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This excerpt taken from the AN 10-K filed Feb 17, 2010. Inventory Management Our new and used vehicle inventories are stated at the lower of cost or market in our Consolidated Balance Sheets. We have generally not experienced losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices. We reduced our new vehicle inventory to 35,996 units at December 31, 2009, from 50,585 units at December 31, 2008. At December 31, 2009, our days supply of new vehicle inventory was 54 days, as compared to 83 days at December 31, 2008. During the first half of 2009, we maintained relatively low new vehicle inventory levels in response to the economic downturn. As noted above under “Market Conditions,” the federal cash for clunkers program stimulated consumer demand for new vehicles during the third quarter of 2009, which impacted our supply of new vehicles. Additionally, the reduced production levels of certain automotive manufacturers during the second quarter of 2009, including the factory shut-downs by General Motors and Chrysler, led to a lower supply of new vehicles in the market generally in the third quarter of 2009. During the second half of 2009, we increased our orders for new vehicles to manage our inventory in expectation of increased demand for the fourth quarter of 2009 and into 2010. We continue to monitor our new vehicle inventory levels closely based on current economic conditions and will adjust them as appropriate. In general, used vehicles that are not sold on a retail basis are liquidated at wholesale auctions. We record estimated losses on used vehicle inventory expected to be liquidated at wholesale auctions at a loss. Our used vehicle inventory balance was net of cumulative write-downs of $0.7 million at December 31, 2009, and $1.7 million at December 31, 2008. Parts, accessories, and other inventory are carried at the lower of acquisition cost (first-in, first-out method) or market. We estimate the amount of potential obsolete inventory based upon past experience and market trends. Our parts, accessories, and other inventory balance was net of cumulative write-downs of $4.4 million at December 31, 2009, and $6.3 million at December 31, 2008. These excerpts taken from the AN 10-K filed Feb 17, 2009. Inventory
Management
Our new and used vehicle inventories are stated at the lower of
cost or market in our consolidated balance sheets.
We have generally not experienced losses on the sale of new
vehicle inventory, in part due to incentives provided by
manufacturers to promote sales of new vehicles and our inventory
management practices. We reduced our new vehicle inventory to
54,074 units at December 31, 2008, from
60,832 units at December 31, 2007. Although we focus
on managing our inventory levels in accordance with consumer
demand, we believe we must maintain a minimum level of inventory
at our lower volume stores that is representative of the full
line of vehicles offered by manufacturers. This may result in a
higher days supply of inventory than would otherwise result if
we were in a better economic environment. However, given our
inventory management practices (such as managing our inventory
purchases based on our sales forecasts and sharing inventory
among stores within a local market), we do not believe the
current business climate is likely to result in material
impairment charges related to new vehicle inventory (subject to
the risks noted in “Market Challenges”
above). We continue to monitor our new vehicle inventory levels
closely based on current economic conditions and will adjust
them as appropriate.
In general, used vehicles that are not sold on a retail basis
are liquidated at wholesale auctions. We record estimated losses
on used vehicle inventory expected to be liquidated at wholesale
auctions at a loss. Our used vehicle inventory balance was net
of cumulative write-downs of $1.7 million at
December 31, 2008, and $2.0 million at
December 31, 2007.
Parts, accessories, and other inventory are carried at the lower
of acquisition cost
(first-in,
first-out method) or market. We estimate the amount of potential
obsolete inventory based upon past experience and market trends.
Our parts, accessories, and other inventory balance was net of
cumulative write-downs of $6.3 million at December 31,
2008, and $5.8 million at December 31, 2007.
Inventory Management Our new and used vehicle inventories are stated at the lower of cost or market in our consolidated balance sheets. We have generally not experienced losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices. We reduced our new vehicle inventory to 54,074 units at December 31, 2008, from 60,832 units at December 31, 2007. Although we focus on managing our inventory levels in accordance with consumer demand, we believe we must maintain a minimum level of inventory at our lower volume stores that is representative of the full line of vehicles offered by manufacturers. This may result in a higher days supply of inventory than would otherwise result if we were in a better economic environment. However, given our inventory management practices (such as managing our inventory purchases based on our sales forecasts and sharing inventory among stores within a local market), we do not believe the current business climate is likely to result in material impairment charges related to new vehicle inventory (subject to the risks noted in “Market Challenges”
above). We continue to monitor our new vehicle inventory levels closely based on current economic conditions and will adjust them as appropriate. In general, used vehicles that are not sold on a retail basis are liquidated at wholesale auctions. We record estimated losses on used vehicle inventory expected to be liquidated at wholesale auctions at a loss. Our used vehicle inventory balance was net of cumulative write-downs of $1.7 million at December 31, 2008, and $2.0 million at December 31, 2007. Parts, accessories, and other inventory are carried at the lower of acquisition cost (first-in, first-out method) or market. We estimate the amount of potential obsolete inventory based upon past experience and market trends. Our parts, accessories, and other inventory balance was net of cumulative write-downs of $6.3 million at December 31, 2008, and $5.8 million at December 31, 2007. | EXCERPTS ON THIS PAGE:
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