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Note 14 - Acquisitions
 12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
(14)
Acquisitions
 
In 2015, we completed the following acquisitions:
 
•
On May 14, 2015, we acquired a smart franchise from Smart Center of Omaha.
 
•
On July 31, 2015, we acquired Bitterroot Ford in Missoula, Montana.
 
•
On August 20, 2015, we acquired Acura of Honolulu in Honolulu, Hawaii.
 
•
On September 28, 2015, we acquired Bennett Motors in Great Falls, Montana.
 
•
On October 12, 2015, we acquired Crown Chrysler Jeep Dodge Ram Fiat in Concord, California.
 
•
On December 17, 2015, we acquired Barton Chrysler Jeep Dodge Ram Alfa Fiat in Spokane, Washington.
 
Revenue and operating income contributed by the 2015 acquisitions subsequent to the date of acquisition were as follows (in thousands):
 
Year Ended December 31,
 
2015
 
Revenue
   $ 45,891  
Operating income
     23  
 
In 2014, we completed the following acquisitions:
 
•
On January 31, 2014, we acquired Island Honda in Kahului, Hawaii.
 
•
On February 3, 2014, we acquired Stockton Volkswagen in Stockton, California.
 
•
On March 5, 2014, we acquired Honolulu Buick GMC Cadillac and Honolulu Volkswagen in Honolulu, Hawaii.
 
•
On April 1, 2014, we acquired Corpus Christi Ford in Corpus Christi, Texas.
 
•
On June 11, 2014, we acquired Beaverton GMC Buick and Portland Cadillac in Portland, Oregon.
 
•
On July 28, 2014, we acquired Bellingham GMC Buick in Bellingham, Washington.
 
•
On October 1, 2014, we completed the purchase of all of the issued and outstanding shares of the capital stock of DCH, which includes 27 stores located in New York, New Jersey and California.
 
•
On October 6, 2014, we acquired Harris Nissan in Clovis, California.
 
All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition.
 
The following table summarizes the consideration paid in cash and equity securities for our acquisitions and the amount of identified assets acquired and liabilities assumed as of the acquisition date (in thousands):
 
Consideration paid for year ended
December 31,
 
2015
 
 
DCH
 
 
All other acquisitions
 
 
Total
2014
 
Cash paid, net of cash acquired
   $ 71,615     $ 569,995     $ 89,639     $ 659,634  
Forgiven outstanding note receivable
     1,374       —       —       —  
Equity securities issued
     —       19,736       —       19,736  
    $ 72,989     $ 589,731     $ 89,639     $ 679,370  
 
Assets acquired and liabilities assumed for year ended December 31,
 
2015
 
 
DCH
 
 
All other acquisitions
 
 
Total
2014
 
Trade receivables, net
   $ 36     $ 63,888     $ —     $ 63,888  
Inventories
     34,374       265,378       48,662       314,040  
Franchise value
     6,843       72,856       7,377       80,233  
Property and equipment
     22,118       256,122       17,395       273,517  
Other assets
     224       20,313       531       20,844  
Floor plan notes payable
     —       (24,686
)
     —       (24,686
)
Debt and capital lease obligations
     (2,160
)
     (52,532
)
     (3,161
)
     (55,693
)
Deferred taxes, net
     —       (49,651
)
     —       (49,651
)
Other liabilities
     (2,537
)
     (92,863
)
     (123
)
     (92,986
)
      58,898       458,825       70,681       529,506  
Goodwill
     14,091       130,906       18,958       149,864  
    $ 72,989     $ 589,731     $ 89,639     $ 679,370  
 
We account for franchise value as an indefinite-lived intangible asset. We expect $14.1 million of the goodwill recognized in 2015 to be deductible for tax purposes. In 2014, we recorded $1.9 million in acquisition expenses as a component of selling, general and administrative expenses in the Consolidated Statements of Operations. We did not have any material acquisition-related expenses in 2015 or 2013.
 
The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the previous year (in thousands, except for per share amounts):
 
Year Ended December 31,
 
2015
 
 
2014
 
Revenue
   $ 7,999,256     $ 7,333,480  
Income from continuing operations, net of tax
     182,131       147,975  
Basic income per share from continuing operations, net of tax
     6.93       5.66  
Diluted income per share from continuing operations, net of tax
     6.88       5.61  
 
These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have been adjusted to reflect the following: depreciation on a straight-line basis over the 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 the acquisitions are included in the reported pro forma revenues and earnings.