Mercer Capital's Auto Dealer Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.

1. VALUE FOCUS
Auto Dealer Industry
www.mercercapital.com
Overview Inside
The aptly named Great Recession hit the auto
industry and its dealers harder than almost any
other industry, save for construction and housing:
As unemployment rose, consumer spending
and home values plummeted. With little to no
discretionary income and no means to finance
car purchases, sales tumbled, margins were
squeezed, and GM and Chrysler filed for Chapter
11 bankruptcy. Recovery began in 2009, con-
fidence and disposable incomes rose allowing
consumers to fund purchases of more durable
goods, including cars. These trends are expected
to continue through 2021. However, the auto
dealer industry, though making a strong recovery
from the most recent recession, is facing pressures
from government regulation, shifting demand and
supply, and new market entrants.
More stringent environmental standards are
causing car prices to rise, the shift to internet for
information and purchasing is forcing margins
down (but also increasing volume), and demand is
shifting more toward hybrid, electric, and autono-
mous cars. The leading auto dealers are taking
notice of these shifting trends.
Macroeconomic Indicators
Productivity 1
Housing 3
Personal Consumption
and Confidence 5
Energy 6
Auto Dealer Indicators
Average Dealer Profile 7
Valuation Trends 9
Mergers & Acquisitions 12
Guideline Company Pricing 13
About Mercer Capital 15
Year-End 2015

2. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 1 www.mercercapital.com
Macroeconomic Indicators // Productivity
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
2008
2009
2010
2011
2012
2013
2014
2015
GDP(inBillions)
AnnualizedRealGrowthRate
Quarterly Annualized Real Growth Rate Annual Real Growth Rate
GDP (Current Dollars) GDP (Chained 2009 Dollars)
Source: Bureau of Economic Analysis
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2008
Q
1
Q
2
Q
3
Q
42009
Q
1
Q
2
Q
3
Q
42010
Q
1
Q
2
Q
3
Q
42011
Q
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Q
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Q
42012
Q
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Q
3
Q
42013
Q
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Q
42014
Q
1
Q
2
Q
3
Q
42015
Q
1
Q
2
Q
3
Q
4
Annualized Quarterly Change Annual ChangeSource: Bureau of Labor Statistics
Gross Domestic Product
According to advance estimates released
by the Department of Commerce’s Bureau
of Economic Analysis (BEA), Real Gross
Domestic Product (GDP), the output of
goods and services produced by labor
and property located in the United States,
increased at an annualized rate of 0.7%
during the fourth quarter of 2015. The
increase was attributable to gains in per-
sonal consumption expenditures, residential
fixed investment, and federal government
spending. Private inventory investment,
exports, and nonresidential fixed investment
decreased. Imports (which are subtracted
from the national income and product
accounts used in the calculation of GDP)
increased.
Business & Manufacturing Productivity
According to the Bureau of Labor Statistics
(BLS), seasonally adjusted nonfarm busi-
ness productivity decreased at an annual
rate of 3.0% in the fourth quarter of 2015.
The decrease was a function of relatively flat
output growth combined with an increase of
3.3% in hours worked. Hourly compensation,
real hourly compensation, and unit labor costs
also experienced increases. The produc-
tivity decrease in the fourth quarter follows
increases of 3.5% and 2.1% in the second and
third quarters, respectively. Annual average
productivity increased 0.3% in the fourth
quarter of 2015 relative to the fourth quarter
of 2014.
Productivity decreased 2.7% for the business
sector (inclusive of farming activity) in the
fourth quarter of 2015. This was the result
of a 3.4% increase in hours worked and
a 0.6% increase in output. Manufacturing
productivity, generally more volatile in its
Gross Domestic Product
Change in Nonfarm Business Productivity
quarterly measures, decreased 0.4% during the quarter. In the second quarter of 2015, BLS
issued revised productivity measures for all periods since 2010, reflecting revisions in source
data, which resulted in weaker productivity growth than previously thought.

3. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 2 www.mercercapital.com
Macroeconomic Indicators // Productivity (cont.)
-100.0%
-50.0%
0.0%
50.0%
100.0%
150.0%
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
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Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Dow Jones Industrial Average S&P 500 NASDAQ CompositeSource: Bloomberg L.P.
The Financial Markets
December 2015 marked the end of a volatile
year in the financial markets. After losses in
the third quarter, four major indices exhibited
growth during the fourth quarter of 2015.Most
Treasury yields improved during the quarter,
due largely to the actions of the Federal
Reserve. The Dow Jones Industrial Average
ended the fourth quarter of 2015 up 7.0% for
the quarter, though down 2.2% during 2015.
The S&P 500 Index also increased 6.5%
during the fourth quarter and down 0.7% in
2015. The NASDAQ Composite Index rose
8.4% during the fourth, and overall, rose
5.7% during 2015. The following chart shows
the relative price performance of the Dow
Jones Industrial Average, S&P 500, and
NASDAQ Composite Indices.
Equity Index Price Return
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
Dec-99
Mar-00
Jun-00
Sep-00
Dec-00
Mar-01
Jun-01
Sep-01
Dec-01
Mar-02
Jun-02
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
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Mar-08
Jun-08
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Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Source: Bureau of Labor Statistics
Unemployment and Payroll Jobs
According to the BLS, the unemployment rate
was 5.0% in December 2015, unchanged
from October and November. Unemployment
rates increased steadily throughout 2008
and into 2009, peaking at 10% in October
2009. The October 2009 unemployment rate
represented the highest level since 1983. Pre-
recession unemployment levels were reached
in December 2014. While unemployment has
consistently fallen throughout the past several
years, the labor force participation rate is
also lower relative to pre-recession levels. In
December 2015, the labor force participation
rate stood at 62.6% (relative to mid- to high-
60s prior to the recession). The labor force
participation rate in the third quarter was
generally lower than the rate in the second
quarter of 2015. Excluding the recent trend,
the last time the labor force participation rate
was lower than its current level was 1977.
As job availability increases the labor force
could increase due to individuals re-entering
the workforce, which could lead to periodic
increases in the unemployment rate in the
foreseeable future. Economists surveyed
Civilian Unemployment Rate
by The Wall Street Journal anticipate an unemployment rate of 4.8% by mid-2016 and a further
decline to 4.7% by December 2016. The number of nonfarm payroll jobs increased by 292,000 in
December 2015. December’s gain follows increases of 307,000 and 252,000 jobs in October and
November, respectively.During 2008 and 2009, the economy lost nearly 8.7 million nonfarm payroll
jobs. Experts believe the economy is still short nearly 2.7 million jobs.Economists surveyed by The
Wall Street Journal anticipate payroll gains of approximately 191,000 jobs per month over the next
year. Population growth adds approximately 102,000 individuals to the workforce per month.

4. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 3 www.mercercapital.com
Home building activity has traditionally been a primary driver of overall economic activity because new home construction stimulates a broad
range of industrial, commercial, and consumer spending and investment. According to the U.S. Census Bureau, new privately owned housing
starts were at a seasonally adjusted annualized rate of 1,149,000 units in December 2015, 2.5% below the revised November rate of 1,179,000
units but 6.4% above the December 2014 level. The seasonally adjusted annual rate of private housing units authorized by building permits
(considered the best indicator of future housing starts) was 1,232,000 units in December 2015, 3.9% below the revised November estimate of
1,282,000 but 14.4% above the December 2014 level.
According to the National Association of Realtors (“NAR”), existing-home sales (at a seasonally adjusted annual rate) totaled 5.5 million in
December 2015, 14.7% above the November level, and 7.7% above the December 2014 level. According to NAR, 2015 marks the best year of
existing home sales since 2006. Housing inventory stood at 1.8 million existing-homes, representing approximately four months of supply at the
current sales pace and down 3.8% since December 2014. The national median existing-home price increased 7.6% relative to December 2014.
Distressed sales, which include foreclosures and short sales, accounted for approximately 8% of sales in December 2015, relative to 11% of
home sales in December 2014.
The December 2015 data indicate that the housing market recovery continues to improve. The housing market has improved considerably from
the depths of the financial crisis, though it remains below peak levels measured in 2005 and 2006. Going forward, slow wage growth and higher
interest rates pose risks to the housing sector.
Macroeconomic Indicators // Housing
0%
1%
2%
3%
4%
5%
6%
7%
8%
Jan-2006Jul-2006Jan-2007Jul-2007Jan-2008Jul-2008Jan-2009Jul-2009Jan-2010Jul-2010Jan-2011Jul-2011Jan-2012Jul-2012Jan-2013Jul-2013Jan-2014Jul-2014Jan-2015Jul-2015
30-Year Mortgage Rate 10-Year Treasury rate Effective Federal Funds Rate
Source: Federal Reserve Economic Data
Key Interest Rates
The Federal Reserve’s Open Market
Committee (“FOMC”) lowered its target for
the federal funds rate to a range of 0% to
0.25% during the fourth quarter of 2008,
representing a total rate cut of 175 to 200
basis points during the quarter. Target
rates were held steady during 2009 and
remained unchanged until December of
2015. This has kept interest rates low,
increasing the ability of households to fund
spending. However, in December 2015,
the FOMC increased the target range for
the federal funds rate to a range of 0.25%
to 0.50%. While still low, this will likely slow
increases in consumer spending. Further,
the yield on the 10-year Treasury note is
expected to increase during 2016, which
could cause consumers to switch to used
cars, as new car loans are less affordable.
Change in Key Interest Rates

5. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 4 www.mercercapital.com
Macroeconomic Indicators // Housing (cont.)
0
50
100
150
200
250
Jan-2006
M
ay-2006
Sep-2006
Jan-2007
M
ay-2007
Sep-2007
Jan-2008
M
ay-2008
Sep-2008
Jan-2009
M
ay-2009
Sep-2009
Jan-2010
M
ay-2010
Sep-2010
Jan-2011
M
ay-2011
Sep-2011
Jan-2012
M
ay-2012
Sep-2012
Jan-2013
M
ay-2013
Sep-2013
Jan-2014
M
ay-2014
Sep-2014
Jan-2015
M
ay-2015
Sep-2015
Housing Price Index SA Case-Shiller 10 City Index SA Case-Shiller 20 City Index SA
Source: Federal Housing Finance Agency and Federal
Reserve Economic Data
Housing Prices
Housing prices have not completely
recovered to pre-recession levels but
have increased year-over-year since
January 2011.
Change in Housing Prices
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
D
ec-00Jun-01D
ec-01Jun-02D
ec-02Jun-03D
ec-03Jun-04D
ec-04Jun-05D
ec-05Jun-06D
ec-06Jun-07D
ec-07Jun-08D
ec-08Jun-09D
ec-09Jun-10D
ec-10Jun-11D
ec-11Jun-12D
ec-12Jun-13D
ec-13Jun-14D
ec-14Jun-15D
ec-15
Private Housing Starts Single Family Starts
Source: U.S. Census Bureau
Note: Permits at a given date are generally a leading indicator of future starts.
Beginning with January 2004, building permit data reflects the change to the 20,000 place series.
Private Housing
Single Family
Housing
Housing Starts
According to the U.S. Census Bureau,
new privately-owned housing starts were
at a seasonally adjusted annualized rate
of 1,149,000 units in December 2015,
2.5% below the revised November rate
of 1,179,000 units but 6.4% above the
December 2014 level. The seasonally
adjusted annual rate of private housing
units authorized by building permits (con-
sidered the best indicator of future housing
starts) was 1,232,000 units in December
2015, 3.9% below the revised November
estimate of 1,282,000 but 14.4% above
the December 2014 level.
Seasonally Adjusted Annualized Rates of New Housing Starts and Building Permits
(millions of units)

6. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 5 www.mercercapital.com
Increases in disposable income allow for increases in personal consumption, especially debt-fund purchases like cars. However, these
increases must keep pace with inflation. Further, increases in disposable income tend to increase confidence in consumers and business
owners. Confident consumers have more optimistic expectations of the future: They expect a stronger economy, lower unemployment, higher
future wages, and better ability to pay for debt-funded purchases. Similarly, confident businesses are a gauge of an economy’s ability to employ
labor productively in the future.
Macroeconomic Indicators // Personal Consumption & Confidence
Disposable Income and Personal Consumption
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$33,000
$34,000
$35,000
$36,000
$37,000
$38,000
$39,000
Jan-2006
Jun-2006
N
ov-2006Apr-2007
Sep-2007
Feb-2008Jul-2008
D
ec-2008
M
ay-2009O
ct-2009
M
ar-2010
Aug-2010Jan-2011Jun-2011
N
ov-2011Apr-2012
Sep-2012
Feb-2013Jul-2013
D
ec-2013
M
ay-2014O
ct-2014
M
ar-2015
Aug-2015
PersonalConsumption(BIllions)
PersonalIncome
Real Disposable Personal Income: Per capita, Chained 2009 Dollars, Monthly, Seasonally Adjusted
Personal Consumption Expendituress, Monthly, Seasonally Adjusted
Source: Federal Reserve Economic Data
0
20
40
60
80
100
120
Jan-2006Jul-2006
Jan-2007Jul-2007
Jan-2008Jul-2008
Jan-2009Jul-2009
Jan-2010Jul-2010
Jan-2011Jul-2011
Jan-2012Jul-2012
Jan-2013Jul-2013
Jan-2014Jul-2014
Jan-2015Jul-2015
Consumer Confidence Index NFIB Small Business Optimism Index
Source: Bloomberg, L.P.
Disposable Income and
Personal Consumption
Real personal income and personal
consumption have both been steadily
increasing year-over-year since 2010,
partly due to growth and partly due to
Federal Reserve policy keeping inflation
near 0.0%. Further, disposable income is
expected to continue rising through 2016.
Confidence
Both consumer and small business con-
fidence has been trending upward since
the Great Recession. This confidence
will drive demand for cars.
Change in Confidence

7. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 6 www.mercercapital.com
Energy prices not only impact the price of manufacturing a car, but also the running price of a car, as consumers must fill up on gas regularly.
Increased environmental regulations have improved fuel economy of most cars but have also led to higher prices at the dealership. Consequently,
consumer demand has shift toward more fuel efficient, typically smaller, vehicles.
Macroeconomic Indicators // Energy
0
20
40
60
80
100
120
140
160
Jan-2006Jul-2006Jan-2007Jul-2007Jan-2008Jul-2008Jan-2009Jul-2009Jan-2010Jul-2010Jan-2011Jul-2011Jan-2012Jul-2012Jan-2013Jul-2013Jan-2014Jul-2014Jan-2015Jul-2015
Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
Source: Energy Information Administration
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Jan-2006Jul-2006Jan-2007Jul-2007Jan-2008Jul-2008Jan-2009Jul-2009Jan-2010Jul-2010Jan-2011Jul-2011Jan-2012Jul-2012Jan-2013Jul-2013
Jan-2014Jul-2014Jan-2015Jul-2015
DollarsPerGallon
New York Harbor Conventional Gasoline Regular Spot Price FOB
U.S. Gulf Coast Conventional Gasoline Regular Spot Price FOB
Los Angeles Reformulated RBOB Regular Gasoline Spot Price
Source: Energy Information Administration
Spot Oil
Oil prices steadily increased from 2009
to historically high levels through the first
half of 2014, shifting consumer demand to
hybrid and electric vehicles. World crude
oil prices decreased sharply during the
second half of 2014 and the first half of
2015, before rising slighting through the
end of 2015.
Gas
Gas prices have mimicked oil prices,
rising to historical highs in the first half
of 2014 before dropping sharply over the
next year and rising slightly in the last
half of 2015.
Spot Oil Prices
Gas Prices

8. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 7 www.mercercapital.com
Macroeconomic measures including employment, productivity housing prices and starts, interest rates, and disposable income have provided an
environment conducive to car purchases. However, rising prices, downward pressure on margins, and changes in demand have caused shifts
in automobile demand.
Auto Dealer Indicators // Average Dealer Profile
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F2016F2017F2018
Passenger Cars Light Trucks Total
Source: IHS Automotive, formerly Polk
0
5
10
15
20
25
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Dealerships(Thousands)
Sales(Millions)
Cost of Sales Total Dealership Expense Pre-Tax Income Dealerships
Source: NADA Data
Average Age of Vehicle Fleet
IHS Automotive, a global automotive
market intelligence firm, found that the
average age of all light vehicles hit a record
high of 11.5 years in 2015 due to rising car
quality; they expect this rate to slow as
new vehicle sales continue to recover, not
hitting 11.6 years until 2016 and 11.7 years
until 2018. Further, they expect this trend
to provide more opportunities for the auto-
motive aftermarket.
Dealership Sales
By the end of 2015, there was an increase
of approximately 150 franchised deal-
erships, only the second increase since
1987, reversing a consolidation trend.
Sales rose 6.8% in 2015, the sixth
year in a row, well above pre-recession
highs. However, net profit before taxes
remained flat at 2.2%. Current pres-
sure on margins stems primarily from
the fact that the asymmetric information
that once favored dealers is balanced
by internet sites such as Edmunds,
cars.com, and autotrader.com. While
margins have been decreasing, deal-
erships have benefitted from increases
in volume.
Average Age of Vehicle Fleet
Dealership Sales

9. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 8 www.mercercapital.com
Auto Dealer Indicators // Average Dealer Profile (cont.)
Products and Services Segmentation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sales
New Vehicle Used Vehicle Service and Parts
Source: NADA Data
Products and Services Segmentation
From 2005 to 2010, the percentage of
sales from used vehicles and service and
parts segments of the industry rose, as
financing new vehicle purchases became
more difficult. Since then, new vehicles’
share of sales has gone up, but has not
recovered to pre-recession levels.
Vehicles and Price
0
200
400
600
800
1,000
1,200
$25,000
$26,000
$27,000
$28,000
$29,000
$30,000
$31,000
$32,000
$33,000
$34,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NewVehiclesSoldPerDealership
AverageRetailSellingPrice
Average Retail Selling Price New Vehicles Sold Per Dealership
Source: NADA Data
Vehicles and Price
Through the second quarter of 2014,
prices were forced up by rising oil prices
and increased environmental regulations.
While oil prices have decreased dras-
tically, regulations have not resulting in
continuing increases in price. Average
vehicles sold per dealership continued
to rise even as the number of franchised
dealerships increased.

10. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 9 www.mercercapital.com
Valuation Trends
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
12/31/14 2/28/15 4/30/15 6/30/15 8/31/15 10/31/15 12/31/15
Auto Components Automobile Manufacturers S&P 500 NASDAQ Composite Dow Jones Industrial Average
Source: Bloomberg L.P.
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
12/31/14 2/28/15 4/30/15 6/30/15 8/31/15 10/31/15 12/31/15
Ford Motor Co General Motors Co Honda Motor Co Ltd Toyota Motor Corp
Tesla Motors Inc Nissan Motor Co Ltd Fiat Chrysler Automobiles NV
Source: Bloomberg, L.P.
Index Performance
OEM Stock Performance
OEMs and Indices
Auto components have continued to outpace auto manufacturers
reflecting continued increases in consumer spending on maintenance
compared to pre-recession levels.
Nissan, Fiat Chrysler, Honda, and Tesla are outperforming General
Motors, Toyota, and Ford. Significant events in the last year influencing
stock prices include volatile oil prices, various high profile recalls, and
increasing EPA emissions standards.

11. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 10 www.mercercapital.com
Valuation Trends (cont.)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132015
FCA (Formerly Chrysler) Ford General Motors
Toyota Honda Nissan
Volkswagen Other Imports
Source: NADA Data
*2014 Data Not Available
Brand Market Share By Unit Sales
FCA and other imports such as Subaru
were the only brands to increase market
share. FCA has experienced growth on
fuel efficient European cars entering the
American market. Volkswagen lost a sig-
nificant amount of market share on the
emissions testing scandal.
Brand Market Share By Unit Sales

12. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 11 www.mercercapital.com
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
12/31/14 1/31/15 2/28/15 3/31/15 4/30/15 5/31/15 6/30/15 7/31/15 8/31/15 9/30/15 10/31/15 11/30/15 12/31/15
AutoNation Inc Penske Automotive Group Inc Sonic Automotive Inc Group 1 Automotive Inc Asbury Automotive Group Inc Lithia Motors Inc
Source: Bloomberg L.P.
Auto Dealership Stock Performance
Publicly Traded Auto Dealerships
“In the fourth quarter, new and used vehicle margins on a combined
basis declined by $217 per vehicle retailed, or 11%, as compared to
the fourth quarter of 2014. As of year-end, our new vehicle invento-
ries increased 13% on a same store basis, as compared to the prior
year, driven by a 49% increase in Premium Luxury inventories. We
have begun, and will continue through the first quarter, to take the
necessary steps to align our costs, inventory, and pricing strategy to
adjust to the current market. In 2016, we expect industry new vehicle
unit sales will again exceed 17 million.” Mike Jackson, President and
CEO of AutoNation. “AutoNation Reports 2015 Fourth Quarter and
Full Year Results.” 28 January 2016.
“The diversification provided by our business model continues to
drive our business forward. Our U.K.-based retail automotive and
U.S.-based commercial truck businesses produced exceptional
results, and the stability of the parts and service business helped
our business produce another solid quarter. We expect 2016 will be
another solid year for both automotive and U.S. commercial truck
sales.” Roger S. Penske, Chairman of Penske Automotive Group.
“Penske Automotive Reports Fourth Quarter Results: Completes
Most Profitable Year in Company History.” 11 February 2016.
“While we delivered a record year in total for revenue, gross profit,
and adjusted diluted earnings per share, our fourth quarter results
were significantly hampered by the negative impact of continued oil
and gas price decreases on the economy in our prime markets of
Houston, Oklahoma and Texas in general. Additionally, we suffered
from increased new and used vehicle margin pressure resulting from
oversupply in a variety of key brands, especially in the U.S. luxury
segment.” Earl J. Hesterberg, President and CEO of Group 1 Auto-
motive. “Group 1 Automotive Reports Fourth Quarter and Full Year
Financial Results: Sets Record Revenue of $10.6 Billion and Earn-
ings of $6.87 Adjusted EPS for FY15.” 11 February 2016.
“I am very pleased with the performance of our team in the fourth
quarter and the year. Subsequent to December 31, 2015, market
news and expectations related to the retail automotive sector created
pressure on public company valuations. As a result, our Board of
Directors increased our authorization to repurchase shares by $100.0
million. During the first quarter of 2016, we repurchased approxi-
mately 4.0 million shares, roughly 7.9% of outstanding shares as
of December 31, 2015, for approximately $72.0 million. We expect
2016 to continue to be favorable to dealers and anticipate new
vehicle industry volume to be between 17.3 million and 17.6 million
units, but expect new vehicle GPU pressure to continue. We project
diluted earnings per share from continuing operations for 2016 to be
between $2.07 and $2.17 per share. This range includes the effect
of projected EchoPark® results and expansion. We are projecting a
loss related to EchoPark® of between $0.21 and $0.23 per diluted
share. We will have additional comments on our 2016 outlook in our
earnings call later today.” B. Scott Smith, President of Sonic Auto-
motive. “Sonic Automotive, Inc. Reports Record Results: Adjusted
Continuing Operations Quarterly EPS of $0.61, Increases Dividend
by 33%.” 23 February 2016.
Valuation Trends (cont.)

13. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 12 www.mercercapital.com
Mergers and Acquisitions
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
0
5
10
15
20
25
30
35
2009 2010 2011 2012 2013 2014 2015
TotalTransactionValue(millions)
NumberofTransactions
Total Transaction Value Number of Transactions
Source: Capital IQ
M&A ActivityDeal activity slowed in 2014 in terms
of number of transactions, despite total
transaction value increasing. While overall
deal value was down in 2015, number of
transactions increased.

14. © 2016 Mercer Capital 13 www.mercercapital.com
Dealer Pricing
Auto Manufacturing Pricing
30-Jun
Price
$
52 Week
Perf.
%
LTM
Ent.
Value
$ Mil
Debt /
Equity
%
EBITDA
Margin
%
EV /
Sales
Multiple
x
EV /
EBITDA
Multiple
x
EV /
Nxt Yr
EBITDA
Multiple
x
Price /
Earnings
xCompany Name Ticker
Sales
$ Mil
EBITDA
$ Mil
Ford Motor Co F 13.48 -5.40% 149,558 15,987 186,369 463.84% 10.69% 1.25 11.66 13.46 7.08
General Motors Co GM 33.59 1.52% 152,356 12,914 113,494 158.29% 8.48% 0.74 8.79 6.67 5.61
Honda Motor Co Ltd HMC 31.69 10.65% 119,287 10,881 114,083 94.62% 9.12% 0.96 10.48 nm 13.31
Hyundai Motor Co 005380.KS 126.47 -15.66% 81,304 8,092 81,690 105.25% 9.95% 1.00 10.10 9.52 5.57
Toyota Motor Corp TM 123.04 0.84% 235,936 37,702 545,149 113.28% 15.98% 2.31 14.46 nm 20.04
Tesla Motors Inc TSLA 240.01 7.91% 4,046 (294) 34,259 249.38% -7.27% 8.47 nm 23.55 nm
Nissan Motor Co Ltd NSANY 20.99 23.94% 101,065 13,132 149,933 150.89% 12.99% 1.48 11.42 nm 18.57
Peugeot SA PEUGF 17.42 na 60,690 5,119 22,210 70.84% 8.44% 0.37 4.34 nm 17.78
Average 75.84 3.40% 113,030 12,942 155,898 175.80% 8.55% 2.07 10.18 13.30 12.57
Median 32.64 1.52% 110,176 11,898 113,789 132.08% 9.54% 1.13 10.48 11.49 13.31
Source: Bloomberg L.P.
31-Dec
Price
$
52 Week
Perf.
%
LTM
Ent.
Value
$ Mil
Debt /
Equity
%
EBITDA
Margin
%
EV /
Sales
Multiple
x
EV /
EBITDA
Multiple
x
EV /
Nxt Yr
EBITDA
Multiple
x
Price /
Earnings
xCompany Name Ticker
Sales
$ Mil
EBITDA
$ Mil
Traditional Auto Dealers
AutoNation Inc AN 59.66 -1.24% 20,862 1,001 12,704 259.38% 4.80% 0.61 12.70 11.77 15.34
Penske Automotive
Group Inc
PAG 42.34 -12.12% 19,257 645 8,454 260.52% 3.35% 0.44 13.11 11.89 11.66
Sonic Automotive Inc SAH 22.76 -15.42% 9,624 286 3,470 320.06% 2.97% 0.36 12.13 10.90 13.39
Group 1 Automotive Inc GPI 75.70 -14.70% 10,633 326 4,550 302.44% 3.06% 0.43 13.97 11.22 19.41
Asbury Automotive
Group Inc
ABG 67.44 -11.17% 6,588 331 3,340 529.89% 5.03% 0.51 10.09 9.92 10.52
Lithia Motors Inc LAD 106.67 23.93% 7,864 344 4,756 236.58% 4.38% 0.60 13.81 10.92 15.44
Average 62.43 -5.12% 12,471 489 6,212 318.15% 3.93% 0.49 12.64 11.10 14.29
Median 63.55 -11.65% 10,128 338 4,653 281.48% 3.86% 0.47 12.90 11.07 14.36
Used Auto Dealers
America's Car-Mart Inc/TX CRMT 26.69 -50.00% 485 (23) 331 45.28% -4.67% 0.68 nm 8.41 12.77
CarMax Inc KMX 53.97 -18.94% 14,958 1,178 21,269 364.26% 7.88% 1.42 18.05 17.16 18.11
Average 40.33 -34.47% 7,721 578 10,800 204.77% 1.60% 1.05 18.05 12.79 15.44
Median 40.33 -34.47% 7,721 578 10,800 204.77% 1.60% 1.05 18.05 12.79 15.44
Source: Bloomberg L.P.
Guideline Company Pricing
Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015

15. Mercer Capital’s Value Focus: Auto Dealer Industry Year-End 2015
© 2016 Mercer Capital 14 www.mercercapital.com
Sources
“IBISWorld Industry Report 44111: New Car Dealers in the US”
“IBISWorld Industry Report 44112: Used Car Dealers in the US”
“NADA Data” 2002-2015. http://www.nada.org/Publications/NADADATA/.

16. Mercer
Capital
Auto Dealer Industry
Services
Contact Us
Copyright © 2016 Mercer Capital Management, Inc. All rights reserved. It is illegal under Federal law to reproduce this publication or any portion of its contents without the publisher’s permission. Media
quotations with source attribution are encouraged. Reporters requesting additional information or editorial comment should contact Barbara Walters Price at 901.685.2120. Mercer Capital’s Industry
Focus does not constitute legal or financial consulting advice. It is offered as an information service to our clients and friends. Those interested in specific guidance for legal or accounting matters should
seek competent professional advice. Inquiries to discuss specific valuation matters are welcomed. To add your name to our mailing list to receive this complimentary publication, visit our web site at
www.mercercapital.com.
Mercer Capital has expertise providing business
valuation and financial advisory services to companies
in the auto dealer industry.
Mercer Capital provides business valuation and financial advisory services to auto dealerships
throughout the nation. We provide valuation services for tax purposes, buy-sell agreements,
partner buyouts, and other corporate planning purposes. Mercer Capital also works with owners
who are considering the sale of their dealership or the acquisition of other dealership(s).
Services Provided
• Valuation of auto dealer industry companies
• Transaction advisory for mergers, acquisitions and divestitures
• Valuations for purchase accounting and impairment testing
• Fairness and solvency opinions
• Litigation support for economic damages and valuation and shareholder disputes
Contact a Mercer Capital professional to discuss your needs in confidence.
Timothy R. Lee, ASA
901.322.9740
leet@mercercapital.com
Matthew R. Crow, CFA, ASA
901.685.2120
crowm@mercercapital.com
Nicholas J. Heinz, ASA
901.322.9788
heinzn@mercercapital.com
Chad M. Giganti
901.322.9746
gigantic@mercercapital.com
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