What were the gains on sale-leaseback transactions for Christian Brothers Automotive in 2023?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| Liabilities and | ||||
|---|---|---|---|---|
| Current Liabilities | ||||
| Accounts payable | $ 6 ,972,206 | $ 1 84,701 $ 1,814,398 $ 2 91,778 $ 195,162 | $ 9 ,458,245 $ (2,268,670) | $ 7 ,189,575 |
| Accrued expenses | 5 ,153,509 | 2 9,256,251 - - 271,570 | 3 4,681,330 (27,327,196) | 7 ,354,134 |
| State and property taxes payable | 4 95,321 | - - - | - 4 95,321 | - 4 95,321 |
| Distributions payable Contract liabilities | 2 ,877,692 | - - - | - 2 ,877,692 | - 2 ,877,692 |
| Current portion of long-term debt | 1 1,742,030 4 ,119,867 | 1 ,672,532 - - - - - 411,580 | - 1 1,742,030 6 ,203,979 | - - 1 1,742,030 6 ,203,979 |
| Operating lease liability, current | 4 1,198,967 | - - - | - 4 1,198,967 | - 4 1,198,967 |
| Other current liabilities | 2 ,419,010 | - - - | - 2 ,419,010 (868,961) | 1 ,550,049 |
| Total current liabilities 7 4,978,602 | 3 1,113,484 1,814,398 2 91,778 878,312 | 109,076,574 (30,464,827) | 7 8,611,747 | |
| Deferred Gain on Sale of | ||||
| Leased Properties | 6 ,300,242 | - - - | - 6 ,300,242 | - 6 ,300,242 |
| Operating Lease Liability, | ||||
| Long-Term | 412,389,122 | - - - | - 412,389,122 | - 412,389,122 |
| Long-Term Debt, | ||||
| Net of Current Portion | ||||
| and Unamortized Loan Fees | 4 6,713,777 | 7 2,595,440 - - 11,826,267 | 131,135,484 (7,281,095) | 123,854,389 |
| Subordinated Debt, | ||||
| Net of Current Portion | - 2 9,916,000 - - | - 2 9,916,000 | - 2 9,916,000 | |
| Total liabilities 540,381,743 | 133,624,924 1,814,398 2 91,778 12,704,579 | 688,817,422 (37,745,922) | 651,071,500 | |
| Shareholders' Equity | ||||
| Common stock | 134 - - - 3,100,000 | 3 ,100,134 (3,100,000) | 134 | |
| Additional paid-in capital | 1 2,330,226 | - - - 1,449,595 | 1 3,779,821 (1,449,595) | 1 2,330,226 |
| Treasury Stock | (1,037,740) | - - - | - (1,037,740) | - (1,037,740) |
| Unearned ESOP share value Retained earnings | (17,817,842) | - - - | - (17,817,842) | - (17,817,842) |
| 9 0,446,066 | (1,568,737) 125,644 (210,938) (755,082) | 8 8,036,953 (3,222,825) | 8 4,814,128 | |
| shareholders' equity 8 3,920,844 | (10,251,555) 125,644 (210,938) 4,202,278 | 7 7,786,273 (7,772,420) | 7 0,013,853 | |
| Noncontrolling Interest | - 8 ,682,818 - - (407,765) | 8 ,275,053 | - 8 ,275,053 | |
| Total shareholders' equity 8 3,920,844 | (1,568,737) 125,644 (210,938) 3,794,513 | 8 6,061,326 (7,772,420) | 7 8,288,906 | |
| Total liabilities and shareholders' equity $ 624,302,587 | $ 132,056,187 $ 1,940,042 $ 8 0,840 $ 16,499,092 | $ 774,878,748 $ (45,518,342) | $ 729,360,406 |
9. Sale-Leaseback Transactions
As of December 31, 2022, the Company had entered into 22 sale-leaseback agreements of land and buildings on leased properties. The Company defers real estate gains during for recognition in future periods. This deferred amount is recognized into income over the life of each respective lease. Gains recognized in the 2023 and 2022 consolidated statements of income related to the amortization of deferred gain on real estate were approximately $2,256,000 and $921,000, resp
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, in 2023, the gains recognized in the consolidated statements of income related to the amortization of deferred gain on real estate were approximately $2,256,000. This amount is included in gains on sale-leaseback transactions.
Christian Brothers Automotive engages in sale-leaseback transactions, where they sell real estate and facilities used by franchise locations and then lease them back. The company defers real estate gains and recognizes them over the life of the respective leases.
The total deferred gain on the sale of real estate at the end of 2023 was approximately $7,153,000. This indicates the cumulative amount of gains from previous sale-leaseback transactions that Christian Brothers Automotive is still recognizing over time.