Asbury Automotive Group (ABG) Raises Common Buyback to $200M; Amends Credit Agreement

October 17, 2014 7:42 AM EDT

Asbury Automotive Group (NYSE: ABG) announced that its Board of Directors has increased the size of the Company's share repurchase authorization. With this increase, the Company now has the authority to repurchase up to $200 million of the Company's common stock. During the third quarter of 2014, the Company repurchased $39.8 million of its common stock and from January 1, 2014 through September 30, 2014, the Company repurchased $69.2 million of its common stock. As of September 30, 2014, the Company had approximately 29.8 million shares outstanding.

Pursuant to the agreements governing our senior secured credit facilities (the "Credit Agreement") and the indenture governing our 8.375% senior subordinated notes due 2020 (the "Indenture"), the Company's ability to repurchase shares of our common stock and pay cash dividends is limited by our required compliance with certain financial covenants and limitations.

The Company also announced that it has entered into an amendment to its Credit Agreement that increased the Company's capacity to repurchase its common stock to $176.4 million.

Under the Indenture, as of September 30, 2014, our capacity to repurchase our common stock remains at $116.5 million. Accordingly, the limitations contained in the Indenture are now the most restrictive.

The limitations under the Credit Agreement and Indenture are subject to a number of adjustments which generally provide for an increase in our stock repurchase capacity of 50% of our net income (as defined in the Credit Agreement and Indenture) per quarter (in the case of the Indenture, reductions for net losses) and a decrease by the amount of share repurchases made and dividends paid on a quarterly basis. These limitations also are subject to a number of other adjustments as set forth in the Credit Agreement and the Indenture, each of which we filed with the Securities and Exchange Commission.

Stock repurchases may be made in open market or privately negotiated transactions from time to time. The Company will base future repurchase decisions on such factors as Asbury's stock price, general economic and market conditions, the potential impact on its capital structure, and the expected return on competing uses of capital such as strategic dealership acquisitions and capital investments. Asbury gives no assurance as to the amount of repurchases to be made or the actual purchase prices.

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