Note

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 March 31,
	2017			2016
Revenues:
Domestic	$	899,759		$	771,902
Import		971,472			862,743
Luxury		363,803			346,813
		2,235,034			1,981,458
Corporate and other		1,067			1,403
	$	2,236,101		$	1,982,861
Segment income*:
Domestic	$	25,442		$	23,132
Import		22,172			24,263
Luxury		4,713			4,583
		52,327			51,978
Corporate and other		38,501			26,691
Depreciation and amortization		(12,739	)		(11,663	)
Other interest expense		(6,671	)		(5,459	)
Other income (expense), net		9,845			(1,526	)
Income before income taxes	$	81,263		$	60,021

*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 March 31,
	2017			2016
Floor plan interest expense:
Domestic	$	7,954		$	6,496
Import		5,873			4,234
Luxury		3,076			2,657
		16,903			13,387
Corporate and other		(8,851	)		(7,478	)
	$	8,052		$	5,909

	March 31, 2017		December 31, 2016
Total assets:
Domestic	$	1,206,623	$	1,225,387
Import		979,834		959,355
Luxury		480,275		511,779
Corporate and other		1,135,232		1,147,629
	$	3,801,964	$	3,844,150