Annual report pursuant to Section 13 and 15(d)

Business Acquisitions and Dispositions (Tables)

v3.20.4
Business Acquisitions and Dispositions (Tables)
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Revenues and Other Activities Associated with Disposed Dealerships Classified as Discontinued Operations
Income (loss) from operations and lease exit accrual adjustments and charges associated with disposed dealerships classified as discontinued operations were as follows: 
Year Ended December 31,
2020 2019 2018
(In thousands)
Income (loss) from operations before taxes $ (1,002) $ (554) $ (610)
Lease exit accrual adjustments and charges —  —  (407)
Income (loss) from discontinued operations before taxes $ (1,002) $ (554) $ (1,017)
Revenues and Other Activities Associated with Disposed Dealerships That Remain in Continuing Operations
Revenues and other operating results associated with disposed dealerships that remain in continuing operations were as follows:
Year Ended December 31,
2020 2019 2018
(In thousands)
Income (loss) from operations before taxes and items below $ (2,580) $ 2,717  $ (5,158)
Gain (loss) on disposal of dealerships (1) 3,095  74,812  39,307 
Lease exit accrual adjustments and charges —  170  (408)
Impairment charges —  —  (8,137)
Income (loss) before taxes $ 515  $ 77,699  $ 25,604 
Total revenues $ 52,138  $ 419,469  $ 884,581 
Business Acquisitions and Dispositions
2. Business Acquisitions and Dispositions
Acquisitions
We acquired two pre-owned businesses for approximately $19.7 million and opened seven new EchoPark stores during 2020. We did not acquire any businesses and opened one new EchoPark store in 2019. We opened one manufacturer-awarded luxury franchised dealership and three new EchoPark stores in 2018. Acquisitions are included in the consolidated financial statements from the date of acquisition.
Dispositions
We disposed of one mid-line import franchised dealership and terminated two luxury franchises in 2020, which generated net cash from dispositions of approximately $9.6 million. We disposed of one luxury franchised dealership and nine
mid-line import franchised dealerships in 2019, which generated net cash from dispositions of approximately $250.7 million. We disposed of two luxury franchised dealerships and five mid-line import franchised dealerships in 2018, which generated net cash from dispositions of approximately $128.7 million. Additionally, we terminated one luxury franchised dealership and ceased operations at a previously acquired pre-owned store in Florida and four stores in our EchoPark Segment in 2018. In conjunction with dealership dispositions, we have agreed to indemnify the buyers from certain liabilities and costs arising from operations or events that occurred prior to sale but which may or may not have been known at the time of sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made under the agreements. See Note 12, “Commitments and Contingencies,” for further discussion.
Prior to our adoption of ASU 2014-08 beginning with our Quarterly Report on Form 10-Q for the period ended June 30, 2014, individual dealership franchises sold, terminated or classified as held for sale were reported as discontinued operations. The results of operations of these dealership franchises sold or terminated on or prior to March 31, 2014 are reported as discontinued operations for all periods presented. Dealership franchises sold after March 31, 2014 have not been reclassified to discontinued operations since they did not meet the criteria in ASU 2014-08.
Income (loss) from operations and lease exit accrual adjustments and charges associated with disposed dealerships classified as discontinued operations were as follows: 
Year Ended December 31,
2020 2019 2018
(In thousands)
Income (loss) from operations before taxes $ (1,002) $ (554) $ (610)
Lease exit accrual adjustments and charges —  —  (407)
Income (loss) from discontinued operations before taxes $ (1,002) $ (554) $ (1,017)
Revenues and other operating results associated with disposed dealerships that remain in continuing operations were as follows:
Year Ended December 31,
2020 2019 2018
(In thousands)
Income (loss) from operations before taxes and items below $ (2,580) $ 2,717  $ (5,158)
Gain (loss) on disposal of dealerships (1) 3,095  74,812  39,307 
Lease exit accrual adjustments and charges —  170  (408)
Impairment charges —  —  (8,137)
Income (loss) before taxes $ 515  $ 77,699  $ 25,604 
Total revenues $ 52,138  $ 419,469  $ 884,581 
(1)Included in selling, general and administrative expenses in the accompanying consolidated statements of operations.
In the ordinary course of business, we evaluate our dealership franchises for possible disposition based on various strategic and performance criteria. As of December 31, 2020, we did not have any franchises classified as held for sale; however, in the future, we may sell franchises that are not currently held for sale.