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GOODWILL AND INTANGIBLE FRANCHISE RIGHTS
 12 Months Ended
Dec. 31, 2023
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 $231.7 million, and franchise rights of $429.0 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, 2023 and 2022 are as follows:
Goodwill
 DealershipsTCATotal
 (In millions)
Balance as of December 31, 2021 (a)$1,561.4 $710.3 $2,271.7 
Reclassified from assets held for sale118.5 — 118.5 
Acquisitions - measurement period adjustments(337.0)(173.7)(510.7)
Divestitures(95.2)— (95.2)
Reclassified to assets held for sale(0.9)— (0.9)
Balance as of December 31, 2022 (a)$1,246.8 $536.6 $1,783.4 
Reclassified from assets held for sale0.9 — 0.9 
Acquisitions240.8 — 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 
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(a) Net of accumulated impairment losses of $537.7 million recorded prior to the year ended December 31, 2021.
 Intangible Franchise Rights
 (In millions)
Balance as of December 31, 2021$1,335.7 
Reclassified from assets held for sale110.0 
Acquisitions - measurement-period adjustments517.7 
Divestitures(163.3)
Balance as of December 31, 2022$1,800.1 
Acquisitions429.0 
Impairments(102.3)
Reclassified to assets held for sale(31.0)
Balance as of December 31, 2023$2,095.8 
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 quantitative impairment tests for franchise rights included 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. 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. These asset impairment charges are reflected in asset impairments in our consolidated statements of income.
Additionally, in connection with a change in reporting units in our Dealerships segment, we performed quantitative impairment tests of goodwill for the affected reporting units as of October 1, 2023, both before and after the change in reporting units. 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 related to certain reporting units indicated that the fair value of these reporting units exceeded their carrying values.
We also performed qualitative assessments on the remaining franchise rights and goodwill reporting units as of October 1, 2023. The results of our qualitative assessment 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. The results of our qualitative assessments of goodwill impairment related to the remaining reporting units indicated that the fair values of the reporting units more likely than not exceeded their carrying values.
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. 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.
We elected to perform a qualitative assessment for our October 1, 2022 goodwill and franchise rights impairment testing and determined that it was more likely than not that the fair value of our franchise rights and reporting units exceeded their carrying value.
In total, we recognized asset impairments of $117.2 million during the year ended December 31, 2023. We did not record an impairment charge for goodwill or franchise rights during the year ended December 31, 2022.