AutoNation 2015 Annual Report Download - page 87

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Table of Contents



The acquisitions that occurred during 2015 were not material to our financial condition or results of operations. Additionally, on a pro forma basis as if the
results of these acquisitions had been included in our consolidated results for the entire years ended December 31, 2015 and 2014, revenue and net income
would not have been materially different from our reported revenue and net income for these periods.
In February 2016, we purchased 12 stores located in Texas, which include Chrysler, Dodge, Jeep, Ram, Chevrolet, Hyundai, Mercedes-Benz, and Sprinter
franchises.

We had non-cash investing and financing activities primarily related to increases in property acquired under capital leases of $27.3 million during 2015,
$11.6 million during 2014, and $18.0 million during 2013. We also had accrued purchases of property and equipment of $25.3 million at December 31,
2015, $16.3 million at December 31, 2014, and $28.1 million at December 31, 2013.
We made interest payments, including interest on vehicle inventory financing, of $135.3 million in 2015, $136.4 million in 2014, and $136.0 million in
2013. We made income tax payments, net of income tax refunds, of $278.8 million in 2015, $225.0 million in 2014, and $200.3 million in 2013.

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties,
other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial
instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision.
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a
fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value and also establishes the following three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market
prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities
The following methods and assumptions were used by us in estimating fair value disclosures for financial instruments:
•
 The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to
their short-term nature or the existence of variable interest rates that approximate prevailing market rates.
85