Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

17. Segment Information

        Our operations are organized by management into operating segments by line of business and geography. We have determined that we have two reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our retail automotive dealership operations, and (ii) Other, consisting of our retail commercial vehicle dealership operations, our commercial vehicle distribution operations and our investments in non-automotive retail operations. The Retail Automotive 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 Automotive reportable segment have been grouped into four geographic operating segments: Eastern, Central, and Western United States and International. The geographic operating segments 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, 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 our 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 Automotive		Other		Intersegment Elimination			Total
Revenues
2014	$	16,602.7	$	579.6	$	(5.1	)	$	17,177.2
2013		14,291.3		152.6		—			14,443.9
2012		12,902.6		—		—			12,902.6
Floor plan interest expense
2014	$	44.7	$	1.4	$	—		$	46.1
2013		42.5		0.6		—			43.1
2012		38.0		—		—			38.0
Other interest expense
2014	$	46.9	$	5.9	$	—		$	52.8
2013		44.1		1.1		—			45.2
2012		46.1		—		—			46.1
Depreciation
2014	$	66.9	$	3.1	$	—		$	70.0
2013		59.1		0.5		—			59.6
2012		52.2		—		—			52.2
Equity in earnings of affiliates
2014	$	3.8	$	37.0	$	—		$	40.8
2013		4.9		25.8		—			30.7
2012		3.3		24.3		—			27.6
Adjusted segment income
2014	$	394.2	$	51.8	$	—		$	446.0
2013		340.7		33.5		—			374.2
2012		284.3		24.3		—			308.6

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

	Year Ended December 31,
	2014		2013		2012
Adjusted segment income	$	446.0	$	374.2	$	308.6
Debt redemption costs		—		—		(17.8	)
Gain on investment		16.0		—		—
Income from continuing operations before income taxes	$	462.0	$	374.2	$	290.8

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

	Retail Automotive		Other		Intersegment Elimination			Total
Total assets(1)
2014	$	5,920.4	$	1,308.2	$	(0.4	)	$	7,228.2
2013		5,747.6		668.2		(0.3	)		6,415.5
Equity method investments
2014	$	62.8	$	290.0	$	—		$	352.8
2013		81.6		265.3		—			346.9
Capital expenditures
2014	$	169.5	$	5.3	$	—		$	174.8
2013		174.7		—		—			174.7
2012		150.9		—		—			150.9

(1) As discussed in Note 4, we treated the operations of our car rental business as discontinued operations. The associated assets have been reclassified to "Assets held for sale" as of December 31, 2014 and 2013 on the Consolidated Balance Sheets and therefore are still included within the Other segment in total assets above.

        The following table presents certain data by geographic area:

	Year Ended December 31,
	2014		2013		2012
Sales to external customers:
U.S.	$	10,435.9	$	9,238.9	$	8,285.8
Non-U.S.		6,741.3		5,205.0		4,616.8
Total sales to external customers	$	17,177.2	$	14,443.9	$	12,902.6
Long-lived assets, net:
U.S.	$	1,177.0	$	1,050.2
Non-U.S.		531.0		447.1
Total long-lived assets	$	1,708.0	$	1,497.3

        The Company's non-U.S. operations are predominantly based in the U.K.