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 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 shops 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 who 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 are 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 June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues:
Domestic
New vehicle	$	597,596		$	528,649		$	1,111,125		$	1,013,906
Used vehicle retail	283,408			251,214			548,235			496,212
Used vehicle wholesale	33,913			30,700			67,519			62,986
Finance and insurance	43,083			37,354			83,083			73,562
Service, body and parts	113,472			96,515			220,614			189,917
Fleet and other	23,596			10,517			35,109			18,124
	1,095,068			954,949			2,065,685			1,854,707
Import
New vehicle	771,987			643,404			1,439,590			1,195,286
Used vehicle retail	335,629			269,512			643,317			516,788
Used vehicle wholesale	30,983			27,283			59,178			54,120
Finance and insurance	54,866			45,282			106,562			85,855
Service, body and parts	116,386			96,964			226,041			185,626
Fleet and other	12,879			12,794			18,475			29,036
	1,322,730			1,095,239			2,493,163			2,066,711
Luxury
New vehicle	361,913			220,388			640,434			396,705
Used vehicle retail	184,941			112,032			327,845			222,637
Used vehicle wholesale	20,263			11,473			34,463			23,696
Finance and insurance	15,934			9,525			28,185			17,519
Service, body and parts	76,883			50,326			141,676			98,358
Fleet and other	17,596			15,419			21,422			24,052
	677,530			419,163			1,194,025			782,967
	3,095,328			2,469,351			5,752,873			4,704,385
Corporate and other	1,209			(2,315		)	3,343			(1,248		)
	$	3,096,537		$	2,467,036		$	5,756,216		$	4,703,137
Segment income¹:
Domestic	$	28,545		$	27,857		$	54,163		$	53,299
Import	30,244			32,238			53,265			54,411
Luxury	11,939			10,315			18,826			15,027
	70,728			70,410			126,254			122,737
Corporate and other	41,015			38,239			82,572			76,740
Depreciation and amortization	(18,821		)	(14,031		)	(35,675		)	(26,770		)
Other interest expense	(13,829		)	(7,169		)	(25,635		)	(13,840		)
Other income, net	1,659			387			3,033			10,232
Income before income taxes	$	80,752		$	87,836		$	150,549		$	169,099

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



	June 30, 2018		December 31, 2017
Total assets:
Domestic	$	1,380,823	$	1,224,276
Import	1,244,218		1,032,665
Luxury	690,774		604,023
Corporate and other	1,848,347		1,822,102
	$	5,164,162	$	4,683,066