AutoNation 2015 Annual Report Download - page 44
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Table of Contents
Our SG&A expenses consist primarily of compensation, including store and corporate salaries, commissions, and incentive-based compensation, as well as
advertising (net of reimbursement-based manufacturer advertising rebates), and store and corporate overhead expenses, which include occupancy costs, legal,
accounting, and professional services, and general corporate expenses. The following table presents the major components of our SG&A.
Compensation $ 1,454.3
$ 1,362.5
$ (91.8)
(6.7)
$ 1,252.9
$ (109.6)
(8.7)
Advertising 188.5
164.9
(23.6)
(14.3)
166.4
1.5
0.9
Store and corporate overhead 620.7
552.2
(68.5)
(12.4)
515.7
(36.5)
(7.1)
Total $ 2,263.5
$ 2,079.6
$ (183.9)
(8.8)
$ 1,935.0
$ (144.6)
(7.5)
Compensation 44.6
45.6
100
bps
45.4
(20)
bps
Advertising 5.8
5.5
(30)
bps
6.0
50
bps
Store and corporate overhead 19.0
18.5
(50)
bps
18.7
20
bps
Total 69.4
69.6
20
bps
70.1
50
bps
SG&A expenses increased in 2015, as compared to 2014, primarily due to a volume-driven increase in variable compensation expense, an increase in store
and corporate overhead expenses due in part to the acquisitions we completed in 2015, and an increase in advertising expenditures. As a percentage of total
gross profit, SG&A expenses decreased slightly to 69.4% in 2015 from 69.6% in 2014, primarily due to a decrease in compensation expense as a percentage
of total gross profit.
SG&A expenses increased in 2014, as compared to 2013, primarily due to a performance-driven increase in compensation expense, an increase in store and
corporate overhead expenses, and an increase in gross advertising expenditures excluding the impact of expenses incurred in 2013 related to the re-branding
of our Domestic and Import stores under the AutoNation retail brand. As a percentage of total gross profit, SG&A expenses decreased to 69.6% in 2014 from
70.1% in 2013 resulting from our continued effective management of our cost structure and improved gross profit.
During 2015, we recognized gains related to property dispositions of $16.7 million ($10.3 million after-tax) and the divestiture of three Import stores of
$7.4 million ($4.6 million after-tax). These gains were partially offset by non-cash property impairments of $6.1 million ($3.8 million after-tax).
During 2014, we recognized a gain related to the divestiture of two Import stores of $4.4 million ($2.7 million after-tax), a gain related to a legal
settlement of $4.0 million ($2.5 million after-tax), and a net gain related to business/property dispositions of $8.1 million ($5.0 million after-tax), primarily
related to the divestiture of our customer lead distribution business.
During 2013, we recognized a net gain related to property dispositions of $7.2 million ($4.5 million after-tax).
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