AutoNation 2015 Annual Report Download - page 43

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Table of Contents
Premium Luxury
The Premium Luxury segment operating results included the following:

 











Revenue $ 6,607.8
$ 5,889.3
$ 718.5
12.2
$ 5,152.3
$ 737.0
14.3
Segment income $ 376.2
$ 366.1
$ 10.1
2.8
$ 321.4
$ 44.7
13.9
Retail new vehicle unit sales 69,693
61,299
8,394
13.7
53,368
7,931
14.9

Premium Luxury revenue increased during 2015, as compared to the same period in 2014 primarily due to an increase in new and used vehicle unit
volume and used vehicle revenue PVR. The increase in new vehicle unit volume was due in part to replacement demand and improved market conditions,
including increased consumer borrowing and confidence. New product offerings from certain automotive manufacturers also favorably impacted new vehicle
unit volume. The increase in used vehicle unit volume was primarily due to an increase in sales of certified pre-owned vehicles, as well as an increase in
trade-in volume associated with new vehicle sales. Used vehicle revenue PVR benefited from the increase in sales of certified pre-owned vehicles, which have
relatively higher average selling prices. New and used vehicle unit volume also benefited from the acquisitions we completed during 2015.
Premium Luxury segment income increased during 2015, as compared to 2014, primarily due to an increase in parts and service gross profit and an
increase in finance and insurance revenue and gross profit, which benefited from an increase in finance and insurance revenue and gross profit PVR and
higher vehicle unit volume. Premium Luxury segment income also benefited from the acquisitions we completed during 2015. Increases in Premium Luxury
segment income were partially offset by an increase in variable expenses and decreases in new and used vehicle gross profit PVR due to increased inventory
levels and changes in manufacturer incentive programs, as well as a competitive automotive retail environment. See “Results of Operations” above.

Premium Luxury revenue increased during 2014, as compared to the same period in 2013, primarily due to an increase in new and used vehicle unit
volume and an increase in new and used vehicle revenue PVR. The increase in new vehicle unit volume was due in part to replacement demand and improved
market conditions, including increased consumer borrowing and improved consumer confidence as compared to the prior year, as well as new product
offerings from certain automotive manufacturers. The increase in used vehicle unit volume was primarily due to an increase in sales of certified pre-owned
vehicles, as well as an increase in trade-in volume associated with new vehicle sales. New and used vehicle unit volume also benefited from the acquisitions
we completed in the fourth quarter of 2014.
Premium Luxury segment income increased during 2014, as compared to 2013, primarily due to an increase in parts and service gross profit and an
increase in new vehicle gross profit, which benefited from higher new vehicle unit volume. Additionally, Premium Luxury segment income benefited from an
increase in finance and insurance revenue and gross profit, which benefited from higher vehicle unit volume and an increase in finance and insurance revenue
and gross profit PVR. Premium Luxury segment income also benefited from the acquisitions we completed in the fourth quarter of 2014. Increases in Premium
Luxury segment income were partially offset by an increase in variable expenses.
41