Quarterly report pursuant to Section 13 or 15(d)

6. Sale and deconsolidation of variable Interest Entity - AAP

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6. Sale and deconsolidation of variable Interest Entity - AAP
3 Months Ended
Mar. 31, 2018
Sale And Deconsolidation Of Variable Interest Entity - Aap  
Variable Interest Entity

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 is 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 provided substantial financial support to fund the operations of AAP. The financial position and results of operations for AAP are reported in our recycling segment. On August 15, 2017, we sold our 50% interest in AAP, and therefore, as of August 15, 2017, no longer consolidate the results of AAP in our financial statements.

 

The following table summarizes the unaudited assets and liabilities of AAP consolidated in our financial position as of April 1, 2017:

 

    April 1, 2017  
Assets      
Current assets   $ 307  
Property and equipment, net     7,120  
Other assets     83  
Total assets   $ 7,510  
         
Liabilities        
Accounts payable   $ 2,421  
Accrued expenses     555  
Current maturities of long-term debt obligations     734  
Long-term debt obligations, net of current maturities     3,208  
Other liabilities (a)     289  
Total liabilities   $ 7,207  

 

(a)    Other liabilities represent loans and advances between ARCA and AAP that are eliminated in consolidation.

  

The following table summarizes the operating results of AAP consolidated in our financial results for the 13 weeks ended March 31, 2018, and April 1, 2017, respectively:

 

    13 Weeks Ended  
    March 31, 2018     April 1, 2017 (b)  
Revenues   $     $ 485  
Gross profit           (117 )
Operating loss           (475 )
Net loss           (511 )

 

(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 $157. The Company received $800 in cash consideration for its 50% equity interest in AAP.