VALUE DRIVEN Second-Quarter Financial Results and Overview. Copyright 2012 Group 1 Automotive, Inc. All rights reserved.

Transcription

1 VALUE DRIVEN 2012 Second-Quarter Financial Results and Overview Copyright 2012 Group 1 Automotive, Inc. All rights reserved. Updated: August 13, 2012

2 Safe Harbor This presentation 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. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. 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. 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 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. Group 1 Automotive, Inc. 2 RS_12Q2_v2.pptx

3 Group 1 Updates Adjusting 2012 Full-Year SAAR Estimate to 14.2 Million from 14.5 Million Reflecting Recent Run Rate Increasing CapEx Spend to $63 Million from <$55 Million Driven by Incremental Parts & Service and Dealership Expansion Opportunities Consolidating Accounting Support Services Group 1 Automotive, Inc. 3 RS_12Q2_v2.pptx

4 2Q12 Best-Ever Quarter Revenues $1.9 Billion is Best-Ever Quarter Gross Profit $285.3 Million is Best-Ever Quarter Finance and Insurance Gross Profit PRU $1,191 is Best-Ever Quarter SAAR 2Q12: 14.1 Million vs. Last Record Quarter for Net Income 3Q06: 16.6 Million Adjusted Net Income $29.7 Million is Best-Ever Quarter Adjusted Diluted Earnings Per Common Share $1.25 is Best-Ever Quarter See appendix for GAAP reconciliations. Financial data is from continuing operations. Group 1 Automotive, Inc. 4 RS_12Q2_v2.pptx

5 Demonstrating Leverage % % 80.6% 80.0% 78.6% 76.4% $5.9 $6.3 $5.7 $ $5.5 $ / 2010 % Change SAAR 10% Revenues 10% EPS (1) 40% 3.4% $3.59 $ % 2.7% 2.9% 2.9% $ % $3.62 $1.78 $ Revenues ($Bil) EPS (1) Operating Margin (1) SG&A as a % of Gross Profit (1) SAAR (Mil) (1) These amounts have been adjusted to exclude the impact of certain items. See appendix for GAAP reconciliation. Financial data is from continuing operations SAAR: Automotive News Data Center Group 1 Automotive, Inc. 5 RS_12Q2_v2.pptx

6 Demonstrating Leverage % 14.1 $ % $1.6 $ % $ % 2Q07 2Q12 Revenues ($Bil) EPCS (1) Operating Margin (1) SG&A as a % of Gross Profit (1) SAAR (Mil) (1) These amounts have been adjusted to exclude the impact of certain items. See appendix for GAAP reconciliation. Financial data is from continuing operations SAAR is average based on J.D. Power Group 1 Automotive, Inc. 6 RS_12Q2_v2.pptx

7 Company Overview

8 What Sets Group 1 Apart? Fortune 500 company Fourth largest dealership group in the U.S. retailing 102,022 new units in 2011 Committed management team with more than 100 years of automotive retailing and OEM experience West Region 60% New Vehicle Unit Sales Owned by independent shareholders with no large controlling owner Well positioned for growth Geographic and brand mix positioned for future market share East Region 34% New Vehicle Unit Sales U.K. 6% New Vehicle Unit Sales New Hampshire (3) Boston Metro (10) Long Island (4) Freehold (3) Atlantic City (4) Folsom Lake (1) Kansas City (3) Annapolis (2) U.K. (11) Los Angeles Metro (8) San Diego (3) Amarillo (1) Lubbock (5) El Paso (3) Austin (3) San Antonio (2) Tulsa (3) Oklahoma City (8) Dallas (5) Beaumont (6) Houston Metro (13) Gulfport (3) Atlanta (3) Mobile (2) Pensacola / Panama City (3) New Orleans (4) Rock Hill (1) Columbia (2) Augusta (1) Hilton Head (1) Tampa Bay Metro (1) 2 U.S. Regions 15 States U.K. / England 122 Dealerships 159 Franchises 32 Brands Note: New Vehicle Unit Sales for quarter ended 6/30/2012; Dealership, Franchise and Brand counts as of 7/26/2012 Group 1 Automotive, Inc. 8 RS_12Q2_v2.pptx

9 Well-Balanced Portfolio 2Q12 AL 1% FL 1% MD 1% SC 2% KS 2% MS 2% NH 3% LA 3% GA 3% NY 3% NJ 5% U.K. 6% OK 8% MA 10% CA 14% Geographic & Brand Diversity (New Vehicle Unit Sales) TX 36% Brand Mix (New Vehicle Unit Sales) 26% 55% 19% Chrysler 4% Daimler 5% GM 6% VW/ Audi/ Porsche 7% Ford 9% Other 5% Honda/ Acura 11% BMW/ MINI 11% Toyota/ Scion/ Lexus 31% Nissan/ Infiniti 11% YTD12 FY05 17% 47% 36% Financial data is from continuing operations Luxury Import Domestic Group 1 Automotive, Inc. 9 RS_12Q2_v2.pptx

10 Stable Business Mix 3% 12% 28% 15% of Revenues Generate 64% of Gross Profit 23% 41% $120 $100 $80 $60 Total Parts & Service Gross Profit 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 57% 14% 22% Parts & Service Gross Profit Covers 85% - 95% of Total Company Fixed Costs and Parts & Service Selling Expenses ($ in millions) Revenues Gross Profit Finance & Insurance Parts & Service $1,896 $285 Used Vehicles Second Quarter New Vehicles 2012 Group 1 Automotive, Inc. 10 RS_12Q2_v2.pptx

11 Leveraging Technology Used Vehicles Utilization of software is critical to manage inventories and maximize higher-profit retail sales Parts & Service Customer Management Software (CMS) and technology improve efficiencies and closing rates On-line and customer-interface tools improve retention Finance & Insurance Presentation of menu-based product and finance offerings improve consistency and transparency >> Using Technology to Improve Customer Experience << Group 1 Automotive, Inc. 11 RS_12Q2_v2.pptx

12 Used Vehicles Driving higher-profit retail sales Continued progress in Used Vehicle technology will drive retail sales Retailed 70,475 Used Vehicles in 2011 $1,800,000 Wholesale Revenues Retail Revenues $1,989 $2,015 $1,600,000 15% $1,813 $1,400,000 27% 22% 85% $1,767 $1,765 $1,200,000 78% 14% Q12 $1,000,000 73% 14% 86% Gross Profit per Retail Unit $800,000 86% $600,000 $400,000 $83 $113 $29 $200,000 $0 Used Retail-to YTD12 New Ratio: ($69) ($81) Q12 Wholesale Gain (Loss) per Unit Financial data is from continuing operations Group 1 Automotive, Inc. 12 RS_12Q2_v2.pptx

13 Parts & Service Stable Business 2011 Repair Orders (external): 1.7 Million Using Customer Management Software (CMS) and technology to Revenue Mix improve efficiencies and closing rates 13% 11% 12% 12% 11% 21% 22% 20% 22% 22% 21% 19% 19% 19% 18% 45% 48% 49% 47% 49% Q12 Customer Pay Wholesale Financial data is from continuing operations Warranty Collision (incl. Parts) Enhancing customer touch points to improve retention Leveraging scale Parts management focus Group 1 Automotive, Inc. 13 RS_12Q2_v2.pptx $140 $120 $100 $80 $60 $40 $20 $0 Gross Profit ($mm) US Light Vehicle SAAR (1) (mm) 20 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 1) Source: J.D. Power

14 Finance & Insurance Focus F&I Penetration Rates Q12 Finance 70% 69% 67% 70% 70% VSC 36% 34% 33% 36% 37% Gap Ins. 27% 25% 21% 22% 22% Maintenance 9% 8% 10% 8% 8% Sealant 22% 4% 11% 13% 14% Gross Profit PRU $ 952 $ 1,045 $ 994 $ 1,135 $ 1,191 F&I Gross Profit Per Retail Unit $1,191 $1,135 $1,045 $994 $ Q12 Consumer financing at pre-recession availability Sub-prime financing improving Leveraging scale Consolidating lender base Enhancing compliance, training and benchmarking Consistent and transparent menu-driven processes Financial data is from continuing operations Group 1 Automotive, Inc. 14 RS_12Q2_v2.pptx

15 Financial Overview

16 Consolidated Financial Results Record Quarter for Revenues - Gross Profit - Net Income - Diluted EPCS ($ in millions, except per share amounts) 2Q12 2Q11 Change Revenues $ 1,895.8 $ 1, % Gross Profit $ $ % Adjusted SG&A as a % of Gross Profit (1) 74.6% 75.0% (40) bps Adjusted Operating Margin (1) 3.4% 3.7% (30) bps Adjusted EBITDA (1) $ 72.6 $ 61.2 $ 11.4 Total Interest Expense (2) $ 17.1 $ 14.7 $ 2.4 Adjusted Net Income (1) $ 29.7 $ % Adjusted Diluted EPCS (1) $ 1.25 $ % (1) See appendix for GAAP reconciliation. (2) Includes non-cash interest expense of $2.5 million incurred in 2Q12 and $2.3 million incurred in 2Q11 related to the Company's 2.25% and 3.00% convertible notes. Group 1 Automotive, Inc. 16 RS_12Q2_v2.pptx

17 Same-Store Financial Results Three Months Ended Six Months Ended 6/30/2012 6/30/2011 Change 6/30/2012 6/30/2011 Change Revenues: New vehicle retail sales $ 979,317 $ 806, % $ 1,820,048 $ 1,589, % Used vehicle retail sales 417, , % 803, , % Used vehicle wholesale sales 63,212 60, % 124, , % Total used $ 481,022 $ 412, % $ 927,737 $ 797, % Parts and service 206, , % 404, , % Finance and insurance 60,563 46, % 113,775 90, % Total $ 1,727,073 $ 1,468, % $ 3,266,268 $ 2,875, % Gross Profit $ 262,610 $ 243, % $ 504,826 $ 464, % ($ in thousands) Group 1 Automotive, Inc. 17 RS_12Q2_v2.pptx

18 SG&A as a % of Gross Profit SG&A as a % of Gross Profit (1) 80.2% 79.8% Gross Profit ($ in millions) 2Q12 2Q11 $ Chg % Chg Total $ 285 $ 244 $ % 75.9% 75.0% 74.6% SG&A as a % of Gross Profit (1) 2Q12 2Q11 +/(-)PY Personnel 45.6% 45.5% 12 bp Advertising 4.9% 4.9% (1) bp Rent & Facility 8.0% 8.6% (61) bp Insurance & Other 16.0% 16.0% 5 bp Total 74.6% 75.0% (44) bp (1) These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. See appendix for GAAP reconciliation. Note: May not foot or cross-foot due to rounding 2Q05 2Q07 2Q09 2Q11 2Q12 Anticipate increased leverage with new vehicle unit sales increase Significantly improved cost structure in 2009 driving leverage improvements Financial data is from continuing operations ($ in millions) Group 1 Automotive, Inc. 18 RS_12Q2_v2.pptx

19 Gross Profit Sensitivity 1H12 1H11 % Chg 1H12 Incremental Throughput Gross Profit $ 546 $ % Change in Gross Profit $ 79.8 Change in SG&A $ 52.9 Personnel $ 256 $ % % Incremental Throughput 34% Advertising % Rent & Facility % Same-store Adjustment 12% Insurance & Other % Total SG&A $ 412 $ % Same-store % Incremental Throughput 46% (1) These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve periodto-period comparability. See appendix for GAAP reconciliation. Note: May not foot due to rounding. ($ in millions) Target about $0.50 of each incremental Gross Profit dollar to EBITDA on a same-store basis Group 1 Automotive, Inc. 19 RS_12Q2_v2.pptx

20 Operating Cash Flow 2Q12 2Q11 YTD2012 FY2011 FY2010 FY2009 Net Income (Loss) $ 28,625 $ 24,683 $ 51,742 $ 82,394 $ 50,304 $ 34,845 Depreciation and Amortization Expense 7,742 6,581 14,978 27,063 26,455 25,828 Asset Impairments ,805 10,840 20,887 (Gain) Loss on Bonds ,872 (8,211) Stock-based Compensation 3,021 2,814 5,915 10,919 9,942 8,869 (Gain) Loss on Sale of Assets (1,580) (786) (1,588) (961) Debt Issue Costs Amortization 3,218 2,970 6,388 11,990 10,322 7,030 Deferred Tax Impact 3,012 7,062 6,075 24,824 23,274 29,646 Other Items (402) Working Capital Adjustments (1,406) 10,241 22,005 (9,057) (13,927) (1,771) Adjusted Operating Cash Flow (1) $ 42,947 $ 53,778 $ 105,860 $ 152,254 $ 122,754 $ 116,969 (1) See appendix for GAAP reconciliation for adjusted operating cash flow. ($ in thousands) Group 1 Automotive, Inc. 20 RS_12Q2_v2.pptx

21 Balance Sheet

22 Summary Balance Sheet As of As of 6/30/ /31/2011 Cash and cash equivalents (1) $ 9,544 $ 14,895 Contracts In Transit and vehicle receivables, net $ 150,978 $ 167,507 Inventories, net $ 1,071,927 $ 867,470 Total current assets $ 1,385,111 $ 1,175,584 Total assets $ 2,795,257 $ 2,476,343 Floorplan notes payable $ 1,061,020 $ 874,925 Offset account related to credit facility (1) $ (101,760) $ (109,207) Other current liabilities $ 311,055 $ 279,229 Total current liabilities $ 1,270,315 $ 1,044,947 Long-Term Debt, net of current maturities $ 516,970 $ 482,601 Total stockholder's equity $ 845,774 $ 807,100 Debt-to-Cap ratio 39.1% 38.1% Total Leverage ratio (2) (1) Available cash of $111.3 million is total of cash and cash equivalents plus offset account related to floorplan credit facility. Offset account is amount of excess cash that is used to paydow n floorplan credit facility but can be immediately redraw n against inventory. (2) Total Leverage ratio is calculated under the amended credit facility dated July 1, 2011, for both periods and is rent adjusted. ($ in thousands) Group 1 Automotive, Inc. 22 RS_12Q2_v2.pptx

23 Debt Maturity (in millions) Maturity Date As of June 30, 2012 Available Actual Liquidity Funding Capacity Cash and cash equivalents $ 9.5 $ 9.5 Short-Term Debt Inventory Financing (1) 2016 $ $ $ 1,250.0 Other Vehicles Financing (2) Current Maturities - LTD and Short-term Financing $ $ $ 1,250.0 Available Cash $ (4) Long-Term Debt Acquisition Line of Credit (1,3) % Convertible Notes (Face: $115.0 Million) 2.25% Convertible Notes (Face: $182.8 Million) Mortgage Facility Real Estate Other 4.4 Total Long-Term Debt $ Total Debt $ 1,501.4 $ $ 1, ) 2) 3) 4) The capacity under the floorplan and acquisition tranches of our credit facility can be redesignated w ithin the overall $1.35 billion commitment. Further, the borrow ings under the acquisition tranche may be limited from time to time based upon certain debt covenants. Borrow ings w ith manufacturer affiliates for rental vehicle financing and foreign inventories not associated w ith any of the Company s domestic credit facilities. The available liquidity balance at June 30, 2012, considers the $24.3 million of letters of credit outstanding. Available cash of $111.3 million is total of cash and cash equivalents plus offset account related to floorplan credit facility. Offset account is amount of excess cash that is used to paydow n floorplan credit facility but can be immediately redraw n against inventory. Group 1 Automotive, Inc. 23 RS_12Q2_v2.pptx

24 Cash Prioritization Acquisitions that clear return hurdles (15% - 20% pretax discounted cash flow) Anticipate slower pace in 2H12 Return cash to stockholders Quarterly Cash Dividend is $0.15 per share Share Repurchases: 241,991 Common shares repurchased at average price of $46.75 in 2Q12 Board authorized $50 Mil share repurchase program replacing any prior authorization on July 11, 2012 Group 1 Automotive, Inc. 24 RS_12Q2_v2.pptx

25 Growth Outlook

26 Light Vehicles Expected Rebound Aging Car Park Industry Sales vs. Scrappage Implies Rebound Average age of vehicle on the road is 10.8 years old Industry Sales Scrappage Linear (Scrappage) Scrappage inflated by Cash for Clunkers program Source: Polk Industry Sales Source: Automotive News Data Center Scrappage Source: CNW Marketing Research (in millions) Group 1 Automotive, Inc. 26 RS_12Q2_v2.pptx

27 Factors Driving Auto Sales Growth Pent-up demand has increased and consumers still intend to buy Age of car park exceeds 10 years above trend Oldest since WWII; 10-year-old vehicles have a 60% probability of being scrapped Scrappage rates near 10-year low Number of licensed drivers is on the rise Population of aged 16+ projected to increase 10 million by 2015 Financing is back to pre-recession levels Aggressive loan to value; approval rates for prime and near prime customers rising Used vehicle prices remain robust Helps consumers in terms of trade-in values; allows for more aggressive leasing Group 1 Automotive, Inc. 27 RS_12Q2_v2.pptx

28 Long-term SAAR Outlook U.S. Light Vehicle SAAR and Trendline; 1981 Present GPI SAAR estimates: 14.2 Million units in 2012 Normalized Sales Rate of 15 to 16 million units Source: Equity Research as of August 15, 2011 Group 1 Automotive, Inc. 28 RS_12Q2_v2.pptx

29 Capital Expenditures 2012 CapEx projected to be $63 mil Includes ~$15 mil for specific Parts & Service initiatives Working with our manufacturer partners to limit spending $70 $53 Maintenance CapEx Capital Expenditures Depreciation & Amortization Expense $63 $15 Mil for P&S Initiatives $40 $29 $16 $20 $22 $22 $23 $ Proj. Group 1 Automotive, Inc. 29 RS_12Q2_v2.pptx

30 External Growth Opportunities Plentiful acquisition opportunities Aging franchise ownership looking for exit strategy Very large and extremely fragmented market $1 trillion market (1) Top 10 groups represent approximately 8% of the market (2) 22, GPI IPO 22,250 21,640 5,000 Fewer Dealerships (3) Top 10 New Vehicle Dealers Unit Sales (2) 8% 21,495 21,200 20,770 20,010 18,460 17,700 17, ) Source: CNW Marketing Research 2) Source: Based on Automotive News Data 3) NADA Other 92% Group 1 Automotive, Inc. 30 RS_12Q2_v2.pptx

31 External Growth Opportunities Continue to look for acquisitions that will augment portfolio and provide 15% - 20% return on capital Cost savings / Economies of scale Projections Group 1 is well positioned to take advantage of acquisition opportunities Grow scale in existing U.S. markets and United Kingdom Acquisitions (Estimated Annual Revenues) ($ in millions) Q $49 $45 1Q $70 $25 $50 $55 2Q $190 $275 2Q 3Q $5 $110 $52 $34 4Q $44 $29 $35 $505 Million $563 Million Group 1 Automotive, Inc. 31 RS_12Q2_v2.pptx

32 Conclusion

33 Exciting New Product Pipeline 2013 Toyota Avalon Late Lexus ES 350 Late Ford Escape Mid Ford Fusion Mid Volkswagen Polo Early Honda Accord Late Acura RDX Early Lincoln MKZ Mid Ford Transit (UK Version) Mid Porsche Boxster Mid Mazda 6 Early Nissan Altima Mid Chevrolet Spark Mid Buick Encore Late BMW X4 Mid Hyundai Santa Fe Late Kia Forte Mid Chevrolet Silverado Mid Cadillac ATS Mid BMW 328i Sedan Early Kia Cadenza Late Hyundai Genesis 2014 Source: Bank of America Merrill Lynch Research dated ; Car and Driver Group 1 Automotive, Inc. 33 RS_12Q2_v2.pptx

34 Proving The Model Works! Well-balanced portfolio (geography, business mix and brands) Profitability of different business units through the cycle Streamlined business -- generating cash Strong balance sheet Operational leverage to take advantage of the auto-retailing rebound Opportunities exist to grow all areas of the business Market conditions becoming more favorable Experienced, successful and driven management team >> Proven business model should drive future expansion << Group 1 Automotive, Inc. 34 RS_12Q2_v2.pptx

35 CORE VALUES Integrity we conduct ourselves with the highest level of ethics both personally and professionally when we sell to and perform service for our customers without compromising our honesty Transparency we promote open and honest communication between each other and our customers Professionalism we set our standards high so that we can exceed expectations and strive for perfection in everything we do Teamwork we put the interest of the group first, before our individual interests, as we know that success only comes when we work together Visit:

36 Appendix

37 Operating Management Team - Corporate Earl J. Hesterberg President and Chief Executive Officer and Director (April 2005) 35+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Ford Motor Company; Ford of Europe; Gulf States Toyota; Nissan Motor Corporation in U.S.A.; Nissan Europe John C. Rickel Senior Vice President and Chief Financial Officer (December 2005) 25+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Ford Motor Company; Ford Europe Darryl M. Burman Vice President and General Counsel (December 2006) 20+ Years Industry Experience Automotive-related Experience: Mergers and Acquisitions; Corporate Finance; Employment and Securities Law Epstein Becker Green Wickliff & Hall, P.C.; Fant & Burman, L.L.P. Peter C. DeLongchamps Vice President, Financial Services and Manufacturer Relations (January 2006) 30+ Years Industry Experience Manufacturer and Automotive Retailing Experience: General Motors Corporation; BMW of North America; Advantage BMW in Houston Mark Iuppenlatz Vice President, Corporate Development (January 2010) 15 Years Industry Experience Automotive-related Experience: Corporate and Real Estate Development; Construction -Sonic Automotive; REIT J. Brooks O Hara Vice President, Human Resources (February 2000) 30+ Years Industry Experience Automotive Industry Experience: Gulf States Toyota Group 1 Automotive, Inc. 37 RS_12Q2_v2.pptx

38 Operating Management Team - Field Frank Grese Jr. Regional Vice President, West Region (January 2006) 35+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Ford Motor Company; Nissan Motor Corporation in U.S.A.; AutoNation; Van Tuyl Daryl Kenningham Regional Vice President, East Region (July 2011) 20+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Gulf States Toyota; Nissan Motor Corporation; Ascent Automotive Ian Twinley Vice President, U.K. Operations 30+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Chandlers Garage Holdings Ltd.; John Grose Group; Ford Motor Company Group 1 Automotive, Inc. 38 RS_12Q2_v2.pptx

39 SAAR: Retail is What Matters SAAR Total Retail Sales Source: J.D. Power/LMC Automotive (New vehicle units in millions) Group 1 Automotive, Inc. 39 RS_12Q2_v2.pptx

40 Consumer Confidence vs. SAAR Source: Bank of America Merrill Lynch Research dated Group 1 Automotive, Inc. 40 RS_12Q2_v2.pptx

41 Used Vehicle Pricing Source: Manheim dated Group 1 Automotive, Inc. 41 RS_12Q2_v2.pptx

42 Floorplan Interest Floorplan Interest Exp. Manufacturer Assistance Interest Rate* 6.5% 7.0% 5.7% 6.0% 4.9% 5.0% 3.9% 3.6% 4.0% $36,840 $34,120 $46,822 $37,171 $32,345 $20,039 $27,687 $26,144 $16,072 $15, % 2.0% 1.0% YTD2012 Manufacturer Assistance as % of Floorplan Int. Expense: 92.6% 79.4% 62.0% 94.4% 103.8% 0.0% * Rate adjusted for impact of interest rate swaps Financial data is from continuing operations ($ in thousands) Group 1 Automotive, Inc. 42 RS_12Q2_v2.pptx

43 SWAPS: Interest Expense Impact INTEREST RATE SWAP LAYERS $'s in millions Q12 2Q12 3Q12 4Q12 Old Layers $ 300 $ 250 $ 225 $ 50 $ 50 New Layers $ 50 $ 50 $ 50 $ 375 $ 375 $ 450 $ 450 $ 550 $ 550 $ 550 $ 300 $ 150 Total $ 350 $ 300 $ 275 $ 425 $ 425 $ 450 $ 450 $ 550 $ 550 $ 550 $ 300 $ 150 Interest Expense (assumes 0.25% LIBOR) - QTD $ 3.35 $ 3.03 $ 2.87 $ 2.64 $ 2.54 $ YTD $ YTD 2012 $ $ Average Interest Rate (current layers) 4.20% 4.26% 4.37% 3.73% 3.07% 2.94% 2.94% 2.81% 3.01% 2.98% 3.32% 3.53% YTD % Group 1 Automotive, Inc. 43 RS_12Q2_v2.pptx

44 Convertibles & Reconciliations See following page(s) for information relating to convertible debt and reconciliations of items noted in slides that are contained in this presentation. Group 1 Automotive, Inc. 44 RS_12Q2_v2.pptx

45 Stock price 3.00% Convertible Notes Dilution Quarter Strike Price $ Conversion Price $ Warrant Price $ Put Date: September 15, 2019 (Shares in thousands) Average Stock Price Dilutive Shares Impact on EPS 2010 Q Q Q (0.00) 2011 Q (0.00) 2011 Q (0.01) 2011 Q (0.02) 2012 Q (0.04) 2012 Q (0.04) If converted Historical Dilution of 3.00% Notes Potential Future Dilution of 3.00% Notes Net (Shares in thousands) shares Lower Call Warrant Net Shares Issuable Accounting Dilution $ $ $ $ $ , (162) $ , (331) $ , (481) $ , (616) $ , (737) $ , (847) $ , (946) $ ,037 1,037 (1,037) ,135 $ ,037 1,120 (1,120) ,341 $ ,037 1,197 (1,197) ,530 $ ,037 1,268 (1,268) ,705 $ ,037 1,333 (1,333) ,867 $ ,037 1,394 (1,394) ,017 $ ,037 1,451 (1,451) ,157 $ ,037 1,504 (1,504) ,288 $ ,037 1,553 (1,553) ,410 $ ,037 1,599 (1,599) ,524 $ ,037 1,643 (1,643) ,632 $ ,037 1,684 (1,684) 1,049 1,049 2,733 $ ,037 1,723 (1,723) 1,106 1,106 2,829 $ ,037 1,759 (1,759) 1,159 1,159 2,918 $ ,037 1,794 (1,794) 1,210 1,210 3,004 $ ,037 1,826 (1,826) 1,258 1,258 3,084 $ ,037 1,858 (1,858) 1,304 1,304 3,162 $ ,037 1,887 (1,887) 1,347 1,347 3,234 $ ,037 1,915 (1,915) 1,388 1,388 3,303 $ ,037 1,942 (1,942) 1,428 1,428 3,370 $ ,037 1,967 (1,967) 1,465 1,465 3,432 $ ,037 1,992 (1,992) 1,501 1,501 3,493 $ ,037 2,015 (2,015) 1,535 1,535 3,550 $ ,037 2,037 (2,037) 1,568 1,568 3,605 $ ,037 2,058 (2,058) 1,599 1,599 3,657

46 Stock 2.25% Convertible Notes Dilution Quarter Strike Price $ Conversion Price $ Warrant Price $ Put Date: June 15, 2016 Historical Dilution of 2.25% Notes Average Stock Price (Shares in thousands) Dilutive Impact on Shares EPS 2010 Q Q Q Q Q Q Q Q Potential Future Dilution of 2.25% Notes (Shares in thousands) price If converted Net shares Lower Call Warrant Net Shares Issuable Accounting Dilution $ $ , $ , $ , $ , $ , $ , $ , $ , $ , $ , $ , ,066 $ , ,212 $ ,076 1,034 1, ,350 $ ,076 1,089 1, ,481 $ ,076 1,142 1, ,604 $ ,076 1,192 1, ,721 $ ,076 1,239 1, ,833 $ ,076 1,284 1, ,939 $ ,076 1,327 1, ,039 $ ,076 1,368 1, ,135 $ ,076 1,407 1, ,227 $ ,076 1,444 1, ,315 $ ,076 1,480 1, ,398 $ ,076 1,514 1, ,479 $ ,076 1,546 1,546 1,009 1,009 2,555 $ ,076 1,578 1,578 1,051 1,051 2,629 $ ,076 1,608 1,608 1,092 1,092 2,700 $ ,076 1,637 1,637 1,131 1,131 2,768 $ ,076 1,664 1,664 1,169 1,169 2,833 $ ,076 1,691 1,691 1,205 1,205 2,896 $ ,076 1,717 1,717 1,240 1,240 2,956 $ ,076 1,742 1,742 1,273 1,273 3,015 $ ,076 1,766 1,766 1,305 1,305 3,071 $ ,076 1,789 1,789 1,337 1,337 3,125 $ ,076 1,811 1,811 1,367 1,367 3,178

47 Group 1 Automotive, Inc. Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, in millions) EBITDA RECONCILIATION: 2Q12 2Q11 Net Income $ 28.6 $ 24.7 Total Interest Expense (1) Net gain on real estate transactions (1.1) - Insurance deductible for hail storm damage Depreciation and Amortization Expense Non-cash Asset Impairments Income Tax Expense Adjusted EBITDA (2) $ 72.6 $ 61.2 (1) Includes Floorplan interest expense and Other interest expense, net (2) Adjusted EBITDA is defined as income (loss) plus floorplan interest expense, other interest expense, net, depreciation and amortization expense, non-cash asset impairments, mortgage debt refinancing expense, loss (less gain) on dealership dispositions, loss (less gain) on debt redemptions, lease terminations and income tax expense (less income tax benefit). While Adjusted EBITDA should not be construed as a substitute for net income or as a better measure of liquidity than net cash provided by operating activities, which are determined in accordance with accounting principles generally accepted in the United States of America ( GAAP ), it is included in our discussion of earnings to provide additional information regarding the amount of cash our business is generating with respect to our ability to meet future debt services, capital expenditures and working capital requirements. Adjusted EBITDA should not be used as an indicator of our operating performance. Consistent with industry practices, our management utilizes Adjusted EBITDA when valuing dealership operations. This measure may not be comparable to similarly titled measures reported by other companies. The table above shows the calculation of Adjusted EBITDA and reconciles Adjusted EBITDA to the GAAP measurement income (loss) for the periods presented in the table. May not foot due to rounding

48 SG&A RECONCILIATION: Group 1 Automotive, Inc. Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, $ in thousands) Three Months Ended: 6/30/2005 6/30/2007 6/30/2009 6/30/2011 6/30/2012 Reported SG&A $ 185,762 $ 191,998 $ 151,113 $ 183,051 $ 214,327 Pre-tax Adjustments: Lease terminations - (500) Gain (loss) on dealership dispositions - - 1, Net gain on real estate transactions ,071 Insurance deductibles for hail storm damage (2,650) Adjusted (1) $ 185,762 $ 191,498 $ 152,568 $ 183,051 $ 212,748 SG&A AS A % OF GROSS PROFIT: 6/30/2005 6/30/2007 6/30/2009 6/30/2011 6/30/2012 Unadjusted 80.2% 76.1% 79.1% 75.0% 75.1% Adjusted (1) 80.2% 75.9% 79.8% 75.0% 74.6% (1) We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations.

49 INCOME FROM OPERATIONS RECONCILIATION: Group 1 Automotive Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, $ in thousands) 2Q07 2Q Income from Operations - As Reported $ 54,720 $ 63,088 $ 201,586 $ 178,368 $ (12,444) $ 108,074 $ 146,103 $ 193,503 Pre-tax Adjustments Non-Cash asset impairment charges ,241 16, ,023 20,792 10,840 4,805 Lease termination charges ,307 1, Loss on dealership dispositions ,053 - Severance costs related to UK-dealership acquisitions Net gain on real estate transactions - (1,071) (1,300) - Accrual for pending legal matter ,000 Insurance deductibles for hail storm damage - 2, Income from Operations - As Adjusted (1) $ 55,576 $ 62,204 $ 203,827 $ 199,459 $ 151,670 $ 129,165 $ 161,258 $ 199,308 Revenue $ 1,646,276 $ 1,895,826 $ 5,940,730 $ 6,260,217 $ 5,654,087 $ 4,525,707 $ 5,509,169 $ 6,079,765 Operating Margin As Reported 3.3% 3.3% 3.4% 2.8% -0.2% 2.4% 2.7% 3.2% As Adjusted (1) 3.4% 3.4% 3.4% 3.2% 2.7% 2.9% 2.9% 3.3% (1) Twelve Months Ended: We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. Financial Data is from Continuing Operations

50 INCOME FROM CONTINUING OPERATIONS RECONCILIATION: Group 1 Automotive Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, in thousands except per share amounts) Twelve Months Ended: 2Q07 2Q Income from Continuing Operations - As Reported $ 23,170 $ 28,625 $ 87,092 $ 64,547 $ (46,010) $ 34,845 $ 50,304 $ 82,394 After-tax Adjustments (2) Non-Cash asset impairment charges ,421 10,797 97,397 13,283 6,930 2,994 Lease termination charges , Loss (gain) on debt redemption ,028 (9,852) (5,299) 2,458 - Mortgage debt refinance charges Loss (gain) on dealership dispositions ,698 - Severance costs related to UK-dealership acquisitions Income tax benefit related to tax elections for prior periods (1,604) (810) - Net gain on real estate transactions - (659) (761) - Accrual for pending legal matter Insurance deductibles for hail storm damage - 1, Income from Continuing Operations - As Adjusted (1) $ 23,728 $ 29,739 $ 88,823 $ 79,132 $ 42,205 $ 41,756 $ 62,224 $ 86,029 Weighted Average Diluted Shares Outstanding 23,815 22,513 24,363 23,339 22,532 22,906 22,788 22,409 Diluted Earnings Per Common Share from Continuing Operations As Reported $ 0.96 $ 1.20 $ 3.52 $ 2.68 $ (1.57) $ 1.43 $ 2.09 $ 3.47 As Adjusted (1) $ 0.98 $ 1.25 $ 3.59 $ 3.29 $ 1.78 $ 1.72 $ 2.59 $ 3.62 (1) We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. (2) Refer to separate reconciliations of certain non-gaap financial measures within the respective quarterly earnings release schedules for specific tax benefit or tax provision information. Financial Data is from Continuing Operations

51 Group 1 Automotive Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, $ in thousands) SG&A RECONCILIATION: Twelve Months Ended: SG&A Expenses - As Reported $ 717,786 $ 758,877 $ 739,430 $ 621,048 $ 693,635 $ 735,229 Pre-tax Adjustments Lease termination charges - (4,307) (1,091) Loss on dealership dispositions (299) (5,053) - Severance costs related to UK-dealership acquisitions (562) - Net gain on real estate transactions ,300 - Accrual for pending legal matter (1,000) SG&A Expenses - As Adjusted (1) $ 717,786 $ 754,570 $ 738,339 $ 620,749 $ 689,320 $ 734,229 Gross Profit $ 939,304 $ 974,466 $ 915,661 $ 775,837 $ 877,033 $ 960,600 SG&A as a % of Gross Profit As Reported 76.4% 77.9% 80.8% 80.0% 79.1% 76.5% As Adjusted (1) 76.4% 77.4% 80.6% 80.0% 78.6% 76.4% (1) We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. Financial Data is from Continuing Operations

52 Group 1 Automotive Reconciliation of Certain Non-GAAP Financial Measures (Unaudited, in thousands) OPERATING CASH FLOW RECONCILIATION: 2Q12 2Q11 YTD2012 FY2011 FY2010 FY2009 Reported operating cash flow $ (36,271) $ 145,919 $ (45,721) $ 199,316 $ (68,466) $ 354,674 Adjustments Change in floorplan notes payable-credit facility, excluding floorplan offset account and net acquisition and disposition related activity 79,218 (69,722) 151,581 (13,350) 193,430 (242,622) Change in floorplan notes payablemanufacturer affiliates associated with net acquisition and disposition related activity - (22,419) - (33,712) (2,210) 4,917 Adjusted operating cash flow (1) $ 42,947 $ 53,778 $ 105,860 $ 152,254 $ 122,754 $ 116,969 (1) Adjusted operating cash flow means cash flow from operating activities plus the adjustments noted above. We use adjusted operating cash flow in our evaluation of the performance of the company, as we believe that it provides additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations.

53 Group 1 Automotive, Inc. Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, NET INCOME RECONCILIATION: % Change % Change As reported $ 28,625 $ 24, $ 51,742 $ 40, After-tax Adjustments: Non-cash asset impairment charges (2) Net gain on real estate transactions (3) (659) - (659) - Insurance deductibles for hail storm damage (4) 1,658-1,658 - Adjusted net income (1) $ 29,739 $ 24, $ 52,856 $ 40, ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES RECONCILIATION: Adjusted net income $ 29,739 $ 24, $ 52,856 $ 40, Less: Adjusted earnings allocated to participating securities 1,637 1, ,789 2, Adjusted net income available to diluted common shares $ 28,102 $ 23, $ 50,067 $ 37, DILUTED INCOME PER COMMON SHARE RECONCILIATION: As reported $ 1.20 $ $ 2.18 $ After-tax Adjustments: Non-cash asset impairment charges Net gain on real estate transactions (0.03) - (0.03) - Insurance deductibles for hail storm damage Adjusted diluted income per share (1) $ 1.25 $ $ 2.23 $ SG&A RECONCILIATION: As reported $ 214,327 $ 183, $ 413,439 $ 358, Pre-tax Adjustments: Net gain on real estate transactions 1,071-1,071 - Insurance deductibles for hail storm damage (2,650) - (2,650) - Adjusted SG&A (1) $ 212,748 $ 183, $ 411,860 $ 358, SG&A AS % REVENUES: Unadjusted Adjusted (1) SG&A AS % OF GROSS PROFIT: Unadjusted Adjusted (1) OPERATING MARGIN %: Unadjusted Adjusted (1), (5) PRETAX MARGIN %: Unadjusted Adjusted (1), (5) SAME STORE SG&A RECONCILIATION: As reported Pre-tax adjustments: $ 197,644 $ 182, $ 382,921 $ 358, Loss on real estate transaction (504) - (504) - Insurance deductibles for hail storm damage (2,650) - (2,650) - Adjusted Same Store SG&A (1) $ 194,490 $ 182, $ 379,767 $ 358,

54 SAME STORE SG&A AS % REVENUES: Unadjusted Adjusted (1) SAME STORE SG&A AS % OF GROSS PROFIT: Unadjusted Adjusted (1) SAME STORE OPERATING MARGIN %: Unadjusted Adjusted (1), (6) Three Months Ended June 30, Six Months Ended June 30, CASH FLOWS FROM OPERATING ACTIVITIES % Change % Change RECONCILIATION: Net cash provided by (used in) operating activities $ (36,271) $ 145,919 (124.9) $ (45,721) $ 200,374 (122.8) Change in floorplan notes payable-credit facility, excluding floorplan offset account and net acquisition and disposition related activity 79,218 (69,722) 151,581 (73,286) Change in floorplan notes payable-manufacturer affiliates associated with net acquisition and disposition related - (22,419) - (26,578) Adjusted net cash provided by operating activities (1) $ 42,947 $ 53,778 (20.1) $ 105,860 $ 100, (1) We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP. Although we find these non-gaap results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. (2) Adjustment is net of tax benefit of $72 for the three and six months ended June 30, 2012, and $57 and $139 for the three and six months ended June 30, 2011, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment. (3) Adjustment is net of tax provision of $412 for the three and six months ended June 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment. (4) Adjustment is net of tax benefit of $992 for the three and six months ended June 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment. (5) (6) Excludes the impact of non-cash asset impairment charges for all periods, as well as a net gain on real estate transactions and insurance deductibles for hail storm damage in Excludes the impact of Same Store non-cash asset impairment charges of $187 for the three and six months ended June 30, 2012, and $142 and $319 for the three and six months ended June 30, 2011, respectively. In addition, this excludes the impact of Same Store loss on real estate transaction of $504 and insurance deductibles of $2,650 for both the three and six months ended June 30, Adjusted Same Store operating income was $60,786, $54,024, $110,718, and $93,410 for the periods presented respectively.