22. Segment Information

During the quarter ended September 30, 2018, the Company’s board of directors appointed Brent Moody, formerly the Chief Operating and Legal Officer, as President of the Company. In this new role, the Company determined that Mr. Moody now performs the role of chief operating decision maker together with the Chief Executive Officer. Additionally, responsibilities of certain members of senior management of the Company were realigned to maximize the contributions of the Company’s recent acquisitions of Retail businesses. As a result of these changes, the Company has determined that its reportable segments have changed. The Company’s new reportable segments have been identified based on various commonalities amongst the Company’s individual product lines, which is consistent with the Company’s operating structure and associated management structure and management evaluates the performance of and allocates resources to these segments based on segment revenues and segment profit. The Company did not aggregate operating segments in the determination of its reportable segments. The segment reporting for prior comparative periods have been recast to conform to the current period presentation.

The Company previously had two reportable segments: (i) Consumer Services and Plans; and (ii) Retail. Following the realignment, the Company now has three reportable segments: (i) Consumer Services and Plans, (ii) Dealership, and (iii) Retail. The Company’s Consumer Services and Plans segment remains the same as prior periods and primarily derives revenue from the sale of emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; co-branded credit cards; vehicle financing and refinancing; club memberships; and publications and directories. The Company has separated the prior Retail segment into two distinct segments: Dealership and Retail. The Company’s Dealership segment primarily derives revenue from the sale of new and used RVs, parts, service and other, and finance and insurance products. The Company’s Retail segment primarily derives revenue from the sale of the following: products, parts, service and other, including RV accessories and supplies; and camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport equipment and supplies. As noted above, both the Dealership and Retail segments derive revenue from the sale of parts, services and other revenues since certain retail locations without associated dealerships have the capability to perform RV repair and maintenance services. Additionally, certain RV parts and accessories can be sold to customers at a dealership or retail location. The revenues and related costs of revenues for these parts and services are recorded in the segment that enters into the transaction with the customer, either Dealership or Retail. Corporate and other is comprised of the corporate operations of the Company. The reportable segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by the Company’s chief operating decision maker to allocate resources and assess performance. The Company’s chief operating decision maker is a group comprised of the Chief Executive Officer and the President. Segment income, defined as income from operations before depreciation and amortization plus floor plan interest expense, is the measure of segment profit reviewed by the Company’s chief operating decision maker.

Segment revenue includes intersegment revenue. Segment income includes intersegment allocations for shared resources, which includes lease expenses for Dealership and Retail locations that share space under a common property lease arrangement.

Reportable segment revenue, segment income, floor plan interest expense, depreciation and amortization, other interest expense, net, total assets, and capital expenditures are as follows:


	Year Ended December 31, 2018
	Consumer
	Services						Intersegment
($ in thousands)	and Plans		Dealership		Retail		Eliminations		Total
Revenue:
Consumer services and plans	$	216,033	$	—	$	—	$	(1,981)	$	214,052
New vehicles		—		2,520,015		—		(7,161)		2,512,854
Used vehicles		—		734,938		—		(2,921)		732,017
Dealership parts, services and other		—		279,438		—		—		279,438
Finance and insurance, net		—		394,214		—		(10,503)		383,711
Retail		—		—		791,970		(122,025)		669,945
Total consolidated revenue	$	216,033	$	3,928,605	$	791,970	$	(144,591)	$	4,792,017

	Year Ended December 31, 2017
	Consumer
	Services			Dealership			Intersegment
($ in thousands)	and Plans(1)		(1) (2)		Retail(1)(2)		Eliminations		Total
Revenue:
Consumer services and plans	$	197,100	$	—	$	—	$	(1,486)	$	195,614
New vehicles		—		2,442,157		—		(6,229)		2,435,928
Used vehicles		—		671,885		—		(3,025)		668,860
Dealership parts, services and other		—		246,898		—		—		246,898
Finance and insurance, net		—		333,988		—		(7,379)		326,609
Retail		—		—		517,200		(111,279)		405,921
Total consolidated revenue	$	197,100	$	3,694,928	$	517,200	$	(129,398)	$	4,279,830

	Year Ended December 31, 2016
	Consumer
	Services			Dealership			Intersegment
($ in thousands)	and Plans(1)		(1) (2)		Retail(1)(2)		Eliminations		Total
Revenue:
Consumer services and plans	$	186,868	$	—	$	—	$	(2,095)	$	184,773
New vehicles		—		1,866,182		—		(3,987)		1,862,195
Used vehicles		—		705,893		—		(2,567)		703,326
Dealership parts, services and other		—		220,422		—		—		220,422
Finance and insurance, net		—		231,861		—		(5,867)		225,994
Retail		—		—		429,816		(110,219)		319,597
Total consolidated revenue	$	186,868	$	3,024,358	$	429,816	$	(124,735)	$	3,516,307

(1)

The Company has adjusted certain prior period amounts for the immaterial correction of errors. See Note 1 — Summary of Significant Accounting Policies — Revisions for Correction of Immaterial Errors.

(2)

The Company has adjusted certain prior period amounts for the immaterial correction of errors. For the years ended December 31, 2017 and 2016, segment revenue for the Company’s Retail segment, which was previously presented with combined Dealership and Retail segments, was originally reported as $4.1 billion and $3.3 billion, respectively. After correction of the errors totaling $5.4 million and $2.7 million for the years ended December 31, 2017 and 2016, segment revenue for the Company’s combined Dealership and Retail segments remained at $4.1 billion and $3.3 billion, respectively. See Note 1 — Summary of Significant Accounting Policies — Revisions for Correction of Immaterial Errors.



	Year Ended December 31,
($ in thousands)	2018		2017		2016
Segment income:(1)
Consumer services and plans	$	110,517	$	98,371	$	89,046
Dealership (2)		265,824		290,607		198,840
Retail (2)		(157,118)		(23,408)		55
Total segment income		219,223		365,570		287,941
Corporate & other		(6,821)		(5,373)		(4,382)
Depreciation and amortization		(49,322)		(31,545)		(24,695)
Other interest expense, net		(63,329)		(42,959)		(48,318)
Tax Receivable Agreement liability adjustment		(1,324)		100,758		—
Loss and expense on debt restructure		(2,056)		(849)		(6,270)
Income before income taxes	$	96,371	$	385,602	$	204,276

(1)

Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense. The Company has recast certain prior period amounts to conform to the three segments presented in 2018.

(2)

The Company has adjusted certain prior period amounts for the immaterial correction of errors. For the years ended December 31, 2017 and 2016, segment income for the Company’s Retail segment, which was previously presented with combined Dealership and Retail segments, was originally reported as $272.6 million and $201.6 million, respectively. After correction of the errors totaling $5.4 million and $2.7 million for the years ended December 31, 2017 and 2016, segment income for the Company’s combined Dealership and Retail segments was $267.2 million and $198.9 million, respectively. See Note 1 — Summary of Significant Accounting Policies — Revisions for Correction of Immaterial Errors.



	Year Ended December 31,
($ in thousands)	2018		2017		2016
Depreciation and amortization:
Consumer services and plans	$	3,435	$	3,688	$	3,780
Dealership		17,124		13,792		11,679
Retail		28,175		14,065		9,236
Subtotal		48,734		31,545		24,695
Corporate & other		588		—		—
Total depreciation and amortization	$	49,322	$	31,545	$	24,695


	Years ended December 31,
($ in thousands)	2018		2017		2016
Other interest expense, net:
Consumer services and plans	$	4	$	(2)	$	19
Dealership		4,858		3,775		3,562
Retail		3,215		2,108		1,833
Subtotal		8,077		5,881		5,414
Corporate & other		55,252		37,078		42,904
Total interest expense	$	63,329	$	42,959	$	48,318


	As of December 31,
($ in thousands)	2018		2017		2016
Assets:
Consumer services and plans	$	174,623	$	180,295	$	152,689
Dealership		1,736,525		1,718,228		1,081,638
Retail		702,383		360,546		147,318
Subtotal		2,613,531		2,259,069		1,381,645
Corporate & other		193,156		307,957		74,416
Total assets	$	2,806,687	$	2,567,026	$	1,456,061

(1)

The Company has adjusted certain prior period amounts for the immaterial correction of errors. Retail segment assets increased $0.2 million and $0.2 million as of December 31, 2017 and 2016, respectively, and Corporate & other assets increased $5.3 million and $0 million as of December 31, 2017 and 2016, respectively. See Note 1 — Summary of Significant Accounting Policies — Revisions for Correction of Immaterial Errors.


	Year Ended December 31,
($ in thousands)	2018		2017		2016
Capital expenditures:
Consumer Services and Plans	$	2,741	$	3,358	$	3,136
Dealership		91,961		43,588		42,506
Retail		159,657		33,825		11,301
Total capital expenditures	$	254,359	$	80,771	$	56,943

The following table presents the effect of the error corrections on the statements of reportable segment revenue and segment income for the periods indicated:


	Year Ended December 31, 2017						Year Ended December 31, 2016
($ in thousands except per share amounts)	As Reported		Adjustment		As Corrected		As Reported		Adjustment		As Corrected
Revenue:
Dealership segment	$	3,700,353	$	(5,425)	$	3,694,928	$	3,027,048	$	(2,690)	$	3,024,358
Total consolidated revenue		4,285,255		(5,425)		4,279,830		3,518,997		(2,690)		3,516,307
Segment income:
Dealership		296,032		(5,425)		290,607		201,530		(2,690)		198,840
Total segment income		370,995		(5,425)		365,570		290,631		(2,690)		287,941
Income from operations before income taxes		389,956		(4,354)		385,602		206,966		(2,690)		204,276