Note 15 - Discontinued Operations and Assets and Related Liabilities Held for Sale

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

(15) Discontinued Operations and Assets and Related Liabilities Held for Sale

We classify an asset group as held for sale if the location has been sold, we have ceased operations at that location or the store meets the criteria required by U.S. generally accepted accounting standards as follows:

• our management team, possessing the necessary authority, commits to a plan to sell the store;

• the store is available for immediate sale in its present condition;

• an active program to locate buyers and other actions that are required to sell the store are initiated;

• a market for the store exists and we believe its sale is likely within one year;

• active marketing of the store commences at a price that is reasonable in relation to the estimated fair market value; and

• our management team believes it is unlikely changes will be made to the plan or the plan to dispose of the store will be withdrawn.

In April 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that amended the accounting guidance related to discontinued operations. This amendment defines discontinued operations as a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. We early adopted this guidance in September 2014 and, as a result, determined that individual stores which met the criteria for held for sale after our adoption date would no longer qualify for classification as discontinued operations. We had previously reclassified a store’s operations to discontinued operations in our Consolidated Statements of Operations, on a comparable basis for all periods presented, provided we did not expect to have any significant continuing involvement in the store’s operations after its disposal.

On May 1, 2014, we completed the sale of one store which had been classified as held for sale since October 2012. This store’s operations have been reclassified to discontinued operations in our Consolidated Statement of Operations, on a comparable basis for all periods presented.

As of December 31, 2014, we had two stores classified as held for sale. We did not have any stores classified as held for sale as of December 31, 2015. Assets held for sale included the following (in thousands):

December 31,	2015		2014
Inventories	$	—	$	6,284
Property, plant and equipment		—		1,739
Intangible assets		—		540
	$	—	$	8,563

Liabilities related to assets held for sale included the following (in thousands):

December 31,	2015		2014
Floor plan notes payable	$	—	$	4,892

Actual floor plan interest expense for a store classified as discontinued operations is directly related to the store’s new vehicles. Interest expense related to our used vehicle inventory financing and revolving line of credit is allocated based on the working capital level of the store. Interest expense included as a component of discontinued operations was as follows (in thousands):

Year Ended December 31,	2015		2014		2013
Floor plan interest	$	—	$	32	$	117
Other interest		—		8		21
Total interest	$	—	$	40	$	138

Certain financial information related to discontinued operations was as follows (in thousands):

Year Ended December 31,	2015		2014			2013
Revenue	$	—	$	12,569		$	38,978
Pre-tax gain (loss) from discontinued operations	$	—	$	(467	)	$	1,310
Net gain on disposal activities		—		5,744			—
				5,277			1,310
Income tax expense		—		(2,097	)		(524	)
Income from discontinued operations, net of income tax expense	$	—	$	3,180		$	786
Goodwill and other intangible assets disposed of	$	—	$	211		$	—

The net gain on disposal activities in 2014 included a $6.8 million gain related to the disposal of goodwill and other intangible assets.