Note 16 - Acquisitions

12 Months Ended

Dec. 31, 2011

Business Combination Disclosure [Text Block]

(16)         Acquisitions

The following acquisitions were completed in 2011:

·      In April 2011, we acquired the inventory, equipment, real estate and intangible assets of, and assumed certain liabilities related to, Mercedes-Benz of Portland, Oregon, Mercedes Benz of Wilsonville, Oregon and Rasmussen BMW/MINI in Portland, Oregon from the Don Rasmussen Group.

·      In October 2011 we acquired the inventory, equipment, real estate and intangible assets of Fresno Subaru from Herwaldt Automotive Group.

These acquisitions contributed revenues of $122.0 million for the year ended December 31, 2011.

The following unaudited pro forma summary presents consolidated information as if the above acquisitions had occurred on January 1, 2010 (in thousands, except for per share amounts):

Year Ended December 31,	2011		2010
Revenue	$	2,753,745	$	2,245,439
Income from continuing operations, net of tax		56,624		14,591
Basic income per share from continuing operations, net of tax		2.16		0.56
Diluted income per share from continuing operations, net of tax		2.12		0.56

These amounts have been calculated by estimating and applying our accounting policies. The results of these stores have been adjusted to reflect depreciation on a straight-line basis over our expected lives for property, plant and equipment; accounting for inventory on a specific identification method; and recognition of interest expense for real estate financing related to stores where we purchased the facility. No nonrecurring pro forma adjustments directly attributable to these business combinations are included in the reported pro forma revenues and earnings.

The above acquisitions were all accounted for under the acquisition method of accounting. No portion of the purchase price was paid with our equity securities. The following table summarizes the consideration paid for acquisitions and the amount of identified assets acquired and liabilities assumed as of the acquisition date (in thousands):

	Consideration
Cash paid	$	55,368
Floor plan financing assumed		19,348
	$	74,716
	Assets Acquired and Liabilities Assumed
Inventories	$	29,268
Franchise value		14,517
Property, plant and equipment		17,351
Real estate lease reserves		325
Other assets		1,475
Reserves		(663	)
Other liabilities		(426	)
		61,847
Goodwill		12,869
	$	74,716

We account for franchise value as an indefinite-lived intangible asset. We expect the full amount of the goodwill recognized to be deductible for tax purposes. We did not have any material acquisition related expenses in 2011.

In July 2011, we were awarded a Ford franchise in Klamath Falls, Oregon. Consideration of $5.1 million was paid for the inventory, equipment and associated real estate.

On July 19, 2010, we acquired the inventory, equipment and intangible assets and assumed certain liabilities related to Honda of Bend and agreed to the transfer of Chevrolet and Cadillac brands from Bob Thomas Chevrolet Cadillac, both located in Bend, Oregon. On August 9, 2010, we acquired the inventory, equipment, real estate and intangible assets and assumed certain liabilities related to Toyota of Billings from Prestige Toyota, located in Billings, Montana. Consideration paid for the acquisitions totaled $25.6 million, of which $23.7 million was paid in cash and $1.9 million was financed through a floor plan credit facility. We subsequently financed the real estate purchased for $8.1 million, for which we had paid cash in connection with the acquisition transactions. The fair values of assets acquired and liabilities assumed are not material to our Consolidated Balance Sheets. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition. Pro forma results operations are not materially different than actual results of operations.