Lithia Motors (LAD) 8-K Lithia Motors Reports 71% Increase In Adjusted Full Year Continuing Operations Eps; Increases 2011 Outlook

Exhibit 99.1

LITHIA MOTORS REPORTS 71% INCREASE IN ADJUSTED FULL YEAR CONTINUING OPERATIONS EPS; INCREASES 2011 OUTLOOK

__________________________________________________

LITHIA MOTORS DECLARES $0.05 PER SHARE DIVIDEND FOR FOURTH QUARTER 2010

Medford, Oregon, February 23, 2011 (1:05 p.m. PT) –Lithia Motors, Inc. (NYSE: LAD) today reported 2010 adjusted fourth quarter net income from continuing operations of $5.6 million, or $0.21 per diluted share. This compares to a 2009 adjusted fourth quarter net loss from continuing operations of $(0.7) million, or $(0.03) per diluted share. Fourth quarter 2010 revenue from continuing operations increased $130.7 million, or 30.8% to $555.6 million, compared to $424.9 million in the year-ago period.

Fourth Quarter Operating Highlights:

• New vehicle same store sales increased 34.4%
• Used vehicle retail same store sales increased 21.1%
• Service, body and parts same store sales increased 5.4%

As shown in the attached reconciliation table, the 2010 and 2009 fourth quarter adjusted results from continuing operations excluded non-core charges of $0.05 and $0.04 per share, respectively, on asset impairments, disposal gains and reserve adjustments. Unadjusted, net income (loss) from continuing operations for the fourth quarter of 2010 and 2009 was $4.4 million or $0.16 per diluted share and $(1.8) million or $(0.07) per diluted share, respectively.

Sid DeBoer, Lithia’s Chairman and CEO, commented, “The economic recovery continued to accelerate through the fourth quarter. All states we operate in posted double digit increases in same store sales.”

For the full year 2010, revenue from continuing operations increased 19.7% to $2.1 billion as compared to $1.8 billion in 2009. Same store new vehicle sales increased 19.5%, used vehicle retail same store sales increased 19.3% and service, body and parts same store sales increased 0.4%. Full year 2010 adjusted net income from continuing operations was $0.94 per share as compared to $0.55 per share in 2009. Unadjusted, full year net income from continuing operations was $0.53 per diluted share, compared to net income from continuing operations of $0.31 per diluted share for 2009.

Mr. DeBoer continued, “For the full year, our adjusted earnings per share from continuing operations increased 71%. This improvement is a testament to the earnings potential Lithia can realize as we increase our market share in an improving economy.”

Balance Sheet Update
Lithia ended the period with $98.2 million in immediately available funds, including $9.3 million in cash, $23.3 million in availability on its revolving credit facility, and $65.6 million in unfinanced new vehicle inventory.

Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.05 per share for the fourth quarter 2010. Lithia will pay the dividend March 25, 2011 to shareholders of record on March 11, 2011.

Increased Outlook for 2011
Lithia projects its 2011 first quarter earnings guidance within a range of $0.19 to $0.21 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.20 to $1.28 per diluted share. Both projections are based on the following annual assumptions:

• Total revenues in range of $2.3 to $2.45 billion
• New vehicle same store sales increasing 16%
• New vehicle gross margin ranging from 7.9% to 8.1%
• Used vehicle same store sales increasing 10%
• Used vehicle gross margin ranging from 13.7% to 14.0%
• Service body and parts same store sales increasing 2%
• Service body and parts gross margin ranging from 48.3% to 48.6%
• Finance and insurance gross profit of $970 per unit
• Tax rate of 40%
• Estimated average diluted shares outstanding of 26.9 million
• Capital expenditures of approximately $26 million
• Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items

Fourth Quarter Earnings Conference Call and Updated Presentation
The fourth quarter conference call may be accessed at 2:00 p.m. PT today by telephone at 877-407-8029. An updated presentation highlighting the fourth quarter results has been added to Investor Relations onwww.lithia.com.

To listen live on our website or for replay, visit Investor Relations onwww.lithia.comand click on the conference call icon. A playback of the conference call will be available after 5:00 p.m. PT on February 23, 2011 through March 2, 2011 by calling 877-660-6853 (Conference ID: 366539 Account: 305).

About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. As of today, Lithia sells 25 brands of new and all brands of used vehicles at 83 stores, which are located in 12 states. Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.

For additional information on Lithia Motors, contact John North, VP Finance / Controller at (541) 618-5748 or visitwww.lithia.comand click on “Investor Relations.”

Sites

www.	lithia.com
www.	lithiacares.com
www.	lithiajobs.com

Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors

Lithia Life on Facebookhttp://www.facebook.com/pages/Lithia-Lifecom/34360183908?ref=ts

Lithia Life on YouTube
http://www.youtube.com/user/LithiaLife

Lithia Life on Twitter
http://twitter.com/LithiaLife

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. Forward-looking statements in this press release include our guidance regarding first quarter and full year 2011 results, the sustainability of the economic recovery and the earnings power produced by increasing revenues. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks" or "will." These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including without lim itation, future economic conditions and others set forth from time to time in the company's filings with the SEC. We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.

Non-GAAP Financial Measures
This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and diluted earnings per share from continuing operations, adjusted SG&A as a percentage of revenues and gross profit, adjusted operating margin, adjusted operating profit as a percentage of gross profit and adjusted pre-tax margin adjusted to exclude certain items disclosed in the attached financial tables. Cash flows from operations were adjusted to include the change in non-trade floorplan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a m eaningful presentation of the Company's results from its core business operations excluding adjustments for items not related to the Company's ongoing core business operations or other non-cash adjustments, and improves the period-to-period comparability of the Company's results from its core business operations. These presentations are not intended to provide net income, cash flows from operations, operating income or selling, general and administrative costs in accordance with GAAP and should not be considered an alternative to GAAP measures.

Lithia Motors, Inc.
Consolidated Statement of Operations(Unaudited)
(In thousands except per share data)
		Three Months Ended					%
		December 31,				Increase	Increase
		2010		2009		(Decrease)	(Decrease)
Revenues:
New vehicle retail	$	290,073	$	210,494	$	79,579	37.8	%
Used vehicle retail		139,652		112,051		27,601	24.6
Used vehicle wholesale		28,209		18,212		9,997	54.9
Finance and insurance		17,267		12,299		4,968	40.4
Service, body and parts		77,297		71,268		6,029	8.5
Fleet and other		3,093		524		2,569	NM
Total revenues		555,591		424,848		130,743	30.8
Cost of sales:
New vehicle retail		267,407		193,970		73,437	37.9
Used vehicle retail		120,755		96,622		24,133	25.0
Used vehicle wholesale		28,270		18,217		10,053	55.2
Service, body and parts		41,698		38,632		3,066	7.9
Fleet and other		2,623		205		2,418	NM
Total cost of sales		460,753		347,646		113,107	32.5
Gross profit		94,838		77,202		17,636	22.8
Asset impairment charges		550		153		397	259.5
SG&A expense		77,292		67,507		9,785	14.5
Depreciation and amortization		4,188		6,316		(2,128)	(33.7)
Income from operations		12,808		3,226		9,582	297.0
Floorplan interest expense		(2,194)		(2,387)		(193)	(8.1)
Other interest expense		(3,730)		(3,476)		254	7.3
Other income, net		66		48		18	37.5
Income (loss) from continuing
operations before income taxes		6,950		(2,589)		9,539	NM
Income tax expense (benefit)		2,571		(775)		3,346	NM
Income tax rate		37.0%		29.9%
Income (loss) from continuing
operations	$	4,379	$	(1,814)	$	6,193	NM	%
Income from discontinued operations,
net of income tax		-		260		(260)	100.0
Net income (loss)	$	4,379	$	(1,554)	$	5,933	NM	%
Diluted net income (loss) per share:
Continuing operations	$	0.16	$	(0.07)	$	0.23	NM	%
Discontinued operations		-		0.01		(0.01)	NM
Net income per share	$	0.16	$	(0.06)	$	0.22	NM	%
Diluted shares outstanding		26,540		25,113		1,427	5.7	%

Lithia Motors, Inc.
Key Performance Metrics(Unaudited)
		Three Months Ended						%
		December 31,				Increase		Increase
		2010		2009		(Decrease)		(Decrease)
Gross margin
New vehicle retail		7.8	%	7.9	%	(10)bps
Used vehicle retail		13.5		13.8		(30) bps
Used vehicle wholesale		(0.2)		-		(20) bps
Finance & insurance		100.0		100.0		- bps
Service, body & parts		46.1		45.8		30 bps
Gross profit margin		17.1		18.2		(110) bps
Unit sales
New vehicle retail		8,907		6,537		2,370		36.3	%
Used vehicle retail		8,386		6,574		1,812		27.6
Used vehicle wholesale		3,708		3,166		542		17.1
Total units sold		21,001		16,277		4,724		29.0
Average selling price
New vehicle retail	$	32,567	$	32,200	$	367		1.1	%
Used vehicle retail		16,653		17,044		(391)		(2.3)
Used vehicle wholesale		7,608		5,753		1,855		32.3
Average gross profit per unit
New vehicle retail	$	2,545	$	2,528	$	17		0.7	%
Used vehicle retail		2,253		2,347		(94)		(4.0)
Used vehicle wholesale		(16)		(2)		(14)		700.0
Finance & insurance		999		938		61		6.5
Revenue mix
New vehicle retail		52.2	%	49.5	%
Used vehicle retail		25.1		26.4
Used vehicle wholesale		5.1		4.3
Finance & insurance, net		3.1		2.9
Service, body & parts		13.9		16.8
Fleet and other		0.6		0.1
		Adjusted				As reported
		Three Months Ended				Three Months Ended
		December 31,				December 31,
Other metrics		2010		2009		2010		2009
SG&A as a % of revenue		13.9	%	15.8	%	13.9	%	15.9	%
SG&A as a % of gross profit		80.8		85.3		81.5		87.4
Operating profit as a % of revenue		2.6		1.1		2.3		0.8
Operating profit as a % of gross profit		14.9		6.1		13.5		4.2
Pretax margin		1.5		(0.2)		1.3		(0.6)

Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
		Three Months Ended					%
		December 31,				Increase	Increase
		2010		2009		(Decrease)	(Decrease)
Revenues
New vehicle retail	$	283,707	$	211,022	$	72,685	34.4	%
Used vehicle retail		135,834		112,203		23,631	21.1
Used vehicle wholesale		27,481		18,146		9,335	51.4
Finance and insurance		15,962		11,908		4,054	34.0
Service, body and parts		75,098		71,272		3,826	5.4
Gross profit
New vehicle retail		21,771		16,622		5,149	31.0
Used vehicle retail		18,507		15,357		3,150	20.5
Used vehicle wholesale		(46)		(2)		(44)	NM
Finance and insurance		15,962		11,908		4,054	34.0
Service, body and parts		34,996		33,328		1,668	5.0
Unit sales
New vehicle retail		8,699		6,554		2,145	32.7	%
Used vehicle retail		8,152		6,583		1,569	23.8
Used vehicle wholesale		3,597		3,160		437	13.8
Total units sold		20,448		16,297		4,151	25.5
Average selling price
New vehicle retail	$	32,614	$	32,197	$	417	1.3	%
Used vehicle retail		16,663		17,044		(381)	(2.2)
Used vehicle wholesale		7,640		5,742		1,898	33.0
Average gross profit per unit
New vehicle retail	$	2,503	$	2,536	$	(33)	(1.3)	%
Used vehicle retail		2,270		2,333		(63)	(2.7)
Used vehicle wholesale		(13)		(1)		(12)	NM
Finance & insurance		947		906		41	4.5

Lithia Motors, Inc.
Consolidated Statement of Operations(Unaudited)
(In thousands except per share data)
		Twelve Months Ended					%
		December 31,				Increase	Increase
		2010		2009		(Decrease)	(Decrease)
Revenues:
New vehicle retail	$	1,067,648	$	881,329	$	186,319	21.1	%
Used vehicle retail		581,185		477,253		103,932	21.8
Used vehicle wholesale		108,113		72,699		35,414	48.7
Finance and insurance		67,107		56,397		10,710	19.0
Service, body and parts		295,823		291,075		4,748	1.6
Fleet and other		11,722		2,614		9,108	NM
Total revenues		2,131,598		1,781,367		350,231	19.7
Cost of sales:
New vehicle retail		980,264		806,912		173,352	21.5
Used vehicle retail		499,182		410,087		89,095	21.7
Used vehicle wholesale		107,468		72,288		35,180	48.7
Service, body and parts		153,239		152,532		707	0.5
Fleet and other		10,015		1,283		8,732	NM
Total cost of sales		1,750,168		1,443,102		307,066	21.3
Gross profit		381,430		338,265		43,165	12.8
Asset impairment charges		15,301		8,272		7,029	85.0
SG&A expense		300,612		276,021		24,591	8.9
Depreciation and amortization		17,577		18,259		(682)	(3.7)
Income from operations		47,940		35,713		12,227	34.2
Floorplan interest expense		(10,597)		(11,015)		(418)	(3.8)
Other interest expense		(14,572)		(14,115)		457	3.2
Other income, net		422		1,495		(1,073)	(71.8)
Income from continuing
operations before income taxes		23,193		12,078		11,115	92.0
Income tax expense		9,093		5,162		3,931	76.2
Income tax rate		39.2	%	42.7	%
Income from continuing
operations	$	14,100	$	6,916	$	7,184	103.9	%
Income (loss) from discontinued
operations, net of income tax		(381)		2,235		(2,616)	NM
Net income	$	13,719	$	9,151	$	4,568	49.9	%
Diluted net income (loss) per
share:
Continuing operations	$	0.53	$	0.31	$	0.22	71.0	%
Discontinued operations		(0.01)		0.10		(0.11)	NM
Net income per share	$	0.52	$	0.41	$	0.11	26.8	%
Diluted shares outstanding		26,279		22,176		4,103	18.5	%
NM – not meaningful

Lithia Motors, Inc.
Key Performance Metrics(Unaudited)
Twelve Months Ended
		December 31,					Increase		% Increase
		2010		2009			(Decrease)		(Decrease)
Gross margin
New vehicle retail		8.2	%	8.4	%		(20) bps
Used vehicle retail		14.1		14.1			- bps
Used vehicle wholesale		0.6		0.6			- bps
Finance & insurance		100.0		100.0			- bps
Service, body & parts		48.2		47.6			60bps
Gross profit margin		17.9		19.0			(110) bps
Unit sales
New vehicle retail		33,701		29,316			4,385		15.0	%
Used vehicle retail		34,969		29,453			5,516		18.7
Used vehicle wholesale		14,365		13,623			742		5.4
Total units sold		83,035		72,392			10,643		14.7
Average selling price
New vehicle retail	$	31,680	$	30,063		$	1,617		5.4	%
Used vehicle retail		16,620		16,204			416		2.6
Used vehicle wholesale		7,526		5,337			2,189		41.0
Average gross profit per unit
New vehicle retail	$	2,593	$	2,538		$	55		2.2	%
Used vehicle retail		2,345		2,280			65		2.9
Used vehicle wholesale		45		30			15		50.0
Finance & insurance		977		960			17		1.8
Revenue mix
New vehicle retail		50.1	%	49.5	%
Used vehicle retail		27.3		26.8
Used vehicle wholesale		5.1		4.1
Finance & insurance, net		3.1		3.2
Service, body & parts		13.9		16.3
Fleet and other		0.5		0.1
		Adjusted					As reported
		Twelve Months Ended					Twelve Months Ended
		December 31,					December 31,
Other metrics		2010		2009			2010		2009
SG&A as a % of revenue		14.1	%	15.5	%		14.1	%	15.5	%
SG&A as a % of gross profit		78.4		81.1			78.8		81.6
Operating profit as a % of revenue		3.1		2.5			2.2		2.0
Operating profit as a % of gross profit		17.0		13.4			12.6		10.6
Pretax margin		1.9		1.1			1.1		0.7

Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
Twelve Months Ended
		December 31,					%
		2010		2009		Increase	Increase
Revenues
New vehicle retail	$	1,053,411	$	881,290	$	172,121	19.5	%
Used vehicle retail		568,532		476,395		92,137	19.3
Used vehicle wholesale		105,701		71,936		33,765	46.9
Finance and insurance		63,096		53,843		9,253	17.2
Service, body and parts		291,549		290,384		1,165	0.4
Gross profit
New vehicle retail		85,642		74,533		11,109	14.9	%
Used vehicle retail		80,118		65,565		14,553	22.2
Used vehicle wholesale		808		633		175	27.6
Finance and insurance		63,096		53,843		9,253	17.2
Service, body and parts		138,694		136,883		1,811	1.3
Unit sales
New vehicle retail		33,173		29,302		3,871	13.2	%
Used vehicle retail		34,173		29,386		4,787	16.3
Used vehicle wholesale		14,043		13,562		481	3.5
Total units sold		81,389		72,250		9,139	12.6
Average selling price
New vehicle retail	$	31,755	$	30,076	$	1,679	5.6	%
Used vehicle retail		16,637		16,212		425	2.6
Used vehicle wholesale		7,527		5,304		2,223	41.9
Average gross profit per unit
New vehicle retail	$	2,582	$	2,544	$	38	1.5	%
Used vehicle retail		2,344		2,231		113	5.1
Used vehicle wholesale		58		47		11	23.2
Finance & insurance		937		917		20	2.1

Lithia Motors, Inc.
Revenue Mix(Unaudited)
	Three months ended				Twelve months ended
	December 31,				December 31,
	2010		2009		2010		2009
New vehicle unit sales brand mix
Chrysler	29.2	%	23.0	%	28.4	%	29.1	%
General Motors	15.1		17.9		16.1		16.5
Toyota	13.8		16.5		13.5		15.1
Honda	8.7		9.5		8.6		8.8
Ford	5.8		5.8		5.8		5.0
Hyundai	5.1		3.8		5.7		5.0
Subaru	6.0		7.4		5.6		5.6
BMW	5.8		6.2		5.4		5.1
Volkswagen, Audi	3.5		3.4		3.6		3.2
Nissan	3.0		3.7		3.4		3.9
Kia	2.0		0.7		2.0		0.6
Mercedes	1.4		1.3		1.2		1.1
Other	0.6		0.8		0.7		1.0
	Three months ended				Twelve months ended
	December 31,				December 31,
	2010		2009		2010		2009
Revenue geographic mix
Texas	23.9	%	24.5	%	24.5	%	23.9	%
Oregon	15.6		15.5		15.0		16.4
California	10.9		11.6		11.2		11.6
Washington	10.2		10.7		10.1		10.0
Alaska	9.0		9.7		10.0		9.9
Montana	8.5		6.1		7.6		6.8
Iowa	7.3		7.7		7.1		7.2
Idaho	5.8		6.3		6.2		6.4
Nevada	4.4		4.1		4.2		4.0
North Dakota	2.4		2.1		2.2		1.9
New Mexico	1.1		0.9		1.0		1.1
Colorado	0.9		0.8		0.9		0.8
As of December 31, 2010

Current store count mix	# of stores	% of total
Chrysler	23	27.4	%
General Motors	12	14.3
Toyota	8	9.5
Honda	8	9.5
Hyundai	6	7.1
BMW	6	7.1
Ford	4	4.8
Volkswagen, Audi	4	4.8
Nissan	4	4.8
Other	4	4.8
Subaru	2	2.4
Kia	2	2.4
Mercedes	1	1.1

Lithia Motors, Inc.
Consolidated Balance Sheet(Unaudited)
(In thousands except per share data)
		December 31, 2010		December 31, 2009
Cash and cash equivalents	$	9,306	$	12,776
Trade receivables, net		75,011		52,097
Inventories, net		415,228		333,628
Other current assets		6,062		7,869
Deferred income taxes		2,937		-
Assets held for sale		-		11,693
Total current assets	$	508,544	$	418,063
Property and equipment, net		362,433		386,054
Goodwill		6,186		-
Franchise value		45,193		42,428
Other non-current assets		9,796		7,820
Deferred income taxes		39,524		40,735
Total assets	$	971,676	$	895,100
Floorplan notes payable		251,257		216,082
Current maturities of long-term debt		12,081		32,708
Trade payables		23,747		18,782
Accrued liabilities		58,784		47,519
Deferred income taxes		-		1,036
Liabilities related to assets held for sale		-		5,050
Total current liabilities	$	345,869	$	321,177
Long-term debt		268,693		233,065
Deferred revenue		20,158		17,981
Other long-term liabilities		16,739		15,839
Total liabilities	$	651,459	$	588,062
Class A common stock		284,807		280,880
Class B common stock		468		468
Additional paid-in capital		10,972		10,501
Other comprehensive income		(4,869)		(3,850)
Retained earnings		28,839		19,039
Total liabilities & shareholders' equity	$	971,676	$	895,100

Lithia Motors, Inc.
Summarized Cash Flow from Operations(Unaudited) (In thousands)

		Twelve Months Ended
		December 31,
		2010		2009
Net income	$	13,719	$	9,151
Adjustments to reconcile net income
to cash provided by (used in)
operating activities:
Asset impairments		15,301		8,272
Depreciation and amortization		17,586		18,821
Amortization of debt discount		-		48
Stock-based compensation		2,419		2,054
Gain on early extinguishment of debt		-		(1,317)
(Gain) loss on disposal of assets		194		(10,686)
Deferred income taxes		(2,131)		5,627
Excess tax deficit (benefit) from
share-based payment arrangements		(264)		45
(Increase) decrease, net of effect of
acquisitions and divestitures
Trade receivables, net		(22,881)		17,780
Inventories		(68,305)		120,785
Other current assets		(1,633)		15,992
Other non-current assets		(2,029)		(4,347)
Increase (decrease), net of effect of
acquisitions and divestitures
Floorplan notes payable		10,550		(179,893)
Trade payables		4,960		(2,789)
Accrued liabilities		10,029		(4,318)
Other long-term liabilities and
deferred revenue		1,155		14,714
Net cash provided by (used in)
operating activities	$	(21,330)	$	9,939

Lithia Motors, Inc.

Reconciliation of Non-GAAP Cash Flow from Operations(Unaudited) (In thousands)

		Twelve Months Ended
		December 31,
Net cash provided by (used in)
operating activities		2010		2009
As reported	$	(21,330)	$	9,939
Floorplan notes payable, non-
trade		24,090		31,417
Adjusted	$	2,760	$	41,356

Lithia Motors, Inc.
Other Highlights(Unaudited)
(In thousands except per share data)
	December		December
	31, 2010		31, 2009
Other information
Long-term debt/total capitalization(1)	45.6	%	43.2	%

⁽¹⁾Total capitalization is comprised of long-term debt and total shareholder’s equity.

Debt covenant ratios
		Requirement				As of December 31, 2010
Minimum tangible net worth		Not less than $200 million						$267.1 million
Vehicle equity		Not less than $65 million						$187.7 million
Fixed charge coverage ratio		Not less than 1.20 to 1						1.68to	1
Liabilities to tangible net worth ratio		Not more than 4.00 to 1						2.44 to	1
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures(Unaudited)
(In thousands)
		Three months ended				Twelve months ended
		December 31,				December 31,
		2010		2009		2010		2009
Selling, general & administrative
As reported	$	77,292	$	67,507	$	300,612	$	276,021
Impairments and disposal gain		48		-		413		-
Reserve adjustments		96		(454)		(1,238)		(454)
Adjusted	$	77,436	$	67,053	$	299,787	$	275,567
Income from operations
As reported	$	12,808	$	3,226	$	47,940	$	35,713
Impairments and disposal gain		502		(277)		14,954		7,842
Reserve adjustments		944		1,854		2,278		1,854
Adjusted	$	14,254	$	4,803	$	65,172	$	45,409
Income (loss) from continuing
operations before income taxes
As reported	$	6,950	$	(2,589)	$	23,193	$	12,078
Impairments and disposal gain		502		(277)		14,954		7,842
Reserve adjustments		944		1,854		2,278		1,854
Gain on extinguishment of debt		-		-		-		(1,317)
Adjusted	$	8,396	$	(1,012)	$	40,425	$	20,457

Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures(Unaudited)
(In thousands except per share data)
Adjusted net income/(loss) and diluted earnings per share
				Three Months Ended December 31,
		Net income/(loss)				Diluted earnings per share
		2010		2009		2010			2009
Continuing Operations
As reported	$	4,379	$	(1,814)	$	0.16		$	(0.07)
Impairments and disposal gain		401		(34)		0.02			-
Reserve adjustments		807		1,103		0.03			0.04
Adjusted	$	5,587	$	(745)	$	0.21		$	(0.03)
Discontinued Operations
As reported	$	-	$	260		$	-	$	0.01
Impairments and disposal (gain)
loss		-		(1,474)			-		(0.06)
Adjusted	$	-	$	(1,214)		$	-	$	(0.05)
Consolidated Operations
As reported	$	4,379	$	(1,554)	$	0.16		$	(0.06)
Adjusted		5,587		(1,959)		0.21			(0.08)
				Twelve Months Ended December 31,
		Net income/(loss)				Diluted earnings per share
		2010		2009		2010			2009
Continuing Operations
As reported	$	14,100	$	6,916	$	0.53		$	0.31
Impairments and disposal gain		9,178		4,967		0.35			0.22
Reserve adjustment		1,532		1,103		0.06			0.06
Gain on extinguishment of debt		-		(812)		-			(0.04)
Adjusted	$	24,810	$	12,174	$	0.94		$	0.55
Discontinued Operations
As reported	$	(381)	$	2,235	$	(0.01)		$	0.10
Impairments and disposal (gain)
loss		173		(6,589)		-			(0.30)
Adjusted	$	(208)	$	(4,354)	$	(0.01)		$	(0.20)
Consolidated Operations
As reported	$	13,719	$	9,151	$	0.52		$	0.41
Adjusted		24,602		7,820		0.93			0.35