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ACQUISITIONS | 9 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS | ACQUISITIONS In the first nine months of 2024, we completed the following acquisitions: •In January 2024, Pendragon PLC’s Fleet Management and UK Motor Divisions in the United Kingdom. •In February 2024, Carousel Motor Group in Minnesota and Wisconsin. •In May 2024, Pine View Hyundai Store in Ontario, Canada. •In June 2024, Sunrise Chevrolet Buick GMC at Collierville and Sunrise Buick GMC at Wolfchase in Tennessee. •In September 2024, Duval Honda, Duval Acura and Gainesville Subaru in Florida. Revenue and operating income contributed by the 2024 acquisitions subsequent to the date of acquisition were as follows (in millions):
Nine Months Ended September 30, | 2024
Revenue | $ | 3,863.7 |
Operating income | 35.1 |
In the first nine months of 2023, we completed the following acquisitions: •In February 2023, Thornhill Acura in Canada. •In March 2023, Jardine Motors Group UK Limited in the United Kingdom. •In June 2023, Priority Auto Group in Virginia. •In June 2023, Wade Ford in Georgia. •In July 2023, Hill Country Honda in Texas. •In August 2023, Arden Auto Group in the United Kingdom. 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 2024 acquisitions and the PPA for identified assets acquired and liabilities assumed as of the acquisition date:
(in millions) | Consideration
Cash paid, net of cash acquired | $ | 1,247.0 |
Total consideration transferred | $ | 1,247.0 |
(in millions) | Assets Acquired and Liabilities Assumed
Accounts receivables, net | $ | 119.0 |
Inventories, net | 1,016.3 |
Property and equipment | 559.3 |
Operating lease right-of-use assets | 289.8 |
Net investment in operating leases | 181.5 |
Deferred taxes, net | 20.5 |
Other assets | 586.4 |
Floor plan notes payable assumed | (868.1) |
Trade payables | (39.6) |
Debt and finance lease obligations assumed | (22.7) |
Operating lease liabilities | (283.9) |
Other liabilities and deferred revenue | (311.5) |
Total net assets acquired and liabilities assumed | $ | 1,247.0 |
The PPA for the 2024 acquisitions are preliminary, as 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 PPA based upon information that is currently available and recorded unallocated items as a component of other non-current assets in the Consolidated Balance Sheets. We expect all of the goodwill related to North American acquisitions completed in 2023 and 2024 to be deductible for US federal income tax purposes. Due to local country laws, we do not expect goodwill related to UK acquisitions completed in 2023 and 2024 to be deductible for UK income tax purposes. In the three and nine-month periods ended September 30, 2024, we recorded $0.2 million and $9.7 million in acquisition-related expenses as a component of selling, general and administrative expense. Comparatively, we recorded $4.8 million and $10.5 million of acquisition-related expenses in the same periods of 2023. The following unaudited pro forma summary presents consolidated information as if all acquisitions in the three and nine-month periods ended September 30, 2024 and 2023 had occurred on January 1, 2023:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions, except per share amounts) | 2024 |  | 2023 |  | 2024 |  | 2023
Revenue | $ | 9,263.1 |  |  | $ | 9,775.6 |  |  | $ | 27,723.4 |  |  | $ | 27,625.3 |
Net income attributable to Lithia Motors, Inc. | 223.8 |  |  | 286.3 |  |  | 617.3 |  |  | 860.9 |
Basic EPS attributable to Lithia Motors, Inc. common stockholders | 8.37 |  |  | 10.39 |  |  | 22.73 |  |  | 31.27 |
Diluted EPS attributable to Lithia Motors, Inc. common stockholders | 8.35 |  |  | 10.36 |  |  | 22.70 |  |  | 31.21 |
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.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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