Pub. 57 2016-2017 Issue 2

33 WINTER 2016 Public companies spent an estimated $572 million on auto dealership acquisitions in the US in the first nine months of 2016, an 18% decrease from the first nine months of 2015. The group is tracking to its lowest acquisition spend since 2013. The publics have seen their stock prices decline dramatically since their peak on June 5, 2015, taking most of them out of the acquisition market. As can be seen below, The Ker- rigan Index, which is composed of the seven publicly traded auto retail stocks, is down 29.63% from its high and 11.35% year-to-date through November 14 th . Chart VI The Kerrigan Index Since November 2014 Source: Kerrigan Advisors Methodology The Kerrigan Auto Retail Index (The Kerrigan Index) is composed of the seven publicly traded auto retail companies with operations focused on the US market, namely AutoNa- tion, Penske, Lithia, Asbury, Group 1, Sonic and CarMax. The purpose is to track this group of companies to identify and assess the drivers impacting changes in their valuations, with implications for both public and private auto retailers. The The Kerrigan Auto Retail Index is weighted by the market capitalization of each company and benchmarked at 100 on 1/3/2000. Change since 1/4/2016 -11.35% Change since 6/5/2015 (peak) -29.63% Change since 11/14/2014 -14.92% The Kerrigan Index 499.15 THE KERRIGAN INDEX 350 400 450 500 550 600 650 700 750 Nov-2014 Mar-2015 Jul-2015 Nov-2015 Mar-2016 Jul-2016 Nov-2016