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Note 7 - Floor Plan Notes Payable and Lines of Credit | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Debt Disclosure [Text Block] |
7 . | FLOOR PLAN NOTES PAYABLE AND LINES OF CREDIT :
Floor Plan Notes Payable Floor plan notes are financing agreements to facilitate the Company ’s purchase of new and used commercial vehicle inventory. These notes are collateralized by the inventory purchased and accounts receivable arising from the sale thereof. The Company’s Floor Plan Credit Agreement provides for a loan commitment of up to $875.0 million and has the interest rate benchmarked to LIBOR, as defined in the agreement. The interest rate under the Company’s Floor Plan Credit Agreement is the three month LIBOR rate plus 1.51%. The interest rate applicable to the Company’s Floor Plan Credit Agreement was approximately 2.99% at December 31, 2017. The Company utilizes its excess cash on hand to pay down its outstanding borrowings under its Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to the Company’s gross interest expense under the Floor Plan Credit Agreement. The Company is required to pay a monthly working capital fee equal to 0.16% per annum multiplied by the amount of voluntary prepayments of new and used inventory loans. The Company finances substantially all of the purchase price of its new commercial vehicle inventory, and the loan value of its used commercial vehicle inventory, under its Floor Plan Credit Agreement, under which BMO Harris pays the manufacturer directly with respect to new commercial vehicles. Amounts borrowed under the Company’s Floor Plan Credit Agreement are due when the related commercial vehicle inventory (collateral) is sold and the sales proceeds are collected by the Company. The Company’s Floor Plan Credit Agreement expires June 30, 2019, although BMO Harris has the right to terminate the Floor Plan Credit Agreement at any time upon 120 days’ written notice. The Company may terminate the Floor Plan Credit Agreement at any time, although if it does so, it must pay a prepayment processing fee equal to 1.0% of the aggregate revolving loan commitments if such termination occurs on or prior to July 1, 2018 or $500,000 if such termination occurs after July 1, 2018 and prior to June 30, 2019, subject to specified limited exceptions. On December 31, 2017, the Company had approximately $656.1 million outstanding under its Floor Plan Credit Agreement. In June 2012, the Company entered into a wholesale financing agreement with Ford Motor Credit Company that provides for the financing of, and is collateralized by, the Company’s new Ford vehicle inventory. This wholesale financing agreement bears interest at a rate of Prime plus 150 basis points minus certain incentives and rebates; however, the prime rate is defined to be a minimum of 3.75%. As of December 31, 2017, the interest rate on the wholesale financing agreement was 5.25% before considering the applicable incentives. On December 31, 2017, the Company had an outstanding balance of approximately $82.0 million under the Ford Motor Credit Company wholesale financing agreement. The Company ’s weighted average interest rate for floor plan notes payable was 1.4% for the year ended December 31, 2017, and 1.6% for the year ended December 31, 2016, which is net of interest related to prepayments of new and used inventory loans. Assets pledged as collateral were as follows (in thousands):
|  | December 31, |
|  | 2017 |  |  | 2016 |
Inventories, new and used vehicles at cost based on specific identification, net of allowance |  | $ | 818,066 |  |  | $ | 642,205 |
Vehicle sale related accounts receivable |  |  | 104,778 |  |  |  | 83,482 |
Total |  | $ | 922,844 |  |  | $ | 725,687 |
Floor plan notes payable related to vehicles |  | $ | 778,561 |  |  | $ | 646,945 |
Lines of Credit The Company has a secured line of credit that provides for a maximum borrowing of $17.5 million. There were no advances outstanding under this secured line of credit at December 31, 2017; however, $11.9 million was pledged to secure various letters of credit related to self-insurance products, leaving $5.6 million available for future borrowings as of December 31, 2017. The Company has a Working Capital Facility with BMO Harris. The Working Capital Facility includes up to $100.0 million of revolving credit loans to the Company for working capital, capital expenditures and other general corporate purposes. The amount of the borrowings under the Working Capital Facility are subject to borrowing base limitations based on the value of the Company’s eligible parts inventory and company vehicles. The Working Capital Facility includes a $20.0 million letter of credit sublimit. Borrowings under the Working Capital Facility bear interest at rates based on LIBOR or the Base Rate, plus an applicable margin determined based on outstanding borrowing under the Working Capital Facility. In addition, the Company is required to pay a commitment fee on the amount unused under the Working Capital Facility. The Working Capital Facility expires on the earlier of (i) March 21, 2020 and (ii) the date on which all commitments under the Floor Plan Working Capital Facility shall have terminated, whether as a result of the occurrence of the Commitment Termination Date or otherwise. There were no advances outstanding under the Working Capital Facility as of December 31, 2017.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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