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DISCONTINUED OPERATIONS AND OTHER DIVESTITURES | 12 Months Ended
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Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES | DISCONTINUED OPERATIONS AND OTHER DIVESTITURES Brazil Discontinued Operations On November 12, 2021, the Company entered into the Brazil Disposal. The Brazil Disposal is expected to close before the end of the second quarter of 2022. The sale price of BRL 510.0 million includes a holdback amount, for general representations and warranties, of BRL 115.0 million or approximately $20.7 million, to be held in escrow for a period of five years from the close of the transaction. At the conclusion of the five-year period, the remaining funds held in escrow would be released to the Company. This amount has been included in the estimated proceeds. The following table summarizes the estimated fair value of proceeds expected and net carrying value of the assets disposed (in millions):
Estimated fair value of proceeds from disposition |  | $ | 91.6 |  |
Estimated net assets disposed |  | 42.3 |  |
Estimated gain before currency translation adjustments |  | 49.2 |  |
Estimated amount of currency translation loss recorded in AOCI |  | (125.7) |  |
Estimated incremental costs to sell |  | 1.1 |  |
Net loss on disposal of the Brazil Discontinued Operations |  | $ | (77.5) |  |
Upon sale of a foreign entity, amounts recorded within Accumulated Other Comprehensive Income (“AOCI”) on the Consolidated Balance Sheets, are required to be reclassified into earnings on the date of disposition. For purposes of determining the net gain or loss on the Brazil Disposal Group, the Company included the non-cash currency translation adjustment recorded in AOCI of a loss of $125.7 million attributable to the Brazil Disposal Group. The loss on sale indicates impairment of assets to be necessary, however, the loss was entirely the result of the non-cash amount reclassified from AOCI. The Company has presented in 2021, a valuation allowance against assets held for sale of the Brazil Disposal Group to reflect the expected loss not attributable to a particular asset within the Brazil Disposal Group. In addition, the purchase price is denominated in BRL, which is subject to foreign currency exchange risk. In order to partially mitigate this risk, the Company entered into a foreign currency derivative for the conversion of BRL to USD in the form of a costless collar which protects the Company from significant downside exposure on $70.0 million of the expected purchase consideration. The assets, liabilities and operating results of the Brazil Disposal Group are reported as discontinued operations for all periods presented as the disposition reflects a strategic shift by the Company. The Company classified assets and liabilities of the Brazil Disposal Group as held for sale in the Consolidated Balance Sheets at the lower of its carrying amount or fair value less costs to sell. Results of the Brazil Discontinued Operations were as follows (in millions):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
REVENUES: |  |  |  |  |  |
New vehicle retail sales |  | $ | 205.6 |  |  | $ | 152.4 |  |  | $ | 286.8 |
Used vehicle retail sales |  | 58.1 |  |  | 50.0 |  |  | 85.4 |
Used vehicle wholesale sales |  | 11.3 |  |  | 12.3 |  |  | 18.3 |
Parts and service sales |  | 38.7 |  |  | 31.9 |  |  | 47.6 |
Finance, insurance and other, net |  | 6.1 |  |  | 5.0 |  |  | 7.6 |
Total revenues |  | 319.8 |  |  | 251.6 |  |  | 445.9 |
COST OF SALES: |  |  |  |  |  |
New vehicle retail sales |  | 184.9 |  |  | 141.3 |  |  | 269.1 |
Used vehicle retail sales |  | 53.1 |  |  | 46.3 |  |  | 79.5 |
Used vehicle wholesale sales |  | 10.5 |  |  | 11.5 |  |  | 17.1 |
Parts and service sales |  | 22.0 |  |  | 17.7 |  |  | 26.6 |
Total cost of sales |  | 270.6 |  |  | 216.7 |  |  | 392.3 |
GROSS PROFIT |  | 49.2 |  |  | 34.8 |  |  | 53.5 |
Selling, general and administrative expenses |  | 34.3 |  |  | 31.1 |  |  | 46.0 |
Depreciation and amortization expense |  | 1.5 |  |  | 2.3 |  |  | 1.6 |
Asset impairments |  | 77.5 |  |  | 11.1 |  |  | 0.5 |
(LOSS) INCOME FROM DISCONTINUED OPERATIONS |  | (64.1) |  |  | (9.6) |  |  | 5.4 |
INTEREST EXPENSE: |  |  |  |  |  |
Floorplan interest expense |  | 1.1 |  |  | 0.3 |  |  | 0.7 |
Other interest expense, net |  | 0.9 |  |  | 0.7 |  |  | 0.1 |
Loss on extinguishment of debt |  | 3.8 |  |  | — |  |  | — |
(LOSS) INCOME BEFORE INCOME TAXES — DISCONTINUED OPERATIONS |  | (69.9) |  |  | (10.5) |  |  | 4.6 |
Provision (benefit) for income taxes |  | 3.4 |  |  | (0.3) |  |  | (0.4) |
NET (LOSS) INCOME — DISCONTINUED OPERATIONS |  | $ | (73.3) |  |  | $ | (10.2) |  |  | $ | 5.0 |
The following table presents cash flows from operating and investing activities for the Brazil Discontinued Operations (in millions):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Net cash provided by operating activities — discontinued operations |  | $ | 5.2 |  |  | $ | 13.1 |  |  | $ | 6.9 |
Net cash used in investing activities — discontinued operations |  | $ | (1.5) |  |  | $ | (6.8) |  |  | $ | (3.0) |
Assets and liabilities of the Brazil Discontinued Operations were as follows (in millions):
|  | As of December 31,
|  | 2021 |  | 2020
Cash and cash equivalents |  | $ | 3.7 |  |  | $ | 18.3 |
Contracts-in-transit and vehicle receivables, net |  | 2.3 |  |  | 0.6 |
Accounts and notes receivable, net |  | 11.8 |  |  | 7.8 |
Inventories |  | 37.2 |  |  | 21.5 |
Prepaid expenses |  | 1.9 |  |  | 4.0 |
Assets of discontinued operations — current |  | 56.9 |  |  | 52.3 |
Property and equipment, net |  | 22.3 |  |  | 23.9 |
Operating lease assets |  | 2.4 |  |  | 2.8 |
Other long-term assets |  | 7.8 |  |  | 8.5 |
Assets of discontinued operations — non-current (1) |  | 32.5 |  |  | 35.2 |
Total assets, before valuation allowance |  | 89.5 |  |  | 87.5 |
Valuation allowance |  | (76.4) |  |  | — |
Total assets, net of valuation allowance (1) |  | $ | 13.0 |  |  | $ | 87.5 |
Floorplan notes payable — credit facility and other |  | $ | 3.3 |  |  | $ | 1.1 |
Floorplan notes payable — manufacturer affiliates |  | 20.1 |  |  | 6.7 |
Current maturities of long-term debt |  | — |  |  | 0.7 |
Current operating lease liabilities |  | 2.5 |  |  | 1.6 |
Accounts payable |  | 13.7 |  |  | 12.2 |
Accrued expenses and other current liabilities |  | 8.7 |  |  | 9.0 |
Liabilities of discontinued operations — current |  | 48.3 |  |  | 31.3 |
Long-term debt |  | — |  |  | 14.1 |
Long-term operating lease liabilities |  | — |  |  | 1.5 |
Liabilities of discontinued operations — non-current (1) |  | — |  |  | 15.7 |
Total liabilities (1) |  | $ | 48.3 |  |  | $ | 47.0 |
(1) The assets and liabilities of the Brazil Discontinued Operations are classified in current assets and liabilities, respectively, in the Consolidated Balance Sheet as of December 31, 2021, as the Brazil Disposal is expected to close before the end of the second quarter of 2022. The assets and liabilities of the Brazil Discontinued Operations are classified in their respective current or long-term classifications in the Consolidated Balance Sheet as of December 31, 2020, in accordance with the nature and underlying classification of such assets and liabilities, as the Brazil Disposal did not occur within one-year of that date. Assets and Liabilities Held for Sale Assets and liabilities classified as held for sale consisted of the following (in millions):
|  | As of December 31,
|  | 2021 |  | 2020
Current assets classified as held for sale |  |  |  |
Brazil Discontinued Operations |  | $ | 13.0 |  |  | $ | 52.3 |
Prime Acquisition (1) |  | 52.3 |  |  | — |
Other (2) |  | 34.9 |  |  | 2.4 |
Total current assets classified as held for sale |  | $ | 100.3 |  |  | $ | 54.7 |
Long-term assets classified as held for sale |  |  |  |
Brazil Discontinued Operations |  | $ | — |  |  | $ | 35.2 |
Total long-term assets classified as held for sale |  | $ | — |  |  | $ | 35.2 |
Current liabilities classified as held for sale |  |  |  |
Brazil Discontinued Operations |  | $ | 48.3 |  |  | $ | 31.3 |
Prime Acquisition (1) |  | 1.6 |  |  | — |
Other |  | — |  |  | — |
Total current liabilities classified as held for sale |  | $ | 49.9 |  |  | $ | 31.3 |
Long-term liabilities classified as held for sale |  |  |  |
Brazil Discontinued Operations |  | $ | — |  |  | $ | 15.7 |
Total long-term liabilities classified as held for sale |  | $ | — |  |  | $ | 15.7 |
(1) For additional details on current assets and current liabilities classified as held for sale in connection with the Prime Acquisition, refer to Note 3. Acquisitions. (2) Includes $9.9 million of goodwill reclassified to assets held for sale as of December 31, 2021. Other Divestitures During the year ended December 31, 2021, the Company recorded a net pre-tax gain totaling $4.4 million related to the disposition of three dealerships representing three franchises and one franchise within an existing dealership in the U.S. The dispositions reduced goodwill by $4.0 million. The Company terminated one franchise within an existing dealership in the U.S. The Company also terminated one dealership representing one franchise in the U.K. During the year ended December 31, 2020, the Company’s dispositions included two dealerships representing three franchises in the U.S. The Company recorded a net pre-tax gain totaling $3.1 million related to these dispositions. During the year ended December 31, 2019, the Company’s dispositions included four dealerships, representing seven franchises, and two terminated franchises in the U.S.; and three dealerships representing four terminated franchises in the U.K. The Company recorded a net pre-tax gain totaling $4.8 million related to these dispositions. The Company’s dispositions generally consist of dealership assets and related real estate. Gains and losses on dispositions are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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