Acquisitions

In 2017, we completed the following acquisitions:


•	On May 1, 2017, we acquired Baierl Auto Group: an eight store platform based in Pennsylvania.


•	On August 7, 2017, we acquired Downtown LA ("DTLA") Auto Group, a seven store platform based in California.


•	On November 11, 2017, we acquired Albany CJD Fiat in Albany, New York.


•	On November 15, 2017, we acquired Crater Lake Ford Lincoln and Crater Lake Mazda in Medford, Oregon.

Revenue and operating income contributed by the 2017 acquisitions subsequent to the date of acquisition were as follows (in thousands):



Year Ended December 31,	2017
Revenue	$	617,300
Operating income	9,316

In 2016, we completed the following acquisitions:


•	On January 26, 2016, we acquired Riverside Subaru in Riverside, California.


•	On February 1, 2016, we acquired Ira Toyota in Milford, Massachusetts.


•	On June 23, 2016, we acquired the Helena Buick GMC franchises in Helena, Montana.


•	On August 1, 2016, we acquired Thousand Oaks Ford in Thousand Oaks, California.


•	On September 12, 2016, we acquired Carbone Auto Group: a nine store platform in New York and Vermont.


•	On September 28, 2016, we acquired Greiner Ford Lincoln in Casper, Wyoming.


•	On October 5, 2016, we acquired Woodland Hills Audi in Woodland Hills, California.


•	On November 16, 2016, we acquired Honolulu Ford in Honolulu, Hawaii.

All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated Financial Statements from the date of acquisition.

The following tables summarize the consideration paid in cash and equity securities for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date (in thousands):



Consideration paid for the Year Ended December 31,	2017		2016
Cash paid, net of cash acquired	$	460,394	$	234,700
Property and equipment transferred	—		2,637
Equity securities issued	2,137		—
Debt issued	1,748		—
	$	464,279	$	237,337



Assets acquired and liabilities assumed for the Year Ended December 31,	2017			2016
Trade receivables, net	$	46,864		$	—
Inventories	189,747			148,915
Franchise value	—			27,087
Property and equipment	146,835			75,345
Other assets	187,549			990
Floor plan notes payable	(72,495		)	(30,134		)
Debt and capital lease obligations	(13,727		)	(22,813		)
Other liabilities	(20,494		)	(9,450		)
	464,279			189,940
Goodwill	—			47,397
	$	464,279		$	237,337

The purchase price allocation for the Baierl Auto Group, DTLA Auto Group, Albany CJD Fiat, Crater Lake Ford Lincoln and Crater Lake Mazda acquisitions is preliminary as we have not obtained all of the detailed information to finalize the opening balance sheet related to real estate purchased, leases assumed and the allocation of franchise value to each reporting unit. Management has recorded the purchase price allocations based on the information that is currently available.

We account for franchise value as an indefinite-lived intangible asset. We recognized $6.0 million and $1.0 million, respectively, in acquisition related expenses as a component of selling, general and administrative expenses in the Consolidated Statements of Operations in 2017 and 2016, respectively.

The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the previous year (in thousands, except for per share amounts):



Year Ended December 31,	2017		2016
Revenue	$	10,879,567	$	10,727,906
Net income	254,966		219,756
Basic net income per share	10.17		8.65
Diluted net income per share	10.14		8.61

These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have been adjusted to reflect the following: depreciation on a straight-line basis over the expected lives for property, plant and equipment; accounting for inventory on a specific identification method; and recognition of interest expense for real estate financing related to stores where we purchased the facility. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the reported pro forma revenues and earnings.