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Note 11 - Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

(11)        Derivative Financial Instruments


From time to time, we enter into interest rate swaps to fix a portion of our interest expense. We do not enter into derivative instruments for any purpose other than to manage interest rate exposure to fluctuations in the one-month LIBOR benchmark. That is, we do not engage in interest rate speculation using derivative instruments.


As of December 31, 2013, we had a $25 million interest rate swap outstanding with U.S. Bank Dealer Commercial Services. This interest rate swap matures on June 15, 2016 and has a fixed rate of 5.587% per annum. The variable rate on the interest rate swap is the one-month LIBOR rate. At December 31, 2013, the one-month LIBOR rate was 0.17% per annum, as reported in the Wall Street Journal.


Typically, we designate all interest rate swaps as cash flow hedges and, accordingly, we record the change in fair value for the effective portion of these interest rate swaps in comprehensive income rather than net income until the underlying hedged transaction affects net income. If a swap is no longer designated as a cash flow hedge and the forecasted transaction remains probable or reasonably possible of occurring, the gain or loss recorded in accumulated other comprehensive loss is recognized in income as the forecasted transaction occurs. If the forecasted transaction is probable of not occurring, the gain or loss recorded in accumulated other comprehensive loss is recognized in income immediately. See Note 12.


The estimated amount that we expect to reclassify from accumulated other comprehensive loss to net income within the next twelve months is $1.2 million at December 31, 2013.


At December 31, 2013 and 2012, the fair value of our derivative instruments was included in our Consolidated Balance Sheets as follows (in thousands):


Balance Sheet Information (in thousands)   Fair Value of Liability Derivatives  
   

Location in Balance Sheet

 

December 31, 2013

 

Derivatives designated as hedging instruments

           

Interest rate swap contract

 

Accrued liabilities

  $ 1,215  
   

Other long-term liabilities

    1,685  
        $ 2,900  

Balance Sheet Information (in thousands)   Fair Value of Liability Derivatives  
   

Location in Balance Sheet

 

December 31, 2012

 

Derivatives designated as hedging instruments

           

Interest rate swap contract

 

Accrued liabilities

  $ 1,839  
   

Other long-term liabilities

    2,840  
        $ 4,679  

The effect of derivative instruments on our Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011 was as follows (in thousands):


Derivatives in Cash Flow Hedging Relationships

 

Amount of gain (loss) recognized in Accumulated OCI (effective portion)

 

Location of loss reclassified from accumulated OCI into Income (effective portion)

 

Amount of loss reclassified from Accumulated OCI into Income (effective portion)

 

Location of loss recognized in Income on derivative (ineffective portion and amount excluded from effectiveness testing)

 

Amount of loss recognized in Income on derivative (ineffective portion and amount excluded from effectiveness testing)

 
                             

For the Year Ended

December 31, 2013

       

Floor plan

       

Floor plan

       

Interest rate swap contract

  $ 1,005  

Interest expense

  $ (740 )

Interest expense

  $ (1,235 )
                             

For the Year Ended

December 31, 2012

       

Floor plan

       

Floor plan

       

Interest rate swap contracts

  $ 1,655  

Interest expense

  $ (1,413 )

Interest expense

  $ (2,900 )
                             

For the Year Ended

December 31, 2011

       

Floor plan

       

Floor plan

       

Interest rate swap contracts

  $ (1,343 )

Interest expense

  $ (1,899 )

Interest expense

  $ (1,587 )