1144980--3/16/2006--ASBURY_AUTOMOTIVE_GROUP

related topics

{customer, product, revenue}

{condition, economic, financial}

{acquisition, growth, future}

{cost, regulation, environmental}

{competitive, industry, competition}

{operation, international, foreign}

{debt, indebtedness, cash}

{investment, property, distribution}

{product, candidate, development}

{personnel, key, retain}

{regulation, change, law}

{stock, price, operating}

RISK FACTORS RELATED TO OUR DEPENDENCE ON VEHICLE MANUFACTURERS If we fail to obtain renewals of one or more of our dealer agreements on favorable terms, if certain of our franchises are terminated, or if certain manufacturers rights under their agreements with us are triggered, our operations may be adversely affected. Our failure to meet manufacturer consumer satisfaction, financial or sales performance requirements may adversely affect our ability to acquire new dealerships and our profitability. The reorganization by, or the bankruptcy of, one or more of the manufacturers could have a material adverse affect on our operations. Manufacturers restrictions on acquisitions or divestitures may limit our future growth and impact our profitability. If state dealer laws that protect automotive retailers are repealed, weakened or superseded by our framework agreements with manufacturers, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their dealer agreements. Manufacturers restrictions regarding a change in our stock ownership may result in the termination or forced sale of our franchises, which could have a material adverse effect on our ability to grow and may adversely impact the value of our common stock. Our dealers depend upon vehicle sales and, therefore, their success depends in large part upon customer demand for the particular vehicle lines they carry. If we fail to obtain a desirable mix of popular new vehicles from manufacturers, our profitability will be negatively impacted. If automobile manufacturers discontinue incentive programs, our sales volumes may be materially and adversely affected. Adverse conditions affecting the manufacturers may negatively impact our profitability. RISKS RELATED TO OUR ACQUISITION STRATEGY If we are unable to acquire and successfully integrate additional dealerships, we will be unable to realize desired results from our growth through acquisition strategy and acquired operations will drain resources from comparatively profitable operations. The competition with other dealer groups to acquire automotive dealerships is intense, and we may not be able to fully implement our growth through acquisition strategy if attractive targets are acquired by competing groups or priced out of our reach due to competitive pressures. Substantial competition in automobile sales and services may adversely affect our profitability. RISKS RELATED TO THE AUTOMOTIVE RETAIL INDUSTRY Our business will be harmed if overall consumer demand suffers from a severe or sustained downturn. Our business may be adversely affected by unfavorable conditions in our local markets, even if those conditions are not prominent nationally. The seasonality of the automobile retail business magnifies the importance of our second and third quarter results. Our business may be adversely affected by import product restrictions and foreign trade risks that may impair our ability to sell foreign vehicles or parts profitably. OTHER RISKS RELATED TO OUR BUSINESS Failure to comply with certain covenants in our debt and lease agreements could adversely affect our ability to operate our business and adversely impact our compliance with our Committed Credit Facility. Our capital costs and our results of operations may be materially and adversely affected by a rising interest rate environment. Governmental regulations and environmental regulation compliance costs may adversely affect our profitability. Our business and financial results may be adversely affected by claims alleging violations of laws and regulations related to our advertising, sales, and finance and insurance activities. The loss of key personnel may adversely affect our business. Our principal stockholders have substantial influence over us. Future changes in financial accounting standards or practices or existing taxation rules or practices may affect our reported results of operations.

Full 10-K form ▸

1144980--3/16/2006--ASBURY_AUTOMOTIVE_GROUP_INC