XML 31 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

Intangibles | 6 Months Ended
--- | ---
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
INTANGIBLES | INTANGIBLES The Company evaluates its intangible assets, consisting entirely of goodwill and indefinite-lived franchise rights, for impairment annually, or more frequently if events or circumstances indicate possible impairment. As described in Note 1 “Interim Financial Information,” since emerging in December 2019, the COVID-19 pandemic has spread globally, including to all of the Company’s markets in the U.S., U.K. and Brazil. While the U.S. and U.K. began to show signs of recovery in the second quarter of 2020, the Company’s showrooms in Brazil did not fully reopen until May 2020 and operated at reduced hours. Despite operations resuming in Brazil, the impact of the virus continues to worsen and has not yet reached its predicted peak in some of the Company’s Brazilian markets. The slower than expected recovery from the COVID-19 pandemic in Brazil during the second quarter of 2020 constituted a triggering event indicating that goodwill may be impaired. Therefore the Company performed a quantitative goodwill impairment test for the Brazil reporting unit as of June 30, 2020 and as a result, the Company recorded a goodwill impairment charge of $10.7 million within the Brazil reporting unit. The following is a roll-forward of the Company’s goodwill accounts by reportable segment (in millions):
|  | Goodwill
|  | U.S. |  | U.K. |  | Brazil |  | Total
Balance, December 31, 2019 (1) |  | $ | 902.3 |  |  | $ | 92.1 |  |  | $ | 13.9 |  |  | $ | 1,008.3 |
Additions and adjustments |  | 1.3 |  |  | — |  |  | — |  |  | 1.3 |
Disposals |  | — |  |  | — |  |  | — |  |  | — |
Impairments |  | — |  |  | — |  |  | (10.7 | ) |  | (10.7 | )
Currency translation |  | — |  |  | (6.0 | ) |  | (3.1 | ) |  | (9.1 | )
Balance, June 30, 2020 |  | $ | 903.6 |  |  | $ | 86.1 |  |  | $ | — |  |  | $ | 989.7 |
(1) Net of accumulated impairments of $108.6 million. The impact of the COVID-19 pandemic on the economy and unemployment during the second quarter of 2020 adversely impacted the Company’s operating results in the U.S., U.K. and Brazil, as well as the Company’s long-term outlook projections compared to the projections in first quarter of 2020. As a result, it was concluded that it was more-likely-than-not that the intangible franchise rights of some dealerships were impaired, requiring a quantitative test as of June 30, 2020. As a result of the quantitative impairment test, the Company determined that the fair value of the franchise rights on six U.K. dealerships and one Brazil dealership were below their respective carrying values. This resulted in franchise rights impairment charges of $11.1 million in the U.K segment and $0.1 million in the Brazil segment. In estimating the fair value required for the goodwill and intangible franchise impairment tests, the Company used a discounted cash flow model, or income approach, specifically the excess earnings method. Significant inputs to the model included changes in revenue growth rates, future gross margins, future SG&A expenses, terminal growth rates and the WACC, which were unobservable inputs, or Level 3 in the fair value hierarchy. The impairment charges were recognized within Asset impairments in the Company's Consolidated Statements of Operations.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_IntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration