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Note 10 - Segments
 9 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note 10. Segments
While we have determined that each individual store is a reporting unit, we have aggregated our reporting units into three reportable segments based on their economic similarities: Domestic, Import and Luxury.
 
Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Chrysler, General Motors and Ford. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Honda, Toyota, Subaru, Nissan and Volkswagen. Our Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by BMW, Mercedes-Benz and Lexus. The franchises in each segment also sell used vehicles, parts and automotive services, and automotive finance and insurance products.
 
Corporate and other revenue and income includes the results of operations of our stand-alone body shop offset by unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other reportable segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden a stand-alone dealership would experience. Examples of these internal allocations include internal rent expense, internal floor plan financing charges, and internal fees charged to offset employees within our corporate headquarters that perform certain dealership functions.
 
We define our chief operating decision maker (“CODM”) to be certain members of our executive management group. Historical and forecasted operational performance is evaluated on a store-by-store basis and on a consolidated basis by the CODM. We derive the operating results of the segments directly from our internal management reporting system. The accounting policies used to derive segment results are substantially the same as those used to determine our consolidated results, except for the internal allocation within Corporate and other discussed above. Our CODM measures the performance of each operating segment based on several metrics, including earnings from operations, and uses these results, in part, to evaluate the performance of, and to allocate resources to, each of the operating segments.
 
 
 
Certain financial information on a segment basis is as follows (in thousands):
 
 
 
Three Months Ended
September 30,
 
 
Nine Months Ended
September 30,
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic
   $ 888,026     $ 814,216     $ 2,483,637     $ 2,273,068  
Import
     989,077       894,371       2,788,838       2,509,756  
Luxury
     392,537       374,558       1,111,215       1,084,051  
      2,269,640       2,083,145       6,383,690       5,866,875  
Corporate and other
     327       1,700       2,477       4,095  
    $ 2,269,967     $ 2,084,845     $ 6,386,167     $ 5,870,970  
Segment income*:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic
   $ 32,394     $ 33,240     $ 84,913     $ 91,853  
Import
     32,832       31,453       86,385       76,665  
Luxury
     7,423       8,318       21,736       25,764  
      72,649       73,011       193,034       194,282  
Corporate and other
     26,794       5,366       81,881       48,327  
Depreciation and amortization
     (12,206
)
     (10,531
)
     (36,372
)
     (30,544
)
Other interest expense
     (5,647
)
     (4,900
)
     (16,608
)
     (14,700
)
Other expense, net
     (1,513
)
     (307
)
     (4,534
)
     (1,031
)
Income before income taxes
   $ 80,077     $ 62,639     $ 217,401     $ 196,334  
*Segment income for each of the segments is defined as income before income taxes, depreciation and amortization, other interest expense and other expense, net.
 
 
 
Three Months Ended
September 30,
 
 
Nine Months Ended
September 30,
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Floor plan interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic
   $ 6,255     $ 5,441     $ 18,869     $ 15,083  
Import
     4,661       3,779       13,403       11,227  
Luxury
     2,720       2,345       8,027       6,715  
      13,636       11,565       40,299       33,025  
Corporate and other
     (7,450
)
     (6,614
)
     (21,995
)
     (18,770
)
    $ 6,186     $ 4,951     $ 18,304     $ 14,255  
 
 
 
 
 
September 30, 2016
 
 
December 31, 2015
 
Total assets:
 
 
 
 
 
 
 
 
Domestic
   $ 1,086,624     $ 985,374  
Import
     877,961       725,011  
Luxury
     445,246       475,305  
Corporate and other
     1,153,775       1,041,609  
    $ 3,563,606     $ 3,227,299