Exhibit 99.2 Q3 2018 Investor Presentation
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “may”, “will” and other similar words. Statements that describe our Company’s objectives, plans or goals are also forward-looking statements. Examples of such forward-looking information we may be discussing in this presentation include, without limitation, earnings expectations, anticipated 2018 industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned stores, the return of capital to stockholders, anticipated future success and impacts from the implementation of our strategic initiatives and earnings per share expectations. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Company’s other periodic reports and information filed with the Securities and Exchange Commission. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements, except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission. 2
CONTENT • COMPANY OVERVIEW • FINANCIAL & OPERATIONS REVIEW • OUTLOOK 3
COMPANY OVERVIEW 4
OVERVIEW – FRANCHISED GEOGRAPHIC Headquartered in Charlotte, NC 96 Stores, 23 Brands, 15 Collision Repair Centers 5 Platforms in Major Metro Markets
OVERVIEW – ECHOPARK GEOGRAPHIC - CO • Have purchased property in the following markets (some are under construction): o Dallas/Ft. Worth o San Antonio o Houston o Austin o Carolinas Colorado Springs 6
OVERVIEW – ECHOPARK GEOGRAPHIC - TX Houston Location Expected to Open • Grand Prairie Location – Relocated driversselect Operation (purchased in Q3 2017) December 2018 • West San Antonio Location Opened in Q4 2017 7 • New Braunfels Location Opened in Q1 2018
OVERVIEW – ECHOPARK GEOGRAPHIC - NC • Opened October 8 • Velocity of Sales Increasing Compared to Other New Openings 8
OVERVIEW - GEOGRAPHIC NV MD 2% 3% SC 2% OH VA 3% 3% NC 4% CA GA 3% 30% CO Concentration 7% in Major Metro AL Markets 5% FL 6% TN TX 7% 26% 9 Note: Percentages are percent of total revenue for FY 2017.
OVERVIEW – BRAND COMPOSITION New Retail Revenue & Other Lux Revenue streams Overall Revenue Mix 7% VW Land Rover and brand mix offer 2% 3% BMW attractive Other Non-Lux diversification across 3% 20% the automotive retail space. Cadillac 3% F&I GM Fixed 4% 4% Ops 14% Audi 6% New Pre- 54% Owned Honda 28% Ford 17% 7% Lexus 6% Toyota Mercedes 11% 12% Note: Percentages are for FY 2017. 10
Q3 2018 FINANCIAL REVIEW FRANCHISED SEGMENT 11
FRANCHISED SEGMENT Q3 2018 RESULTS B/(W) than Q3 2017 (1) (amounts in millions, except per share data) Q3 2018 (1) $% Revenue $2,285 ($164) (6.7%) Gross Profit $346 ($10) (2.8%) SG&A ($269) $10 3.7% SG&A as % of Gross 77.7% 70 bps Depreciation ($21) ($0) (0.3%) Operating Profit $56 $0 0.1% Interest & Other ($24) ($3) (15.0%) Pre-tax $31 ($3) (9.2%) Diluted EPS $0.52 $0.05 10.6% Tax Rate Change and Cost Control Drove Overall Increase in EPS (1) – Q3 2018 & Q3 2017 results are adjusted – See appendix for reconciliation to GAAP amounts. 12
NEW VEHICLE SAAR 19.0 Hurricane Harvey Q3 2018 16.9M vs 17.1M Q3 2017 18.5 18.5 YTD 2018 – 17.1M Full Year 2017 – 17.2M 18.0 17.8 17.5 17.5 17.4 17.4 17.0 17.0 17.0 17.0 17.0 16.5 16.5 16.4 16.0 15.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2018 Forecast 13
NEW VEHICLE SAAR - RETAIL 16.0 Hurricane Harvey 15.5 YTD 2018 – 13.5M 15.5 Full Year 2017 – 13.9M 15.0 14.9 14.5 14.2 14.0 13.8 13.4 13.5 13.2 13.3 13.0 12.5 12.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 14
NEW VEHICLE SAME STORE - FRANCHISED Q3 2018 Q3 2017 B/(W) New Volume 31,010 33,162 (6.5%) Selling Price$ 39,829 $ 38,868 2.5% Gross Margin % 4.9% 4.9% 0 bps GPU$ 1,971 $ 1,918 $ 53 Gross Profit (millions)$ 61.1 $ 63.6 (3.9%) Retail SAAR (millions) 13.7 14.1 (2.8%) New Units Jul Aug Sep Total 2018 10,417 10,647 9,946 31,010 2017 10,789 10,307 12,066 33,162 B/(W) (372) 340 (2,120) (2,152) % B/(W) (3.4%) 3.3% (17.6%) (6.5%) 15
NEW VEHICLE – GROSS, UNIT & GPU TREND Continuing Operations - Franchised Gross $ (in millions) Units $2,132 $2,070 $2,078 $1,950 $1,988 $1,911 $1,886 $1,925 $1,909 $1,866 $1,855 $1,745 $78 $74 $1,730 $74 $65 $66 $66 $62 $63 $62 37,493 $58 $58 $57 36,531 $57 35,856 36,054 35,562 35,489 33,782 33,148 30,605 30,495 30,877 31,009 29,500 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Gross Per Unit 16
DAYS’ SUPPLY 80 70 71 66 60 62 50 52 52 40 36 38 34 35 35 36 31 35 30 29 31 20 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 New Used Parts 17
USED VEHICLE RETAIL Franchised – Same Store Q3 2018 Q3 2017 B/(W) Retail Volume 27,254 26,657 2.2% GPU$ 1,325 $ 1,264 $ 61 Used to New 88% 80% 800 bps Vehicles/Store/Month (96 stores) 95 93 2 Front-End Gross and F&I (in millions) Jul Aug Sep Total 2018$ 25.4 $ 25.5 $ 23.5 $ 74.3 2017 23.3 21.5 26.6 71.4 B/(W)$ 2.1 $ 4.0 $ (3.1) $ 3.0 18
F&I – GROSS & GPU Franchised – Same Store Gross $ (in millions) GPU$ $84 $81 $1,402 $1,415 Q3 2018 Q3 2017 19
FIXED OPERATIONS Franchised – Same Store (amounts in millions) Q3 2018 Q3 2017 B/(W) Revenue$ 337 $ 327 2.8% Gross Profit$ 163 $ 158 3.7% 20
FIXED OPERATIONS GROSS Franchised – Same Store (amounts in millions) Q3 2018 Q3 2017 $ B/(W) % B/(W) Customer Pay$ 74 $ 71 $ 3 4.7% Warranty 37 37 (0) (0.9%) Wholesale Parts 7 7 0 2.2% Internal, Sublet & Other 46 43 3 6.1% Total Gross Profit$ 163 $ 158 $ 6 3.7% 21
Q3 2018 FINANCIAL REVIEW ECHOPARK SEGMENT 22
ECHOPARK SEGMENT Q3 2018 RESULTS B/(W) than Q3 2017 (1) (amounts in millions, except per share, unit and per unit data) Q3 2018 (1) $% Revenue $185.9 $128.8 225.5% Gross Profit $14.3 $8.0 129.4% SG&A ($16.7) ($7.6) (83.2%) SG&A as % of Gross 117.2% 2,960 bps Depreciation Expense ($2.0) ($0.6) (46.8%) Operating Profit ($4.4) ($0.2) (4.2%) Interest & Other ($1.0) ($0.4) (68.1%) Pre-tax ($5.5) ($0.6) (12.1%) Diluted EPS ($0.09) ($0.02) (28.6%) Retail Units 7,698 5,298 220.8% Total Front-End Gross and F&I Gross per Unit Retailed $1,794 (113) (5.9%) 23 (1) – Q3 2018 & Q3 2017 results are adjusted – See appendix for reconciliation to GAAP amounts.
Q3 2018 FINANCIAL REVIEW TOTAL ENTERPRISE 24
CONSOLIDATED Q3 2018 RESULTS B/(W) than Q3 2017 (1) (amounts in millions, except per share data) Q3 2018 (1) $% Revenue $2,471 ($35) (1.4%) Gross Profit $361 ($2) (0.6%) SG&A ($286) $3 0.9% SG&A as % of Gross 79.3% 30 bps Depreciation ($23) ($1) (3.0%) Operating Profit $51 ($0) (0.3%) Interest & Other ($26) ($4) (16.4%) Continuing Ops: Profit (after tax) $18 $1 5.1% Diluted EPS $0.43 $0.03 7.5% 25 (1) – Q3 2018 & Q3 2017 results are adjusted – See appendix for reconciliation to GAAP amounts.
CONSOLIDATED Q3 2018 REVENUE & GROSS PROFIT B/(W) than Q3 2017 (amounts in millions, except unit and per unit data) Q3 2018 $ % New Revenue $1,235 ($127) (9.3%) Used Retail Revenue $746 $86 13.1% Fixed Operations Revenue $343 ($5) (1.3%) F&I Revenue $98 $5 5.6% Total Revenue $2,471 ($35) (1.4%) New Gross $62 ($5) (6.9%) - Units 31,009 (4,480) (12.6%) - GPU $1,988 $121 6.5% Used Retail Gross $35 ($4) (9.8%) - Units 34,952 4,111 13.3% - GPU $1,010 ($259) (20.4%) F&I Gross $98 $5 5.6% - GPU $1,505 $97 6.9% Fixed Operations Gross $167 ($1) (0.5%) Total Gross $361 ($2) (0.6%) 26
CONSOLIDATED Q3 2018 REVENUE & GROSS PROFIT – SAME STORE B/(W) than Q3 2017 (amounts in millions, except unit and per unit data) Q3 2018 $ % New Revenue $1,235 ($54) (4.2%) Used Retail Revenue $654 $39 6.3% Fixed Operations Revenue $338 $8 2.4% F&I Revenue $88 $2 2.1% Total Revenue $2,361 $1 0.0% New Gross $61 ($2) (3.9%) - Units 31,010 (2,152) (6.5%) - GPU $1,971 $53 2.8% Used Retail Gross $35 $0 0.1% - Units 30,527 2,199 7.8% - GPU $1,156 ($89) (7.1%) F&I Gross $88 $2 2.1% - GPU $1,444 $39 2.8% Fixed Operations Gross $163 $4 2.8% Total Gross $346 $5 1.6% 27
CONSOLIDATED Q3 2018 ADJUSTED SG&A TO GROSS 79.3% 79.6% 22.9% 22.8% 4.1% 4.9% 48.2% 47.5% 4.1% 4.4% Q3 2018(1) Q3 2017 (1) Advertising Comp Rent Other 28 (1) – Q3 2018 & Q3 2017 results are adjusted – See appendix for reconciliation to GAAP amounts.
CONSOLIDATED Q3 2018 INTEREST EXPENSE B/(W) than Q3 2017 (amounts in millions) Q3 2018 $ % Floor Plan Interest Expense $12 ($3) (37.3%) Interest Expense, Other $13 ($0) (2.2%) Total Interest Expense $26 ($4) (16.4%) Floor Plan Higher Due to Rate Increases • New Up 76 bps • Used Up 36 bps Fed Funds Rate Increases • March 21 – 0.25% • June 13 – 0.25% • September 26 – 0.25% • Expect One Additional 0.25% Increase in 2018 • Expect Three 0.25% Increases in 2019 and One 0.25% Increase in 2020 29
CONSOLIDATED Q3 2018 DEPRECIATION EXPENSE B/(W) than Q3 2017 (amounts in millions) Q3 2018 $ % Depreciation Expense - Franchised $21 ($0) (0.3%) Depreciation Expense - EchoPark $2 ($1) (46.8%) Total $23 ($1) (3.0%) New EchoPark Texas Builds Driving Increase 30
2018 CAPEX Forecast Forecast (amounts in millions) FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Real Estate & Facility Related $ 199.3 $ 60.4 $ 29.4 $ 32.8 $ 25.6 $ 148.2 All Other Cap Ex 34.9 5.3 4.5 1.5 12.4 23.7 Subtotal$ 234.2 $ 65.7 $ 33.9 $ 34.3 $ 38.1 $ 172.0 Less: Mortgages (52.5) (21.0) (0.1) - - (21.1) Total Cash Used - Cap Ex$ 181.8 $ 44.8 $ 33.8 $ 34.3 $ 38.1 $ 150.9 31
DEBT COVENANTS Covenant Q3 2018 Liquidity Ratio >= 1.05 1.14 Fixed Charge Coverage Ratio >= 1.20 1.45 Total Lease Adjusted Leverage Ratio <= 5.75 5.11 Compliant with all Covenants 32
ADJUSTED EBITDA LTM Q3 (amounts in thousands) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net Income $ 31,548 $ 89,929 $ 76,254 $ 89,101 $ 81,618 $ 97,217 $ 86,311 $ 93,193 $ 92,983 $ 91,782 Non-Floor Plan Interest 67,735 68,604 63,576 58,453 55,356 52,269 49,524 48,034 50,531 51,483 Depreciation & Amortization 57,036 45,827 51,164 52,616 58,139 62,161 72,130 81,034 92,127 97,309 Income Taxes (53,900) (19,745) 46,907 47,648 43,386 62,346 55,962 59,899 13,198 5,093 Stock Compensation 1,931 2,814 3,698 5,160 7,208 7,675 9,814 11,165 11,119 12,806 Lease Exit Charges 33,013 4,266 4,384 4,286 2,915 302 1,848 1,386 2,157 2,258 Impairment 30,038 249 1,151 950 9,872 6,594 17,955 8,063 9,394 20,039 Loss (Gain) on Debt Extinguishment 6,745 7,665 1,107 19,713 28,238 - - (6) 14,607 - Long-Term Compensation Arrangements - - - - - - - - - 33,795 Loss (Gain) on Dealership Disposal 102 (2,615) 386 (10,343) 457 (11,279) (2,748) 48 (9,980) (40,662) Adjusted EBITDA $ 174,248 $ 196,994 $ 248,627 $ 267,584 $ 287,189 $ 277,285 $ 290,796 $ 302,816 $ 276,136 $ 273,903 33
SHARE REPURCHASES (000's) (000's) (000's) Shares $/Share $ Availability EOY - 2017$ 107,686 Q1 Activity 1,153 20.35 $ 23,468 (23,468) Q2 Activity - - - - Q3 Activity 32 19.95 643 (643) Total 2018 Activity 1,186 $ 20.34 $ 24,111 $ 83,575 34
APPENDIX 35
NON-GAAP RECONCILIATIONS Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Continuing Operations Continuing Operations Franchised Franchised Dealerships EchoPark Consolidated Dealerships EchoPark Consolidated Reported: Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . $ 0.45 $ (0.09) $ 0.36 $ 0.52 $ (0.07) $ 0.45 Adjustments (net of income taxes): Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - 0.01 - 0.01 Legal and storm damage charges . . . . . . . . . . . . . . . . . 0.02 - 0.02 0.05 - 0.05 Loss (gain) on disposal of franchises . . . . . . . . . . . . . . - - - (0.11) - (0.11) Executive transition costs. . . . . . . . . . . . . . . . . . . . . . . . . 0.03 - 0.03 - - - Non-recurring tax items. . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 - 0.02 - - - Effect of adjustments, net of income taxes . . . . . . . . 0.07 - 0.07 (0.05) - (0.05) Adjusted: Diluted earnings (loss) per share. . . . . . . . . . . . . . . . . . $ 0.52 $ (0.09) $ 0.43 $ 0.47 $ (0.07) $ 0.40 36
NON-GAAP RECONCILIATIONS Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Continuing Operations Continuing Operations Franchised Franchised Dealerships EchoPark Consolidated Dealerships EchoPark Consolidated Reported: Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . $ 1.52 $ (0.81) $ 0.71 $ 0.97 $ (0.25) $ 0.72 Adjustments (net of income taxes): Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.24 - 0.24 0.03 0.02 0.05 Legal and storm damage charges . . . . . . . . . . . . . . . . . 0.10 - 0.10 0.15 - 0.15 Long-term compensation-related charges . . . . . . . . . . - 0.55 0.55 - - - Loss (gain) on disposal of franchises . . . . . . . . . . . . . . (0.66) - (0.66) (0.12) - (0.12) Executive transition costs. . . . . . . . . . . . . . . . . . . . . . . . . 0.03 - 0.03 - - - Lease exit adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 0.04 - 0.04 - 0.01 0.01 Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . - - - 0.21 - 0.21 Non-recurring tax items . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 - 0.02 - - - Effect of adjustments, net of income taxes . . . . . . . . (0.23) 0.55 0.32 0.27 0.03 0.30 Adjusted: Diluted earnings (loss) per share. . . . . . . . . . . . . . . . . . $ 1.29 $ (0.26) $ 1.03 $ 1.24 $ (0.22) $ 1.02 37
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark Three Months Ended Three Months Ended Three Months Ended September 30, September 30, September 30, Continuing Operations 2018 2017 2018 2017 2018 2017 (In millions) Reported: SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 289.0 $ 284.0 $ 272.3 $ 274.9 $ 16.7 $ 9.1 Adjustments: Legal and storm damage charges . . . . . . . . . . . . . . . . . . . . . . . . . (1.2) (3.9) (1.2) (3.9) - - Executive transition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) - (1.6) - - - Gain (loss) on disposal of franchises . . . . . . . . . . . . . . . . . . . . . . (0.3) 8.5 (0.3) 8.5 - - Total SG&A adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.1) 4.6 (3.1) 4.6 - - Adjusted: SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 285.9 $ 288.5 $ 269.2 $ 279.5 $ 16.7 $ 9.1 Reported: SG&A expenses as % of gross profit . . . . . . . . . . . . . . . . . . . . . . . 80.2% 78.3% 78.6% 77.1% NM NM Adjustments: Legal and storm damage charges . . . . . . . . . . . . . . . . . . . . . . . . . (0.3%) (1.1%) 0.2% (1.1%) - - Executive transition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5%) 0.0% (0.5%) 0.2% - - Gain (loss) on disposal of franchises . . . . . . . . . . . . . . . . . . . . . . (0.1%) 2.4% (0.1%) 2.4% - - Total SG&A adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.9%) 1.3% (0.4%) 1.5% - - Adjusted: SG&A expenses as % of gross profit . . . . . . . . . . . . . . . . . . . . . . . 79.3% 79.6% 78.2% 78.6% NM NM NM = Not meaningful 38
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark Three Months Ended Three Months Ended Three Months Ended September 30, September 30, September 30, Continuing Operations 2018 2017 2018 2017 2018 2017 (In millions) Reported: Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48.1 $ 55.8 $ 52.5 $ 60.1 $ (4.4) $ (4.3) Adjustments (before income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (4.6) 3.1 (4.6) - - Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 0.2 - 0.2 - - Total adjustments before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (4.4) 3.1 (4.4) - - Adjusted: Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 51.2 $ 51.4 $ 55.6 $ 55.7 $ (4.4) $ (4.3) Reported: Income (loss) from continuing operations before taxes . . . . . $ 22.6$ 33.9 $ 28.1 $ 38.8 $ (5.5) $ (4.9) Adjustments (before income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (4.6) 3.1 (4.6) - - Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 0.2 - 0.2 - - Total adjustments before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (4.4) 3.1 (4.4) - - Adjusted: Income (loss) from continuing operations before taxes . . . . . $ 25.7$ 29.5 $ 31.2 $ 34.4 $ (5.5) $ (4.9) Reported: Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . $ 15.3 $ 19.7 Adjustments (net of income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 (2.5) Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 0.2 Non-recurring tax items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 - Total adjustments, net of income taxes . . . . . . . . . . . . . . . . . . . 3.0 (2.3) Adjusted: Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . $ 18.3 $ 17.4 39
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark Nine Months Ended Nine Months Ended Nine Months Ended September 30, September 30, September 30, Continuing Operations 2018 2017 2018 2017 2018 2017 (In millions) Reported: SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 871.4 $ 870.1 $ 791.1 $ 842.8 $ 80.3 $ 27.3 Adjustments: Legal and storm damage charges . . . . . . . . . . . . . . . . . . . . . . . . . (5.7) (10.7) (5.7) (10.7) - - Long-term compensation-related charges . . . . . . . . . . . . . . . . . . (32.6) - - - (32.6) - Executive transition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) - (1.6) - - - Lease exit adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2) (1.0) (2.2) (0.4) - (0.6) Gain (loss) on disposal of franchises . . . . . . . . . . . . . . . . . . . . . . 38.9 8.5 38.9 8.5 - - Total SG&A adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.2) (3.2) 29.4 (2.6) (32.6) (0.6) Adjusted: SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 868.2 $ 866.9 $ 820.5 $ 840.2 $ 47.7 $ 26.7 Reported: SG&A expenses as % of gross profit . . . . . . . . . . . . . . . . . . . . . . . 81.0% 81.0% 76.5% 79.7% NM NM Adjustments: Legal and storm damage charges . . . . . . . . . . . . . . . . . . . . . . . . . (0.5%) (1.0%) (0.5%) (1.0%) - - Long-term compensation-related charges . . . . . . . . . . . . . . . . . . (3.1%) - - - (3.1%) - Executive transition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1%) - (0.1%) - - - Lease exit adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2%) (0.1%) (0.2%) (0.1%) - - Gain (loss) on disposal of franchises . . . . . . . . . . . . . . . . . . . . . . 3.7% 0.8% 3.7% 0.8% - - Total SG&A adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3%) (0.3%) 2.8% (0.3%) (3.1%) - Adjusted: SG&A expenses as % of gross profit . . . . . . . . . . . . . . . . . . . . . . . 80.7% 80.7% 79.3% 79.4% NM NM NM = Not meaningful 40
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark Nine Months Ended Nine Months Ended Nine Months Ended September 30, September 30, September 30, Continuing Operations 2018 2017 2018 2017 2018 2017 (In millions) Reported: Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 119.0 $ 134.4 $ 164.1 $ 151.1 $ (45.1) $ (16.7) Adjustments (before income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 3.2 (29.4) 2.6 32.6 0.6 Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.0 3.3 13.9 1.6 0.1 1.7 Total adjustments before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2 6.5 (15.5) 4.2 32.7 2.3 Adjusted: Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 136.2 $ 140.9 $ 148.6 $ 155.3 $ (12.4) $ (14.4) Reported: Income (loss) from continuing operations before taxes . . . . . $ 44.1 $ 54.3 $ 92.1 $ 72.6 $ (48.0) $ (18.3) Adjustments (before income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 3.2 (29.4) 2.6 32.6 0.6 Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.0 3.3 13.9 1.6 0.1 1.7 Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 15.3 - 15.3 - - Total adjustments before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2 21.8 (15.5) 19.5 32.7 2.3 Adjusted: Income (loss) from continuing operations before taxes . . . . . $ 61.3 $ 76.1 $ 76.6 $ 92.1 $ (15.3) $ (16.0) Reported: Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . $ 30.4 $ 32.0 Adjustments (net of income taxes): SG&A expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 2.0 Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 2.1 Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 9.6 Non-recurring tax items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 - Total adjustments, net of income taxes . . . . . . . . . . . . . . . . . . . 13.8 13.7 Adjusted: 41 Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . $ 44.2 $ 45.7
NON-GAAP RECONCILIATIONS Consolidated Consolidated Three Months Ended Nine Months Ended September 30, September 30, Continuing Operations 2018 2017 2018 2017 (In millions) (In millions) Reported: Interest Expense - Other. . . . . . . . . . . . . . . . . . . . . . . . . $ 13.3 $ 13.0 $ 40.1 $ 39.2 Adjustments: Double-carry interest - 7.0% Notes. . . . . . . . . . . . . . . . - - - (0.7) Total other income adjustments . . . . . . . . . . . . . . . . - - - (0.7) Adjusted: Total Interest Expense - Other. . . . . . . . . . . . . . . . . . . . $ 13.3 $ 13.0 $ 40.1 $ 38.5 Consolidated Consolidated Three Months Ended Nine Months Ended September 30, September 30, Continuing Operations 2018 2017 2018 2017 (In millions) (In millions) Reported: Other Expense / (Income). . . . . . . . . . . . . . . . . . . . . . . .$ (0.0) $ (0.0) $ (0.1) $ 14.5 Adjustments: Debt extinguishment - 7.0% Notes. . . . . . . . . . . . . . . . - - - (14.6) Total other income adjustments . . . . . . . . . . . . . . . . - - - (14.6) Adjusted: Total Other Expense (Income). . . . . . . . . . . . . . . . . . . .$ (0.0) $ (0.0) $ (0.1) $ (0.1) 42
NON-GAAP RECONCILIATIONS Three Months Ended September 30, 2018 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Reported: Earnings (loss) and shares . . . . . . . . . . . . . . . . . 42,673 $ 15,301 $ (183) $ 15,118 Effect of participating securities: Non-vested restricted stock . . . . . . . . . . . . . . . (14) - (14) Basic earnings (loss) and shares . . . . . . . . . . . 42,673 $ 15,287 $ 0.36 $ (183) $ (0.01) $ 15,104 $ 0.35 Effect of dilutive securities: Stock compensation plans . . . . . . . . . . . . . . . . 321 Diluted earnings (loss) and shares . . . . . . . . . . 42,994 $ 15,287 $ 0.36 $ (183) $ (0.01) $ 15,104 $ 0.35 Adjustments: Legal and storm damage charges. . . . . . . . . . . $ 1,185 $ - $ 1,185 Loss on disposal of franchises . . . . . . . . . . . . . 346 - 346 Executive transition costs. . . . . . . . . . . . . . . . . . . 1,581 - 1,581 Total adjustments before taxes . . . . . . . . . . . . . . 3,112 - 3,112 Income tax effect of adjustments . . . . . . . . . . . . (848) - (848) Non-recurring tax items. . . . . . . . . . . . . . . . . . . . . 763 - 763 Effect of adjustments net of income taxes . . . $ 3,027 $ 0.07 $ - $ - $ 3,027 $ 0.07 Adjusted: Earnings (loss) and diluted earnings (loss) per share (1) . . . . . . . $ 18,328 $ 0.43 $ (183) $ (0.01) $ 18,145 $ 0.42 (1) Net loss attributable to EchoPark was $0.09 per fully diluted share in the three months ended September 30, 2018. 43
NON-GAAP RECONCILIATIONS Three Months Ended September 30, 2017 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Reported: Earnings (loss) and shares . . . . . . . . . . . . . . . . . 43,496 $ 19,730 $ (290) $ 19,440 Effect of participating securities: Non-vested restricted stock. . . . . . . . . . . . . . . . (18) - (18) Basic earnings (loss) and shares . . . . . . . . . . . 43,496 $ 19,712 $ 0.45 $ (290) $ - $ 19,422 $ 0.45 Effect of dilutive securities: Stock compensation plans . . . . . . . . . . . . . . . . 315 Diluted earnings (loss) and shares . . . . . . . . . . 43,811 $ 19,712 $ 0.45 $ (290) $ (0.01) $ 19,422 $ 0.44 Adjustments: Impairment charges . . . . . . . . . . . . . . . . . . . . . . . $ 198 $ - $ 198 Legal and storm damage charges. . . . . . . . . . . 3,930 - 3,930 Loss on disposal of franchises . . . . . . . . . . . . . (8,489) - (8,489) Total adjustments before taxes . . . . . . . . . . . . . . (4,361) - (4,361) Income tax effect of adjustments . . . . . . . . . . . . 2,065 - 2,065 Effect of adjustments, net of income taxes . . $ (2,296) $ (0.05) $ - $ - $ (2,296) $ (0.05) Adjusted: Earnings (loss) and diluted earnings (loss) per share (2) . . . . . . . $ 17,434 $ 0.40 $ (290) $ (0.01) $ 17,144 $ 0.39 (2) Net loss attributable to EchoPark was $0.07 per fully diluted share in the three months ended September 30, 2017. 44
NON-GAAP RECONCILIATIONS Nine Months Ended September 30, 2018 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Reported: Earnings (loss) and shares . . . . . . . . . . . . . . . . . 42,708 $ 30,409 $ (579) $ 29,830 Effect of participating securities: Non-vested restricted stock . . . . . . . . . . . . . . . (29) - (29) Basic earnings (loss) and shares . . . . . . . . . . . 42,708 $ 30,380 $ 0.71 $ (579) $ (0.01) $ 29,801 $ 0.70 Effect of dilutive securities: Stock compensation plans . . . . . . . . . . . . . . . . 256 Diluted earnings (loss) and shares . . . . . . . . . . 42,964 $ 30,380 $ 0.71 $ (579) $ (0.02) $ 29,801 $ 0.69 Adjustments: Impairment charges . . . . . . . . . . . . . . . . . . . . . . . $ 13,958 $ - $ 13,958 Legal and storm damage charges. . . . . . . . . . . 5,749 - 5,749 Lease exit adjustments . . . . . . . . . . . . . . . . . . . . 2,235 - 2,235 Gain on disposal of franchises . . . . . . . . . . . . . . (38,893) - (38,893) Long-term compensation-related charges . . . . 32,522 - 32,522 Executive transition costs . . . . . . . . . . . . . . . . . . . 1,581 - 1,581 Total adjustments before taxes . . . . . . . . . . . . . . 17,152 - 17,152 Income tax effect of adjustments . . . . . . . . . . . . (4,674) - (4,674) Non-recurring tax items . . . . . . . . . . . . . . . . . . . . 1,313 - 1,313 Effect of adjustments, net of income taxes . . $ 13,791 $ 0.32 $ - $ - $ 13,791 $ 0.32 Adjusted: Earnings (loss) and diluted earnings (loss) per share (3) . . . . . . . $ 44,200 $ 1.03 $ (579) $ (0.02) $ 43,621 $ 1.01 (3) Net loss attributable to EchoPark was $0.26 per fully diluted share in the nine months ended September 30, 2018. 45
NON-GAAP RECONCILIATIONS Nine Months Ended September 30, 2017 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Reported: Earnings (loss) and shares . . . . . . . . . . . . . . . . . 44,281 $ 32,024 $ (993) $ 31,031 Effect of participating securities: Non-vested restricted stock . . . . . . . . . . . . . . . (28) - (28) Basic earnings (loss) and shares . . . . . . . . . . . 44,281 $ 31,996 $ 0.72 $ (993) $ (0.02) $ 31,003 $ 0.70 Effect of dilutive securities: Stock compensation plans . . . . . . . . . . . . . . . . 304 Diluted earnings (loss) and shares . . . . . . . . . . 44,585 $ 31,996 $ 0.72 $ (993) $ (0.02) $ 31,003 $ 0.70 Adjustments: Impairment charges . . . . . . . . . . . . . . . . . . . . . . . $ 3,313 $ - $ 3,313 Legal and storm damage charges. . . . . . . . . . . 10,781 - 10,781 Lease exit adjustments . . . . . . . . . . . . . . . . . . . . 992 - 992 Gain on disposal of franchises . . . . . . . . . . . . . . (8,489) - (8,489) Loss on debt extinguishment. . . . . . . . . . . . . . . . 15,268 - 15,268 Total adjustments before taxes . . . . . . . . . . . . . . 21,865 - 21,865 Income tax effect of adjustments . . . . . . . . . . . . (8,229) - (8,229) Effect of adjustments, net of income taxes . . $ 13,636 $ 0.30 $ - $ - $ 13,636 $ 0.30 Adjusted: Earnings (loss) and diluted earnings (loss) per share (4) . . . . . . . $ 45,660 $ 1.02 $ (993) $ (0.02) $ 44,667 $ 1.00 (4) Net loss attributable to EchoPark was $0.22 per fully diluted share in the nine months ended September 30, 2017. 46
