold, leaving a Chevrolet store and a Subaru store; and o The Lithia Toyota Lincoln Mercury franchise in Medford, Oregon was split with Toyota moving to its own new facility. |
New Vehicle Sales Percentage of New as a Percentage of Vehicle Dollar Sales Manufacturer Total Sales in 2000 ------------------------------------ ------------------------------------------ DaimlerChrysler (Chrysler, Plymouth, Dodge, Jeep, Dodge Trucks) 21.4% 39.5% Ford (Ford, Lincoln, Mercury) 9.0 16.7 General Motors (Chevrolet, Saturn) 6.0 11.0 Toyota 4.8 8.8 Volkswagen, Audi 3.1 5.8 Nissan 2.3 4.3 Subaru 1.8 3.3 Honda (Acura, Honda) 1.5 2.7 Isuzu 1.2 2.2 BMW 1.1 2.1 Hyundai 0.8 1.5 Mazda 0.4 0.7 Suzuki 0.3 0.6 Volvo 0.2 0.3 Daewoo 0.1 0.2 Kia 0.1 0.2 Mitsubishi 0.0 0.1 -------------------- -------------------- 54.1% 100.0% ==================== ==================== The following table sets forth Lithia's unit and dollar sales of new vehicles for each of the past five years: (dollars in thousands) 1996 1997 1998 1999 2000 ---------------------- ---------- --------- ----------- ---------- ----------- New units 3,274 7,493 17,708 28,645 37,230 New vehicle sales $65,092 $161,294 $388,431 $673,339 $898,016 Lithia purchases substantially all of its new car inventory directly from manufacturers who allocate new vehicles to stores based on the amount of vehicles sold by the store and by the store's market area. |
SELECTED FINANCIAL DATA ------- ----------------------- Year Ended December 31, ------------------------------------------------------- (In thousands, except per share 1996 (1) 1997 1998 1999 2000 amounts) -------- -------- -------- -------- -------- CONSOLIDATED STATEMENT OF OPERATIONS DATA: Revenues: New vehicles $ 65,092 $ $388,431 $ $898,016 161,294 673,339 Used vehicles 58,611 113,099 220,544 375,562 480,846 Service, body and parts 13,197 29,828 72,216 120,722 164,002 Other revenues 5,944 15,574 33,549 73,036 115,747 -------- -------- -------- -------- -------- Total revenues 142,844 319,795 714,740 1,242,659 1,658,611 Cost of sales 117,025 265,049 599,379 1,043,373 1,391,042 -------- -------- -------- -------- -------- Gross profit 25,819 54,746 115,361 199,286 267,569 Selling, general and 19,830 40,625 85,188 146,381 195,500 administrative Depreciation and amortization 1,756 2,483 3,469 5,573 7,605 -------- -------- -------- -------- -------- Income from operations 4,233 11,638 26,704 47,332 64,464 Floorplan interest expense (697) (2,179) (7,108) (11,105) (17,728) Other interest expense (656) (824) (2,735) (4,250) (7,917) Other income, net 1,349 862 921 74 716 -------- -------- -------- -------- -------- Income before minority interest and income taxes 4,229 9,497 17,782 32,051 39,535 Minority interest (687) - - - - -------- -------- -------- -------- -------- -------- Income before income taxes (1) 3,542 9,497 17,782 32,051 39,535 Income tax (expense) benefit 813 (3,538) (6,993) (12,877) (15,222) -------- -------- -------- -------- -------- Net income $ 4,355 $ 5,959 $ 10,789 $19,174 $ 24,313 ======== ======== ======== ======== ======== PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS DATA: Income before taxes and minority interest, as reported $ 4,229 Pro forma provision for taxes (2) (1,623) -------- Pro forma net income $ 2,606 ======== Basic net income per share (3) $ 0.56 $ 0.85 $ 1.18 $ 1.72 $ 1.95 ======== ======== ======== ======== ======== Shares used in basic net income 4,657 6,988 9,147 11,137 12,447 per share ======== ======== ======== ======== ======== Diluted net income per share (3) $ 0.52 $ 0.82 $ 1.14 $ 1.60 $ 1.76 ======== ======== ======== ======== ======== Shares used in diluted net income per share 4,973 7,303 9,470 11,998 13,804 ======== ======== ======== ======== ======== As of December 31, ------------------------------------------------------- (In thousands) 1996 (1) 1997 1998 1999 2000 -------- -------- -------- -------- -------- CONSOLIDATED BALANCE SHEET DATA: Working capital $ 25,431 $ 23,870 $ 53,553 $ 74,999 $ 98,917 Total assets 68,964 166,526 294,398 506,433 628,003 Short-term debt 22,000 85,385 132,310 215,535 260,479 Long-term debt, less current 6,160 26,558 41,420 73,911 131,586 maturities Total shareholders' equity 27,914 37,877 91,511 155,638 181,775 (1) Effective January 1, 1997, the Company converted from the LIFO method of accounting for inventories to the FIFO method. |
Lithia Motors, Inc. Year Ended December 31, ----------------------------------------------- ------------------------------------------ 2000 1999 1998 ------------ ----------- ----------- Revenues: New vehicles 54.1% 54.2% 54.3% Used vehicles 29.0% 30.2% 30.9% Service, body and parts 9.9% 9.7% 10.1% Other 7.0% 5.9% 4.7% ------------ ----------- ----------- Total revenues 100.0% 100.0% 100.0% Gross profit 16.1% 16.0% 16.1% Selling, general and administrative expenses 11.8% 11.8% 11.9% Depreciation and amortization 0.5% 0.4% 0.5% Income from operations 3.9% 3.8% 3.7% Floorplan interest expense 1.1% 0.9% 1.0% Other interest expense 0.5% 0.3% 0.4% Other, net 0.0% 0.0% 0.1% Income before tax 2.4% 2.6% 2.5% Income tax expense 0.9% 1.0% 1.0% Net income 1.5% 1.5% 1.5% RESULTS OF OPERATIONS - 2000 COMPARED TO 1999 Year Ended % December 31, Increase Increase ----------------------- 2000 1999 (Decrease) (Decrease) --------- ---------- ---------- ----------- Revenues: New vehicle sales $898,016 $673,339 $224,677 33.4% Used vehicle sales 480,846 375,562 105,284 28.0 Service, body and parts 164,002 120,722 43,280 35.9 Other revenues 115,747 73,036 42,711 58.5 --------- ---------- ---------- ----------- Total revenues 1,658,611 1,242,659 415,952 33.5 Cost of sales 1,391,042 1,043,373 347,669 33.3 --------- ---------- ---------- ----------- Gross profit 267,569 199,286 68,283 34.3 Selling, general and 195,500 146,381 49,119 33.6 administrative Depreciation and amortization 7,605 5,573 2,032 36.5 --------- ---------- ---------- ----------- Income from operations 64,464 47,332 17,132 36.2 Floorplan interest expense (17,728) (11,105) 6,623 59.6 Other interest expense (7,917) (4,250) 3,667 86.3 Other, net 716 74 642 867.6 --------- ---------- ---------- ----------- Income before income taxes 39,535 32,051 7,484 23.4 Income tax expense (15,222) (12,877) 2,345 18.2 --------- ---------- ---------- ----------- Net income $24,313 $19,174 $ 5,139 26.8% ========= ========== ========== =========== New units sold 37,230 28,645 8,585 30.0% Average selling price $24,121 $23,506 $615 2.6% Used units sold - retail 30,896 23,840 7,056 29.6% Average selling price $13,149 $13,148 $1 - Used units sold - wholesale 16,751 13,424 3,327 24.8% Average selling price $4,454 $4,627 $(173) (3.7)% REVENUES. |
RESULTS OF OPERATIONS - 1999 COMPARED TO 1998 Year Ended December 31, % ----------------------- Increase Increase 1999 1998 (Decrease) (Decrease) --------- ---------- ---------- ----------- Revenues: New vehicle sales $673,339 $388,431 $284,908 73.3% Used vehicle sales 375,562 220,544 155,018 70.3 Service, body and parts 120,722 72,216 48,506 67.2 Other revenues 73,036 33,549 39,487 117.7 --------- ---------- ---------- ----------- Total revenues 1,242,659 714,740 527,919 73.9 Cost of sales 1,043,373 599,379 443,994 74.1 --------- ---------- ---------- ----------- Gross profit 199,286 115,361 83,925 72.8 Selling, general and 146,381 85,188 61,193 71.8 administrative Depreciation and amortization 5,573 3,469 2,104 60.7 --------- ---------- ---------- ----------- Income from operations 47,332 26,704 20,628 77.2 Floorplan interest expense (11,105) (7,108) 3,997 56.2 Other interest expense (4,250) (2,735) 1,515 55.4 Other, net 74 921 (847) (92.0) --------- ---------- ---------- ----------- Income before income taxes 32,051 17,782 14,269 80.2 Income tax expense (12,877) (6,993) 5,884 84.1 --------- ---------- ---------- ----------- Net income $19,174 $10,789 $ 8,385 77.7% ========= ========== ========== =========== New units sold 28,645 17,708 10,937 61.8% Average selling price $23,506 $21,935 $1,571 7.2% Used units sold 23,840 13,645 10,195 74.7% Average selling price $13,148 $12,768 $380 3.0% Used units sold - wholesale 13,424 9,532 3,892 40.8% Average selling price $4,627 $4,860 $(233) (4.8)% REVENUES. |
Lithia's dealerships, brands sold and percentage of current annual revenues are as follows: Oregon Stores (13) Franchises (40) 24% Lithia Honda Suzuki Honda, Suzuki Lithia Volkswagen Isuzu Volkswagen, Isuzu Lithia Toyota Lincoln Mercury Toyota, Lincoln/Mercury Lithia Dodge Chrysler Plymouth Mazda Jeep Dodge, Dodge Truck, Chrysler/Plymouth, Mazda, Jeep Saturn of Southwest Oregon Saturn Lithia Nissan BMW Nissan, BMW Lithia's Grants Pass Auto Center Dodge, Dodge Truck, Chrysler/Plymouth, Jeep Lithia Dodge of Eugene Dodge, Dodge Truck Lithia Toyota of Springfield Toyota Lithia Nissan of Eugene Nissan Lithia ford Lincoln Mercury Nissan of Roseburg Ford, Lincoln/Mercury, Nissan Lithia Dodge Chrysler/Plymouth Jeep of Roseburg Dodge, Dodge Truck, Chrysler/Plymouth, Jeep Lithia Klamath Falls Auto Center Toyota, Dodge, Dodge Truck, Chrysler/Plymouth, Jeep California Stores (15) Franchises (21) % Lithia Toyota of Vacaville Toyota Lithia Dodge of Concord Dodge, Dodge Truck Lithia Volkswagen of Concord Volkswagen, Isuzu Lithia Ford of Concord Ford Lithia Ford Lincoln Mercury of Napa Ford, Lincoln/Mercury Lithia Chevrolet of Redding Chevrolet Lithia Toyota of Redding Toyota Lithia Nissan of Bakersfield Nissan Lithia BMW of Bakersfield BMW Acura of Bakersfield Acura Lithia Jeep of Bakersfield Jeep Lithia Ford of Fresno Ford Lithia Mazda Suzuki of Fresno Mazda, Suzuki Lithia Nissan of Fresno Nissan Lithia Jeep Hyundai of Fresno Jeep, Hyundai Nevada Stores (4) Franchises (8) % Lithia Reno Suzuki, Audi, Lincoln/Mercury, Isuzu Lithia Volkswagen of Reno Volkswagen Lithia Sparks (satellite of Lithia Reno) Suzuki, Lincoln/Mercury, Isuzu Lithia Reno Subaru Hyundai Subaru, Hyundai Washington Stores (3) Franchises (6) % Lithia Camp Chevrolet Chevrolet Lithia Camp Imports Subaru, BMW, Volvo Lithia Dodge of Tri-Cities Dodge, Dodge Truck Colorado Stores (6) Franchises (19) % Lithia Centennial Chrysler Plymouth Jeep Chrysler/Plymouth, Jeep Lithia Cherry Creek Dodge Dodge, Dodge Truck Lithia Colorado Chrysler Plymouth Kia Chrysler/Plymouth, Kia Lithia Foothills Chrysler Suzuki Hyundai Dodge, Dodge Truck, Chrysler/Plymouth, Suzuki, Hyundai, Jeep Lithia Colorado Jeep Jeep Lithia Colorado Springs Jeep Chrysler Plymouth Jeep, Chrysler/Plymouth Idaho Stores (4) Franchises (7) % Roundtree Chevrolet Chevrolet Roundtree Lincoln-Mercury Isuzu Lincoln/Mercury, Isuzu Lithia Ford Chrysler of Boise Ford, Chrysler Roundtree Daewoo of Boise Daewoo 45 Stores 101 Franchises-25 Brands % Since Lithia's initial public offering in December 1996, it has completed the purchase of 37 dealerships with the following revenues at the time of acquisition: In addition, we separated the Bakersfield, California BMW/Acura dealership into two stores and the Medford, Oregon, Lithia Honda Volkswagen Isuzu and Suzuki dealership into two stores. |
(1)Substantially identical agreements exist between Chrysler Corporation and Lithia Chrysler Plymouth Jeep Eagle, Inc., dba Lithia Chrysler Plymouth Jeep, relating Plymouth and Jeep, dated September 28, 1999; Lithia Centennial Chrysler Plymouth Jeep, Inc., relating to Chrysler, Plymouth and Jeep dated May 26, 1999; Lithia Cherry Creek Dodge, Inc., relating to Dodge sales and service (dated May 26, 1999; Lithia Colorado Chrysler Plymouth, Inc., dba Lithia Chrysler Plymouth Kia relating to Chrysler and Plymouth sales and service, dated May 26, 1999; Lithia Colorado Jeep, Inc., relating to Jeep sales and service, dated May 26, 1999; Lithia Colorado Springs Jeep Chrysler Plymouth, Inc., relating to Chrysler, Plymouth and Jeep sales and service, dated May 26, 1999; Lithia DE, Inc., dba Lithia Dodge of Eugene, relating to Dodge sales and service dated March 4, 1999; Lithia Dodge, L.L.C., dba Lithia Dodge, relating to Dodge sales and service, dated October 14, 1999; Lithia Foothills Chrysler, Inc., relating to Chrysler, Plymouth, Dodge, and Jeep sales and service, dated May 26, 1999; Lithia's Grants Pass Auto Center, L.L.C., relating to Chrysler, Plymouth, Dodge and Jeep sales and service, dated April 21, 1999; Lithia JEB, Inc., dba Lithia Jeep of Bakersfield, relating to Jeep sales and service, dated March 11, 1998; Lithia JEF, Inc., dba Lithia Jeep of Fresno, relating to Jeep sales and service, dated January 21, 1998; Lithia Klamath, Inc., dba Lithia Dodge Chrysler Plymouth Jeep of Klamath Falls, relating to Chrysler, Plymouth, Dodge, and Jeep sales and service, dated May 27, 1999; Lithia of Roseburg, Inc., dba Lithia Dodge Chrysler Plymouth Jeep of Roseburg, relating to Chrysler, Plymouth, Jeep, and Dodge sales and service, dated December 14, 1999; Lithia DC, Inc., dba Lithia Dodge of Concord, relating to Dodge sales and service, dated April 2, 1998; Lithia Dodge of Tri-Cities, Inc., relating to Dodge sales and service, dated October 5, 1999 (2)Substantially identical agreements exist with Ford Motor Company for its Ford and Lincoln lines. |
(17)Tract (1): 700 & 822 N. Central Ave, 217 & 220 N. Beatty St., 710 & 815 Niantic St., 713 & tax lot 13900 on Maple St., tax lot 13700 on Putnam, 527, 531, 533 & 613 N. Bartlett, collectively at a annual lease rate of $284,741; Tract (2): 400 N. Riverside at an annual lease rate of $117,900; Tract (3): 325 & 360 E. Jackson St., 400 N. Central Ave., 315, 321, 334, 341, 343 & 345 Apple St., 440 Front St., 401 & 405 E. 4th St., 326 & 344 N. Bartlett, 309, 315 & 333 N. Riverside collectively at an annual lease rate of $521,463; Tract (4): 322 E. 4th, 315 & 324 E. 5th St., 225, 319 & 323 E. 6th, tax lot 8000 at 6th & Riverside, 129 & 201 N. Riverside, 220, 224 & 235 N. Bartlett, tax lot 4700 at 4th and N. Bartlett, tax lots 4400 & 4500 on Maple, collectively at an annual lease rate of $472,716; Tract (5): 400, 705, 712 & 717 N Riverside, 712 Pine St., collectively at an annual lease rate of $172,291; Tract (6); relating to properties located in Grants Pass, Oregon at 1421 NE 6th St and 1470 NE 7th St, collectively at an annual lease rate of $260,292. |
(18)Substantially identical lease agreements also exist between Lithia Real Estate, Inc. and (i) Lithia FVHC, Inc. relating to the properties in Concord, California, located at 1260 Diamond Way and 2285 Diamond Way; (ii) Lithia BB, Inc., relating to the property in Bakersfield, California, located at 3201 Cattle Drive; (iii) Lithia DE, Inc., relating to properties in Eugene, Oregon, located at 2121 Centennial Boulevard and 80 Centennial Loop; (iv) Lithia TKV, Inc. relating to the property in Vacaville, California, located at 100 Auto Center Drive; (v) Lithia Auto Services, Inc. relating to the property in Medford, Oregon, located at 2665 Bullock Road; (vi) Lithia FN, Inc. relating to the property in Napa, California, located at 300 Soscol Avenue; (vii) Lithia NB, Inc. relating to the properties in Bakersfield, California, located at 3101 and 3201 Cattle Drive and 2800 and 2808 Pacheco Road; (viii) Lithia MMF, Inc. relating to the properties in Fresno, California, located at 155 and 165 East Auto Center Drive; (ix) Lithia FMF, Inc. relating to the properties in Fresno, California, located at 175 and 195 East Auto Center Drive; (x) Lithia DC, Inc. relating to the property in Concord, California, located at 4901 Marsh Drive; (xi) Lithia SALMIR, Inc. relating to the properties in Reno, Nevada, located at 7063 and 7175 South Virginia Street and the property in Sparks, Nevada, located at 40 Victorian Avenue; and (xii) Lithia NF, Inc., relating to the property in Fresno, California, located at 5580 North Blackstone Avenue. |
Substantially identical lease agreements also exist between Lithia Real Estate, Inc. and (i) Lithia FVHC, Inc. relating to the properties in Concord, California, located at 1260 Diamond Way and 2285 Diamond Way; (ii) Lithia BB, Inc., relating to the property in Bakersfield, California, located at 3201 Cattle Drive; (iii) Lithia DE, Inc., relating to properties in Eugene, Oregon, located at 2121 Centennial Boulevard and 80 Centennial Loop; (iv) Lithia TKV, Inc. relating to the property in Vacaville, California, located at 100 Auto Center Drive; (v) Lithia Auto Services, Inc. relating to the property in Medford, Oregon, located at 2665 Bullock Road; (vi) Lithia FN, Inc. relating to the property in Napa, California, located at 300 Soscol Avenue; (vii) Lithia NB, Inc. relating to the properties in Bakersfield, California, located at 3101 and 3201 Cattle Drive and 2800 and 2808 Pacheco Road; (viii) Lithia MMF, Inc. relating to the properties in Fresno, California, located at 155 and 165 East Auto Center Drive; (ix) Lithia FMF, Inc. relating to the properties in Fresno, California, located at 175 and 195 East Auto Center Drive; (x) Lithia DC, Inc. relating to the property in Concord, California, located at 4901 Marsh Drive; (xi) Lithia SALMIR, Inc. relating to the properties in Reno, Nevada, located at 7063 and 7175 South Virginia Street and the property in Sparks, Nevada, located at 40 Victorian Avenue; and (xii) Lithia NF, Inc., relating to the property in Fresno, California, located at 5580 North Blackstone Avenue. |
Substantially identical lease agreements also exist between Lithia Real Estate, Inc., and (i) Lithia FVHC, Inc. relating to the properties in Concord, California, located at 1260 Diamond Way and 2285 Diamond Way; (ii) Lithia BB, Inc., relating to the property in Bakersfield, California, located at 3201 Cattle Drive; (iii) Lithia DE, Inc., relating to the properties in Eugene, Oregon, located at 2121 Centennial Boulevard and 80 Centennial Loop; (iv) Lithia TKV, Inc. relating to the property in Vacaville, California, located at 100 Auto Center Drive; (v) Lithia Auto Services, Inc. relating to the property in Medford, Oregon, located at 2665 Bullock Road; (vi) Lithia FN, Inc. relating to the property in Napa, California, located at 300 Sascol Avenue; (vii) Lithia NB, Inc. relating to the properties in Bakersfield, California, located at 3101 and 3201 Cattle Drive and 2800 and 2808 Pacheco Road; (viii) Lithia MMF, Inc. relating to the properties in Fresno, California, located and 155 and 165 East Auto Center Drive; (ix) Lithia FMF, Inc. relating to the properties in Fresno, California, located at 175 and 195 East Auto Center Drive; (x) Lithia DC, Inc. relating to the property in Concord, California, located at 4901 Marsh Drive; (xi) Lithia SALMIR, Inc. relating to the properties in Reno, Nevada, located at 7063 and 7175 South Virginia Street and the property in Sparks, Nevada, located at 40 Victorian Avenue; and (xii) Lithia NF, Inc., relating to the property in Fresno, California, located at 5580 North Blackstone Avenue. |
Tenneco consists of four operating segments: Clean Air, Powertrain, Ride Performance, and Motorparts: •The Clean Air segment designs, manufactures, and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning, and weight on a vehicle for light vehicle, commercial truck, and off-highway OE customers; •The Powertrain segment designs, manufactures, and distributes a variety of original equipment powertrain products for light vehicle, commercial truck, off-highway, and industrial applications to OE customers for use in new vehicle production and original equipment service (“OES”) parts to support their service and distribution channels; •The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE and aftermarket customer base, including noise, vibration, and harshness (“NVH”) performance materials, advanced suspension technologies (“AST”), ride control, and braking; and •The Motorparts segment designs, manufactures, sources, markets, and distributes a broad portfolio of leading brand-name products in the global vehicle aftermarket while also servicing the OES market. |
In addition, international operations are subject to various risks which could have a material adverse effect on those operations or our business as a whole, including: •currency exchange rate fluctuations, including those in countries with hyperinflationary economies; •exposure to local economic conditions and labor issues; •exposure to local political conditions, including the risk of seizure of assets by a foreign government; •exposure to local social conditions, including corruption and any acts of war, terrorism or similar events; •exposure to local public health issues and the resultant impact on economic and political conditions; •inflation in certain countries; •limitations on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; •retaliatory tariffs and restrictions limiting free movement of goods and an unfavorable trade environment, including as a result of political conditions and changes in the laws in the U.S. and elsewhere and as described in more details below; and •requirements for manufacturers to use locally produced goods. |
Tenneco consists of four operating segments, Clean Air, Powertrain, Ride Performance, and Motorparts: •The Clean Air segment designs, manufactures, and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning, and weight on a vehicle for light vehicle, commercial truck, and off-highway OE customers; •The Powertrain segment designs, manufactures, and distributes a variety of original equipment powertrain products for light vehicle, commercial truck, off-highway, and industrial applications to OE customers for use in new vehicle production and OES parts to support their service and distribution channels; •The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, and braking; and •The Motorparts segment designs, manufactures, sources, markets, and distributes a broad portfolio of leading brand-names products in the global vehicle aftermarket while also servicing the original equipment servicers market. |
The increase was primarily driven by: •an increase in restructuring charges, net and non-cash asset impairment charges of $496 million primarily related to the impairment of long-lived asset groups triggered by the effects of COVID-19 on the Company's projected financial information, global headcount and cost reduction initiatives, and other actions to optimize our distribution footprint and warehousing locations; •a net increase in non-cash goodwill and intangible impairment charges of $142 million, which was comprised of an increase of $159 million in goodwill impairment charges, an increase of $65 million in definite-lived intangible asset impairments, and a decrease of $82 million in indefinite-lived intangible asset impairments; and •an increase in income tax expense of $440 million primarily attributable to the $507 million in non-cash charges to tax expense relating to the full valuation allowances established for the U.S. deferred taxes for the year ended December 31, 2020 and $98 million in non-cash charges to tax expense for changes in valuation allowance for deferred taxes relating to non-U.S. jurisdictions. |
These limitations are in addition to other affirmative and negative covenants (with customary exceptions, materiality qualifiers and limitations) in the New Credit Facility, including with respect to: financial reporting; payment of taxes; maintenance of existence; compliance with law and material contractual obligations; maintenance of property and insurance; inspection of property, books and records; notices of certain events; compliance with environmental laws; provision and maintenance of collateral perfection; satisfaction of the financial maintenance covenants described above; incurrence of indebtedness; permitting liens over assets; mergers, consolidations, dispositions or other fundamental transactions; dispositions and asset sales; restricted payments; investments; compliance with limitations on certain transactions with nonconsolidated affiliates; sale and leaseback transactions; changes in fiscal periods; negative pledge clauses in certain contracts; changes to lines of business; prepayments and modifications of certain subordinated indebtedness (as more fully described below); use of proceeds; transactions involving special purpose finance subsidiaries; and transactions related to effectuating a spin-off (as defined in the New Credit Facility), each as more specifically described in the New Credit Facility. |
The New Credit Facility contains customary representations and warranties, including, as a condition to future revolver borrowings, that all such representations and warranties are true and correct, in all material respects, on the date of borrowing, including representations (with customary exceptions, materiality qualifiers and limitations) as to: existence; compliance with law; power, authority and enforceability; no violation of law or material contracts; material litigation; no default under the New Credit Facility and related documents; ownership of property, including material intellectual property; payment of material taxes; compliance with margin stock regulations; labor matters; ERISA; Investment Company Act matters; subsidiaries; use of loan proceeds; environmental matters; accuracy of information; security documents; solvency; anti-corruption laws and sanctions; and that since December 31, 2017 there has been no development or event that has had a material adverse effect on the business or financial condition of the Company and its subsidiaries, each as more specifically described in the New Credit Facility. |
The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows: The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining less restrictive financial maintenance covenants described below under New Credit Facility - Other Terms and Conditions: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Initially, and so long as the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s Investors Service, Inc. (“Moody’s”) and BB- (with a stable outlook) or higher from Standard & Poor’s Financial Services LLC (“S&P”), the interest rate on borrowings under the Term Loan B facility will be LIBOR plus 2.75%; at any time the foregoing conditions are not satisfied, the interest rate on the Term Loan B facility will be LIBOR plus 3.00%. |
These limitations are in addition to other affirmative and negative covenants (with customary exceptions, materiality qualifiers and limitations) in the New Credit Facility, including with respect to: financial reporting; payment of taxes; maintenance of existence; compliance with law and material contractual obligations; maintenance of property and insurance; inspection of property, books and records; notices of certain events; compliance with environmental laws; provision and maintenance of collateral perfection; satisfaction of the financial maintenance covenants described above; incurrence of indebtedness; permitting liens over assets; mergers, consolidations, dispositions or other fundamental transactions; dispositions and asset sales; restricted payments; investments; compliance with limitations on certain transactions with nonconsolidated affiliates; sale and leaseback transactions; changes in fiscal periods; negative pledge clauses in certain contracts; changes to lines of business; prepayments and modifications of certain subordinated indebtedness (as more fully described below); use of proceeds; transactions involving special purpose finance subsidiaries; and transactions related to effectuating a spin-off (as defined in the New Credit Facility), each as more specifically described in the New Credit Facility. |
The New Credit Facility contains customary representations and warranties, including, as a condition to future revolver borrowings, that all such representations and warranties are true and correct, in all material respects, on the date of borrowing, including representations (with customary exceptions, materiality qualifiers and limitations) as to: existence; compliance with law; power, authority and enforceability; no violation of law or material contracts; material litigation; no default under the New Credit Facility and related documents; ownership of property, including material intellectual property; payment of material taxes; compliance with margin stock regulations; labor matters; ERISA; Investment Company Act matters; subsidiaries; use of loan proceeds; environmental matters; accuracy of information; security documents; solvency; anti-corruption laws and sanctions; and that since December 31, 2017 there has been no development or event that has had a material adverse effect on the business or financial condition of the Company and its subsidiaries, each as more specifically described in the New Credit Facility. |
Segment and Geographic Area Information Tenneco consists of four operating segments, Clean Air, Powertrain, Ride Performance, and Motorparts: •The Clean Air segment designs, manufactures, and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning, and weight on a vehicle for light vehicle, commercial truck, and off-highway OE customers; •The Powertrain segment designs, manufactures, and distributes a variety of original equipment powertrain products for light vehicle, commercial truck, off-highway, and industrial applications to OE customers for use in new vehicle production and original equipment service (“OES”) parts to support their service and distribution channels; •The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, and braking; and •The Motorparts segment designs, manufactures, sources, markets and distributes a broad portfolio of leading brand-name products in the global vehicle aftermarket while also servicing the OES market. |
Additional integration challenges include: • diversion of management’s attention to integration matters; • challenges in learning day-to-day operations of a new business with new management and teams; • difficulties in sustaining achieved cost savings, synergies, business opportunities and growth prospects from the Federal-Mogul Acquisition; • unforeseen difficulties post the integration of operations and systems, including the risk that information technology-enabled process transformations do not achieve the desired levels of process efficiency, customer satisfaction and/or expected business benefits; • difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; • difficulties in the assimilation of employees; • difficulties in managing the expanded operations of a significantly larger and more complex company; • challenges in attracting and retaining key personnel; • the impact of potential liabilities we may be inheriting from Federal-Mogul; and • coordinating a geographically dispersed organization. |
In addition, international operations are subject to various risks which could have a material adverse effect on those operations or our business as a whole, including: • currency exchange rate fluctuations, including those in countries with hyperinflationary economies; • exposure to local economic conditions and labor issues; • exposure to local political conditions, including the risk of seizure of assets by a foreign government; • exposure to local social conditions, including corruption and any acts of war, terrorism or similar events; • exposure to local public health issues and the resultant impact on economic and political conditions; • inflation in certain countries; • limitations on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; • retaliatory tariffs and restrictions limiting free movement of goods and an unfavorable trade environment, including as a result of political conditions and changes in the laws in the United States and elsewhere and as described in more details below; and • requirements for manufacturers to use locally produced goods. |
TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF COMPREHENSIVE INCOME (LOSS) TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF COMPREHENSIVE INCOME (LOSS) TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF COMPREHENSIVE INCOME (LOSS) TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) BALANCE SHEETS TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) BALANCE SHEETS TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF CASH FLOWS TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF CASH FLOWS TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) STATEMENT OF CASH FLOWS SCHEDULE II TENNECO INC. AND CONSOLIDATED SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (a) The amount for the year ended December 31, 2019 includes $142 million related to a local valuation adjustment due to an ownership change in a jurisdiction with a valuation allowance. |
In addition, international operations are subject to various risks which could have a material adverse effect on those operations or our business as a whole, including: • currency exchange rate fluctuations; • exposure to local economic conditions and labor issues; • exposure to local political conditions, including the risk of seizure of assets by a foreign government; • exposure to local social conditions, including corruption and any acts of war, terrorism or similar events; • exposure to local public health issues and the resultant impact on economic and political conditions; • inflation in certain countries; • limitations on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; • retaliatory tariffs and restrictions limiting free movement of goods and an unfavorable trade environment, including as a result of political conditions and changes in the laws in the United States and elsewhere and as described in more details below; • the impact of uncertainties surrounding the implementation of Brexit; and • requirements for manufacturers to use locally produced goods. |
So long as no default exists, we would, however, under our New Credit Facility, be permitted to repay or refinance our senior unsecured notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (ii) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after October 1, 2018 and (iii) in exchange for qualified capital stock issued after October 1, 2018; and (iv) with additional payments provided that such additional payments are capped as follows based on a pro forma consolidated leverage ratio after giving effect to such additional payments: Although the New Credit Facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
During 2017, our OE customers included the following manufacturers of light vehicles, commercial trucks and off-highway equipment and engines: North America Europe Asia AM General Agco Corp Austem BMW AvtoVAZ Beijing Automotive Caterpillar BMW BMW CNH Industrial Caterpillar Brilliance Automobile Daimler AG CNH Industrial (Iveco) CAMC FCA Daimler AG Chang'an Automotive Ford Motor Deutz AG China National Heavy-Duty Truck Group General Motors Ford Motor Daimler AG Harley-Davidson Geely Automobile Dongfeng Motor Honda Motors General Motors FCA Hyundai Motor John Deere First Auto Works John Deere Mazda Motor Ford Motor Navistar International McLaren Automotive Geely Automobile Renault/Nissan Paccar General Motors Paccar PSA Peugeot Citroen Great Wall Motor Toyota Motor Renault/Nissan Isuzu Motor Company Volkswagen Group Suzuki Motor Jiangling Motors Volvo Global Truck Tata Motors JND Toyota Motor Kubota Volkswagen Group Renault/Nissan Volvo Global Truck SAIC Motor Tata Motors Toyota Motor Weichai Power Yuchai Group Australia South America India General Motors CNH Industrial (Iveco) Ashok Leyland Toyota Motor Daimler AG BMW FCA Daimler AG Ford Motor Ford Motor General Motors General Motors John Deere John Deere PSA Peugeot Citroen Mahindra & Mahindra Randon S.A. Renault/Nissan Renault/Nissan Suzuki Motor Toyota Motor Tata Motors Volkswagen Group Toyota Motor Volkswagen Group The following customers accounted for 10 percent or more of our net sales in any of the last three years. |
We design, manufacture and distribute a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight, including the following: • Catalytic converters and diesel oxidation catalysts - Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide; • Diesel Particulate Filters (DPFs) - Devices to capture and regenerate particulate matter emitted from diesel engines; • Burner systems - Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems; • Lean NOx traps - Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology; • Hydrocarbon vaporizers and injectors - Devices to add fuel to a diesel exhaust system in order to regenerate particulate filters or Lean NOx traps; • Selective Catalytic Reduction (SCR) systems - Devices which reduce NOx emissions from diesel powertrains using urea mixers and injected reductants such as Verband der Automobil industrie e.V. |
's AdBlue® or Diesel Exhaust Fluid (DEF); • SCR-coated diesel particulate filters (SDPF) systems - Lightweight and compact devices combining the SCR catalyst and the particulate filter onto the same substrate for reducing NOx and particulate matter emissions; • Urea dosing systems - Systems comprised of a urea injector, pump, and control unit, among other parts, that dose liquid urea onto SCR catalysts; • Four-way catalysts - Devices that combine a three-way catalyst and a particulate filter onto a single device by having the catalyst coating of a converter directly applied onto a particulate filter; • Alternative NOx reduction technologies - Devices which reduce NOx emissions from diesel powertrains, by using, for example, alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia; • Mufflers and resonators - Devices to provide noise elimination and acoustic tuning; • Fabricated exhaust manifolds - Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe. |
We have won the PACE Award for our Kinetic® suspension technology; ◦ Dual-mode suspension - An adaptive suspension solution used for small- and medium-sized vehicles that provides drivers a choice of two suspension modes such as comfort and sport; ◦ Semi-active and active suspension systems - Shock absorbers and suspension systems such as CVSAe and ACOCAR™ that electronically adjust a vehicle’s performance based on certain inputs such as steering and braking; and ◦ Kinetic H2/CVSA Continuously Variable Semi Active suspension system (Formerly known as CES) - In 2011, we won the Supplier of the Year award from Vehicle Dynamics International magazine, which recognizes outstanding achievement in global automotive suspension and chassis engineering, for the Kinetic H2/CVSA Continuously Variable Semi Active suspension system installed on the McLaren MP4-12C; and • Other - We also offer other ride performance products such as load assist products, springs, steering stabilizers, adjustable suspension systems, suspension kits and modular assemblies. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock, in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after May 12, 2017; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock, in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after May 12, 2017; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net periodic pension costs for the years 2017, 2016 and 2015, consist of the following components: Amounts recognized in accumulated other comprehensive loss for pension benefits consist of the following components: Amounts recognized for pension and postretirement benefits in other comprehensive income for the year ended December 31, 2017 and 2016 include the following components: In 2018, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2017 and 2016 were as follows: The following estimated benefit payments are payable from the pension plans to participants: The following assumptions were used in the accounting for the pension plans for the years of 2017, 2016, and 2015: We made contributions of $32 million to our pension plans during 2017. |
During 2016, our OE customers included the following manufacturers of light vehicles, commercial trucks and off-highway equipment and engines: North America Europe Asia AM General Agco Corp Austem BMW AvtoVAZ Beijing Automotive Caterpillar BMW BMW CNH Industrial Caterpillar Brilliance Automobile Daimler AG CNH Industrial (Iveco) Chang'an Automotive FCA Daimler AG China National Heavy-Duty Truck Group Ford Motor Deutz AG Daimler AG General Motors Ford Motor Dongfeng Motor Harley-Davidson Geely Automobile FCA Honda Motors General Motors First Auto Works Hyundai Motor John Deere Ford Motor John Deere Mazda Motor Geely Automobile Navistar International McLaren Automotive General Motors Nissan Motor Nissan Motor Great Wall Motor Paccar Paccar Isuzu Motor Company Toyota Motor PSA Peugeot Citroen Jiangling Motors Volkswagen Group Renault JND Volvo Global Truck Suzuki Motor Kubota Tata Motors Nissan Motor Toyota Motor SAIC Motor Volkswagen Group Tata Motors Volvo Global Truck Toyota Motor Weichai Power Yuchai Group Australia South America India Ford Motor Agrale S.A. Ashok Leyland General Motors CNH Industrial (Iveco) BMW Toyota Motor Daimler AG Daimler AG FCA Ford Motor Ford Motor General Motors General Motors Mahindra & Mahindra Navistar International Nissan Motor Nissan Motor Suzuki Motor PSA Peugeot Citroen Tata Motors Randon S.A. Toyota Motor Renault Volkswagen Group Toyota Motor Volkswagen Group The following customers accounted for 10 percent or more of our net sales in any of the last three years. |
We design, manufacture and distribute a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight, including the following: • Catalytic converters and diesel oxidation catalysts - Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide; • Diesel Particulate Filters (DPFs) - Devices to capture and regenerate particulate matter emitted from diesel engines; • Burner systems - Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems; • Lean NOx traps - Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology; • Hydrocarbon vaporizers and injectors - Devices to add fuel to a diesel exhaust system in order to regenerate particulate filters or Lean NOx traps; • Selective Catalytic Reduction (SCR) systems - Devices which reduce NOx emissions from diesel powertrains using urea mixers and injected reductants such as Verband der Automobil industrie e.V. |
's AdBlue® or Diesel Exhaust Fluid (DEF); • SCR-coated diesel particulate filters (SDPF) systems - Lightweight and compact devices combining the SCR catalyst and the particulate filter onto the same substrate for reducing NOx and particulate matter emissions; • Urea dosing systems - Systems comprised of a urea injector, pump, and control unit, among other parts, that dose liquid urea onto SCR catalysts; • Four-way catalysts - Devices that combine a three-way catalyst and a particulate filter onto a single device by having the catalyst coating of a converter directly applied onto a particulate filter; • Alternative NOx reduction technologies - Devices which reduce NOx emissions from diesel powertrains, by using, for example, alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia; • Mufflers and resonators - Devices to provide noise elimination and acoustic tuning; • Fabricated exhaust manifolds - Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe. |
We have won the PACE Award for our Kinetic® suspension technology; ◦ Dual-mode suspension - An adaptive suspension solution used for small- and medium-sized vehicles that provides drivers a choice of two suspension modes such as comfort and sport; ◦ Semi-active and active suspension systems - Shock absorbers and suspension systems such as CVSAe and ACOCAR™ that electronically adjust a vehicle’s performance based on certain inputs such as steering and braking; and ◦ Kinetic H2/CVSA Continuously Variable Semi Active suspension system (Formerly known as CES) - In 2011, we won the Supplier of the Year award from Vehicle Dynamics International magazine, which recognizes outstanding achievement in global automotive suspension and chassis engineering, for the Kinetic H2/CVSA Continuously Variable Semi Active suspension system installed on the McLaren MP4-12C; and • Other - We also offer other ride performance products such as load assist products, springs, steering stabilizers, adjustable suspension systems, suspension kits and modular assemblies. |
In addition, international operations are subject to various risks which could have a material adverse effect on those operations or our business as a whole, including: • currency exchange rate fluctuations; • exposure to local economic conditions and labor issues; • exposure to local political conditions, including the risk of seizure of assets by a foreign government; • exposure to local social unrest, including any resultant acts of war, terrorism or similar events; • exposure to local public health issues and the resultant impact on economic and political conditions; • hyperinflation in certain foreign countries; • controls on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; • export and import restrictions and an unfavorable trade environment, including as a result of political conditions and changes in the laws in the United States and elsewhere; and • requirements for manufacturers to use locally produced goods. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock, in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net periodic pension costs for the years 2016, 2015 and 2014, consist of the following components: Amounts recognized in accumulated other comprehensive loss for pension benefits consist of the following components: Amounts recognized for pension and postretirement benefits in other comprehensive income for the year ended December 31, 2016 and 2015 include the following components: In 2017, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2016 and 2015 were as follows: The following estimated benefit payments are payable from the pension plans to participants: The following assumptions were used in the accounting for the pension plans for the years of 2016, 2015, and 2014: We made contributions of $37 million to our pension plans during 2016. |
During 2015, our OE customers included the following manufacturers of light vehicles, commercial trucks and off-highway equipment and engines: North America Europe Asia AM General Agco Corp Beijing Automotive Caterpillar AvtoVAZ BMW CNH Industrial BMW Brilliance Automobile Daimler AG Caterpillar Chang'an Automotive FCA CNH Industrial (Iveco) China National Heavy-Duty Truck Group Ford Motor Daimler AG Daimler AG General Motors Deutz AG Dongfeng Motor Harley-Davidson FCA Deutz AG Honda Motors Ford Motor First Auto Works Hyundai Motor Geely Automobile Ford Motor John Deere General Motors Geely Automobile Navistar International John Deere General Motors Nissan Motor Mazda Motor Great Wall Motor Paccar McLaren Automotive Isuzu Motor Company Toyota Motor Nissan Motor Jiangling Motors Volkswagen Group Paccar JND Volvo Global Truck PSA Peugeot Citroen Kubota Renault Nissan Motor Suzuki Motor SAIC Motor Tata Motors Toyota Motor Toyota Motor Weichai Power Volkswagen Group Yuchai Group Volvo Global Truck Australia South America India Ford Motor Agrale S.A. Ashok Leyland General Motors CNH Industrial (Iveco) BMW Toyota Motor Daimler AG Daimler AG FCA Ford Motor Ford Motor General Motors General Motors Mahindra & Mahindra Navistar International Nissan Motor Nissan Motor Suzuki Motor PSA Peugeot Citroen Tata Motors Randon S.A. Toyota Motor Renault Volkswagen Group Toyota Motor Volkswagen Group The following customers accounted for 10 percent or more of our net sales in any of the last three years. |
We design, manufacture and distribute a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight, including the following: • Catalytic converters and diesel oxidation catalysts - Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide; • Diesel Particulate Filters (DPFs) - Devices to capture and regenerate particulate matter emitted from diesel engines; • Burner systems - Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems; • Lean NOx traps - Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology; • Hydrocarbon vaporizers and injectors - Devices to add fuel to a diesel exhaust system in order to regenerate particulate filters or Lean NOx traps; • Selective Catalytic Reduction (SCR) systems - Devices which reduce NOx emissions from diesel powertrains using urea mixers and injected reductants such as Verband der Automobil industrie e.V. |
's AdBlue® or Diesel Exhaust Fluid (DEF); • SCR-coated diesel particulate filters (SDPF) systems - Lightweight and compact devices combining the SCR catalyst and the particulate filter onto the same substrate for reducing NOx and particulate matter emissions; • Urea dosing systems - Systems comprised of a urea injector, pump, and control unit, among other parts, that dose liquid urea onto SCR catalysts; • Four-way catalysts - Devices that combine a three-way catalyst and a particulate filter onto a single device by having the catalyst coating of a converter directly applied onto a particulate filter; • Alternative NOx reduction technologies - Devices which reduce NOx emissions from diesel powertrains, by using, for example, alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia; • Mufflers and resonators - Devices to provide noise elimination and acoustic tuning; • Fabricated exhaust manifolds - Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe. |
We have won the PACE Award for our Kinetic® suspension technology; ◦ Dual-mode suspension - An adaptive suspension solution used for small- and medium-sized vehicles that provides drivers a choice of two suspension modes such as comfort and sport; ◦ Semi-active and active suspension systems - Shock absorbers and suspension systems such as CVSA2 and ACOCAR™ that electronically adjust a vehicle’s performance based on certain inputs such as steering and braking; ◦ Kinetic H2/CVSA Continuously Variable Semi Active suspension system (Formerly known as CES) - In 2011, we won the Supplier of the Year award from Vehicle Dynamics International magazine, which recognizes outstanding achievement in global automotive suspension and chassis engineering, for the Kinetic H2/CVSA Continuously Variable Semi Active suspension system installed on the McLaren MP4-12C; and • Other - We also offer other ride performance products such as load assist products, springs, steering stabilizers, adjustable suspension systems, suspension kits and modular assemblies. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock, in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net periodic pension costs for the years 2015, 2014 and 2013, consist of the following components: Amounts recognized in accumulated other comprehensive loss for pension benefits consist of the following components: Amounts recognized for pension and postretirement benefits in other comprehensive income for the year ended December 31, 2015 and 2014 include the following components: In 2016, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2015 and 2014 were as follows: The following estimated benefit payments are payable from the pension plans to participants: The following assumptions were used in the accounting for the pension plans for the years of 2015, 2014, and 2013: We made contributions of $25 million to our pension plans during 2015. |
During 2014, our OE customers included the following manufacturers of light vehicles, commercial trucks and off-highway equipment and engines: North America Europe Asia AM General AvtoVAZ Beijing Automotive Caterpillar BMW BMW Club Car Caterpillar Brilliance Automobile CNH Industrial CNH Industrial (Iveco) Chang'an Automotive Daimler AG Daimler AG China National Heavy-Duty Truck Group E-Z Go Deutz AG Daimler AG Fiat Chrysler Automobile Ducati Motor Dongfeng Motor Ford Motor Fiat Chrysler Automobile Deutz AG General Motors Ford Motor First Auto Works Harley-Davidson Gas-Gas Motors Ford Motor Honda Motors Geely Automobile Geely Automobile Hyundai Motor General Motors General Motors John Deere John Deere Great Wall Motor Navistar International Mazda Motor Hyundai Motor Nissan Motor McLaren Automotive Isuzu Motor Company Oshkosh Truck Nissan Motor Jiangling Motors Paccar Paccar Kubota Toyota Motor Porsche Navistar International Volkswagen Group PSA Peugeot Citroen Nissan Motor Volvo Global Truck Renault SAIC Motor Scania Suzuki Motor Suzuki Motor Toyota Motor Tata Motors Volkswagen Group Toyota Motor Weichai Power Volkswagen Group Yuchai Group Volvo Global Truck Australia South America India Ford Motor Agrale S.A. Ashok Leyland General Motors CNH Industrial (Iveco) Club Car Toyota Motor Daimler AG Daimler AG Fiat Chrysler Automobile E-Z Go Ford Motor Ford Motor General Motors General Motors Hyundai Motor Isuzu Motor MAN SE Mahindra & Mahindra Navistar International Nissan Motor Nissan Motor Suzuki Motor PSA Peugeot Citroen Tata Motors Renault Toyota Motor Scania Volkswagen Group Toyota Motor Volkswagen Group The following customers accounted for 10 percent or more of our net sales in any of the last three years. |
We design, manufacture and distribute a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight, including the following: • Catalytic converters and diesel oxidation catalysts - Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide; • Diesel Particulate Filters (DPFs) - Devices to capture and regenerate particulate matter emitted from diesel engines; • Burner systems - Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems; • Lean NOx traps - Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology; • Hydrocarbon vaporizers and injectors - Devices to add fuel to a diesel exhaust system in order to regenerate diesel particulate filters or Lean NOx traps; • Selective Catalytic Reduction (SCR) systems - Devices which reduce NOx emissions from diesel powertrains using injected reductants such as Verband der Automobil industrie e.V. |
's AdBlue® or Diesel Exhaust Fluid (DEF); • Alternative NOx reduction technologies - Devices which reduce NOx emissions from diesel powertrains, by using alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia; • Mufflers and resonators - Devices to provide noise elimination and acoustic tuning; • Fabricated exhaust manifolds - Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe; fabricated manifolds can form the core of an emissions module that includes an integrated catalytic converter (maniverter) and/or turbocharger; • Pipes - Utilized to connect various parts of both the hot and cold ends of an exhaust system; • Hydroformed assemblies - Forms in various geometric shapes, such as Y-pipes or T-pipes, which provide optimization in both design and installation as compared to conventional pipes; • Elastomeric hangers and isolators - Used for system installation and elimination of noise and vibration, and for the improvement of useful life; and • Aftertreatment control units - Computerized electronic devices that utilize embedded software to regulate the performance of active aftertreatment systems, including the control of sensors, injectors, vaporizers, pumps, heaters, valves, actuators, wiring harnesses, relays and other mechatronic components. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock, in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement) or with the net cash proceeds of our common stock in each case issued within 180 days prior to such repayment; (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement) and certain indebtedness incurred by our foreign subsidiaries; (iii) with the proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after December 8, 2014; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) based on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
Net periodic pension costs for the years 2014, 2013 and 2012, consist of the following components: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Amounts recognized in accumulated other comprehensive loss for pension benefits consist of the following components: Amounts recognized for pension and postretirement benefits in other comprehensive income for the year ended December 31, 2014 and 2013 include the following components: In 2015, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost: The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2014 and 2013 were as follows: TENNECO INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following estimated benefit payments are payable from the pension plans to participants: The following assumptions were used in the accounting for the pension plans for the years of 2014, 2013, and 2012: We made contributions of $46 million to our pension plans during 2014. |
During 2013, our OEM and commercial truck and off-highway engine manufacturer customers included: North America Europe Asia AM General AvtoVAZ Beijing Automotive Caterpillar BMW BMW Club Car Caterpillar Brilliance Automobile CNH Industrial CNH Industrial (Iveco) Changan Automotive Daimler AG Daimler AG China National Heavy-Duty Truck Group E-Z Go Deutz AG Daimler AG Fiat Chrysler Automobile Ducati Motor Dongfeng Motor Ford Motor Fiat Chrysler Automobile Ducati Motor General Motors Ford Motor First Auto Works Harley-Davidson Gas-Gas Motors Ford Motor Honda Motors Geely Automobile Geely Automobile Hyundai Motor General Motors General Motors John Deere Harley-Davidson Great Wall Motor Navistar International John Deere Hyundai Motor Nissan Motor Mazda Motor Isuzu Motors Oshkosh Truck McLaren Automotive Jiangling Motors Paccar Nissan Motor Kubota Toyota Motor Paccar Nissan Motor Volkswagen Group PSA Peugeot Citroen SAIC Motor Volvo Global Truck Renault Suzuki Motor Scania Toyota Motor Suzuki Motor Volkswagen Group Tata Motors Weichai Power Toyota Motor Yuchai Group Volkswagen Group Volvo Global Truck Australia South America India Club Car CNH Industrial (Iveco) Club Car CNH Industrial (Iveco) Daimler AG Daimler AG Ford Motor Fiat Chrysler Automobile E-Z Go General Motors Ford Motor Ford Motor Toyota Motor General Motors General Motors MAN SE Isuzu Motor Navistar International Mahindra & Mahindra Nissan Motor Nissan Motor PSA Peugeot Citroen Suzuki Motor Renault Tata Motors Scania Toyota Motor Toyota Motor Volkswagen Group Volkswagen Group The following customers accounted for 10 percent or more of our net sales in any of the last three years. |
We design, manufacture and distribute a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight, including the following: • Catalytic converters and diesel oxidation catalysts - Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide; • Diesel Particulate Filters (DPFs) - Devices to capture and regenerate particulate matter emitted from diesel engines; • Burner systems - Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems; • Lean NOx traps - Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology; • Hydrocarbon vaporizers and injectors - Devices to add fuel to a diesel exhaust system in order to regenerate diesel particulate filters or Lean NOx traps; • Selective Catalytic Reduction (SCR) systems - Devices which reduce NOx emissions from diesel powertrains using injected reductants such as Verband der Automobil Industrie e.V. |
(AdBlue™) or Diesel Exhaust Fluid (DEF); • Alternative NOx reduction technologies - Devices which reduce NOx emissions from diesel powertrains, by using alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia; • Mufflers and resonators - Devices to provide noise elimination and acoustic tuning; • Fabricated Exhaust manifolds - Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe; fabricated manifolds can form the core of an emissions module that includes an integrated catalytic converter (maniverter) and/or turbocharger; • Pipes - Utilized to connect various parts of both the hot and cold ends of an exhaust system; • Hydroformed assemblies - Forms in various geometric shapes, such as Y-pipes or T-pipes, which provide optimization in both design and installation as compared to conventional pipes; • Hangers and isolators - Used for system installation and elimination of noise and vibration, and for the improvement of useful life; and • Aftertreatment control units - Computerized electronic devices that utilize embedded software to regulate the performance of active aftertreatment systems, including the control of sensors, injectors, vaporizers, pumps, heaters, valves, actuators, wiring harnesses, relays and other mechatronic components. |
So long as no default existed, we would, however, under our senior credit facility agreement, be permitted to repay or refinance our senior notes (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the senior credit facility agreement or with the net cash proceeds of our common stock); (ii) with the net cash proceeds of the incremental facilities (as defined in the senior credit facility agreement); (iii) with the net cash proceeds of the revolving loans (as defined in the senior credit facility agreement); (iv) with the cash generated by our operations; (v) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the senior credit facility agreement) issued by us after March 22, 2012; and (vi) in exchange for permitted refinancing indebtedness or in exchange for shares of our common stock; provided that such purchases are capped as follows (with respect to clauses (iii), (iv) and (v) on a pro forma consolidated leverage ratio after giving effect to such purchase, cancellation or redemption): Although the senior credit facility agreement would permit us to repay or refinance our senior notes under the conditions described above, any repayment or refinancing of our outstanding notes would be subject to market conditions and either the voluntary participation of note holders or our ability to redeem the notes under the terms of the applicable note indenture. |
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