6. Sale and deconsolidation of variable Interest Entity - AAP

9 Months Ended

Sep. 29, 2018

Sale And Deconsolidation Of Variable Interest Entity - Aap

Sale and deconsolidation of variable interest entity - AAP

Note 6:          Sale and deconsolidation of variable interest entity - AAP

The financial position and results of operations of AAP have been consolidated in our financial statements since AAP’s inception based on our conclusion that AAP was a variable interest entity that we controlled due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. Since inception we had provided substantial financial support to fund the operations of AAP. The financial position and results of operations for AAP were reported in our recycling segment. On August 15, 2017, we sold our 50% interest in AAP, and therefore, as of August 15, 2017, we no longer consolidated the results of AAP in our financial statements.

The following table summaries the unaudited assets and liabilities of AAP de-consolidated from our financial position as of August 15, 2017.

Assets	August 15, 2017
Current assets	$	367
Property and equipment, net		6,809
Other assets		93
Total assets	$	7,269
Liabilities
Accounts payable	$	2,661
Accrued expenses		619
Current maturities of long-term debt obligations		729
Long-term debt obligations, net of current maturities		3,431
Total liabilities	$	7,440

The following table summarizes the unaudited operating results of AAP consolidated in our financial results for the 13 weeks and 39 weeks ended September 29, 2018, and September 30, 2017, respectively:

	13 Weeks Ended					39 Weeks Ended
	September 29, 2018		September 30, 2017 (b)			September 29, 2018		September 30, 2017 (b)
Revenues	$	–	$	306		$	–	$	1,433
Gross profit		–		38			–		24
Operating loss		–		(140	)		–		(848	)
Net loss		–		(165	)		–		(991	)

(b)    Operating results for AAP were consolidated in the Company’s operating results from inception of AAP through August 15, 2017, the date of our 50% equity sale in AAP. We recorded a gain of $81 on the sale and deconsolidation of our 50% equity interest in AAP. Net Cash outflow arising from deconsolidation of AAP was $35. The Company received $800 in cash consideration for its 50% equity interest in AAP.