AutoNation 2015 Annual Report Download - page 90

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Table of Contents
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


We recorded non-cash impairment charges of $3.0 million in 2015 and $1.1 million in 2014 related to our long-lived assets held for sale in continuing
operations.
The non-cash impairment charges related to assets held for sale in continuing operations are included in Other Income, Net (within Operating Income) in
our Consolidated Statements of Income and are reported in the “Corporate and other” category of our segment information.

We recorded non-cash impairment charges of $0.8 million in 2015 and $0.2 million in 2014 related to long-lived assets held for sale in discontinued
operations.
The non-cash impairment charges related to assets held for sale in discontinued operations are included in Loss from Discontinued Operations in our
Consolidated Statements of Income.
As of December 31, 2015, we had assets held for sale of $47.1 million in continuing operations and $22.3 million in discontinued operations. As of
December 31, 2014, we had assets held for sale of $64.7 million in continuing operations and $23.2 million in discontinued operations.

We own and operate franchised automotive stores in the United States pursuant to franchise agreements with vehicle manufacturers. In 2015,
approximately 65% of our total revenue was generated by our stores in Florida, Texas, and California. Franchise agreements generally provide the
manufacturers or distributors with considerable influence over the operations of the store. The success of any franchised automotive dealership is dependent,
to a large extent, on the financial condition, management, marketing, production, and distribution capabilities of the vehicle manufacturers or distributors of
which we hold franchises. We had receivables from manufacturers or distributors of $221.4 million at December 31, 2015, and $198.3 million at
December 31, 2014. Additionally, a large portion of our Contracts-in-Transit included in Receivables, net, in the accompanying Consolidated Balance
Sheets, are due from automotive manufacturers’ captive finance subsidiaries which provide financing directly to our new and used vehicle customers.
We purchase substantially all of our new vehicles from various manufacturers or distributors at the prevailing prices available to all franchised dealers.
Additionally, we finance our new vehicle inventory primarily with automotive manufacturers’ captive finance subsidiaries. Our sales volume could be
adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles and related financing.
We are subject to a concentration of risk in the event of financial distress of or other adverse event related to a major vehicle manufacturer or related lender
or supplier. The core brands of vehicles that we sell are manufactured by Toyota (including Lexus), Ford, Honda, Nissan, General Motors, Mercedes-Benz,
FCA US (formerly Chrysler), BMW, and Volkswagen (including Audi and Porsche). Our business could be materially adversely impacted by another
bankruptcy of or other adverse event related to a major vehicle manufacturer or related lender or supplier.
Concentrations of credit risk with respect to non-manufacturer trade receivables are limited due to the wide variety of customers and markets in which our
products are sold as well as their dispersion across many different geographic areas in the United States. Consequently, at December 31, 2015, we do not
consider AutoNation to have any significant non-manufacturer concentrations of credit risk.
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