2016 q1 investor presentation · • expected operating results, such as improved store efficiency...

1 LITHIA MOTORS APRIL 2016

INVESTORPRESENTATION


DISCLOSUREForward-Looking StatementsThis presentation includes “forward-looking statements” within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statementsinclude statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions andbusiness strategy, and often contain words such as “project,” “outlook,” "expect," "anticipate," "intend," "plan," "believe," “estimate,” “may,” "seek," “would,” “should,” “likely,” “goal,” “strategy,”“future,” “maintain,” “continue,” “remain,” “target” or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others,statements regarding:

• Expected operating results, such as improved store efficiency and performance; generating 2016 second quarter earnings per share of $1.86 to $1.90 per diluted share and 2016full year earnings of $7.30 to $7.50 per diluted share and all projections;

• The increase in our annual revenues that we estimate will result from dealerships that we acquired;• Anticipated ability to improve store performance; • Anticipated additions of dealership locations to our portfolio in the future; and• Anticipated availability of liquidity from our credit facility and unfinanced operating real estate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate maydiffer materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially fromestimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and thefinancial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financialcovenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation and others set forth throughout Part II, Item 7. Management's Discussionand Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our most recent Annual Report on Form 10-K, and from time to time in our other filingswith the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements,including our earnings outlook, which are made as of the date of this release.

Non-GAAP Financial Measures This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenues and gross profit, adjustedoperating margin, adjusted operating profit as a percentage of gross profit, and adjusted pre-tax margin. Non-GAAP measures do not have definitions under GAAP and may be defineddifferently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the mostdirectly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directlycomparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flowsrelated to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believethe non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because theyexclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. Thesepresentations should not be considered an alternative to GAAP measures.


LITHIA MOTORS OVERVIEWNationwide Geographic Footprint


▪ Two growth paths: exclusive markets for Lithia,metro markets for DCH

▪ Performance-based entrepreneurial culture

LITHIA MOTORS OVERVIEW138 Dealerships in the United States

NATIONAL MARKETSHARE LITHIA NEW VEHICLE UNIT MIX

Import 47% 55%

Honda 20%

Toyota 19%

Subaru 7%

Nissan 4%

Other Import* 5%

Domestic 45% 33%Chrysler 19%

GM 9%

Ford 5%

Luxury 8% 12%

BMW 5%

Mercedes 1%

Lexus 1%

Other Luxury** 5%Note: 2015 national market share for March 2016 from the “Auto Unit Sales & SAAR” report published by Stephens Inc.; Lithia market share based on new vehicle unit sales for the three months endedMarch 31, 2016.

* Other import includes Hyundai, Volkswagen, Kia, Mazda and Mitsubishi

** Other luxury includes Porsche and Volvo


CORNERSTONES OF SUCCESS

OPERATIONALGROWTH

New vehicle recovery continues

Used market 3x bigger than newmarket

Service work driven by SAARrecovery

ACQUISITIONOPPORTUNITIES

Unconsolidated industry

Target 20% after tax ROE peryear

FINANCALDISCIPLINE

Balance investment andshareholder return

Ample liquidity to deploy

Path to $8.00 Earnings Per Share

OPERATIONALGROWTH

FINANCIAL

DISCIPLINE ACQ

UISI

TIO

N

OPP

ORT

UNIT

IES


Milestone 5$5.1

GROWTH MILESTONES

▪ Achieved withorganic growth andacquisitions

▪ Completed firstMilestone in 2013;Milestone 2 in2014; Milestones 3and 4 in 2015

▪ Target completingMilestone 5 in 1-3years

Delivers $8.00 Earnings Per Share

Note: See appendix for reconciliation of adjusted earnings per share.

ADJUSTED EARNINGS PER SHARE

ORGANIC REVENUE GROWTH ($B)

ACQUISITION REVENUE GROWTH ($B)

Milestone 1$4.00

Milestone 2$5.00

Milestone 3$6.00

Milestone 4$7.00

Milestone 5$8.00

Milestone 1$4.0

Milestone 2$4.3

Milestone 3$4.5

Milestone 4$4.9

Milestone 1$.01

Milestone 2$1.0

Milestone 3$2.3

Milestone 4$3.1

Milestone 5$4.1

$2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00

FCST 2016

FY 2015

FY 2014

2012 Base

$7.50$7.02

$5.11$2.72

$3.0 $3.5 $4.0 $4.5 $5.0

FCST 2016

FY 2015

FY 2014

2012 Base

$5.1$4.8

$4.5$3.4

$0.0 $1.0 $2.0 $3.0 $4.0

FCST 2016

FY 2015

FY 2014

2012 Base

$3.4$3.1

$0.9

OPERATIONALGROWTH


STABLE, PROFITABLE INDUSTRYFour Separate Diversified Businesses

▪ Recession-tested

▪ Variable coststructure

▪ Diverse andcomplimentarygross profit mix

▪ Service businessconsistent

Note: Used vehicles includes both used retail and wholesale vehicles.

YTD 2016 RevenueMix

YTD 2016 GrossProfit Mix

New vehicles 55% 22%

Used vehicles 30% 22%

Service, body and parts 10% 31%

F&I and other 5% 25%

PROFITABILITY MIX

PROFITABILITY AND SAAR

Peer Group PTI % SAAR Growth Rate

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%2007 2008 2009 2010 2011 2012 2013 2014 2015

2.0% 1.9% 1.5% 2.1% 2.5% 2.6% 2.8% 2.7% 2.8%

-3%

-18%-21%

11% 11% 13%7% 6% 6%

Note: Margin based on reported adjusted pre-tax income as a percentage of revenue. Peer group average includes Lithia,AutoNation, Sonic, Asbury, Penske, and Group 1.


CA NJ/NY OR TX MT WA NV AK ID HI IA ND NM MA

27%

21%

13% 13%

6%4% 4% 3% 2% 2% 2% 1% 1% 1%

NEW VEHICLE MARKETOpportunities Remain Despite Recovery

▪ After recessionaryperiods, SAARperformed abovethe long-runaverage

▪ Geographic andeconomicdiversification

YTD 2016 NEW VEHICLE UNIT MIX

HISTORICAL NEW VEHICLE SAAR PERFORMANCE

Source: US Department of Commerce, Bureau of Economic Analysis, data as of February 3, 2016

Recovery spikes above long-run average

SAAR Trend Live

20

15

10

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015


PrivateParty, 29%

IndependentDealers, 32%

FranchisedDealers,37%

CarMax,2%

New Used

2011 2012 2013 2014 2015

12.8 14.4 15.4 16.4 17.4

38.8 40.5 42.038.8 39.4

USED VEHICLE MARKETLargest Future Opportunity

▪ Used vehiclemarket 2.5x largerthan new

▪ Franchiseddealers 37% ofused vehiclemarket

▪ 72% of 2015 usedretail salesoriginate from newvehicle sale

Source: WardsAuto Group “U.S. Market Used Vehicle Sales“ report

USED MARKET SIZE USED MARKET SHARE

Source: 2015 data from WardsAuto Group “U.S. Market Used VehicleSales“ report

LITHIA USED WATERFALL

Same store sale in Units Retail Sale Retailed Trade-ins% Sold w/

Retailed Trade

2015 New Vehicles 31,779 12,712 40%

1st Trade-in Retailed 12,712 4,767 15%

2nd Trade-in Retailed 4,767 1,589 5%

3rd Trade-in Retailed 1,589 636 2%

Aggregate Retailed Trades 19,0682015 Used Retail 26,531

72%

Ret

ail U

nits

sol

d(in

Mill

ions

)

3.0x 2.8x 2.7x 2.4x 2.3x


<=25 26-25 51-75 76-100 100+

Store Distribution of Average Used retail Units Sold per Month

14

48

33 29

14

CPO Core Value Auto

Same Store Revenue Growth

15%

12%

7%

YTD 2016 USED MIX DETAILS

USED VEHICLE GROWTH

▪ Achieving 75 unitgoal increases unitsales 17%

▪ 68% of stores sellless than 75 unitgoal

Target 75 Used Units Per Store Per Month

YTD 2016 AVERAGE USED RETAIL UNITS SOLD PER MONTH

Average:64 units

YTD 2016 SAME STORE USED UNIT MIX

CPO: Manufacturer certified pre-owned vehiclesCore: 3 to 7 year old vehiclesValue Auto: Vehicles over 80,000 miles

Goal:75 units

Core,50%

ValueAuto,23%

CPO,27%


Lithia Peer Average

$1,196

$1,337

* Total vehicle metrics include sales and gross profit for new, used retail, used wholesale and F&I and new and used retail units

2013 2014 2015

Service Contracts Lifetime Oil Contracts

42%

36%

43%

32%

44%

33%

VEHICLE SALES GROWTH

▪ F&I per unit $141lower than peeraverage

▪ F&I productsincrease serviceretention

▪ Total gross profitper unit of $3,507up $72 from 2015

Opportunity Exists in F&I

Note: Peer average includes AutoNation, Sonic, Asbury,Penske, and Group 1.

F&I PENETRATION RATES

Note: Penetration rates are on a same store basis. 2015 LOF penetration ratesdiluted by DCH, as product offering at DCH stores started in 2015.

2015 F&I PER UNIT

YTD 2016 VEHICLE SALES SAME STORE DETAILS

RevenueGrowth Unit Growth

Gross ProfitGrowth

GP per RetailUnit

GP per RetailUnit

Y-o-Y Change

New 6% 5% 6% $2,040 $24

Used retail 12% 11% 6% $2,357 $(105)

F&I 17% NA 17% $1,292 $111

Total vehicle* 8% 7% 10% $3,507 $72


10 - Year Avg SB&P Y-o-Y SS Sales Growth*

130,000

120,000

110,000

100,000

90,000

80,000

70,000

60,000

50,000

10%

5%

0%

-5%

-10%

2009 2010 2011 2012 2013 2014 2015 2016E

74,825 74,668 75,025 76,220 79,14985,431

95,145 112,268

-4.4%

0.7%

4.5%6.3% 6.4%

11.3% 10.3%7.5%

SERVICE MARKETTailwind as Units in Operation Expand

▪ Service growthcorrelated withSAAR growth

▪ Increasing servicework as installedunits grow

Note: Forecasted same store service, body and parts growth for 2016E

TRAILING SAAR/SERVICE GROWTH

LITHIA MARKET UIO OPPORTUNITY

Trailing 5-year SAAR Growth Trailing 3-year Industry SB&P Growth

15

10

5

0

-5

-101981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011


Avg GPAcross AllUnits Sold

Avg GPper Sold

UnitsRetained

$76

$193

$140

$265

$126

$284

$105

$298

$86

$311

$75

$314

$64

$312

$52

$310

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

46%

65%

56%

45%

35%30%

26%21%

32%39%

31%25%

20% 17% 14% 11%

SERVICE GROWTHImproving Retention Increases Service Revenue

▪ Average 41% newand 24% usedretention in serviceover 8 years

▪ Across all vehiclessold, cumulativeservice GP per unitis $724

▪ Ex defections,cumulative GP perunit is $2,287

% NewVehicle

% Used Vehicle

Total$724

Total$2,287

% OF VEHICLES SOLD RETURNING FOR SERVICE

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

CUMULATIVE SERVICE GROSS PROFIT PER VEHICLE


2008 2009 2010 2011 2012 2013 2014 2015

4.1 4.4 4.5 4.8 4.9 4.9 4.9 5.0

SERVICE GROWTHRetaining Customers Longer

▪ Service revenueincreasing due tomore units inoperation

▪ Average age ofvehicles servicedincreased 1 yearsince 2008

SAME STORE SALES YEAR-OVER-YEAR COMPARISON

2010 2011 2012 2013 2014 2015

Customer Pay 4.9% 4.0% 6.8% 4.7% 9.1% 8.3%

Warranty (8.1)% (4.2)% (2.9)% 13.4% 23.0% 25.2%

Wholesale Parts (0.7)% 9.3% 8.4% 7.2% 8.2% 4.2%

Body Shop (2.2)% 14.0% 15.1% 3.8% 10.5% 5.0%

Total 0.7% 4.5% 6.3% 6.4% 11.3% 10.3%

Avg # of Veh Srvper month 0-1 Yrs 2-3 Yrs 4-5 Yrs 6-7 Yrs 8-9 Yrs 10+ Yrs

2012 67,695 24% 16% 21% 16% 10% 13%

2013 71,957 26% 18% 15% 16% 11% 14%

2014 78,288 27% 20% 12% 15% 11% 15%

2015 83,357 28% 22% 13% 10% 11% 17%

Serv

iced

Vehi

cle

Mix

AVERAGE AGE OF VEHICLES SERVICED


LEVERAGING COST STRUCTURE

▪ Throughput isincremental % ofgross profit tooperating incomeafter SG&Aexpenses

▪ 2014 and 2015SG&A as a % ofgross profitimpacted by DCHacquisition

Target Throughput of 45% to 50% on a Same Store Basis

$MM YTD 2016 % of GP YTD 2015 % of GP $ Change

Personnel $149 48.4% $133 48.7% $16

Advertising 19 6.3 15 5.6 4

Rent 6 2.1 6 2.2 —

Facility Cost 9 3.0 12 4.3 (3)

Other 35 11.3 29 10.6 6

Total $218 71.1% $195 71.3% $23

Gross Profit $307 $273 34

Throughput % 32%Same store throughput % 37%

ADJUSTED SG&A DETAILS

Note: See appendix for reconciliation of adjusted SG&A expense

Target45-50%

ADJUSTED SG&A AS A % OF GROSS PROFIT SAME STORE THROUGHPUT

Q1 2014 Q1 2015 Q1 2016

68.5%

71.3% 71.1%

2013 2014 2015 YTD 2016

51%43%

50.4%

37%

ACQUISITIONOPPORTUNITIES


UNCONSOLIDATED INDUSTRY

▪ Over 18,000dealerships in thecountry

▪ 10 largest dealersown 1,225 stores

Abundant Acquisition Opportunities

DEALERSHIPS IN THE US

HIGHLY FRAGMENTED MARKET

Source: Automotive News, number of Light Vehicle Dealerships in the U.S.

Source: Automotive News 2015 Top 150 Dealership Groups

2009 2010 2011 2012 2013 2014 2015 2016

20,45318,607 17,653 17,858 17,760 17,875 18,000 18,058

Top 10Dealers

7%

All Other93%


FUTURE GROWTH STRATEGYTwo Growth Paths, Over Double the Acquisition Targets

Micro Small Medium Large Extra Large Mega

Vehicle Registrations in Market 0-5K 5K-25K 25K-50K 50K-100K 100K-200K 200K+

Est. Store Count in US 3,950 3.5 1,600 1,700 2,400 4,650

Domestic

Import

Luxury

Est. Acq Targets 210 680 310 30 470 960

1,230 1,430

▪ Lithia: exclusive franchises in medium markets for domestic/importstores and large markets for luxury stores

▪ DCH: extra large and mega markets to cluster domestic, import andluxury stores


2010 2011 2012 2013 2014 2015

5%23%

41%57%

89%

211%

ACQUISITION GROWTH

▪ 75-100% 5-year aftertax ROE

▪ 3x-5x EV/EBITDA

▪ 10%-20% of annualrevenues

Targeting 20% After Tax Return on Equity

ACCUMULATED RETURN ON EQUITY

INVESTMENT METRICS

▪ Improveperformancethrough commonsystems andmeasurements

*Equity defined as investment costs, excluding new vehicles and assuming all real estate is leased at actual rent or if owned, a 7% capitalization rate**Assumes steady state revenues 2 years after acquisition, EBITDA adjusted to include flooring interest as an operating expense

2012 2013 2014 2015

$MM Multiple $MM Multiple $MM Multiple $MM Multiple

# of Store 6 8 36 8

Equity* $26 $33 $320 $31

Est. EBITDA** $8 3.1x $9 3.7x $69 4.7x $8 3.7x

Est. Rev** $265 10% $273 12% $2,715 12% $270 12%

ACQUISITION METRICS

Note: Return based on net income assuming all real estate is leased at actual rent or, if owned, at 7% capitalization rate. Years are based oncalendar years. Acquisition year reflects partial year results from acquisition date forward and most recent period results are year-to-datethrough March 31, 2016.

Year 6

Year 5

Year 4

Year 3

Year 2

Year 1

Acq Year

FINANCIALDISCIPLINE


65.0%

55.0%

45.0%

35.0%

25.0%

Deb

tto

Tota

lCap

ital

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Deb

t/A

djus

ted

EBIT

DA

2012 2013 2014 2015 YTD 2016

41%32%

49%44% 44%

$(M

illio

ns)

2016 2017 2018 2019 2020 2021 Beyond

$—$23 $30 $34 $26 $29

$252

FINANCIAL DISCIPLINE

▪ Leverageincreased in 2014due to DCHacquisition

▪ Ample liquiditylevels with minimalnear term debtmaturities

Positioned for Continued Growth

FUNDS FOR GROWTH

$MM Q1 2016

Cash and Cash Equivalents $22

Availability on Line of Credit 149

Unfinanced Real Estate* 150

Total $321

BALANCE SHEET LEVERAGE

FUTURE MORTGAGE MATURITIES

*Unfinanced real estate represents 80% of the net book value of unfinanced realestate used in operations.

Note: Total capital includes outstanding debt excluding vehicle floor plan financing and total shareholder’s equity. Adjusted EBITDA is definedas earnings before interest excluding floor plan interest, taxes, depreciation and amortization. Debt to adjusted EBITDA calculation is based onoutstanding debt as of the end of the period and TTM adjusted EBITDA

Note: Outstanding mortgage amounts as of March 31, 2016

2.5x1.9x

2.5x

1.8x 1.9x


Free Cash Flow** Acquisition Equity Value

2011 2012 2013 2014 2015

$28 $34

$130$87

$164

$41 $26 $33

$320

$31

FINANCIAL DISCIPLINEBalance Investment and Shareholder Return

CAPITAL EXPENDITURES

DIVIDENDS PAID

FREE CASH FLOW AND ACQUISITIONS

SHARE REPURCHASES

$MM 2013 2014 2015 FCST2016

Post-Acq. Improv. $12 $21 $33 $22

Facilities for Open Points 5 7 3 —

Lease Buy-outs 7 25 10 27

Existing Facility Improv. 14 20 20 39

Maintenance 12 13 17 26

Total $50 $86 $83 $114

# of Shares 848,092 127,900 226,729*Q4’12 dividend was accelerated and paid in December 2012 rather in2013. Data has been normalized to include the $0.10 dividend in 2013

**Free cash flow defined as earnings before interest, taxes, depreciation and amortization (EBITDA) add backstock compensation less cash paid for taxes, interest, dividends and capital expenditures.

712,486

Dividends Paid Dividend per Share

$20.0

$15.0

$10.0

$5.0

$0.0

$MM

$0.8

$0.6

$0.4

$0.2

$0.0

$pe

rSha

re

2011 2012 2013 2014 2015

$7$10

$13$16

$20$0.26$0.37

$0.49

$0.61

$0.76

306,386

Share Repurchases Price per Share

$70.0

$60.0

$50.0

$40.0

$30.0

$20.0

$10.0

$0.0

$MM

$120

$100

$80

$60

$40

$20

$0

$pe

rSha

re

2012 2013 2014 2015 YTD 2016

$21$5

$16$32

$58$24.41

$40.76

$70.52

$102.84

$81.05

Q1 2016 UPDATE


Gross Profit($MM)

Q1 2015 Q1 2016

$273$307

Revenue ($MM)

Q1 2015 Q1 2016

$1,789

$1,983

Income Statement SummaryQ1’16 FINANCIAL RESULTS

▪ Increased revenue11% and EPS 12%

▪ Grew total samestore sales 8%

Revenue Gross Profit

New vehicles 6.2% 5.8%

Used retail vehicles 12.4 6.0

F&I 17.4 17.4

Service, parts and body 10.4 11.0

Total 8.2% 9.8%

SAME STORE QUARTER-OVER-QUARTER GROWTH

Q1 2016 HIGHLIGHTS

12% 12% 11%

Note: See appendix for reconciliation of adjusted diluted EPS

Adjusted DilutedEPS

Q1 2015 Q1 2016

$1.39 $1.55


(80)

Asbury Lithia AutoNation Group1 Penske Sonic

68.6%

71.3%69.7%

74.6%

77.7%

80.6%

69.4%71.1% 71.3%

74.8%

77.2%

80.6%

Q1’16 FINANCIAL RESULTS

SAME STORE GROSS PROFIT GROWTH

SAME STORE SALES GROWTH

ADJUSTED NET PROFIT MARGIN

ADJUSTED SG&A AS A % OF GROSS PROFIT

Note: See appendix for reconciliation of adjusted net profit margin

LAD ABG AN GPI PAG SAH

New Vehicles 6.2% 1.2% (4.4)% (1.1)% 1.6% (2.1)%

Used Vehicles 12.4% 0.3% (3.6)% 6.1% 3.3% 2.3%

F&I 17.4% 7.3% 2.5% 2.2% 5.9% 9.7%

SB&P 10.4% 8.3% 4.6% 5.4% 3.7% 9.1%

Total 8.2% 7.9% (2.0)% 1.4% 2.7% 1.2% bps reduction(increase)

20 (160) (20)

Note: See appendix for reconciliation of adjusted SG&A

Peer Comparisons

50 -

Q1 2015 Q1 2016

Lithia Sonic Asbury Group1 Penske AutoNation

9.8%

4.2%2.3% 1.4% 1.0%

(2.0)%

Asbury Lithia AutoNation Penske Group1 Sonic

2.1% 2.0% 1.9%

1.6%1.4%

0.8%


2016 GUIDANCE

▪ Q2’16: $1.86 - $1.90▪ FY’16: $7.30 - $7.50

PROJECTED EARNINGS RANGE*:

2016 PERFORMANCE ASSUMPTIONS:

*Excludes the impact of future acquisitions, dispositions and any potential non-core items

Annual Assumptions

Total Revenues $8.5 to $8.6 billion

New vehicle sales increase 4.5%

Used vehicle sales increase 9.5%

Service body and parts sales increase 7.5%

Finance and insurance per unit $1,270 to $1,290 per unit

New vehicle margins 5.8% to 6.0%

Used vehicle margins 11.8% to 12.0%

Service body and parts margins 48.8% to 49.0%

Tax rate 39.5%

Average diluted shares outstanding 25.9 million

APPENDIX


SUPPLEMENTAL INFORMATIONBalance Sheet

$K As of March 31,2016

As of December 31,

2015

Cash and cash equivalents 21,559 45,008

Accounts receivable 286,292 308,462

Inventories, net 1,541,085 1,470,987

Other current assets 50,473 54,408

Total current assets 1,899,409 1,878,865

Property and equipment, net 882,405 876,660

Goodwill 213,934 213,220

Franchise value 161,668 157,699

Other non-current assets 110,202 100,855

Total assets 3,267,618 3,227,299

$K As of March 31,2016

As of December 31,

2015

Floor plan notes payable 55,836 48,083

Floor plan notes payable: non-trade 1,296,751 1,265,872

Current maturities of long-term debt 33,721 38,891

Trade payables 78,250 70,871

Accrued liabilities 179,145 167,108

Total current liabilities 1,643,703 1,590,825

Long-term debt, less current maturities 595,663 606,463

Deferred revenue 70,066 66,734

Deferred income taxes 59,134 53,129

Other long-term liabilities 84,375 81,984

Total liabilities 2,452,941 2,399,135

Total stockholders’ equity 814,677 828,164

Total liabilities and stockholder’sequity 3,267,618 3,227,299


SUPPLEMENTAL INFORMATION2016 Income Statement

$K Q4 2016 Q3 2016 Q2 2016 Q1 2016 FY 2016

New vehicle 1,096,055 1,096,055Used vehicle 532,726 532,726Wholesale used vehicles 65,146 65,146Finance and insurance 77,638 77,638Service, body and parts 196,675 196,675Fleet and other 14,621 14,621 Total revenues 1,982,861 1,982,861

New vehicle 66,766 66,766Used vehicle 64,277 64,277Wholesale used vehicles 1,830 1,830Finance and insurance 77,638 77,638Service, body and parts 96,119 96,119Fleet and other 552 552 Total gross profit 307,182 307,182

Asset impairments 3,498 3,498Selling, general and administrative 219,106 219,106Depreciation and amortization 11,663 11,663 Operating Income 72,915 72,915

Floor plan interest expense 5,909 5,909Other interest expense 5,459 5,459Other expense, net 1,526 1,526 Income before taxes 60,021 60,021Income tax expense 19,751 19,751 Net Income 40,270 40,270



$K Q4 2015 Q3 2015 Q2 2015 Q1 2015 FY 2015

New vehicle 1,167,893 1,227,080 1,149,512 1,007,816 4,552,301Used vehicle 469,399 505,885 488,801 462,931 1,927,016Wholesale used vehicles 63,054 69,472 66,796 62,208 261,530Finance and insurance 69,318 76,633 72,463 64,604 283,018Service, body and parts 193,024 189,796 182,695 173,475 738,990Fleet and other 30,594 15,979 36,680 18,144 101,397 Total revenues 1,993,282 2,084,845 1,996,947 1,789,178 7,864,252

New vehicle 72,097 77,157 69,342 61,774 280,370Used vehicle 56,827 62,287 62,693 59,442 241,249Wholesale used vehicles 310 580 1,406 2,161 4,457Finance and insurance 69,318 76,633 72,463 64,604 283,018Service, body and parts 94,783 93,950 90,749 84,439 363,921Fleet and other 88 580 996 955 2,619 Total gross profit 293,423 311,187 297,649 273,375 1,175,634

Asset impairment charges 5,733 4,131 6,130 4,130 20,124Selling, general and administrative 200,219 223,728 195,610 191,618 811,175Depreciation and amortization 11,056 10,531 10,287 9,726 41,600 Operating Income 76,415 72,797 85,622 67,901 302,735

Floor plan interest expense 5,279 4,951 4,655 4,649 19,534Other interest expense 4,791 4,900 4,972 4,828 19,491Other (income) expense, net (25) 307 356 368 1,006 Income before taxes 66,370 62,639 75,639 58,056 262,704Income tax expense (benefit) 18,638 19,248 24,416 17,403 79,705 Income (loss) from continuing operations 47,732 43,391 51,223 40,653 182,999



$K Q4 2014 Q3 2014 Q2 2014 Q1 2014 FY 2014

New vehicle 1,071,543 732,121 694,484 579,522 3,077,670Used vehicle 409,591 340,522 310,475 301,893 1,362,481Wholesale used vehicles 59,867 48,853 44,286 42,693 195,699Finance and insurance 60,057 46,855 43,838 39,631 190,381Service, body and parts 172,398 120,772 114,337 104,617 512,124Fleet and other 19,851 7,988 14,382 9,750 51,971 Total revenues 1,793,307 1,297,111 1,221,802 1,078,106 5,390,326

New vehicle 65,518 47,648 45,994 39,024 198,184Used vehicle 50,492 43,898 44,067 40,796 179,253Wholesale used vehicles 307 504 1,504 1,331 3,646Finance and insurance 60,057 46,855 43,838 39,631 190,381Service, body and parts 84,301 58,421 56,182 50,832 249,739Fleet and other 446 514 715 447 2,122 Total gross profit 261,121 197,840 192,300 172,061 823,322

Asset impairment charges 1,853 - - - 1,853Selling, general and administrative 184,288 131,627 125,463 121,829 563,207Depreciation and amortization 8,964 6,067 5,825 5,507 26,363 Operating Income 66,016 60,146 61,012 44,725 231,899

Floor plan interest expense 4,535 3,127 3,215 2,984 13,861Other interest expense 4,848 2,051 1,869 1,974 10,742Other income, net (89) (1,027) (1,146) (937) (3,199) Income (loss) before taxes 56,722 55,995 57,074 40,704 210,495Income tax expense (benefit) 15,583 21,458 21,904 16,010 74,955 Income (loss) from continuing operations 41,139 34,537 35,170 24,694 135,540


SUPPLEMENTAL INFORMATIONQuarterly Same Store Revenue Changes

Q4 Q3 Q2 Q1 FY

2016New vehicle 6.2% 6.2%Used vehicle 12.4 12.4Wholesale used vehicles 3.0 3.0Finance and insurance 17.4 17.4Service, body and parts 10.4 10.4Fleet and other (19.6) (19.6) Total revenues 8.2% 8.2%

2015New vehicle 6.5% 11.4% 7.7% 11.5% 8.9%Used vehicle 12.2 12.8 16.3 11.7 13.2Wholesale used vehicles 4.1 11.3 11.6 5.8 8.0Finance and insurance 13.0 16.1 15.3 12.6 14.7Service, body and parts 10.2 10.2 9.6 11.1 10.3Fleet and other 53.7 1.8 53.3 26.2 40.4 Total revenues 8.8% 11.7% 11.0% 11.5% 10.6%

2014New vehicle 12.3% 11.1% 12.1% 10.2% 11.5%Used vehicle 16.7 13.8 11.4 19.3 15.2Wholesale used vehicles 15 6.9 11.2 4.3 9.2Finance and insurance 14.5 16.6 17.5 18 16.6Service, body and parts 12.5 13.1 10.4 9.4 11.4Fleet and other 86.3 2.2 (10.7) 10.8 15.7 Total revenues 14.1% 12% 11.6% 12.5% 12.5%


SUPPLEMENTAL INFORMATIONQuarterly Gross Margins

Q4 Q3 Q2 Q1 FY

2016New vehicle 6.1% 6.1%Used vehicle 12.1 12.1Wholesale used vehicles 2.8 2.8Finance and insurance 100.0 100.0Service, body and parts 48.9 48.9Fleet and other 3.8 3.8 Total revenues 15.5% 15.5%




SUPPLEMENTAL INFORMATION2016 Adjusted Income Statement Details

YTD 3/31/2016

Gain on sale ofstores

EquityInvestment

Legal reserveadjustment

YTD 12/31/2015

$K, except for per share amounts As Reported Q1 Q1 Q1 Adjusted

Asset impairments 3,498 — (3,498) — —

Selling, general and administrative 219,106 1,087 — (1,906) 218,287.

Income from operations 72,915 (1,087) 3,498 1,906 77,232

Other expense, net (1,526) — 2,066 — 540

Income before income taxes 60,021 (1,087) 5,564 1,906 66,404

Income taxes (19,751) 426 (5,945) (747) (26,017)

Net income 40,270 (661) (381) 1,159 40,387

Diluted earnings per share 1.55 (0.03) (0.01) 0.04 1.55

Diluted share count 25,973



YTD 12/31/2015

Gain on sale of stores Asset impairment TransitionAgreement

Equity Investment YTD 12/31/2015

$K, except for per share amounts As Reported Q1 Q2 Q2 Q4 Q3 Q1 Q2 Q3 Q4 Adjusted

Asset impairments 20,124 — — (2,000) (1,603) — (4,130) (4,130) (4,131) (4,130) —

Selling, general and administrative 811,175 3,349 2,570 — — (18,296) — — — — 798,798

Income from operations 302,735 (3,349) (2,570) 2,000 1,603 18,296 4,130 4,130 4,131 4,130 253,088

Other income (1,006) — — — — — 1,732 1,733 1,732 1,733 4,165

Income from continuing operationsbefore income taxes

262,704 (3,349) (2,570) 2,000 1,603 18,296 5,862 5,863 5,863 5,863 228,298

Income taxes (79,705) 1,004 1,305 (780) (605) (6,507) (7,250) (7,652) (7,414) (8,516) (88,361)

Net income from continuing operations 182,999 (2,345) (1,265) 1,220 998 11,789 (1,388) (1,789) (1,551) (2,653) 139,937

Diluted earnings per share fromcontinuing operations

6.91 (0.09) (0.05) 0.05 0.03 0.45 (0.05) (0.07) (0.06) (0.10) 7.02




YTD 12/31/2014

DisposalGain

Reserveadjustments

EquityInvestment Acquisition expenses Tax Attribute YTD

12/31/2014

$K, except for per share amounts AsReported

Q2 Q1 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Adjusted

Asset impairments 1,853 - - (1,853) - - - - - - -

Selling, general and administrative 563,207 - (3,931) - (163) (883) (819) - - - 557,411

Income from operations 231,899 - 3,931 1,853 163 883 819 - - - 239,548

Other income 3,199 1,160 4,359

Income from continuing operations beforeincome taxes

210,495 - 3,931 3,013 163 883 819 - - - 219,304

Income taxes (74,955) - (1,545) (6,506) (63) (319) (338) (73) (194) (600) (84,593)

Net income from continuing operations 135,540 - 2,386 (3,493) 100 564 481 (73) (194) (600) 134,711

Net income from discontinued operations 3,180 (3,490) - - - - - - - - (310)

Net income 138,720 (3,490) 2,386 (3,493) 100 564 481 (73) (194) (600) 134,401

Diluted earnings per share from continuingoperations

5.14 - 0.09 (0.13) - 0.02 0.02 - (0.01) (0.02) 5.11

Diluted earnings per share from discontinuedoperations

0.12 (0.13) - - - - - - - - (0.01)

Diluted earnings per share 5.26 (0.13) 0.09 (0.13) - 0.02 0.02 - (0.01) (0.02) 5.10


2016 q1 investor presentation · • expected operating results, such as improved store efficiency...

Documents