RideNow Group, Inc.RDNW
RideNow Group, Inc. Leases Disclosure
LEASES
Supplemental information related to leases as of December 31 was as follows ($ in millions):
| Leases | Balance Sheet Classification | 2024 | 2023 | |||||||||||||||||
| Assets: | ||||||||||||||||||||
| Operating lease assets | ROU assets | $ | 157.1 | $ | 163.9 | |||||||||||||||
| Finance lease assets | 43.8 | 45.6 | ||||||||||||||||||
| Total | $ | 200.9 | $ | 209.5 | ||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating | 24.3 | $ | 23.9 | |||||||||||||||||
| Non-Current | ||||||||||||||||||||
| Operating | Long-term portion of operating lease liabilities | 129.8 | 134.1 | |||||||||||||||||
| Finance | 50.6 | 49.8 | ||||||||||||||||||
| Total lease liabilities | $ | 204.7 | $ | 207.8 | ||||||||||||||||
The weighted-average remaining lease terms and discount rates for our operating and financing leases as of December 31 for the corresponding year were as follows:
| 2024 | 2023 | ||||||||||
| Weighted average remaining lease term (years): | |||||||||||
| Operating leases | 13.6 | 13.9 | |||||||||
| Finance leases | 38.7 | 39.7 | |||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | 14.3 | % | 14.1 | % | |||||||
| Finance leases | 9.0 | % | 9.0 | % | |||||||
The following table provides information related to the lease costs of finance and operating leases ($ in millions):
| Lease Expense | Income Statement Classification | 2024 | 2023 | |||||||||||||||||
| Operating | SG&A expenses | $ | 33.3 | $ | 32.6 | |||||||||||||||
| Finance: | ||||||||||||||||||||
| Depreciation on assets | Depreciation and amortization expense | 3.1 | 0.9 | |||||||||||||||||
| Interest on lease liabilities | Interest expense | 4.6 | 1.4 | |||||||||||||||||
| Total lease costs | $ | 41.0 | $ | 34.9 | ||||||||||||||||
The following table provides information related to the portion of operating lease assets and liabilities which are attributable to related-party operating leases (described in Note 15) at December 31 ($ in millions):
| Leases | 2024 | 2023 | ||||||||||||
| Assets: | ||||||||||||||
| ROU assets – related party | $ | 106.3 | $ | 108.5 | ||||||||||
| All other ROU assets | 50.8 | 55.4 | ||||||||||||
| Total | $ | 157.1 | $ | 163.9 | ||||||||||
| Liabilities: | ||||||||||||||
| Current: | ||||||||||||||
Current portion of lease liabilities – related party | $ | 14.6 | $ | 14.2 | ||||||||||
| Current portion of lease liabilities – all other leases | 9.7 | 9.7 | ||||||||||||
| Total current liabilities | 24.3 | 23.9 | ||||||||||||
| Non-Current: | ||||||||||||||
Long-term portion of lease liabilities – related party | 101.5 | 96.2 | ||||||||||||
Long-term portion of lease liabilities – all other leases | 28.3 | 37.9 | ||||||||||||
| Total non-current liabilities | 129.8 | 134.1 | ||||||||||||
| Total operating lease liabilities | $ | 154.1 | $ | 158.0 | ||||||||||
Supplemental cash flow information related to leases was as follows:
| ($ in millions) | 2024 | 2023 | |||||||||
| Cash payments for operating leases | $ | 30.5 | $ | 29.3 | |||||||
| New assets obtained in exchange for operating lease liabilities | 5.9 | 14.9 | |||||||||
| Cash payments for finance leases | 3.8 | 1.2 | |||||||||
The following table summarizes the future minimum payments for leases as of December 31, 2024:
| ($ in millions) | Operating Leases | Finance Lease | ||||||||||||
| 2025 | $ | 30.2 | $ | 3.8 | ||||||||||
| 2026 | 29.1 | 3.9 | ||||||||||||
| 2027 | 27.8 | 4.0 | ||||||||||||
| 2028 | 22.7 | 4.1 | ||||||||||||
| 2029 | 20.9 | 4.2 | ||||||||||||
| Thereafter | 247.9 | 201.6 | ||||||||||||
| Total lease payments | 378.6 | 221.6 | ||||||||||||
| Less imputed interest | (224.5) | (171.0) | ||||||||||||
| Present value of lease liabilities | $ | 154.1 | $ | 50.6 | ||||||||||
Sale-Leaseback Transactions
2024 Sale-Leaseback
In December 2024, the Company entered into a sale-leaseback transaction with a related third party discussed in more detail in Note 15. Under these agreements, the Company sold one of its dealership properties, including land, buildings and certain improvements, at a price of $4.0 million and then leased the assets back from a related party through the 2024 sale-leaseback transaction.
The 2024 sale-leaseback met the criteria under GAAP for a true sale. The Company removed the assets from its records and will recognize rent expense related to the leased assets. The ROU asset and short- and long-term liabilities related to this lease are in the amounts reflected above for December 31, 2024 and are included on our consolidated balance sheet.
2023 Sale-Leaseback
In September 2023, the Company entered into a sale and master lease agreement (a “sale-leaseback”) with an unrelated third party. Under these agreements, the Company sold eight of its dealership properties, including land, buildings and certain improvements, at a price of $50.0 million and then leased the assets back through the sale-leaseback transaction.
Based on certain criteria and in accordance with GAAP, the transaction was accounted for as a failed sale-leaseback. As a result, the dealership property assets remain on the consolidated balance sheet at their historical net book value and are depreciated over the remaining term of the master lease. A was recognized in the amount of the net proceeds received in the amount of $48.2 million. The Company does not recognize rent expense related to the leased assets. Instead, monthly rent payments under the master agreement (initially, $0.3 million, increasing annually by the lesser of two times the Consumer Price Index or 2% during the initial term and all option periods) will be recorded as interest expense and a reduction of the outstanding liability over the expected term of the lease.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.