<SEC-DOCUMENT>0001193125-24-238969.txt : 20241121
<SEC-HEADER>0001193125-24-238969.hdr.sgml : 20241121
<ACCEPTANCE-DATETIME>20241017171855
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ACCESSION NUMBER:		0001193125-24-238969
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20241017

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ASBURY AUTOMOTIVE GROUP INC
		CENTRAL INDEX KEY:			0001144980
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500]
		ORGANIZATION NAME:           	07 Trade & Services
		IRS NUMBER:				010609375
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2905 PREMIERE PARKWAY NW
		STREET 2:		SUITE 300
		CITY:			DULUTH
		STATE:			GA
		ZIP:			30097
		BUSINESS PHONE:		770-418-8200

	MAIL ADDRESS:	
		STREET 1:		2905 PREMIERE PARKWAY NW
		STREET 2:		SUITE 300
		CITY:			DULUTH
		STATE:			GA
		ZIP:			30097
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<TYPE>CORRESP
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">ASBURY AUTOMOTIVE GROUP, INC. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2905 Premiere Parkway, Suite 300 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Duluth, GA 30097 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">October&nbsp;17,
2024 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>VIA EDGAR SUBMISSION </I></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities
and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Trade&nbsp;&amp; Services </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and
Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, NE </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549
</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="10%" VALIGN="top" ALIGN="left">Attention:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Mr.&nbsp;Robert Shapiro </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#8201;&#8201;&#8195;Mr.&nbsp;Doug Jones </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom"><B>RE:</B></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><B>Asbury Automotive Group, Inc.</B></TD></TR>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for Fiscal Year Ended December&nbsp;31, 2023</B></TD></TR>
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<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><B>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for Fiscal Quarter Ended June&nbsp;30, 2024</B></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><B>Form <FONT STYLE="white-space:nowrap">8-K</FONT> Furnished August&nbsp;2, 2024</B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr. Shapiro and Mr. Jones: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We have reviewed the comment in the letter of the staff of the Division of Corporation Finance (the &#147;<B><I>Staff</I></B>&#148;) of the
Securities and Exchange Commission (the &#147;<B><I>Commission</I></B>&#148;), dated October&nbsp;7, 2024 (referred to as the &#147;<B><I>Comment Letter</I></B>&#148;) regarding Asbury Automotive Group, Inc.&#146;s Quarterly Report on Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended June&nbsp;30, 2024 (our &#147;<B><I>Quarterly Report</I></B>&#148;), and Current Report on Form <FONT STYLE="white-space:nowrap">8-K</FONT> Furnished August&nbsp;2, 2024 (our
&#147;<B><I>Form <FONT STYLE="white-space:nowrap">8-K</FONT></I></B>&#148;). Our response is set forth below. For your convenience, we have included the text of your comment in bold prior to our related response. References to the
&#147;Company,&#148; &#147;we,&#148; &#147;us&#148; and &#147;our&#148; refer to Asbury Automotive Group, Inc., a Delaware corporation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Form <FONT
STYLE="white-space:nowrap">8-K</FONT> Furnished August&nbsp;2, 2024 </U></B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for Fiscal Quarter
Ended June&nbsp;30, 2024 </U></B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>CDK Outage, page 15 </U></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>1. Refer to
your response to prior comment 1 that you believe the impact of the CDK Global cyber incident was not material to your operations and otherwise did not require further disclosure in the Form <FONT STYLE="white-space:nowrap">10-Q</FONT> beyond what
was disclosed. The negative impact to your earnings per share for the quarter ended June&nbsp;30, 2024 of $.95 to $1.15 per diluted share disclosed in your earnings release for the second quarter of fiscal 2024 appears material in that it
represented 68% to 83% of your reported diluted per share amount for the quarter. We note numerous references in the June&nbsp;30, 2024 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> to the negative impact of the CDK incident and reference to
higher accounts payable and floor plan payable balances impacting operating cash flow for the period. To the extent the CDK cyber incident is cited as a factor affecting results of operations and operating cash flows between periods, please quantify
the impact so investors may understand its magnitude and relative impact. Refer to section III.D of Release <FONT STYLE="white-space:nowrap">No.&nbsp;33-6835</FONT> (501.04 of the staff&#146;s Codification of Financial Reporting Releases) for
guidance. </B></P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company respectfully acknowledges the Staff&#146;s comment and intends to include the
following disclosure in the Overview section of MD&amp;A in the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended September&nbsp;30, 2024 (bolded items reflect changes from the Form
<FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended June&nbsp;30, 2024): </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#147;<B>CDK Outage</B> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">During June 2024, one of the Company&#146;s vendors (CDK Global) experienced a cyber-incident impacting certain services provided to the
Company and many other automotive retailers, including the Company&#146;s sales, service, inventory, customer relationship management, and accounting functions. Upon discovery of the incident, we took immediate precautionary steps to protect our
systems. Beginning on June&nbsp;19, 2024, the outage affected all Asbury locations, with the exception of our Koons stores which utilize a different dealer management system. All functions of CDK were not fully restored for us until July&nbsp;8,
2024, with other <FONT STYLE="white-space:nowrap">plug-ins</FONT> and <FONT STYLE="white-space:nowrap">bolt-on</FONT> applications coming back online in the weeks thereafter. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The CDK outage had a negative impact on our financial results during the quarter ended June&nbsp;30, 2024 as a result of fewer new and used
vehicle sales, which also impacted our F&amp;I business, a reduction in parts and service volumes and certain <B>incremental</B> expenses related to our recovery efforts. <B>We estimated the earnings per share for the quarter ended
June</B><B></B><B>&nbsp;30, 2024 was negatively impacted between $0.95 and $1.15 per diluted share, without taking into account any potential recoveries related to the incident. The CDK Global cyber incident is not expected to continue to impact the
Company&#146;s operations and results in future periods.</B> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We have cybersecurity insurance coverage of $15.0&nbsp;million, with a
$2.5&nbsp;million deductible. The likelihood and timing of recovering some portion of our losses through insurance or other recoveries is difficult to predict. The insurance recoveries we receive, if any, may not occur for several quarters or
longer.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">More specifically, with respect to the disclosure of higher than expected accounts payable and floor plan payable balances
as of June&nbsp;30, 2024, we do not intend to provide more detailed, quantitative disclosure in our Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended September&nbsp;30, 2024 since such balances were paid in a very short time
period following the balance sheet date, such that a disclosure would not be meaningful to our <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">year-to-date</FONT></FONT> cash flows and liquidity. However, the Company respectfully
acknowledges the Staff&#146;s comment, and when significant or unusual items occur in the future that affect the Company&#146;s results of operations and cash flows, the Company intends to include appropriate quantitative disclosures regarding the
impact of such item(s) in the applicable filing as available. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Notwithstanding the aforementioned planned disclosure in our Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended September&nbsp;30, 2024, we believe that the estimated impacts of the CDK cyber incident on the Company&#146;s financial results for the quarter ended June&nbsp;30, 2024 were not material
taking into consideration both quantitative and qualitative factors. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In connection with our above response, Asbury Automotive Group, Inc.
acknowledges that: (a)&nbsp;it is responsible for the adequacy and accuracy of the disclosures in the filings referenced in the Comment Letter; (b)&nbsp;Staff comments or changes to disclosures in response to Staff comments do not foreclose the
Commission from taking any action with respect to the such filings; and (c)&nbsp;it may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Please address any questions you may have to me at (770) <FONT STYLE="white-space:nowrap">418-8206</FONT> or via email at
mwelch@asburyauto.com. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">Respectfully,</TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Michael D. Welch</TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Michael D. Welch</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Senior Vice President</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">and Chief Financial Officer</P></TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">cc:</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">David W. Hult, Chief Executive Officer, President and Director</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Maureen F. Morrison, Director and Chair of the Audit Committee</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Nathan Briesemeister, Vice President, Chief Accounting Officer and Controller</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dean Calloway, Senior Vice President, General Counsel and Secretary</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Joel T. May, Jones Day</P></TD></TR>
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