8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):   October 26, 2006

Asbury Automotive Group, Inc.

 (Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

5511	01-0609375
(Commission File Number)	(IRS Employer Identification No.)
622 Third Avenue, 37th Floor, New York, NY	10017
(Address of principal executive offices)	(Zip Code)

(212) 885-2500

(Registrant’s telephone number, including area code)

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Conditions.

The registrant issued a press release on October 26, 2006 announcing its financial results for the third quarter and nine-month period ended September 30, 2006, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01  Regulation FD Disclosure.

The registrant hereby furnishes the press release identified under Item 2.02 and attached hereto as Exhibit 99.1.

Item 9.01  Financial Statements and Exhibits.

(c)             Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 26, 2006.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ASBURY AUTOMOTIVE GROUP, INC.
Date: October 26, 2006	By:	/s/ Kenneth B. Gilman
		Name:	Kenneth B. Gilman
		Title:	President and Chief Executive Officer

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated October 26, 2006.

4

EX-99.1

Exhibit 99.1

	Investors May Contact: Stacey Yonkus Director, Investor Relations
	(212) 885-2512
	investor@asburyauto.com
	Reporters May Contact:
	Kevin Brown
	RF|Binder Partners
	(212) 994-7537
	Kevin.Brown@RFBinder.com

Asbury Automotive Group Reports Record Third Quarter Financial Results

Income from Continuing Operations Increases 7%; Up 14% Adjusted for Non-Operating Items

SG&A as a Percent of Gross Profit Improves 130 Basis Points

New York, NY, October 26, 2006 – Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported financial results for the third quarter and nine months ended September 30, 2006.

Income from continuing operations for the third quarter increased 7% to $18.2 million, or $0.54 per diluted share, from $17.1 million, or $0.52 per diluted share, in last year’s third quarter.  Results for this year’s third quarter include non-operating items related to a secondary offering and a bond buy back program which reduced earnings by $0.03 per diluted share.  This year’s third quarter also includes a stock-based compensation charge of approximately $0.02 per diluted share.  Last year’s third quarter included a restructuring charge of $0.01 per diluted share.  Excluding these items, third quarter income from continuing operations rose 14% to $19.9 million, or $0.59 per diluted share.  Net income for the 2006 quarter was $17.2 million, or $0.51 per diluted share, compared to $15.0 million, or $0.45 per diluted share, in last year’s quarter.

For the first nine months of 2006, income from continuing operations was $51.2 million, or $1.51 per diluted share, up 17% from $43.9 million, or $1.34 per diluted share, in the corresponding period last year.  Results for the 2006 period include certain non-operating items that totaled $2.1 million, or $0.06 per diluted share.  Results for the first nine months of 2005 included after-tax costs of approximately $2.6 million, or $0.08 per diluted share, related to the Company’s regional restructuring.  Excluding these items from the 2006 and 2005 results, income from continuing operations for the first nine months of 2006 was up 14% to $53.3 million, or $1.57 per diluted share.  For the first nine months of 2006, net income was $48.7 million, or $1.44 per diluted share, compared to $40.6 million, or $1.24 per diluted share, in the prior year period.

Additional financial highlights for the third quarter of 2006, as compared to last year’s third quarter, included:

·Total revenue for the quarter was approximately $1.5 billion, a 4% increase.  Total gross profit was $229.8 million, up 6%.

·Same-store retail revenue and gross profit (excluding fleet and wholesale businesses) rose 3% and 5%, respectively.

·New vehicle retail revenue increased 1% (flat same-store), and unit sales declined 3% (down 4% same-store).  New vehicle retail gross profit rose 4% (3% same-store).

·Used vehicle retail revenue (total and same-store) increased 12%, and unit sales (total and same-store) were up 5%.  Used vehicle retail gross profit (total and same-store) increased 11%.

·Parts, service and collision repair (fixed operations) revenue increased 4% (3% same-store), and gross profit increased 5% (total and same-store).

·Net finance and insurance (F&I) revenue was up 3% (2% same-store), and dealership-generated F&I revenue rose 6% (5% same-store).  Dealership-generated F&I per vehicle retailed (PVR) increased 6% to $905 (total and same-store).

·Selling, general and administrative (SG&A) expenses as a percentage of gross profit were 76.2% for the quarter, a 130 basis point improvement compared with 77.5% a year ago.  On an adjusted basis, SG&A expenses were 75.4% of gross profit for the quarter, a 180 basis point improvement, excluding non-operating items and a stock based compensation charge, compared to 77.2% a year ago.

President and CEO Kenneth B. Gilman said, “Asbury’s earnings for the third quarter, adjusted for non-operating items, were the highest in the Company’s history.  We are also pleased that these earnings are at the high-end of our recently released preliminary third quarter results.  Our strong earnings are all the more impressive when you consider the difficult year-to-year comparisons for new car sales – due to employee pricing promotions a year ago – and the strong headwind we’ve encountered due to increased interest rates.  Our excellent performance reflects well on Asbury’s favorable brand mix, the continued steady growth of our higher-margin used vehicle and service businesses, and our ongoing cost-reduction efforts.”

Mr. Gilman continued, “Our strong operational performance, specifically in used vehicles and fixed operations, over the last two years is the direct result of strategic programs we have implemented to accelerate our growth.  In addition, the regionalization of our field operations put us in an ideal position to capitalize on our operating initiatives.  Simply said, we believe we have one of the best operating models in the industry – where local management is responsible for customer facing activities but common systems, processes and procedures will be applied for our infrastructure and back office.”

J. Gordon Smith, Senior Vice President and CFO, said, “The third quarter was Asbury’s eighth in a row of adjusted SG&A expense leverage improvement.  That ratio improved another 180 basis points in the third quarter versus the prior year quarter, and we still see additional opportunity to continue to leverage our expense structure in 2007 and beyond.  Other highlights of the quarter included the Board’s decisions to institute a quarterly dividend of $0.20 per common share which represents a payout of 40% of net income which is a three-plus percent yield, the highest in the industry.  We also initiated a $40 million bond buy back program of which $15 million has been repurchased to date.”

Commenting on earnings for 2006, the Company noted that it remains comfortable with its recently increased guidance range of $1.85 to $1.90 for diluted earnings per share from continuing

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operations, which includes an expected $0.10 per share due to the impact of expensing of stock-based compensation.

Asbury will host a conference call to discuss its third quarter results this morning at 10:00 a.m. Eastern Time.  The call will be simulcast live on the Internet and can be accessed by logging onto http://www.asburyauto.com or http://www.ccbn.com.  In addition, a live audio of the call will be accessible to the public by calling 800-289-0730 (domestic), or 913-981-5509 (international); no access code is necessary.  Callers should dial in approximately 5 to 10 minutes before the call begins.

About Asbury Automotive Group

Asbury Automotive Group, Inc., headquartered in New York City, is one of the largest automobile retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, the Company currently operates 87 retail auto stores, encompassing 120 franchises for the sale and servicing of 33 different brands of American, European and Asian automobiles. The Company offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts.

Forward-Looking Statements

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward- looking statements include statements relating to goals, plans, projections and guidance regarding the Company’s financial position, results of operations, market position, potential future acquisitions and business strategy. These statements are based on management’s current expectations and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, market factors, the Company’s relationships with vehicle manufacturers and other suppliers, risks associated with the Company’s indebtedness, risks related to potential future acquisitions, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally and governmental regulations and legislation. There can be no guarantees that the Company’s plans for future operations will be successfully implemented or that they will prove to be commercially successful or that the Company will be able to continue paying dividends in the future at the current rate or at all. These and other risk factors are discussed in the Company’s annual report on Form 10-K and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

[Tables Follow]

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Asbury Automotive Group, Inc.

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2006			2005			2006			2005
REVENUES:
New vehicle	$	913,194		$	891,491		$	2,652,347		$	2,535,068
Used vehicle	394,402			360,029			1,137,069			1,028,901
Parts, service and collision repair	171,652			165,126			513,576			474,798
Finance and insurance, net	41,198			40,133			120,042			114,687
Total revenues	1,520,446			1,456,779			4,423,034			4,153,454
COST OF SALES:
New vehicle	848,979			830,005			2,466,609			2,360,850
Used vehicle	357,864			327,670			1,032,966			937,903
Parts, service and collision repair	83,843			81,780			253,587			233,421
Total cost of sales	1,290,686			1,239,455			3,753,162			3,532,174
GROSS PROFIT	229,760			217,324			669,872			621,280
OPERATING EXPENSES:
Selling, general and administrative	174,996			168,395			512,360			486,947
Depreciation and amortization	5,076			4,930			15,164			14,390
Income from operations	49,688			43,999			142,348			119,943
OTHER INCOME (EXPENSE):
Floor plan interest expense	(10,311		)	(6,533		)	(30,712		)	(20,521		)
Other interest expense	(11,225		)	(10,314		)	(33,268		)	(30,183		)
Interest income	1,523			163			3,271			598
Loss on extinguishment of long-term debt, net	(914		)	—			(914		)	—
Other income, net	400			14			1,225			455
Total other expense, net	(20,527		)	(16,670		)	(60,398		)	(49,651		)
Income before income taxes	29,161			27,329			81,950			70,292
INCOME TAX EXPENSE	10,935			10,248			30,731			26,359
INCOME FROM CONTINUING OPERATIONS	18,226			17,081			51,219			43,933
DISCONTINUED OPERATIONS, net of tax	(1,047		)	(2,128		)	(2,483		)	(3,354		)
NET INCOME	$	17,179		$	14,953		$	48,736		$	40,579
BASIC EARNINGS PER COMMON SHARE:
Continuing operations	$	0.55		$	0.52		$	1.55		$	1.35
Discontinued operations	(0.03		)	(0.06		)	(0.08		)	(0.11		)
Net income	$	0.52		$	0.46		$	1.47		$	1.24
DILUTED EARNINGS PER COMMON SHARE:
Continuing operations	$	0.54		$	0.52		$	1.51		$	1.34
Discontinued operations	(0.03		)	(0.07		)	(0.07		)	(0.10		)
Net income	$	0.51		$	0.45		$	1.44		$	1.24
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	33,258			32,737			33,087			32,644
Diluted	33,841			33,032			33,853			32,847

4

Asbury Automotive Group, Inc.

Selected Data

(Dollars in thousands, except per vehicle data)

(Unaudited)

	As Reported for the  Three Months Ended September 30,										Same Store for the  Three Months Ended September 30,
	2006					2005					2006					2005
RETAIL VEHICLES SOLD:
New retail units	28,294			62.2	%	29,096			63.9	%	28,007			62.0	%	29,096			63.9	%
Used retail units	17,205			37.8	%	16,428			36.1	%	17,200			38.0	%	16,428			36.1	%
Total retail units	45,499			100.0	%	45,524			100.0	%	45,207			100.0	%	45,524			100.0	%
REVENUE:
New retail	$	874,184		57.5	%	$	861,640		59.2	%	$	865,645		57.3	%	$	861,640		59.2	%
Used retail	304,186			20.0	%	272,505			18.7	%	304,131			20.1	%	272,505			18.7	%
Parts, service and collision repair	171,652			11.3	%	165,126			11.3	%	170,773			11.3	%	165,126			11.3	%
Finance and insurance, net	41,198			2.7	%	40,133			2.8	%	40,921			2.7	%	40,133			2.8	%
Total retail revenue	1,391,220					1,339,404					1,381,470					1,339,404
Fleet	39,010			2.6	%	29,851			2.0	%	38,893			2.6	%	29,851			2.0	%
Wholesale	90,216			5.9	%	87,524			6.0	%	90,188			6.0	%	87,524			6.0	%
Total revenue	$	1,520,446		100.0	%	$	1,456,779		100.0	%	$	1,510,551		100.0	%	$	1,456,779		100.0	%
GROSS PROFIT:
New retail	$	63,207		27.5	%	$	60,776		28.0	%	$	62,717		27.5	%	$	60,776		28.0	%
Used retail	36,728			16.0	%	33,204			15.3	%	36,719			16.1	%	33,204			15.3	%
Parts, service and collision repair	87,809			38.2	%	83,346			38.3	%	87,344			38.2	%	83,346			38.3	%
Finance and insurance, net	41,198			17.9	%	40,133			18.5	%	40,921			17.9	%	40,133			18.5	%
Total retail gross profit	228,942					217,459					227,701					217,459
Fleet	1,008			0.5	%	710			0.3	%	1,003			0.4	%	710			0.3	%
Wholesale	(190		)	(0.1	)%	(845		)	(0.4	)%	(196		)	(0.1	)%	(845		)	(0.4	)%
Total gross profit	$	229,760		100.0	%	$	217,324		100.0	%	$	228,508		100.0	%	$	217,324		100.0	%
Adjusted SG&A expenses	$	173,188				$	167,804				$	172,567				$	167,804
Adjusted SG&A expenses as a percentage of gross profit	75.4		%			77.2		%			75.5		%			77.2		%
REVENUE PER VEHICLE RETAILED:
New retail	$	30,896				$	29,614				$	30,908				$	29,614
Used retail	17,680					16,588					17,682					16,588
GROSS PROFIT PER VEHICLE RETAILED:
New retail	$	2,234				$	2,089				$	2,239				$	2,089
Used retail	2,135					2,021					2,135					2,021
Finance and insurance, net	905					882					905					882
Dealership generated finance and insurance, net	905					856					905					856
GROSS PROFIT MARGIN:
New retail	7.2		%			7.1		%			7.2		%			7.1		%
Used retail	12.1		%			12.2		%			12.2		%			12.2		%
Parts, service and collision repair	51.2		%			50.5		%			51.1		%			50.5		%

5

Asbury Automotive Group, Inc.

Selected Data

(Dollars in thousands, except per vehicle data)

(Unaudited)

	As Reported for the  Nine Months Ended September 30,										Same Store for the  Nine Months Ended September 30,
	2006					2005					2006					2005
RETAIL VEHICLES SOLD:
New retail units	81,181			62.3	%	80,030			63.3	%	79,918			62.1	%	80,030			63.3	%
Used retail units	49,109			37.7	%	46,354			36.7	%	48,875			37.9	%	46,354			36.7	%
Total retail units	130,290			100.0	%	126,384			100.0	%	128,793			100.0	%	126,384			100.0	%
REVENUE:
New retail	$	2,532,233		57.3	%	$	2,425,156		58.4	%	$	2,496,618		57.1	%	$	2,425,156		58.4	%
Used retail	869,600			19.7	%	776,330			18.7	%	866,022			19.8	%	776,330			18.7	%
Parts, service and collision repair	513,576			11.6	%	474,798			11.4	%	509,339			11.6	%	474,798			11.4	%
Finance and insurance, net	120,042			2.7	%	114,687			2.8	%	118,706			2.7	%	114,687			2.8	%
Total retail revenue	4,035,451					3,790,971					3,990,685					3,790,971
Fleet	120,114			2.7	%	109,912			2.6	%	119,178			2.7	%	109,912			2.6	%
Wholesale	267,469			6.0	%	252,571			6.1	%	266,561			6.1	%	252,571			6.1	%
Total revenue	$	4,423,034		100.0	%	$	4,153,454		100.0	%	$	4,376,424		100.0	%	$	4,153,454		100.0	%
GROSS PROFIT:
New retail	$	182,648		27.3	%	$	172,120		27.7	%	$	180,321		27.2	%	$	172,120		27.7	%
Used retail	105,143			15.7	%	90,633			14.6	%	104,641			15.8	%	90,633			14.6	%
Parts, service and collision repair	259,989			38.8	%	241,377			38.9	%	257,800			38.9	%	241,377			38.9	%
Finance and insurance, net	120,042			17.9	%	114,687			18.4	%	118,706			17.9	%	114,687			18.4	%
Total retail gross profit	667,822					618,817					661,468					618,817
Fleet	3,090			0.5	%	2,098			0.3	%	3,072			0.4	%	2,098			0.3	%
Wholesale	(1,040		)	(0.2	)%	365			0.1	%	(1,079		)	(0.2	)%	365			0.1	%
Total gross profit	$	669,872		100.0	%	$	621,280		100.0	%	$	663,461		100.0	%	$	621,280		100.0	%
Adjusted gross profit	$	666,472				$	621,280				$	660,061				$	621,280
Adjusted SG&A expenses	$	506,598				$	482,790				$	503,142				$	482,790
Adjusted SG&A expenses as a percentage of adjusted gross profit	76.0		%			77.7		%			76.2		%			77.7		%
REVENUE PER VEHICLE RETAILED:
New retail	$	31,192				$	30,303				$	31,240				$	30,303
Used retail	17,708					16,748					17,719					16,748
GROSS PROFIT PER VEHICLE RETAILED:
New retail	$	2,250				$	2,151				$	2,256				$	2,151
Used retail	2,141					1,955					2,141					1,955
Finance and insurance, net	921					907					922					907
Dealership generated finance and insurance, net	882					878					882					878
GROSS PROFIT MARGIN:
New retail	7.2		%			7.1		%			7.2		%			7.1		%
Used retail	12.1		%			11.7		%			12.1		%			11.7		%
Parts, service and collision repair	50.6		%			50.8		%			50.6		%			50.8		%

6

Asbury Automotive Group, Inc.

Selected Data

(In thousands)

(Unaudited)

	As of		As of
	September 30, 2006		December 31, 2005
BALANCE SHEET HIGHLIGHTS:
Cash and cash equivalents	$	133,475	$	57,194
Inventories	715,458		709,791
Total current assets	1,188,168		1,185,180
Floor plan notes payable	613,374		614,382
Total current liabilities	798,003		838,226
CAPITALIZATION:
Long-term debt (including current portion)	$	482,546	$	496,949
Stockholders’ equity	602,316		547,766
Total	$	1,084,862	$	1,044,715

7

ASBURY AUTOMOTIVE GROUP, INC.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION

(In thousands, except vehicle and per vehicle data)

(Unaudited)

The Company evaluates F&I gross profit performance on a per vehicle retailed (“PVR”) basis by dividing total F&I gross profit by the number of retail vehicles sold.  During 2003, the Company renegotiated a contract with a third party finance and insurance product provider, which resulted in the recognition of income in 2006 and 2005 that was not attributable to retail vehicles sold during 2006 and 2005 (referred to as “corporate generated F&I gross profit”).  During the second quarter of 2006, the Company decided to sell its remaining interest in the pool of extended service contracts which had been the source of its corporate generated F&I gross profit, which resulted in the recognition of a $3.4 million gain on the sale (“corporate generated F&I gain”).  The Company believes that dealership generated F&I PVR, which excludes the additional amounts derived from contracts negotiated by the corporate office, provides a more accurate measure of the Company’s finance and insurance operating performance.  The following table reconciles F&I gross profit to dealership generated F&I gross profit, and provides the necessary components to calculate dealership generated F&I gross profit PVR.

	As Reported for the Three Months Ended September 30,					Same Store for the Three Months Ended September 30,
	2006		2005			2006		2005
RECONCILIATION OF FINANCE AND INSURANCE GROSS PROFIT TO DEALERSHIP GENERATED FINANCE AND INSURANCE GROSS PROFIT:
F&I gross profit	$	41,198	$	40,133		$	40,921	$	40,133
Less: corporate generated F&I gross profit	—		(1,184		)	—		(1,184		)
Dealership generated F&I gross profit	$	41,198	$	38,949		$	40,921	$	38,949
RETAIL VEHICLES SOLD:
New retail units	28,294		29,096			28,007		29,096
Used retail units	17,205		16,428			17,200		16,428
Total retail units	45,499		45,524			45,207		45,524
F&I gross profit PVR	$	905	$	882		$	905	$	882
Dealership generated F&I gross profit PVR	$	905	$	856		$	905	$	856

	As Reported for the Nine Months Ended September 30,						Same Store for the Nine Months Ended September 30,
	2006			2005			2006			2005
RECONCILIATION OF FINANCE AND INSURANCE GROSS PROFIT TO DEALERSHIP GENERATED FINANCE AND INSURANCE GROSS PROFIT:
F&I gross profit	$	120,042		$	114,687		$	118,706		$	114,687
Less: corporate generated F&I gross profit	(1,685		)	(3,754		)	(1,685		)	(3,754		)
Less: corporate generated F&I gain	(3,400		)	—			(3,400		)	—
Dealership generated F&I gross profit	$	114,957		$	110,933		$	113,621		$	110,933
RETAIL VEHICLES SOLD:
New retail units	81,181			80,030			79,918			80,030
Used retail units	49,109			46,354			48,875			46,354
Total retail units	130,290			126,384			128,793			126,384
F&I gross profit PVR	$	921		$	907		$	922		$	907
Dealership generated F&I gross profit PVR	$	882		$	878		$	882		$	878

8

The Company’s income from continuing operations was impacted by (i) the adoption of Statement of Financial Accounting Standards No. 123R (“SFAS 123R”), (ii) its decision to issue restricted stock units instead of stock options, (iii) the sale of its remaining interest in a pool of extended service contracts, (iv) expenses related to a secondary stock offering, (v) its decision to abandon certain strategic projects and (vi) expenses related to the extinguishment of long-term debt during the nine months ended September 30, 2006; and expenses related to our regional reorganization during the three and nine months ended September 30, 2005.  Effective January 1, 2006, The Company has adopted SFAS 123R under the modified prospective transition method and therefore has recorded stock compensation expense under the fair value method for the three and nine months ended September 30, 2006. Prior to January 1, 2006, stock compensation expense was recorded under the intrinsic value method.  We believe that a more accurate comparison of income from continuing operations can be made by adjusting for these items.

	As Reported for the Three Months Ended September 30,						Increase (Decrease)		% Change
	2006			2005
RECONCILIATION OF ADJUSTED SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
SG&A expenses	$	174,996		$	168,395		$	6,601	4	%
Reorganization expenses	—			(591		)
Secondary stock offering expenses	(846		)	—
Stock compensation expense	(962		)	—
Adjusted SG&A expenses	$	173,188		$	167,804		$	5,384	3	%
Gross profit	$	229,760		$	217,324		$	12,436	6	%
Adjusted SG&A expenses as a percentage of gross profit	75.4		%	77.2		%

	Same Store for the Three Months Ended September 30,						Increase (Decrease)		% Change
	2006			2005
RECONCILIATION OF ADJUSTED SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
SG&A expenses	$	174,375		$	168,395		$	5,980	4	%
Reorganization expenses	—			(591		)
Secondary stock offering expenses	(846		)	—
Stock compensation expense	(962		)	—
Adjusted SG&A expenses	$	172,567		$	167,804		$	4,763	3	%
Gross profit	$	228,508		$	217,324		$	11,184	5	%
Adjusted SG&A expenses as a percentage of gross profit	75.5		%	77.2		%

	As Reported for the Nine Months Ended September 30,						Increase (Decrease)		% Change
	2006			2005
RECONCILIATION OF ADJUSTED SG&A EXPENSES AS A PERCENTAGE OF ADJUSTED GROSS PROFIT
SG&A expenses	$	512,360		$	486,947		$	25,413	5	%
Reorganization expenses	—			(4,157		)
Abandoned strategic project expenses	(1,658		)	—
Secondary stock offering expenses	(846		)	—
Stock compensation expense	(3,258		)	—
Adjusted SG&A expenses	$	506,598		$	482,790		$	23,808	5	%
Gross profit	$	669,872		$	621,280		$	48,592	8	%
Corporate generated F&I gain	(3,400		)	—
Adjusted gross profit	$	666,472		$	621,280		$	45,192	7	%
Adjusted SG&A expenses as a percentage of adjusted gross profit	76.0		%	77.7		%

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	Same Store for the Nine Months Ended September 30,						Increase (Decrease)		% Change
	2006			2005
RECONCILIATION OF ADJUSTED SG&A EXPENSES AS A PERCENTAGE OF ADJUSTED GROSS PROFIT
SG&A expenses	$	508,904		$	486,947		$	21,957	5	%
Reorganization expenses	—			(4,157		)
Abandoned strategic project expenses	(1,658		)	—
Secondary stock offering expenses	(846		)	—
Stock compensation expense	(3,258		)	—
Adjusted SG&A expenses	$	503,142		$	482,790		$	20,352	4	%
Gross profit	$	663,461		$	621,280		$	42,181	7	%
Corporate generated F&I gain	(3,400		)	—
Adjusted gross profit	$	660,061		$	621,280		$	38,781	6	%
Adjusted SG&A expenses as a percentage of adjusted gross profit	76.2		%	77.7		%

	As Reported for the Three Months Ended September 30,				Increase (Decrease)		% Change
	2006		2005
RECONCILILATION OF ADJUSTED INCOME FROM CONTINUING OPERATIONS
Net income	$	17,179	$	14,953	$	2,226	15	%
Discontinued operations, net of tax	1,047		2,128
Income from continuing operations	18,226		17,081		1,145		7	%
Reorganization expenses, net of tax	—		369
Loss on extinguishment of long-term debt, net of tax	571		—
Secondary stock offering expenses, net of tax	529		—
Stock compensation expense, net of tax	601		—
Adjusted income from continuing operations	$	19,927	$	17,450	$	2,477	14	%
Net income	$	0.51	$	0.45	$	0.06	13	%
Discontinued operations, net of tax	0.03		0.07
Income from continuing operations	0.54		0.52		0.02		4	%
Reorganization expenses, net of tax	—		0.01
Loss on extinguishment of long-term debt, net of tax	0.02		—
Secondary stock offering expenses, net of tax	0.01		—
Stock compensation expense, net of tax	0.02		—
Adjusted income from continuing operations	$	0.59	$	0.53	$	0.06	11	%
Weighted average common shares outstanding (diluted):	33,841		33,032

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	As Reported for the Nine Months Ended September 30,					Increase (Decrease)		% Change
	2006			2005
RECONCILILATION OF ADJUSTED INCOME FROM CONTINUING OPERATIONS
Net income	$	48,736		$	40,579	$	8,157	20	%
Discontinued operations, net of tax	2,483			3,354
Income from continuing operations	51,219			43,933		7,286		17	%
Reorganization expenses, net of tax	—			2,598
Loss on extinguishment of long-term debt, net of tax	571			—
Corporate generated F&I gain, net of tax	(2,125		)	—
Secondary stock offering expenses, net of tax	529			—
Abandoned strategic project expenses, net of tax	1,036			—
Stock compensation expense, net of tax	2,036			—
Adjusted income from continuing operations	$	53,266		$	46,531	$	6,735	14	%
Net income	$	1.44		$	1.24	$	0.20	16	%
Discontinued operations, net of tax	0.07			0.10
Income from continuing operations	1.51			1.34		0.17		13	%
Reorganization expenses, net of tax	—			0.08
Loss on extinguishment of long-term debt, net of tax	0.02			—
Corporate generated F&I gain, net of tax	(0.06		)	—
Secondary stock offering expenses, net of tax	0.01			—
Abandoned strategic project expenses, net of tax	0.03			—
Stock compensation expense, net of tax	0.06			—
Adjusted income from continuing operations	$	1.57		$	1.42	$	0.15	11	%
Weighted average common shares outstanding (diluted):	33,853			32,847

11