Group 1 Automotive Announces Second Quarter 2018 Financial Results

Transcription

1 FOR IMMEDIATE RELEASE Group 1 Automotive Announces Second Quarter 2018 Financial Results Record Results Driven by Company-Wide Focus on Used Vehicles and Strong Cost Control HOUSTON, July 26, 2018 Group 1 Automotive, Inc. (NYSE: GPI), ( Group 1 or the Company ), an international, Fortune 500 automotive retailer, today reported 2018 second quarter net income of $56.5 million, diluted earnings per common share of $2.72, adjusted net income (a non-gaap measure) of $50.8 million, and adjusted diluted earnings per common share (a non-gaap measure) of $2.45. Second quarter 2018 adjusted net income and diluted earnings per share exclude approximately $5.7 million net aftertax adjustments, or $0.27 per common share. These adjustments consisted of a net gain on real estate and dealership transactions, which was approximately $15.2 million, or $0.73 per common share, partially offset by the impact of catastrophic events of $4.4 million, or $0.21 per common share; non-cash asset impairments of $3.2 million, or $0.15 per common share; and legal settlements of approximately $2.0 million, or $0.10 per common share. We delivered a solid quarter, reflecting a relatively strong U.S. vehicle market in June, favorable overall performance in the U.K., a corporate-wide focus on our used vehicle business, and a major cost reduction initiative in both the U.S. and the U.K. early this year that began to pay dividends this quarter, said Earl J. Hesterberg, Group 1 s president and chief executive officer. These results demonstrate our ability to grow earnings in a flat retail sales environment. In addition, during the quarter, the Company has launched a renewed focus on capital deployment, with an emphasis on actions, such as disposal of underperforming assets, more stringent control of capital expenditures, and enhanced share repurchases, targeted at delivering improved shareholder value. Actions taken this quarter include the disposal of a large underperforming dealership and a stepped-up pace of share repurchases. Consolidated Results for Second Quarter 2018 (year-over-year comparable basis) For ease of comparison, we have included constant currency metrics (a non-gaap measure) both below (shown in parenthesis) and in the financial tables that follow: Total revenue grew 10.2 percent (9.2 percent) to $2.9 billion. Total gross profit grew 8.2 percent (7.5 percent), to $438.2 million. New vehicle revenues increased 7.4 percent (6.6 percent) on 6.3 percent higher unit sales. New vehicle gross profit improved 2.2 percent (1.8 percent), to $76.6 million. Retail used vehicle revenues increased 19.8 percent (18.4 percent) on 18.8 percent higher unit sales. Retail used vehicle gross profit increased 14.0 percent (12.7 percent), to $51.2 million. Total used vehicle gross profit was up 15.3 percent (14.1 percent), to $51.5 million. In the U.S., the Val-u-Line initiative the Company launched last quarter has continued to build momentum, with Same Store used retail unit sales increasing 11 percent, and Val-u-Line units growing to 10 percent of the mix. Parts and service gross profit increased 9.1 percent (8.3 percent) on revenue growth of 8.0 percent (7.4 percent). Same Store parts and service gross profit increased 3.2 percent (2.7 percent) on Same Store parts and service revenue growth of 2.4 percent (2.0 percent). Finance and Insurance (F&I) gross profit per retail unit (PRU) decreased 3.4 percent (decreased 3.9 percent), to $1,412 and total F&I gross profit increased $8.6 million, or 8.1 percent (7.5 percent). Selling, General and Administrative (SG&A) expenses as a percent of gross profit improved 340 basis points, to 70.3 percent. Adjusted Same Store SG&A as a percent of gross profit improved 110 basis points, to 72.3 percent, reflecting strong improvements in all three of our markets. Page 1 of 35

2 Group 1 Automotive, Inc. Provision for income taxes declined 17.0 percent, to $18.7 million, or to approximately 24.9 percent of income before income taxes, primarily reflecting the impact of the U.S. Tax Reform Bill that reduced the U.S. corporate income tax rate. Segment Results for Second Quarter 2018 (year-over-year comparable basis) United States: The Company s U.S. operations accounted for 73.7 percent of total revenues and 80.0 percent of total gross profit. Total U.S. revenues were $2.2 billion, an increase of 2.1 percent, driven by increases in used retail (up 10.4 percent), F&I revenue (up 3.1 percent), and parts and service (up 2.2 percent). F&I gross profit PRU decreased $33, or 2.0 percent per unit, to $1,655; and total gross profit grew 3.0 percent, to $350.7 million. We were pleased with our used car performance and cost control in the U.S. in the second quarter. Same Store used vehicle retail unit sales were up 11 percent and total used vehicle gross profit increased six percent. Total Same Store gross profit increased one percent, which when coupled with strong cost control, evidenced by adjusted SG&A leverage of 110 basis points, drove improved bottom-line results. Same Store adjusted operating income increased five percent and adjusted operating margin improved 20 basis points to 4.2 percent, said Daryl Kenningham, Group 1 s president of U.S. operations. New vehicle retail gross profit PRU was roughly flat with a slight increase of $4, to $1,855. Total used vehicle gross profit PRU increased $69, to $1,128, reflecting the impact of the used vehicle initiatives we launched last quarter, which drove a shift of over 2,000 units from low-margin wholesale to higher margin retail sales. SG&A expenses as a percent of gross profit improved 480 basis points, to 66.8 percent; and operating margin increased 60 basis points, to 4.6 percent. Adjusted SG&A expenses as a percent of gross profit improved 110 basis points, to 70.3 percent. United Kingdom: The Company s U.K. operations accounted for 22.7 percent of total revenues and 17.1 percent of total gross profit. Total U.K. revenues increased 52.6 percent (43.6 percent), to $666.9 million, driven by double-digit revenue growth across each business segment. Same Store U.K. revenues grew 13.6 percent (6.9 percent), to $493.1 million, and new vehicle units sold increased 7.2 percent, despite the industry growing only 2.4 percent. Total gross profit increased 46.9 percent (38.3 percent), to $74.8 million, with Same Store gross profit increasing 12.6 percent (6.1 percent), to $57.1 million. This growth was driven by strong improvements of 16.8 percent (10 percent) in Same Store parts and service gross profit, as well as double-digit growth in F&I and used retail gross. SG&A expenses as a percent of gross profit improved 20 basis points, to 83.2 percent; and operating margin decreased 10 basis points, to 1.4 percent. Adjusted Same Store SG&A expenses as a percent of gross profit improved 140 basis points, to 81.1 percent; and Same Store operating margin increased 10 basis points, to 1.7 percent. Brazil: The Company s Brazilian operations were approximately breakeven during the second quarter and accounted for 3.6 percent of total revenues and 2.9 percent of total gross profit as a trucking strike in May negatively impacted results. The Company s Same Store new vehicle revenue grew 1.7 percent on a constant currency basis, with units down 5.4 percent. On a Same Store constant currency basis, total revenues grew 5.0 percent, driven by revenue growth of the aforementioned 1.7 percent in new vehicles, 16.5 percent in total used vehicles, 2.7 percent in parts & service, and 5.1 percent in F&I. SG&A expenses as a percent of gross profit increased 10 basis points, to 91.1 percent. Adjusted Same Store SG&A expenses as a percent of gross profit decreased 280 basis points, to 86.6 percent Page 2 of 35

3 Group 1 Automotive, Inc. Share Repurchase Authorization During the second quarter of 2018, the Company repurchased 610,752 shares at an average price per common share of $68.90, for a total of $42.1 million. In July 2018, the Company repurchased an additional 367,773 shares at an average price per common share of $67.98, for a total of $25.0 million. Year-to-date through July 25, 2018, the Company has repurchased 1,114,130 shares at an average price per common share of $68.46, for a total of $76.3 million. These repurchases represent approximately 5.5 percent of the Company s share float at the beginning of the year. As of July 25, 2018, the Company has $73.4 million remaining on its Board authorized common stock share repurchase program. Future repurchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions, and subject to Board approval and covenant restrictions. Corporate Development As previously announced, the Company acquired Toyota Alpha Trevo Automóveis Ltda in western São Paulo, Brazil in April 2018, which will operate as T-Drive Toyota Alphaville, and is expected to generate approximately $45 million in annualized revenues. This acquisition provides the opportunity to both increase scale in a growing market and further expand the Company s Toyota presence with additional open points to be announced at a future date. Additionally, the Company is pleased to announce the relocation of Honda São Bernardo do Campo to a new facility. The facility is owned by the Company and will enable significant uplift in new, used and aftersales business. In June 2018, the Company disposed of 3 franchises, which included a BMW franchise in Kentish Town in the U.K., as well as a Mercedes-Benz franchise and Sprinter franchise in Escondido, California. These three stores generated approximately $115 million in trailing-twelve-month revenues. Year-to-date 2018, the Company has acquired a total of 12 franchises, which are expected to generate an estimated $405 million in annual revenues; and the Company has disposed of three aforementioned franchises. Second Quarter 2018 Earnings Conference Call Details Group 1 s senior management will host a conference call today at 10 a.m. ET to discuss the second quarter financial results and the Company s outlook and strategy. The conference call will be simulcast live on the Internet at then click on Investor Relations and then Events or through this link: A webcast replay will be available for 30 days. The conference call will also be available live by dialing in 15 minutes prior to the start of the call at: Domestic: International: Conference ID: A telephonic replay will be available following the call through August 2, 2018 by dialing: Domestic: International: Replay ID: ABOUT GROUP 1 AUTOMOTIVE, INC. Group 1 owns and operates 180 automotive dealerships, 236 franchises, and 48 collision centers in the United States, the United Kingdom and Brazil that offer 32 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts. Page 3 of 35

4 Group 1 Automotive, Inc. Investors please visit and where Group 1 discloses additional information about the Company, its business, and its results of operations. FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often 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, should, foresee, may or will and similar expressions. While management believes that these forwardlooking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. NON-GAAP FINANCIAL MEASURES In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering alternative financial measures not prepared in accordance with GAAP. This includes evaluating measures such as adjusted selling, general and administrative expenses, adjusted net income and adjusted diluted earnings per share. These adjusted measures are not measures of financial performance under U.S. GAAP, but are instead considered non-gaap financial performance measures. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-gaap financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. We caution investors not to place undue reliance on such non-gaap measures, but also to consider them with the most directly comparable GAAP measures. In our evaluation of results from time to time, we exclude items that do not arise directly from core operations, such as noncash asset impairment charges, gains and losses on dealership franchise or real estate transactions, and catastrophic weather events such as hail storms, hurricanes, and snow storms. Because these non-core charges and gains materially affect the Company's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-gaap measures excluding such items. In addition to using such non-gaap measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-overperiod historical basis and a better indication of expected future trends. Our management also uses these adjusted measures in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non- GAAP measures, and the related reconciliations, because we believe investors use these metrics in evaluating longerterm period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. The exclusion of certain expenses in the calculation of non-gaap Page 4 of 35

5 Group 1 Automotive, Inc. financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-gaap financial measures. In addition, we evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-gaap measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than United States dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. SOURCE: Group 1 Automotive, Inc. Investor contacts: Sheila Roth Manager, Investor Relations Group 1 Automotive, Inc sroth@group1auto.com Media contacts: Pete DeLongchamps Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs Group 1 Automotive, Inc pdelongchamps@group1auto.com or Clint Woods Pierpont Communications, Inc cwoods@piercom.com Page 5 of 35

6 Group 1 Automotive, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) REVENUES: Three Months Ended June 30, New vehicle retail sales $ 1,555,570 $ 1,448, Used vehicle retail sales 821, , Used vehicle wholesale sales 92,854 99,377 (6.6) Parts and service 358, , Finance, insurance and other, net 115, , Total revenues 2,943,462 2,672, COST OF SALES: New vehicle retail sales 1,478,988 1,373, Used vehicle retail sales 770, , Used vehicle wholesale sales 92,613 99,644 (7.1) Parts and service 163, , Total cost of sales 2,505,299 2,267, GROSS PROFIT 438, , SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 308, , DEPRECIATION AND AMORTIZATION EXPENSE 16,638 14, ASSET IMPAIRMENTS 4, OPERATING INCOME 109,165 92, OTHER EXPENSE: Floorplan interest expense (14,563) (13,226) 10.1 Other interest expense, net (19,414) (17,315) 12.1 INCOME BEFORE INCOME TAXES 75,188 61, PROVISION FOR INCOME TAXES (18,725) (22,557) (17.0) NET INCOME $ 56,463 $ 39, Less: Earnings allocated to participating securities $ 1,916 $ 1, Earnings available to diluted common shares $ 54,547 $ 37, DILUTED EARNINGS PER SHARE $ 2.72 $ Weighted average dilutive common shares outstanding 20,046 20,522 (2.3) Weighted average participating securities (7.0) Total weighted average shares outstanding 20,754 21,283 (2.5) Page 6 of 35

7 REVENUES: Six Months Ended June 30, New vehicle retail sales $ 3,069,160 $ 2,785, Used vehicle retail sales 1,602,423 1,346, Used vehicle wholesale sales 196, ,534 (3.3) Parts and service 707, , Finance, insurance and other, net 227, , Total revenues 5,803,488 5,191, COST OF SALES: New vehicle retail sales 2,917,151 2,641, Used vehicle retail sales 1,507,714 1,256, Used vehicle wholesale sales 194, ,701 (4.3) Parts and service 325, , Total cost of sales 4,945,562 4,402, GROSS PROFIT 857, , SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 632, , DEPRECIATION AND AMORTIZATION EXPENSE 32,980 27, ASSET IMPAIRMENTS 4, OPERATING INCOME 188, , OTHER EXPENSE: Floorplan interest expense (28,650) (25,168) 13.8 Other interest expense, net (38,234) (34,314) 11.4 INCOME BEFORE INCOME TAXES 121, , PROVISION FOR INCOME TAXES (29,078) (39,814) (27.0) NET INCOME $ 92,277 $ 73, Less: Earnings allocated to participating securities $ 3,123 $ 2, Earnings available to diluted common shares $ 89,154 $ 70, DILUTED EARNINGS PER SHARE $ 4.42 $ Weighted average dilutive common shares outstanding 20,176 20,609 (2.1) Weighted average participating securities (9.8) Total weighted average shares outstanding 20,888 21,398 (2.4) Page 7 of 35

8 Group 1 Automotive, Inc. Consolidated Balance Sheets (Unaudited) (Dollars in thousands) ASSETS: June 30, 2018 December 31, 2017 CURRENT ASSETS: Cash and cash equivalents $ 41,575 $ 28, Contracts in transit and vehicle receivables, net 249, ,433 (18.5) Accounts and notes receivable, net 178, ,611 (5.4) Inventories, net 1,721,249 1,763,293 (2.4) Prepaid expenses and other current assets 80,957 42, Total current assets 2,271,826 2,329,186 (2.5) PROPERTY AND EQUIPMENT, net 1,348,521 1,318, GOODWILL AND INTANGIBLE FRANCHISE RIGHTS 1,233,201 1,198, OTHER ASSETS 33,194 24, Total assets $ 4,886,742 $ 4,871, LIABILITIES AND STOCKHOLDERS' EQUITY: CURRENT LIABILITIES: Floorplan notes payable - credit facility and other $ 1,147,892 $ 1,240,695 (7.5) Offset account related to floorplan notes payable - credit facility (119,562) (86,547) 38.1 Floorplan notes payable - manufacturer affiliates 404, , Offset account related to floorplan notes payable - manufacturer affiliates (24,500) (22,500) 8.9 Current maturities of long-term debt and short-term financing 76,412 77,609 (1.5) Current liabilities from interest rate risk management activities 682 1,996 (65.8) Accounts payable 442, , Accrued expenses 189, , Total current liabilities 2,116,761 2,198,487 (3.7) 5.00% SENIOR NOTES (principal of $550,000 at June 30, 2018 and December 31, 2017, respectively) 542, , % SENIOR NOTES (principal of $300,000 at June 30, 2018 and December 31, 2017, respectively) 296, , ACQUISITION LINE 39,636 26, REAL ESTATE RELATED AND OTHER LONG-TERM DEBT, net of current maturities 419, , CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities 59,610 47, DEFERRED INCOME TAXES 138, , LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES 1,597 8,583 (81.4) OTHER LIABILITIES 99,296 97, STOCKHOLDERS' EQUITY: Common stock Additional paid-in capital 288, ,461 (1.0) Retained earnings 1,339,185 1,246, Accumulated other comprehensive loss (126,358) (123,226) 2.5 Treasury stock (328,962) (290,531) 13.2 Total stockholders' equity 1,172,612 1,124, Total liabilities and stockholders' equity $ 4,886,742 $ 4,871, Page 8 of 35

9 NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: Region Geographic Market Group 1 Automotive, Inc. Additional Information - Consolidated (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2018 (%) 2017 (%) 2018 (%) 2017 (%) United States Texas California Oklahoma Massachusetts Georgia Florida Louisiana New Hampshire New Jersey South Carolina Kansas Mississippi Alabama Maryland New Mexico International United Kingdom Brazil NEW VEHICLE UNIT SALES BRAND MIX: Toyota/Scion/Lexus Volkswagen/Audi/Porsche BMW/MINI Ford/Lincoln Honda/Acura Nissan Chevrolet/GMC/Buick/Cadillac Mercedes-Benz/smart/Sprinter Chrysler/Dodge/Jeep/RAM Hyundai/Kia Jaguar/Land Rover Other Page 9 of 35

10 Group 1 Automotive, Inc. Additional Information - U.S. (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended June 30, REVENUES: New vehicle retail sales $ 1,146,882 $ 1,143, Used vehicle retail sales 592, , Used vehicle wholesale sales 42,781 66,476 (35.6) Total used 634, , Parts and service 288, , Finance, insurance and other, net 97,442 94, Total $ 2,168,001 $ 2,123, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 56,358 $ 57,000 (1.1) Used vehicle retail sales 38,809 36, Used vehicle wholesale sales 1, Total used 40,362 36, Parts and service 156, , Finance, insurance and other, net 97,442 94, Total $ 350,670 $ 340, UNITS SOLD: Retail new vehicles sold 30,388 30,802 (1.3) Retail used vehicles sold 28,484 25, Wholesale used vehicles sold 7,292 9,701 (24.8) Total used 35,776 34, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 37,741 $ 37, Used vehicle retail $ 20,784 $ 21,276 (2.3) GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,855 $ 1, Used vehicle retail sales 1,362 1,456 (6.5) Used vehicle wholesale sales Total used 1,128 1, Finance, insurance and other, net (per retail unit) $ 1,655 $ 1,688 (2.0) OTHER: SG&A expenses $ 234,279 $ 243,844 (3.9) Adjusted SG&A expenses (1) $ 246,586 $ 243, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (12,809) $ (12,062) 6.2 Floorplan assistance 11,206 11,452 (2.1) Net floorplan expense $ (1,603) $ (610) Other interest expense, net $ (17,332) $ (16,572) 4.6 (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 10 of 35

11 Six Months Ended June 30, REVENUES: New vehicle retail sales $ 2,236,835 $ 2,162, Used vehicle retail sales 1,155,837 1,058, Used vehicle wholesale sales 96, ,021 (29.4) Total used 1,252,620 1,195, Parts and service 573, , Finance, insurance and other, net 193, , Total $ 4,256,487 $ 4,091, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales 3.1 (0.1) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 109,493 $ 108, Used vehicle retail sales 72,294 74,636 (3.1) Used vehicle wholesale sales 2,987 (116) 2,675.0 Total used 75,281 74, Parts and service 307, , Finance, insurance and other, net 193, , Total $ 686,355 $ 661, UNITS SOLD: Retail new vehicles sold 59,061 58, Retail used vehicles sold 55,794 50, Wholesale used vehicles sold 16,675 19,682 (15.3) Total used 72,469 69, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 37,873 $ 37, Used vehicle retail $ 20,716 $ 21,107 (1.9) GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,854 $ 1,856 (0.1) Used vehicle retail sales 1,296 1,489 (13.0) Used vehicle wholesale sales 179 (6) 3,083.3 Total used 1,039 1,067 (2.6) Finance, insurance and other, net (per retail unit) $ 1,686 $ 1, OTHER: SG&A expenses $ 487,220 $ 480, Adjusted SG&A expenses (1) $ 499,527 $ 481, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (25,146) $ (22,940) 9.6 Floorplan assistance 21,956 21, Net floorplan expense $ (3,190) $ (1,204) Other interest expense, net $ (34,348) $ (32,844) 4.6 (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 11 of 35

12 Group 1 Automotive, Inc. Additional Information - U.K. (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 338,635 $ 231, Used vehicle retail sales 208, , Used vehicle wholesale sales 46,527 30, Total used 254, , Parts and service 57,996 37, Finance, insurance and other, net 15,617 9, Total $ 666,883 $ 437, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales (3.0) (2.3) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 15,907 $ 13, Used vehicle retail sales 11,103 6, Used vehicle wholesale sales (1,378) (715) (92.7) (82.7) Total used 9,725 5, Parts and service 33,555 21, Finance, insurance and other, net 15,617 9, Total $ 74,804 $ 50, UNITS SOLD: Retail new vehicles sold 10,914 7, Retail used vehicles sold 8,501 5, Wholesale used vehicles sold 5,955 4, Total used 14,456 9, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 31,028 $ 29, (0.4) Used vehicle retail $ 24,480 $ 22, GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,457 $ 1,741 (16.3) (20.8) Used vehicle retail sales 1,306 1, Used vehicle wholesale sales (231) (173) (33.5) (26.9) Total used Finance, insurance and other, net (per retail unit) $ 804 $ OTHER: SG&A expenses $ 62,258 $ 42, Adjusted SG&A expenses (1) $ 62,258 $ 42, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (1,617) $ (1,053) Floorplan assistance Net floorplan expense $ (1,377) $ (833) Other interest expense, net $ (1,790) $ (684) (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 12 of 35

13 Six Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 693,039 $ 490, Used vehicle retail sales 400, , Used vehicle wholesale sales 92,712 60, Total used 493, , Parts and service 111,137 73, Finance, insurance and other, net 29,880 18, Total $ 1,327,425 $ 887, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales (1.4) (0.8) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 34,418 $ 28, Used vehicle retail sales 19,663 12, Used vehicle wholesale sales (1,308) (504) (159.5) (150.8) Total used 18,355 11, Parts and service 63,602 42, Finance, insurance and other, net 29,880 18, Total $ 146,255 $ 101, UNITS SOLD: Retail new vehicles sold 21,364 16, Retail used vehicles sold 16,336 11, Wholesale used vehicles sold 11,542 8, Total used 27,878 19, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 32,440 $ 28, Used vehicle retail $ 24,526 $ 21, GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,611 $ 1,664 (3.2) (11.5) Used vehicle retail sales 1,204 1, Used vehicle wholesale sales (113) (61) (85.2) (80.5) Total used Finance, insurance and other, net (per retail unit) $ 793 $ OTHER: SG&A expenses $ 121,854 $ 84, Adjusted SG&A expenses (1) $ 121,854 $ 83, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (3,131) $ (2,087) Floorplan assistance Net floorplan expense $ (2,605) $ (1,638) Other interest expense, net $ (3,322) $ (1,265) (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 13 of 35

14 Group 1 Automotive, Inc. Additional Information - Brazil (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 70,053 $ 73,582 (4.8) 6.2 Used vehicle retail sales 21,738 21, Used vehicle wholesale sales 3,546 2, Total used 25,284 23, Parts and service 11,244 11,883 (5.4) 5.8 Finance, insurance and other, net 1,997 2,134 (6.4) 4.6 Total $ 108,578 $ 111,402 (2.5) 8.8 GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 4,317 $ 4, Used vehicle retail sales 1,302 1,530 (14.9) (4.9) Used vehicle wholesale sales (67.3) (66.7) Total used 1,368 1,732 (21.0) (12.2) Parts and service 5,007 5,454 (8.2) 2.6 Finance, insurance and other, net 1,997 2,134 (6.4) 4.6 Total $ 12,689 $ 13,487 (5.9) 5.0 UNITS SOLD: Retail new vehicles sold 2,169 2,180 (0.5) Retail used vehicles sold 1, Wholesale used vehicles sold Total used 1,345 1, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 32,297 $ 33,753 (4.3) 6.8 Used vehicle retail $ 21,249 $ 21,609 (1.7) 9.7 GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,990 $ 1, Used vehicle retail sales 1,273 1,549 (17.8) (8.2) Used vehicle wholesale sales (75.9) (75.5) Total used 1,017 1,414 (28.1) (20.0) Finance, insurance and other, net (per retail unit) $ 626 $ 674 (7.1) 3.8 OTHER: SG&A expenses $ 11,555 $ 12,268 (5.8) 5.3 Adjusted SG&A expenses (1) $ 11,005 $ 12,268 (10.3) 0.1 SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (137) $ (111) Floorplan assistance Net floorplan expense $ (137) $ (111) Other interest expense, net $ (292) $ (59) (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 14 of 35

15 Six Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 139,286 $ 133, Used vehicle retail sales 45,929 44, Used vehicle wholesale sales 7,388 5, Total used 53,317 50, Parts and service 23,104 23,641 (2.3) 5.0 Finance, insurance and other, net 3,869 4,121 (6.1) 1.3 Total $ 219,576 $ 212, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 8,098 $ 7, Used vehicle retail sales 2,752 3,174 (13.3) (7.0) Used vehicle wholesale sales (52.1) (50.7) Total used 2,969 3,627 (18.1) (12.4) Parts and service 10,380 10,587 (2.0) 5.2 Finance, insurance and other, net 3,869 4,121 (6.1) 1.3 Total $ 25,316 $ 26,119 (3.1) 4.2 UNITS SOLD: Retail new vehicles sold 4,236 3, Retail used vehicles sold 2,094 2, Wholesale used vehicles sold Total used 2,773 2, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 32,881 $ 33,866 (2.9) 4.4 Used vehicle retail $ 21,934 $ 22,324 (1.7) 5.4 GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,912 $ 1,969 (2.9) 4.7 Used vehicle retail sales 1,314 1,576 (16.6) (10.5) Used vehicle wholesale sales (56.5) (55.3) Total used 1,071 1,379 (22.3) (16.9) Finance, insurance and other, net (per retail unit) $ 611 $ 691 (11.6) (4.5) OTHER: SG&A expenses $ 23,365 $ 24,150 (3.3) 4.0 Adjusted SG&A expenses (1) $ 22,815 $ 24,150 (5.5) 1.3 SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (373) $ (141) Floorplan assistance Net floorplan expense $ (373) $ (141) Other interest expense, net $ (564) $ (205) (1) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 15 of 35

16 Group 1 Automotive, Inc. Additional Information - Consolidated (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 1,555,570 $ 1,448, Used vehicle retail sales 821, , Used vehicle wholesale sales 92,854 99,377 (6.6) (8.9) Total used 914, , Parts and service 358, , Finance, insurance and other, net 115, , Total $ 2,943,462 $ 2,672, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales 0.3 (0.3) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 76,582 $ 74, Used vehicle retail sales 51,214 44, Used vehicle wholesale sales 241 (267) Total used 51,455 44, Parts and service 195, , Finance, insurance and other, net 115, , Total $ 438,163 $ 404, UNITS SOLD: Retail new vehicles sold 43,471 40, Retail used vehicles sold 38,008 32, Wholesale used vehicles sold 13,569 14,075 (3.6) Total used 51,577 46, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 35,784 $ 35, Used vehicle retail $ 21,623 $ 21, (0.3) GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,762 $ 1,833 (3.9) (4.3) Used vehicle retail sales 1,347 1,403 (4.0) (5.1) Used vehicle wholesale sales 18 (19) Total used Finance, insurance and other, net (per retail unit) $ 1,412 $ 1,461 (3.4) (3.9) OTHER: SG&A expenses $ 308,092 $ 298, Adjusted SG&A expenses (1) $ 319,849 $ 297, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (14,563) $ (13,226) Floorplan assistance 11,447 11,672 (1.9) (2.1) Net floorplan expense $ (3,116) $ (1,554) Other interest expense, net $ (19,414) $ (17,315) (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 16 of 35

17 Six Months Ended June 30, Constant Currency (1) REVENUES: New vehicle retail sales $ 3,069,160 $ 2,785, Used vehicle retail sales 1,602,423 1,346, Used vehicle wholesale sales 196, ,534 (3.3) (6.8) Total used 1,799,306 1,550, Parts and service 707, , Finance, insurance and other, net 227, , Total $ 5,803,488 $ 5,191, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales 1.0 (0.1) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 152,009 $ 144, Used vehicle retail sales 94,709 89, Used vehicle wholesale sales 1,896 (167) 1, ,266.5 Total used 96,605 89, Parts and service 381, , Finance, insurance and other, net 227, , Total $ 857,926 $ 788, UNITS SOLD: Retail new vehicles sold 84,661 79, Retail used vehicles sold 74,224 63, Wholesale used vehicles sold 28,896 28, Total used 103,120 92, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 36,252 $ 35, Used vehicle retail $ 21,589 $ 21, GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,796 $ 1,821 (1.4) (2.9) Used vehicle retail sales 1,276 1,414 (9.8) (11.2) Used vehicle wholesale sales 66 (6) 1, ,254.7 Total used (3.8) (5.2) Finance, insurance and other, net (per retail unit) $ 1,431 $ 1, (0.5) OTHER: SG&A expenses $ 632,439 $ 588, Adjusted SG&A expenses (1) $ 644,196 $ 589, SG&A as % revenues Adjusted SG&A as % revenues (1) SG&A as % gross profit Adjusted SG&A as % gross profit (1) Operating margin % Adjusted operating margin % (1) Pretax margin % Adjusted pretax margin % (1) INTEREST EXPENSE: Floorplan interest expense $ (28,650) $ (25,168) Floorplan assistance 22,482 22, Net floorplan expense $ (6,168) $ (2,983) Other interest expense, net $ (38,234) $ (34,314) (1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 17 of 35

18 REVENUES: Group 1 Automotive, Inc. Additional Information - Same Store U.S. (1) (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended June 30, New vehicle retail sales $ 1,121,138 $ 1,139,798 (1.6) Used vehicle retail sales 579, , Used vehicle wholesale sales 41,158 66,187 (37.8) Total used 620, , Parts and service 284, , Finance, insurance and other, net 95,298 93, Total $ 2,121,904 $ 2,116, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 54,648 $ 56,783 (3.8) Used vehicle retail sales 37,716 36, Used vehicle wholesale sales 1, Total used 39,277 36, Parts and service 154, , Finance, insurance and other, net 95,298 93, Total $ 343,311 $ 338, UNITS SOLD: Retail new vehicles sold 29,830 30,730 (2.9) Retail used vehicles sold 27,971 25, Wholesale used vehicles sold 7,133 9,681 (26.3) Total used 35,104 34, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 37,584 $ 37, Used vehicle retail $ 20,729 $ 21,254 (2.5) GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,832 $ 1,848 (0.9) Used vehicle retail sales 1,348 1,456 (7.4) Used vehicle wholesale sales Total used 1,119 1, Finance, insurance and other, net (per retail unit) $ 1,649 $ 1,680 (1.8) OTHER: SG&A expenses $ 249,033 $ 242, Adjusted SG&A expenses (2) $ 241,221 $ 241,916 (0.3) SG&A as % revenues Adjusted SG&A as % revenues (2) SG&A as % gross profit Adjusted SG&A as % gross profit (2) Operating margin % Adjusted operating margin % (2) (1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office. (2) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 18 of 35

19 REVENUES: Six Months Ended June 30, New vehicle retail sales $ 2,189,357 $ 2,158, Used vehicle retail sales 1,133,549 1,056, Used vehicle wholesale sales 93, ,732 (31.3) Total used 1,227,487 1,193, Parts and service 564, , Finance, insurance and other, net 189, , Total $ 4,171,191 $ 4,083, GROSS MARGIN %: New vehicle retail sales Used vehicle retail sales Used vehicle wholesale sales 3.2 (0.1) Total used Parts and service Finance, insurance and other, net Total GROSS PROFIT: New vehicle retail sales $ 106,718 $ 107,991 (1.2) Used vehicle retail sales 70,744 74,579 (5.1) Used vehicle wholesale sales 2,986 (90) 3,417.8 Total used 73,730 74,489 (1.0) Parts and service 302, , Finance, insurance and other, net 189, , Total $ 672,896 $ 659, UNITS SOLD: Retail new vehicles sold 57,980 58,228 (0.4) Retail used vehicles sold 54,829 50, Wholesale used vehicles sold 16,356 19,662 (16.8) Total used 71,185 69, AVERAGE RETAIL SALES PRICE: New vehicle retail $ 37,761 $ 37, Used vehicle retail $ 20,674 $ 21,096 (2.0) GROSS PROFIT PER UNIT SOLD: New vehicle retail sales $ 1,841 $ 1,855 (0.8) Used vehicle retail sales 1,290 1,489 (13.4) Used vehicle wholesale sales 183 (5) 3,760.0 Total used 1,036 1,068 (3.0) Finance, insurance and other, net (per retail unit) $ 1,679 $ 1, OTHER: SG&A expenses $ 496,645 $ 478, Adjusted SG&A expenses (2) $ 488,833 $ 479, SG&A as % revenues Adjusted SG&A as % revenues (2) SG&A as % gross profit Adjusted SG&A as % gross profit (2) Operating margin % Adjusted operating margin % (2) (1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office. (2) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-gaap financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP. Page 19 of 35