Lithia Motors (LAD)

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits, was $14.8 million, $12.6 million and $11.7 million for the years ended December 31, 2008, 2007 and 2006, respectively. Manufacturer cooperative advertising credits were $3.8 million in 2008, $4.6 million in 2007 and $4.8 million in 2006.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits, was $17.4 million, $14.7 million and $13.8 million for the years ended December 31, 2008, 2007 and 2006, respectively. Manufacturer cooperative advertising credits were $4.3 million in 2008, $5.0 million in 2007 and $5.1 million in 2006.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits, was $17.4 million, $14.7 million and $13.8 million for the years ended December 31, 2008, 2007 and 2006, respectively. Manufacturer cooperative advertising credits were $4.3 million in 2008, $5.0 million in 2007 and $5.1 million in 2006.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits, was $17.4 million, $14.7 million and $13.8 million for the years ended December 31, 2008, 2007 and 2006, respectively. Manufacturer cooperative advertising credits were $4.3 million in 2008, $5.0 million in 2007 and $5.1 million in 2006.

Advertising

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $5.6 million, $6.0 million and $4.6 million, was $21.3 million, $20.1 million and $17.9 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Advertising

FACE="Times New Roman" SIZE="2">We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $5.6 million,
$6.0 million and $4.6 million, was $21.3 million, $20.1 million and $17.9 million for the years ended December 31, 2007, 2006 and 2005, respectively.

FACE="Times New Roman" SIZE="2">Environmental Liabilities and Expenditures

Accruals for environmental matters, if any, are
recorded in operating expenses when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Accrued liabilities are exclusive of claims against third parties and are not discounted.

In general, on going costs related to environmental remediation are charged to expense. Environmental costs are capitalized if such costs increase the
value of the property and/or mitigate or prevent contamination from future operations.

We are aware of limited contamination at certain of
our current and former facilities, and are in the process of conducting investigations and/or remediation at some of these properties. Based on our current information, we do not believe that any costs or liabilities relating to such contamination,
other environmental matters or compliance with environmental regulations will have a material adverse effect on our cash flows, results of operations or financial condition. There can be no assurances, however, that additional environmental matters
will not arise or that new conditions or facts will not develop in the future at our current or formerly owned or operated facilities, or at sites that we may acquire in the future, that will result in a material adverse effect on our cash flows,
results of operations or financial condition.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $6.6 million, $5.2 million and $6.3 million, was $20.7 million, $18.7 million and $16.8 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $5.2 million, $6.3 million and $5.9 million, was $19.3 million, $17.4 million and $19.4 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $5.2 million, $6.3 million and $5.9 million, was $19.3 million, $17.4 million and $19.4 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Advertising

We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Advertising expense, net of manufacturer cooperative advertising credits of $6.5 million, $6.1 million and $8.2 million, was $18.3 million, $20.1 million and $16.8 million for the years ended December 31, 2004, 2003 and 2002, respectively.