q4'15 company update• expected operating results, such as improved store efficiency and...

1 LITHIA MOTORS FEBRUARY 2016

Q4'15 COMPANYUPDATE


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 first quarter earnings per share of $1.47 to $1.51 per diluted share and 2016 fullyear earnings of $7.30 to $7.50 per diluted share and all projections set forth under the headings “2016 Outlook”;

• 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 presentation. Non-GAAP Financial Measures This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share from continuing operations, adjusted SG&A as a percentage of revenuesand gross profit, adjusted operating margin, adjusted operating profit as a percentage of gross profit, and adjusted pre-tax margin. Non-GAAP measures do not have definitions under GAAPand may be defined differently 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 areview of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider themwith the most directly comparable 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 thevisibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to thisrelease. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations,because they exclude 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.These presentations 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 OVERVIEW139 Dealerships in the United States

NATIONAL MARKETSHARE LITHIA NEW VEHICLE UNIT MIX

Import 47% 54%

Honda 20%

Toyota 19%

Subaru 7%

Nissan 4%

Other Import* 4%

Domestic 45% 33%Chrysler 19%

GM 9%

Ford 5%

Luxury 8% 13%

BMW 6%

Mercedes 2%

Lexus 1%

Other Luxury** 4%Note: 2015 national market share for December 2015 from the “Auto Unit Sales & SAAR” report published by Stephens Inc.; Lithia market share based on new vehicle unit sales for the twelve months endedDecember 31, 2015.

* 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.

2015 Revenue Mix 2015 Gross ProfitMix

New vehicles 58% 24%

Used vehicles 28% 21%

Service, body and parts 9% 31%

F&I and other 5% 24%

PROFITABILITY MIX

PROFITABILITY AND SAAR

Peer Group PTI % SAAR Growth Rate

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

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

-3%

-18%-21%

11% 11% 13%

7% 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.

2007 2008 2009 2010 2011 2012 2013 2014


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

22%

18% 17%15%

6% 5% 5%3% 3% 3% 2% 2% 1%

NEW VEHICLE MARKETOpportunities Remain Despite Recovery

▪ After recessionaryperiods, SAARperformed abovethe long-runaverage

▪ Geographic andeconomicdiversification

2015 NEW VEHICLE UNIT STATE 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, 28%

IndependentDealers, 34%

FranchisedDealers,37%

CarMax,1%

New Used

2008 2009 2010 2011 2012

13.210.4 11.6 12.7 14.4

36.5 35.5 36.9 38.8 40.5

USED VEHICLE MARKETLargest Future Opportunity

▪ Used vehiclemarket 3x largerthan new

▪ Franchiseddealers 37% ofused vehiclemarket

▪ 75% of 2015 usedretail salesoriginate from newvehicle sale

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

USED MARKET SIZE USED MARKET SHARE

Source: 2012 data from WardsAuto Group “U.S. Market Used VehicleSales“ reportLITHIA USED WATERFALL

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

Retailed Trade

2015 New Vehicles 96,556 38,622 40%

1st Trade-in Retailed 38,622 14,483 15%

2nd Trade-in Retailed 14,483 4,828 5%

3rd Trade-in Retailed 4,828 1,931 2%

Aggregate Retailed Trades 57,9332015 Used Retail 77,552

75%

Ret

ail U

nits

sol

d(in

Mill

ions

)

2.7x 3.4x 3.2x 3.1x 2.8x


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

Store Distribution of Average Used retail Units Sold per Month

13

4439

27

13

Core,51%

ValueAuto,26%

CPO,23%

USED VEHICLE GROWTH

▪ Achieving 75 unitgoal increases unitsales 21%

▪ 71% of stores sellless than 75 unitgoal

Target 75 Used Units Per Store Per Month

2015 AVERAGE USED RETAIL UNITS SOLD PER MONTH

Average:62 units

2015 SAME STORE USED UNIT MIX 2015 USED MIX DETAILS

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

Goal:75 units

CPO Core Value Auto

Same Store Revenue Growth

17%

12%

9%


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

Lithia Peer Average

$1,196

$1,337 2013 2014 2015

Service Contracts Lifetime Oil Contracts

42%

36%

42%

37%

43%

25%

VEHICLE SALES GROWTH

▪ F&I per unit $141lower than peeraverage

▪ F&I productsincrease serviceretention

▪ Total gross profitper unit of $3,583up $68 from 2014

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

2015 VEHICLE SALES SAME STORE DETAILS

RevenueGrowth Unit Growth

Gross ProfitGrowth

GP per RetailUnit

GP per RetailUnit

Y-o-Y Change

New 9% 7% 5% $2,131 $(42)

Used retail 13% 9% 11% $2,545 $37

F&I 15% NA 15% $1,244 $73

Total vehicle* 10% 8% 10% $3,583 $68


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

112,134

-4.3%

0.7%

4.5%6.5% 6.7%

11.3% 10.3%

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 FY 2016

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


$ (Millions)

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

4.0 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 4.8% 3.9% 6.9% 5.2% 9.1% 7.9%

Warranty (8.5)% (4.2)% (2.7)% 13.9% 23.4% 25.3%

Wholesale Parts (0.6)% 9.8% 8.7% 7.2% 8% 4.6%

Body Shop (2.2)% 14.0% 15.1% 3.8% 10.5% 3.7%

Total 0.7% 4.5% 6.5% 6.7% 11.4% 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 21% 21% 23% 15% 9% 11%

2013 71,957 24% 16% 21% 16% 10% 13%

2014 78,288 26% 18% 15% 16% 11% 14%

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

Serv

iced

Vehi

cle

Mix

SAME STORE SALES YEAR-OVER-YEAR COMPARISON


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 2014 % of GP 2015 % of GP $ Change

Personnel $375 45.5% $538 45.7% $163

Advertising 47 5.7 70 6.0 23

Rent 17 2.1 24 2.0 7

Facility Cost 34 4.1 46 3.9 12

Other 85 10.3 121 10.3 36

Total $558 67.7% $799 67.9% $241

Gross Profit $823 $1,176 353

Throughput % 32%Same store throughput % 50%

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

2012 2013 2014 2015

69.4%

67.2%67.7% 67.9%

2012 2013 2014 2015

51% 51%43%

50%

ACQUISITIONOPPORTUNITIES


UNCONSOLIDATED INDUSTRY

▪ Over 17,800dealerships in thecountry

▪ 10 largest dealersown 1,300 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 2014 Top 150 Dealership Groups

2007 2008 2009 2010 2011 2012 2013 2014

21,761 21,461 20,45318,607 17,653 17,767 17,851 17,838

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

3%19%

36%54%

83%

201%

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 3.3x $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 December 31, 2015

Year 5

Year 4

Year 3

Year 2

Year 1

Acq Year

FINANCIALDISCIPLINE


$(M

illio

ns)

2016 2017 2018 2019 2020 2021 Beyond

$—$25 $31 $34 $27 $29

$242

FINANCIAL DISCIPLINE

▪ Leverageincreased in 2014due to DCHacquisition

▪ Ample liquiditylevels with minimalnear term debtmaturities

Positioned for Continued Growth

FUNDS FOR GROWTH

$MM Q4 2015

Cash and Cash Equivalents $45

Availability on Line of Credit 134

Unfinanced Real Estate* 159

Total $338

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 December 31, 2015

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

2011 2012 2013 2014 2015

44% 41%32%

49%44%

2.5x

1.9x

1.3x

2.5x

1.8x


Share Repurchases Price per Share

$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

$47$24.41

$40.76

$70.52

$102.84

$79.11

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 $40

Facilities for Open Points 5 7 3 —

Lease Buy-outs 7 25 10 17

Existing Facility Improv. 14 20 20 19

Maintenance 12 13 17 24

Total $50 $86 $83 $100

# 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.

595,000

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

Q4 2015 UPDATE


Adjusted DilutedEPS

Q4 2014 Q4 2015

$1.42$1.74

Gross Profit($MM)

Q4 2014 Q4 2015

$261$293

Revenue ($MM)

Q4 2014 Q4 2015

$1,793

$1,993

Income Statement SummaryQ4’15 FINANCIAL RESULTS

▪ Increased revenue11% and EPS 23%

▪ Grew total samestore sales 9%

Revenue Gross Profit

New vehicles 7% 8%

Used retail vehicles 12% 11%

F&I 13% 13%

Service, parts and body 10% 11%

Total 9% 10%

SAME STORE QUARTER-OVER-QUARTER GROWTH

Q4 2015 HIGHLIGHTS

12% 23% 11%

Note: See appendix for reconciliation of adjusted diluted EPS


Lithia AutoNation Asbury Group1 Sonic Penske

70.3%

67.9%

70.0%

72.7%

76.2%

79.2%

68.2%

70.0% 70.5%

75.3% 75.5%

79.6%

90

Q4’15 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 6.5% 6.4% 2.1% (0.2)% 1.7% 4.4%

Used Vehicles 12.2% 6.4% 2.2% 7.9% 6.2% 7.2%

F&I 13.0% 8.6% 7.4% 3.0% 15.4% 9.7%

SB&P 10.2% 7.3% 3.9% 2.7% 3.2% 8.1%

Total 8.8% 6.5% 2.6% 1.9% 4.6% 5.5% bps reduction(increase)

(210) (50) (260)

Note: See appendix for reconciliation of adjusted SG&A

Peer Comparisons

(70) (40)

Q4 2014 Q4 2015

Lithia Sonic Asbury Penske Group1 AutoNation

10.3%

4.4% 4.1%2.7%

0.8% 0.6%

Lithia AutoNation Asbury Penske Group1 Sonic

2.3%

2.0% 2.0%

1.4%1.3%

1.2%


2016 GUIDANCE

▪ Q1’16: $1.47 - $1.51▪ 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 $8.4 to $8.5 billion

New vehicle sales increase 5.5%

Used vehicle sales increase 6.0%

Service body and parts sales increase 5.0%

Finance and insurance per unit $1,210 per unit

New vehicle margins 5.8% to 6.0%

Used vehicle margins 12.4% to 12.6%

Service body and parts margins 49.0% to 49.4%

Tax rate 40.0%

Average diluted shares outstanding 26.0 million

APPENDIX


SUPPLEMENTAL INFORMATIONBalance Sheet

$KAs of

December 31,2015

As of December 31,

2014

Cash and cash equivalents 45,008 29,898

Accounts receivable 308,462 295,379

Inventories, net 1,470,987 1,249,659

Other current assets 54,408 32,010

Assets held for sale — 8,563

Total current assets 1,878,865 1,615,509

Property and equipment, net 876,660 816,745

Goodwill 213,220 199,375

Franchise value 157,699 150,892

Other non-current assets 100,855 98,411

Total assets 3,227,299 2,880,932

$KAs of

December 31, 2015

As of December 31,

2014

Floor plan notes payable 48,083 41,047

Floor plan notes payable: non-trade 1,265,872 1,137,632

Current maturities of long-term debt 38,891 31,912

Trade payables 70,871 70,853

Accrued liabilities 167,108 153,661

Deferred income taxes — 2,603

Liabilities related to assets held for sale — 4,892

Total current liabilities 1,590,825 1,442,600

Long-term debt, less current maturities 606,463 609,066

Deferred revenue 66,734 54,403

Deferred income taxes 53,129 42,795

Other long-term liabilities 81,984 58,963

Total liabilities 2,399,135 2,207,827

Total stockholders’ equity 828,164 673,105

Total liabilities and stockholder’sequity 3,227,299 2,880,932


SUPPLEMENTAL INFORMATION2015 Income Statement

$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, net (25) 307 356 368 1,006 Income (loss) 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



$K Q4 2013 Q3 2013 Q2 2013 Q1 2013 FY 2013

New vehicle $589,535 $604,135 $569,487 $493,441 $2,256,598Used vehicle 253,797 280,734 258,465 239,228 1,032,224Wholesale used vehicles 37,642 43,396 37,691 39,506 158,235Finance and insurance 35,994 37,132 34,218 31,663 139,007Service, body and parts 100,797 97,784 94,462 90,440 383,483Fleet and other 7,109 6,109 14,182 8,802 36,202 Total revenues 1,024,874 1,069,290 1,008,505 903,080 4,005,749

New vehicle 39,097 38,586 38,788 34,647 151,118Used vehicle 35,351 41,641 38,893 34,973 150,858Wholesale used vehicles 332 710 695 974 2,711Finance and insurance 35,994 37,132 34,218 31,663 139,007Service, body and parts 48,107 46,991 46,693 43,779 185,570Fleet and other 412 329 546 402 1,689 Total gross profit 159,293 165,389 159,833 146,438 630,953

Selling, general and administrative 108,416 108,570 109,283 101,131 427,400Depreciation and amortization 5,316 5,099 4,899 4,721 20,035 Operating Income 45,561 51,720 45,651 40,586 183,518

Floor plan interest expense 2,979 2,909 3,036 3,449 12,373Other interest expense 2,115 1,933 1,941 2,361 8,350Other income, net (773) (835) (584) (801) (2,993) Income (loss) before taxes 41,240 47,713 41,258 35,577 165,788Income tax expense (benefit) 14,080 16,822 15,977 13,695 60,574 Income (loss) from continuing operations 27,160 30,891 25,281 21,882 105,214


SUPPLEMENTAL INFORMATIONQuarterly Same Store Revenue Changes

Q4 Q3 Q2 Q1 FY

2015New vehicle 6.5% 11.4% 7.7 % 11.5% 8.9%Used vehicle 12.2% 12.8% 16.3 % 11.7% 13.2%Wholesale used vehicles 4.1% 11.3% 11.6 % 5.8% 8.0%Finance and insurance 13.0% 16.1% 15.3 % 12.6% 14.7%Service, body and parts 10.2% 10.2% 9.6 % 11.1% 10.3%Fleet and other 53.7% 1.8% 53.3 % 26.2% 40.4% Total revenues 8.8% 11.7% 11 % 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% 15.2%Wholesale used vehicles 15% 6.9% 11.2 % 4.3% 9.2%Finance and insurance 14.5% 16.6% 17.5 % 18% 16.6%Service, body and parts 12.5% 13.1% 10.4 % 9.4% 11.4%Fleet and other 86.3% 2.2% (10.7)% 10.8% 15.7% Total revenues 14.1% 12% 11.6 % 12.5% 12.5%

2013New vehicle 10.7% 15.6% 18.5 % 21.8% 16.4%Used vehicle 16% 16.6% 18.5 % 22% 18.3%Wholesale used vehicles 2.7% 18.1% 1.5 % 12.5% 8.6%Finance and insurance 17.7% 14.6% 20.1 % 24.3% 18.9%Service, body and parts 7.9% 5.6% 7.1 % 6.6% 6.8%Fleet and other -4.7% 34.3% 25.3 % -31.8% 0% Total revenues 11.6% 15% 16.7 % 18.8% 15.3%


SUPPLEMENTAL INFORMATIONQuarterly Gross Margins

Q4 Q3 Q2 Q1 FY

2015New vehicle 6.2% 6.3% 6.0% 6.1% 6.2%Used vehicle 12.1% 12.3% 12.8% 12.8% 12.5%Wholesale used vehicles 0.5% 0.8% 2.1% 3.5% 1.7%Finance and insurance 100.0% 100.0% 100.0% 100.0% 100.0%Service, body and parts 49.1% 49.5% 49.7% 48.7% 49.2%Fleet and other 0.3% 3.6% 2.7% 5.3% 2.6% Total revenues 14.7% 14.9% 14.9% 15.3% 14.9%




SUPPLEMENTAL INFORMATION2015 Adjusted Income Statement Details

YTD 12/31/2015

Gain on sale of stores Asset impairment TransitionAgreement

Equity Investment YTD 12/31/2015

$K 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

Diluted share count 26,490



YTD 12/31/2014

DisposalGain

Reserveadjustments

EquityInvestment Acquisition expenses Tax Attribute YTD

12/31/2014

$K 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) $5.1




YTD 12/31/2013

Disposalgain Reserve adjustments Tax attribute YTD

12/31/2013

$K As Reported Q4 Q2 Q4 Q2 Q3 Q4 Adjusted

Selling, general and administrative $427,400 2,531 (3,812) (2,341) - - - $423,778

Income from operations $183,518 (2,531) 3,812 2,341 - - - $187,140

Income from continuing operations before income taxes $165,788 (2,531) 3,812 2,341 - - - $169,410

Income taxes (60,574) 968 (1,484) (869) (228) (1,284) (1,320) (64,791)

Net income from continuing operations $105,214 (1,563) 2,328 1,472 (228) (1,284) (1,320) $104,619

Net income from discontinued operations 786 - - - - - - 786

Net income $106,000 (1,563) 2,328 1,472 (228) (1,284) (1,320) $105,405

Diluted earnings per share from continuing operations $4.02 (0.06) 0.09 0.05 (0.01) (0.05) (0.05) $3.99

Diluted earnings per share from discontinued operations 0.03 - - - - - - 0.03

Diluted earnings per share $4.05 (0.06) 0.09 0.05 (0.01) (0.05) (0.05) $4.02


q4'15 company update• expected operating results, such as improved store efficiency and...

Documents