Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

16. 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 non-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 accounting policies of the segments are the same and are described in Note 1.

The following table summarizes revenues, floor plan interest expense, other interest expense, debt discount amortization, depreciation and amortization, equity in earnings of affiliates, and income (loss) from continuing operations before certain non-recurring 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 (loss), for each of the Company’s reportable segments. Adjusted segment income excludes the items in the table below in order to enhance the comparability of segment income from period to period.

	Retail		PAG Investments		Total
Revenues
2011	$	11,556,232	$	—	$	11,556,232
2010		10,328,385		—		10,328,385
2009		9,012,217		—		9,012,217
Floor plan interest expense
2011	$	28,515	$	—	$	28,515
2010		33,779		—		33,779
2009		34,097		—		34,097
Other interest expense
2011	$	45,020	$	—	$	45,020
2010		49,176		—		49,176
2009		55,085		—		55,085
Debt discount amortization
2011	$	1,718	$	—	$	1,718
2010		8,637		—		8,637
2009		13,043		—		13,043
Depreciation
2011	$	48,903	$	—	$	48,903
2010		46,253		—		46,253
2009		51,401		—		51,401
Equity in earnings of affiliates
2011	$	2,196	$	23,255	$	25,451
2010		2,577		17,992		20,569
2009		2,617		11,191		13,808
Adjusted segment income
2011	$	225,133	$	23,255	$	248,388
2010		169,722		17,992		187,714
2009		101,620		11,191		112,811

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

	Year Ended December 31,
	2011		2010		2009
Adjusted segment income	$	248,388	$	187,714	$	112,811
Gain on debt repurchase		—		1,634		10,429
Income (loss) from continuing operations before income taxes	$	248,388	$	189,348	$	123,240

Total assets, equity method investments, and capital expenditures by reporting segment are as set forth in the table below.

	Retail		PAG Investments		Total
Total assets
2011	$	4,253,570	$	248,729	$	4,502,299
2010		3,833,530		236,302		4,069,832
Equity method investments
2011	$	49,911	$	248,729	$	298,640
2010		52,104		236,302		288,406
Capital expenditures
2011	$	133,115	$	—	$	133,115
2010		75,699		—		75,699
2009		89,203		—		89,203

The following table presents certain data by geographic area:

	Year Ended December 31,
	2011		2010		2009
Sales to external customers:
U.S.	$	7,294,981	$	6,460,046	$	5,546,551
Foreign		4,261,251		3,868,339		3,465,666
Total sales to external customers	$	11,556,232	$	10,328,385	$	9,012,217
Long-lived assets, net:
U.S.	$	846,108	$	738,779
Foreign		325,005		280,726
Total long-lived assets	$	1,171,113	$	1,019,505

The Company’s foreign operations are predominantly based in the U.K.