Acquisitions

3 Months Ended

Mar. 31, 2020

In the first three months of 2020, we completed the following acquisitions:


•	On February 17, 2020, Sacramento Lexus and Roseville Lexus in California.

Revenue and operating income contributed by the 2020 acquisitions subsequent to the date of acquisition were as follows (in millions):



Three Months Ended March 31,	2020
Revenue	$	12.7
Operating income	—

There were no acquisitions in the first three months of 2019.

All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition.

The following tables summarize the consideration paid for the 2020 acquisitions and the amount of identified assets acquired and liabilities assumed as of the acquisition date (in millions):



	Consideration
Cash paid, net of cash acquired	$	72.3

The purchase price allocations for the Sacramento Lexus and Roseville Lexus acquisitions are preliminary, and we have not obtained and evaluated all of the detailed information necessary to finalize the opening balance sheet amounts in all respects. We recorded the purchase price allocations based upon information that is currently available. Unallocated items are recorded as a component of other non-current assets in the Consolidated Balance Sheets. The following table details the preliminary purchase price allocations for the 2020 acquisitions (in millions):



	Assets Acquired and Liabilities Assumed
Inventories, net	$	24.7
Property and equipment, net	0.5
Other non-current assets	55.7
Floor plan notes payable	(7.3		)
Other long-term liabilities	(1.3		)
	$	72.3

We expect substantially all of the goodwill related to acquisitions completed in 2020 to be deductible for federal income tax purposes.

In the three-month periods ended March 31, 2020 and March 31, 2019, we recorded $0.5 million and $0.2 million in acquisition-related expenses as a component of selling, general and administrative expense, respectively.

The following unaudited proforma summary presents consolidated information as if all acquisitions in the three-month periods ended March 31, 2020 and 2019, had occurred on January 1, 2019 (in millions, except per share amounts):



	Three Months Ended March 31,
	2020		2019
Revenue	$	2,805.5	$	2,871.8
Net income	46.3		56.8
Basic net income per share	1.99		2.45
Diluted net income per share	1.97		2.44

These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have

been adjusted to reflect the following: depreciation on a straight-line basis over the expected lives for property and equipment, accounting for inventory on a specific identification method, and recognition of interest expense for real estate financing related to stores where we purchased the facility. No nonrecurring proforma adjustments directly attributable to the acquisitions are included in the reported proforma revenues and earnings