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, as well as, 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,
	2017			2016			2017			2016
Revenues:
Domestic	$	1,008,310		$	893,156		$	2,863,018		$	2,495,468
Import	1,209,955			983,947			3,276,667			2,777,007
Luxury	463,518			392,537			1,246,484			1,111,215
	2,681,783			2,269,640			7,386,169			6,383,690
Corporate and other	(1,441		)	327			(2,690		)	2,477
	$	2,680,342		$	2,269,967		$	7,383,479		$	6,386,167
Segment income¹:
Domestic	$	31,141		$	32,292		$	84,440		$	84,420
Import	36,954			32,934			91,365			86,878
Luxury	7,515			7,423			22,542			21,736
	75,610			72,649			198,347			193,034
Corporate and other	34,541			26,794			111,281			81,881
Depreciation and amortization	(14,828		)	(12,206		)	(41,598		)	(36,372		)
Other interest expense	(9,905		)	(5,647		)	(23,745		)	(16,608		)
Other income (expense), net	1,125			(1,513		)	11,357			(4,534		)
Income before income taxes	$	86,543		$	80,077		$	255,642		$	217,401

¹Segment income for each of the segments is defined as income before income taxes, depreciation and amortization, other interest expense and other income (expense), net.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Floor plan interest expense:
Domestic	$	9,900		$	6,303		$	26,570		$	19,031
Import	8,007			4,613			20,608			13,241
Luxury	4,494			2,720			11,018			8,027
	22,401			13,636			58,196			40,299
Corporate and other	(11,772		)	(7,450		)	(30,183		)	(21,995		)
	$	10,629		$	6,186		$	28,013		$	18,304



	September 30, 2017		December 31, 2016
Total assets:
Domestic	$	1,256,960	$	1,225,387
Import	1,067,466		959,355
Luxury	590,515		511,779
Corporate and other	1,456,652		1,147,629
	$	4,371,593	$	3,844,150