XML 42 R19.htm IDEA: XBRL DOCUMENT
v3.25.0.1

GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | 12 Months Ended
--- | ---
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | GOODWILL AND INTANGIBLE FRANCHISE RIGHTS Our acquisitions have resulted in the recording of goodwill and intangible franchise rights. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible franchise rights is an asset representing our rights under franchise agreements with vehicle manufacturers. In connection with the Koons acquisition, we recorded goodwill of $272.4 million and franchise rights of $401.0 million. Goodwill related to the Koons acquisition was allocated to the Dealerships segment. The changes in goodwill and intangible franchise rights for the years ended December 31, 2024 and 2023 are as follows:
| Goodwill
| Dealerships |  | TCA |  | Total
| (In millions)
Balance as of December 31, 2022 (a) | $ | 1,246.8 |  |  | $ | 536.6 |  |  | $ | 1,783.4 |
Reclassified from assets held for sale | 0.9 |  |  | — |  |  | 0.9 |
Acquisitions | 240.8 |  |  | — |  |  | 240.8 |
Divestitures | (0.9) |  |  | — |  |  | (0.9) |
Impairments | (14.9) |  |  | — |  |  | (14.9) |
Reclassified to assets held for sale | (0.3) |  |  | — |  |  | (0.3) |
Balance as of December 31, 2023 (a) | $ | 1,472.4 |  |  | $ | 536.6 |  |  | $ | 2,009.0 |
Reclassified from assets held for sale | 29.6 |  |  | — |  |  | 29.6
Acquisitions | 40.9 |  |  | — |  |  | 40.9
Divestitures | (30.1) |  |  | — |  |  | (30.1) |
Impairments | (1.3) |  |  | — |  |  | (1.3) |
Reclassified to assets held for sale | (3.5) |  |  | — |  |  | (3.5) |
Balance as of December 31, 2024 (a) | $ | 1,508.1 |  |  | $ | 536.6 |  |  | $ | 2,044.7 |
_____________________________ (a) Net of accumulated impairment losses of $537.7 million recorded prior to the year ended December 31, 2022.
| Intangible Franchise Rights
| (In millions)
Balance as of December 31, 2022 | $ | 1,800.1 |
Acquisitions - measurement-period adjustments | 429.0 |
Impairments | (102.3) |
Reclassified to assets held for sale | (31.0) |
Balance as of December 31, 2023 | $ | 2,095.8 |
Reclassified from assets held for sale | 71.9
Acquisitions - measurement-period adjustments | (26.7) |
Divestitures | (74.6) |
Impairments | (148.2) |
Reclassified to assets held for sale | (6.5) |
Balance as of December 31, 2024 | $ | 1,911.7 |
Our quantitative impairment tests for franchise rights include a comparison of the estimated fair value to the carrying value of each franchise right asset. The Company estimates fair value by using a discounted cash flow model (income approach) based on market participant assumptions related to the cash flows directly attributable to the franchise. These assumptions include year-over-year and terminal growth rates, weighted average cost of capital, future gross margins, and future selling, general and administrative expenses. Based on the underperformance of certain stores, we performed quantitative impairment tests in the second quarter of 2024 and as of our annual impairment testing date, October 1, 2024. The results of the quantitative impairment testing identified that the carrying values of certain of our franchise rights intangible assets exceeded their fair value by $134.1 million and $14.1 million and the related impairment charges were recorded during the three months ended June 30, 2024 and December 31, 2024, respectively. In total, we recognized a $148.2 million pre-tax non-cash impairment charge related to our franchise rights intangible assets during the year ended December 31, 2024. Based on the underperformance of certain stores, limited primarily to two brands, along with an increase in discount rates, we performed quantitative impairment tests of franchise rights for certain stores in our Dealerships segment as of October 1, 2023. The results of the quantitative impairment testing identified that the carrying values of certain of our franchise rights intangible assets exceeded their fair value. As a result, we recognized a $73.1 million pre-tax non-cash impairment charge related to our franchise rights intangible assets during the year ended December 31, 2023. We also performed qualitative impairment assessments on the remaining franchise rights as of October 1, 2024 and 2023, respectively. The results of our qualitative impairment assessments on the remaining franchise rights indicated that the fair values of the franchise rights related to those dealerships more likely than not exceeded their carrying values. Additionally, in connection with changes in reporting units in our Dealerships segment, we performed qualitative and quantitative impairment tests of goodwill for the affected reporting units as of October 1, 2024 and 2023, both before and after the change in reporting units. Lastly, we performed an interim quantitative impairment test of goodwill for two reporting units in the second quarter of 2024. The quantitative impairment tests of goodwill included a comparison of the estimated fair value to the carrying value of the reporting unit. The Company estimates fair value by using a discounted cash flow model (income approach) based on market participant assumptions. These assumptions include year-over-year and terminal growth rates, weighted average cost of capital, future gross margins, and future selling, general and administrative expenses. The results of our quantitative goodwill impairment tests during the second quarter of 2024 and as of October 1, 2024 and 2023 related to certain reporting units indicated that the fair value of these reporting units exceeded their carrying values. We performed qualitative impairment assessments on the remaining reporting units as of October 1, 2024 and 2023, respectively. The results of our qualitative impairment assessments of goodwill related to the remaining reporting units indicated that the fair values of the reporting units more likely than not exceeded their carrying values. We also recorded a goodwill impairment charge of $1.3 million during the year ended December 31, 2024 related to one dealership that met the assets held for sale criteria in June 2024. The quantitative impairment test of the disposal group included a comparison of the estimated fair value to the carrying value of the disposal group less cost to sell. In December 2023, certain dealerships met the held for sale criteria and the assets and liabilities associated with these dealerships were reclassified as assets held for sale and liabilities associated with assets held for sale in our consolidated balance sheets. As a result, we evaluated the disposal groups to ensure their recording at the lower of their carrying value or fair value less costs to sell. The quantitative impairment tests of each disposal group included a comparison of the estimated fair value to the carrying value of the disposal group less costs to sell. The Company determined the estimated fair value of each disposal group based on the estimated sales proceeds less cost to sell. As a result of this analysis, we recorded asset impairment charges of $44.1 million in 2023. These asset impairment charges are reflected in asset impairments in our consolidated statements of income. Since the resulting impairment charges and the decision to dispose of these dealerships represented a triggering event for goodwill, we performed quantitative impairment tests of goodwill for the affected reporting units in December 2023. The results of our quantitative goodwill impairment tests for the affected reporting units indicated that the fair value of these reporting units exceeded their carrying values. In total, we recognized asset impairments of $149.5 million and $117.2 million during the years ended December 31, 2024 and 2023, respectively.

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 goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration