Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

11. Segment Information

The Company’s operations are organized by management into operating segments by line of business and geography. The Company has determined it has two reportable segments as defined in generally accepted accounting principles for segment reporting, including: (i) Retail, consisting of our automotive retail operations and (ii) PAG Investments, consisting of our investments in businesses other than automotive retail operations. The Retail reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and the retail automotive joint ventures. The individual dealership operations included in the Retail reportable segment have been grouped into four geographic operating segments, which have been aggregated into one reportable segment as their operations (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). The Company previously presented its smart USA distribution operation as a third reportable segment. That operation was sold to DVI in 2011 and is presented in discontinued operations.

The following table summarizes revenues and income from continuing operations before certain items and income taxes, which is the measure by which management allocates resources to its segments, and which we refer to as adjusted segment income, for each of our reportable segments. Adjusted segment income excludes the item in the table below in order to enhance the comparability of segment income from period to period.

Three Months Ended September 30

			PAG
	Retail		Investments		Total
Revenues
2011	$	2,951,046	$	—	$	2,951,046
2010		2,669,773		—		2,669,773
Adjusted segment income
2011		61,925		8,475		70,400
2010		45,153		6,765		51,918

Nine Months Ended September 30

			PAG
	Retail		Investments		Total
Revenues
2011	$	8,623,710	$	—	$	8,623,710
2010		7,697,770		—		7,697,770
Adjusted segment income
2011		171,229		15,867		187,096
2010		127,077		10,362		137,439

The following table reconciles total adjusted segment income to consolidated income from continuing operations before income taxes.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Adjusted segment income	$	70,400	$	51,918	$	187,096	$	137,439
Gain on debt repurchase		—		607		—		1,634
Income from continuing operations before income taxes	$	70,400	$	52,525	$	187,096	$	139,073