Group 1 Automotive Reports 2014 Second Quarter Financial Results - MyFoxTallahassee.com

Group 1 Automotive Reports 2014 Second Quarter Financial Results

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SOURCE Group 1 Automotive, Inc.

HOUSTON, July 24, 2014 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported 2014 second quarter adjusted net income of $40.0 million, which equates to adjusted earnings per share of $1.47. The quarter included several significant non-recurring charges especially relating to a convertible senior notes redemption, which resulted in GAAP net income and diluted earnings per share of $16.9 million and $0.62, respectively. Adjusted net income increased 0.6 percent from the comparable, adjusted prior-year period. On a GAAP basis, net income decreased 54.9 percent from the comparable prior-year period.

Adjusted net income for the second quarter of 2014 excludes a $20.8 million after-tax loss related to the partial redemption of the Company's 3.00% Convertible Senior Notes, $1.1 million of after-tax, non-cash asset impairment charges, $1.0 million of after-tax charges related to catastrophic events, $0.3 million of after-tax legal settlement charges related to prior years, $0.3 million in net foreign transaction tax and a $0.3 million net, after-tax gain on real estate and dealership transactions. On a comparable basis, adjusted net income for the second quarter of 2013 excludes $6.8 million of after-tax charges related to catastrophic events, a $4.8 million net, after-tax gain on real estate and dealership transactions and $0.4 million of after-tax, non-cash asset impairment charges.

"Our second quarter earnings were significantly impacted by several major factors," said Earl J. Hesterberg, Group 1's president and chief executive officer. "On the positive side, our U.K. operations continue to set new records with a revenue increase of 21.2 percent and a gross profit increase of 24.4 percent. Additionally, our U.S. business continues to grow nicely with revenue up 9.5 percent and increases across all of our major business segments. Also, we took major steps during the quarter to restructure our balance sheet by redeeming a large portion of our 3.00% Convertible Senior Notes and announcing the mandatory redemption of our 2.25% Convertible Senior Notes. This should reduce our ongoing diluted share count by approximately 2.2 million shares, which should provide a major benefit to our shareholders in the future. On the disappointing side, the Brazilian market deteriorated significantly during the quarter due to political and economic uncertainty, as well as major business disruption from the World Cup event. Our Brazilian revenue declined 18.8 percent on a new vehicle unit sales decrease of 22.3 percent. The deterioration in our Brazilian business represents a 15 cent reduction in our total adjusted EPS profit performance versus the comparable period last year."

Consolidated Results for Second Quarter 2014 (year-over-year comparable basis)

  • Total revenue increased 7.6 percent to an all-time quarterly record of $2.5 billion; total gross profit grew 8.2 percent to $369.1 million.
  • New vehicle revenue increased 6.5 percent, reflecting 2.2 percent higher unit sales, as U.S. Same Store new vehicle unit sales grew 3.0 percent.
  • Used vehicle retail revenue increased 7.9 percent, reflecting 4.2 percent higher used retail unit sales.
  • Parts and service gross profit increased 10.3 percent on revenue growth of 8.5 percent. Consolidated Same Store parts and service gross profit increased 7.0 percent on revenue growth of 5.6 percent.
  • Finance and Insurance (F&I) gross profit increased 12.9 percent. Same Store consolidated F&I sales grew 9.9 percent as per retail unit improved $124 to $1,319, a 10.4% increase.
  • Adjusted selling, general and administrative (SG&A) expenses as a percent of gross profit increased 30 basis points, to 73.1 percent, with a Same Store expansion of 90 basis points, to 72.7 percent. Both increases are primarily a result of the deteriorating economic situation in Brazil. On a GAAP basis, SG&A expenses as a percent of gross profit increased 10 basis points, to 73.7 percent.
  • Adjusted operating margin declined 10 basis points to 3.5 percent. On a GAAP basis, operating margin declined 10 basis points, to 3.4 percent.
  • U.K. Same Store revenue increased 21.2 percent driven by 19.3 percent growth in new vehicle revenue, 25.4 percent growth in used vehicle revenue, 18.7 percent growth in parts and service, and 27.0 percent growth in finance and insurance. Gross profit improved 24.5 percent to $29.5 million.

For the six-month period ended June 30, 2014, the Company reported adjusted net income of $71.3 million, or $2.66 per diluted share, compared to adjusted net income of $69.0 million, or $2.69 per diluted share for the same period in the prior year. On a GAAP basis, net income and EPS for the six-month period ended June 30, 2014 were $48.2 million and $1.80, respectively. The Company's total revenue for the six-month period ended June 30, 2014 increased 11.0 percent to $4.8 billion. Reconciliations of non-GAAP financial measures are included in the attached financial tables.

Segment Results for Second Quarter 2014 (year-over-year comparable basis)

  • United States:

Group 1's U.S. revenues were $2.1 billion, an increase of 9.5 percent. The revenue growth was primarily attributed to unit sales increases of 6.4 percent in new vehicles and 3.6 percent in retail used vehicles, as well as an increase of 8.8 percent in parts and service revenue. The higher revenue drove gross profit growth of 9.1 percent, reflecting the higher new and used retail volumes, expanded parts and service margins of 60 basis points, and an F&I increase of 12.3 percent, or $91, to $1,442 per retail unit.

On a comparable basis, adjusted SG&A expenses as a percent of gross profit improved 30 basis points to 71.3 percent and adjusted operating margin was flat at 4.0 percent. Group 1's U.S. operations accounted for 82.0 percent of total revenues and 85.8 percent of total gross profit.

  • United Kingdom:

Group 1's U.K. operations accounted for 10.0 percent of total revenues and 8.0 percent of total gross profit. Total revenue increased 21.2 percent to $251.3 million, and gross profit increased 24.4 percent. This gross profit increase was driven by new vehicle retail sales growth of 26.2 percent, parts and service growth of 18.2 percent, and an F&I increase of 26.8 percent, on the higher retail unit sales and a $130 increase in F&I per retail unit to $709.

On a comparable basis, SG&A expenses as a percent of gross profit improved 260 basis points to 75.6 percent.

  • Brazil:

Group 1's Brazil operations accounted for 8.0 percent of total revenues and 6.2 percent of total gross profit. Gross profit was $22.8 million on revenues of $199.7 million.

Adjusted SG&A expenses as a percent of gross profit was 95.1 percent and adjusted operating margin was 0.3 percent.

Corporate Development

During the second quarter of 2014, as previously announced, the Company acquired 2 dealerships (Mercedes-Benz and Kia) in Texas that are estimated to generate $140.0 million in annual revenues.  In June 2014, the Company was granted a Sprinter franchise in Beverly Hills estimated to generate $15.0 million in annual revenues. 

In July 2014, as previously announced, the Company acquired 2 dealerships (Chevrolet and Mazda) in Texas that are estimated to generate $225.0 million in annual revenues.

Year to date, the Company has acquired 9 franchises that are expected to generate $535.0 million in annual revenues and disposed of 2 franchises (Hyundai and Volvo) that generated trailing-twelve-month revenues of $50.0 million.

Convertible Senior Notes

As previously announced, on July 7, 2014, the Company gave notice to holders of its 2.25% Convertible Senior Notes due 2036 that it will redeem all of such outstanding notes on September 4, 2014 at a redemption price equal to 100 percent of the aggregate principal amount of such notes and accrued, but unpaid interest, if any. There is currently $182.8 million in aggregate principal amount of such notes outstanding. Holders may convert their 2.25% Convertible Senior Notes at any time prior to 5:00 p.m. on August 29, 2014, at a conversion rate of 16.8716 shares of the Company's common stock per $1,000 principal amount of such notes with a related observation period beginning on and including July 28, 2014 and ending on and including August 29, 2014.

Additionally, on June 25, 2014, the Company completed its tender offer and purchased $92,450,000 in aggregate principal amount of its outstanding 3.00% Convertible Senior Notes due 2020, representing approximately 80.4 percent of such outstanding notes. The Company has $22,550,000 in aggregate principal amount outstanding of such notes as of June 30, 2014.

Second Quarter 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 www.group1auto.com, then click on 'Investor Relations' and then 'Events' or visit www.group1corp.com/events. 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: 1-888-317-6003
International: 1-412-317-6061
Access Code: 1936175

A telephonic replay will be available following the call through August 25, 2014  at 9:00 a.m. ET by dialing:

Domestic: 1-877-344-7529
International: 1-412-317-0088
Access Code: 1936175 

About Group 1 Automotive, Inc.
Group 1 owns and operates 153 automotive dealerships, 195 franchises, and 38 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.
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 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. 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.

Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com

Media contacts:
Pete DeLongchamps
V.P. Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com

 

Group 1 Automotive, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)








 Three Months Ended June 30, 


2014


2013


% Change

REVENUES:






New vehicle retail sales

$ 1,466,064


$ 1,376,219


6.5

Used vehicle retail sales

577,250


534,804


7.9

Used vehicle wholesale sales

94,971


83,316


14.0

Parts and service

283,207


260,950


8.5

Finance and insurance

90,146


79,821


12.9

  Total revenues

2,511,638


2,335,110


7.6







COST OF SALES:






New vehicle retail sales

1,385,218


1,295,854


6.9

Used vehicle retail sales

531,584


491,299


8.2

Used vehicle wholesale sales

93,730


82,804


13.2

Parts and service

131,958


123,879


6.5

  Total cost of sales

2,142,490


1,993,836


7.5







GROSS PROFIT

369,148


341,274


8.2







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

271,970


251,159


8.3







DEPRECIATION AND AMORTIZATION EXPENSE

10,753


8,884


21.0







ASSET IMPAIRMENTS

1,721


609


182.6







OPERATING INCOME

84,704


80,622


5.1







OTHER EXPENSE:






Floorplan interest expense

(10,329)


(10,873)


(5.0)

Other interest expense, net

(12,567)


(9,570)


31.3

Loss on redemption of long-term debt

(23,614)


-


100.0

INCOME BEFORE INCOME TAXES

38,194


60,179


(36.5)







PROVISION FOR INCOME TAXES

(21,332)


(22,791)


(6.4)







NET INCOME

$      16,862


$      37,388


(54.9)

Earnings allocated to participating securities

$         (619)


$      (1,592)


(61.1)

Earnings available to diluted common shares

$      16,243


$      35,796


(54.6)

DILUTED EARNINGS PER SHARE

$          0.62


$          1.43


(56.6)

Weighted average dilutive common shares outstanding

26,242


24,980


5.1

Weighted average participating securities

986


1,112


(11.3)

Total weighted average shares outstanding

27,228


26,092


4.4








 Six Months Ended June 30, 


2014


2013


% Change

REVENUES:






New vehicle retail sales

$ 2,734,900


$ 2,486,454


10.0

Used vehicle retail sales

1,127,147


1,006,203


12.0

Used vehicle wholesale sales

184,144


157,867


16.6

Parts and service

552,524


498,460


10.8

Finance and insurance

173,786


149,958


15.9

  Total revenues

4,772,501


4,298,942


11.0







COST OF SALES:






New vehicle retail sales

2,587,148


2,343,453


10.4

Used vehicle retail sales

1,038,680


922,422


12.6

Used vehicle wholesale sales

179,791


154,933


16.0

Parts and service

259,612


236,371


9.8

  Total cost of sales

4,065,231


3,657,179


11.2







GROSS PROFIT

707,270


641,763


10.2







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

529,528


484,592


9.3







DEPRECIATION AND AMORTIZATION EXPENSE

20,678


17,297


19.5







ASSET IMPAIRMENTS

1,721


609


182.6







OPERATING INCOME

155,343


139,265


11.5







OTHER EXPENSE:






Floorplan interest expense

(21,242)


(20,237)


5.0

Other interest expense, net

(23,080)


(18,812)


22.7

Other expense, net

-


(789)


(100.0)

Loss on redemption of long-term debt

(23,614)


-


100.0

INCOME BEFORE INCOME TAXES

87,407


99,427


(12.1)







PROVISION FOR INCOME TAXES

(39,242)


(39,921)


(1.7)







NET INCOME

$      48,165


$      59,506


(19.1)

Earnings allocated to participating securities

$      (1,773)


$      (2,522)


(29.7)

Earnings available to diluted common shares

$      46,392


$      56,984


(18.6)

DILUTED EARNINGS PER SHARE

$          1.80


$          2.32


(22.4)

Weighted average dilutive common shares outstanding

25,837


24,544


5.3

Weighted average participating securities

974


1,093


(10.9)

Total weighted average shares outstanding

26,811


25,637


4.6

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)










June 30,


December 31,





2014


2013


% Change

 ASSETS: 


(Unaudited)





 CURRENT ASSETS: 







 Cash and cash equivalents 


$      21,295


$          20,215


5.3

 Contracts in transit and vehicle receivables, net 


210,911


225,156


(6.3)

 Accounts and notes receivable, net 


142,115


135,058


5.2

 Inventories, net 


1,514,274


1,542,318


(1.8)

 Deferred income taxes 


16,595


21,150


(21.5)

 Prepaid expenses and other current assets 


119,013


24,041


395.0

 Total current assets 


2,024,203


1,967,938


2.9

 PROPERTY AND EQUIPMENT, net 


837,821


796,356


5.2

 GOODWILL AND INTANGIBLE FRANCHISE RIGHTS 


1,100,677


1,038,808


6.0

 DEFERRED INCOME TAXES 


-


-


100.0

 OTHER ASSETS 


14,189


16,376


(13.4)

 Total assets 


$ 3,976,890


$     3,819,478


4.1








 LIABILITIES AND STOCKHOLDERS' EQUITY: 







 CURRENT LIABILITIES: 







 Floorplan notes payable - credit facility and other 


$ 1,122,333


$     1,143,104


(1.8)

 Offset account related to floorplan notes payable - credit facility 


(64,614)


(56,198)


15.0

 Floorplan notes payable - manufacturer affiliates 


298,656


346,572


(13.8)

 Current maturities of long-term debt and short-term financing 


30,516


36,225


(15.8)

 Accounts payable 


283,491


254,930


11.2

 Accrued expenses 


142,665


140,543


1.5

 Total current liabilities 


1,813,047


1,865,176


(2.8)

 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at June 30, 2014 and December 31, 2013) 


164,556


160,334


2.6

 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $22,550 and $115,000 at June 30, 2014 and December 31, 2013, respectively) 


16,907


84,305


(79.9)

 5.00% SENIOR NOTES (aggregate principal of $350,000 at June 30, 2014) 


344,796


-


100.0

 MORTGAGE FACILITY, net of current maturities 


62,860


64,271


(2.2)

 ACQUISITION LINE 


20,457


60,000


(65.9)

 OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities 


284,667


250,958


13.4

 CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities 


44,332


43,821


1.2

 DEFERRED INCOME TAXES 


152,167


152,291


(0.1)

 LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES 


27,271


26,078


4.6

 OTHER LIABILITIES 


55,900


47,975


16.5

 COMMITMENTS AND CONTINGENCIES 







 TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 2.25% and 3.00% CONVERTIBLE SENIOR NOTES 


22,860


29,094


(21.4)

 STOCKHOLDERS' EQUITY: 







 Common stock 


258


257


0.4

 Additional paid-in capital 


259,783


368,641


(29.5)

 Retained earnings 


816,056


776,101


5.1

 Accumulated other comprehensive loss 


(39,928)


(51,677)


(22.7)

 Treasury stock 


(69,099)


(58,147)


18.8

 Total stockholders' equity 


967,070


1,035,175


(6.6)

 Total liabilities and stockholders' equity 


$ 3,976,890


$     3,819,478


4.1

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)














Three Months Ended


Six Months Ended




June 30,


June 30,




2014 (%)


2013 (%)


2014 (%)


2013 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:








Region

Geographic Market









East

Massachusetts


5.9


5.8


5.7


6.2


Georgia


4.8


3.4


4.6


3.8


New Jersey


3.7


3.9


3.5


4.3


New Hampshire


2.2


2.2


2.2


2.3


New York


2.2


2.8


2.0


2.8


Louisiana


1.8


2.4


1.9


2.4


South Carolina


1.5


1.4


1.4


1.5


Mississippi


1.5


1.6


1.4


1.7


Florida


1.4


1.2


1.3


1.3


Alabama


0.9


0.8


0.8


0.8


Maryland


0.5


0.5


0.5


0.5




26.4


26.0


25.3


27.6











West

Texas


34.1


31.2


34.1


32.6


California


9.9


10.7


9.7


11.9


Oklahoma


8.1


7.9


8.3


7.7


Kansas


2.5


2.6


2.5


2.5


Louisiana


0.7


-


0.7


-




55.3


52.4


55.3


54.7











International

Brazil


9.8


12.9


10.2


9.1


United Kingdom


8.5


8.7


9.2


8.6




100.0


100.0


100.0


100.0











NEW VEHICLE UNIT SALES BRAND MIX:









Toyota/Scion/Lexus


27.2


26.5


26.6


27.0

BMW/MINI


11.7


10.8


11.5


10.5

Honda/Acura


11.4


12.6


11.5


12.5

Ford/Lincoln


10.8


11.4


11.4


11.5

Nissan/Infiniti


9.3


10.4


9.5


10.5

Volkswagen/Audi/Porsche


6.3


6.3


6.4


6.5

Hyundai/Kia


5.5


4.6


5.5


4.5

Chevrolet/GMC/Buick/Cadillac


5.4


4.4


5.4


4.8

Chrysler/Dodge/Jeep/RAM


4.4


3.9


4.5


4.1

Mercedes Benz/smart/Sprinter


4.4


4.2


4.2


4.4

Other


3.6


4.9


3.5


3.7




100.0


100.0


100.0


100.0

 

Group 1 Automotive, Inc.

Additional Information - U.S.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 1,191,321


$ 1,078,607


10.4

Used vehicle retail sales


474,075


448,574


5.7

Used vehicle wholesale sales


68,649


56,725


21.0

Total used


542,724


505,299


7.4

Parts and service


243,796


224,084


8.8

Finance and insurance


82,755


73,664


12.3

Total


$ 2,060,596


$ 1,881,654


9.5








GROSS MARGIN %:







New vehicle retail sales


5.2


5.4



Used vehicle retail sales


8.2


8.5



Used vehicle wholesale sales


1.7


0.4



Total used


7.4


7.6



Parts and service


54.1


53.5



Finance and insurance


100.0


100.0



Total


15.4


15.4










GROSS PROFIT:







New vehicle retail sales


$      62,096


$      58,325


6.5

Used vehicle retail sales


38,922


38,341


1.5

Used vehicle wholesale sales


1,139


248


359.3

Total used


40,061


38,589


3.8

Parts and service


131,865


119,898


10.0

Finance and insurance


82,755


73,664


12.3

Total


$    316,777


$    290,476


9.1








UNITS SOLD:







Retail new vehicles sold


34,685


32,589


6.4

Retail used vehicles sold


22,707


21,928


3.6

Wholesale used vehicles sold


10,461


9,940


5.2

Total used


33,168


31,868


4.1








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,347


$      33,097


3.8

Used vehicle retail


$      20,878


$      20,457


2.1








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,790


$        1,790


0.0

Used vehicle retail sales


1,714


1,748


(1.9)

Used vehicle wholesale sales


109


25


336.0

Total used


1,208


1,211


(0.2)

Finance and insurance (per retail unit)


$        1,442


$        1,351


6.7








OTHER: (1)







SG&A expenses


$    225,898


$    207,977


8.6

SG&A as % revenues


11.0


11.1



SG&A as % gross profit


71.3


71.6



Operating margin %


4.0


4.0



Pretax margin %


3.0


3.0










INTEREST EXPENSE:







Floorplan interest


$      (8,361)


$      (8,645)


(3.3)

Floorplan assistance


11,378


10,010


13.7

Net floorplan income


$        3,017


$        1,365


121.0

Other interest expense, net


$    (11,799)


$      (9,301)


26.9










Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 2,203,873


$ 2,041,239


8.0

Used vehicle retail sales


924,562


866,913


6.6

Used vehicle wholesale sales


133,120


114,394


16.4

Total used


1,057,682


981,307


7.8

Parts and service


474,115


440,438


7.6

Finance and insurance


159,552


140,456


13.6

Total


$ 3,895,222


$ 3,603,440


8.1








GROSS MARGIN %:







New vehicle retail sales


5.1


5.4



Used vehicle retail sales


8.3


8.8



Used vehicle wholesale sales


2.6


2.1



Total used


7.5


8.0



Parts and service


53.6


53.3



Finance and insurance


100.0


100.0



Total


15.6


15.6










GROSS PROFIT:







New vehicle retail sales


$    113,031


$    109,907


2.8

Used vehicle retail sales


76,362


75,960


0.5

Used vehicle wholesale sales


3,395


2,373


43.1

Total used


79,757


78,333


1.8

Parts and service


254,168


234,721


8.3

Finance and insurance


159,552


140,457


13.6

Total


$    606,508


$    563,418


7.6








UNITS SOLD:







Retail new vehicles sold


64,632


61,367


5.3

Retail used vehicles sold


45,450


43,044


5.6

Wholesale used vehicles sold


20,411


19,597


4.2

Total used


65,861


62,641


5.1








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,099


$      33,263


2.5

Used vehicle retail


$      20,342


$      20,140


1.0








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,749


$        1,791


(2.3)

Used vehicle retail sales


1,680


1,765


(4.8)

Used vehicle wholesale sales


166


121


37.2

Total used


1,211


1,251


(3.2)

Finance and insurance (per retail unit)


$        1,449


$        1,345


7.7








OTHER: (1)







SG&A expenses


$    442,294


$    412,068


7.3

SG&A as % revenues


11.4


11.4



SG&A as % gross profit


72.9


73.1



Operating margin %


3.8


3.8



Pretax margin %


2.8


2.8










INTEREST EXPENSE:







 Floorplan interest 


$    (16,944)


$    (16,941)


-

 Floorplan assistance 


21,093


18,183


16.0

 Net floorplan income 


$        4,148


$        1,242


234.0

 Other interest expense, net 


$    (22,062)


$    (18,341)


20.3








(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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Additional Information - U.K.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 131,803


$ 110,473


19.3

Used vehicle retail sales


73,260


58,429


25.4

Used vehicle wholesale sales


21,549


17,958


20.0

Total used


94,809


76,387


24.1

Parts and service


20,211


17,024


18.7

Finance and insurance


4,501


3,552


26.7

Total


$ 251,324


$ 207,436


21.2








GROSS MARGIN %:







New vehicle retail sales


6.9


6.5



Used vehicle retail sales


6.7


6.9



Used vehicle wholesale sales


(1.3)


(3.4)



Total used


4.9


4.5



Parts and service


56.1


56.4



Finance and insurance


100.0


100.0



Total


11.7


11.4










GROSS PROFIT:







New vehicle retail sales


$     9,040


$     7,161


26.2

Used vehicle retail sales


4,930


4,052


21.7

Used vehicle wholesale sales


(281)


(614)


(54.2)

Total used


4,649


3,438


35.2

Parts and service


11,336


9,594


18.2

Finance and insurance


4,501


3,551


26.8

Total


$   29,526


$   23,744


24.4








UNITS SOLD:







Retail new vehicles sold


3,626


3,605


0.6

Retail used vehicles sold


2,720


2,524


7.8

Wholesale used vehicles sold


2,195


2,251


(2.5)

Total used


4,915


4,775


2.9








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   36,349


$   30,644


18.6

Used vehicle retail


$   26,934


$   23,149


16.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,493


$     1,986


25.5

Used vehicle retail sales


1,813


1,605


13.0

Used vehicle wholesale sales


(128)


(273)


(53.1)

Total used


946


720


31.4

Finance and insurance (per retail unit)


$        709


$        579


22.5








OTHER:







SG&A expenses


$   22,316


$   18,570


20.2

SG&A as % revenues


8.9


9.0



SG&A as % gross profit


75.6


78.2



Operating margin %


2.5


2.2



Pretax margin %


2.2


1.8










INTEREST EXPENSE:







Floorplan interest


$      (336)


$      (421)


(20.2)

Floorplan assistance


156


-


100.0

Net floorplan expense


$      (180)


$      (421)


(57.2)

Other interest expense, net


$      (509)


$      (293)


73.7










Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 262,404


$ 205,298


27.8

Used vehicle retail sales


144,737


103,394


40.0

Used vehicle wholesale sales


41,194


31,722


29.9

Total used


185,931


135,116


37.6

Parts and service


41,571


31,795


30.7

Finance and insurance


9,119


6,305


44.6

Total


$ 499,025


$ 378,514


31.8








GROSS MARGIN %:







New vehicle retail sales


6.7


6.7



Used vehicle retail sales


5.9


6.1



Used vehicle wholesale sales


0.4


(1.7)



Total used


4.7


4.2



Parts and service


55.1


53.7



Finance and insurance


100.0


100.0



Total


11.7


11.3










GROSS PROFIT:







New vehicle retail sales


$   17,538


$   13,793


27.2

Used vehicle retail sales


8,519


6,270


35.9

Used vehicle wholesale sales


170


(530)


132.1

Total used


8,689


5,740


51.4

Parts and service


22,909


17,078


34.1

Finance and insurance


9,119


6,304


44.7

Total


$   58,255


$   42,915


35.7








UNITS SOLD:







Retail new vehicles sold


7,371


6,432


14.6

Retail used vehicles sold


5,459


4,252


28.4

Wholesale used vehicles sold


4,356


3,694


17.9

Total used


9,815


7,946


23.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   35,600


$   31,918


11.5

Used vehicle retail


$   26,513


$   24,317


9.0








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,379


$     2,144


11.0

Used vehicle retail sales


1,561


1,475


5.8

Used vehicle wholesale sales


39


(143)


127.3

Total used


885


722


22.6

Finance and insurance (per retail unit)


$        711


$        590


20.5








OTHER:(1)







SG&A expenses


$   44,788


$   34,464


30.0

SG&A as % revenues


9.0


9.1



SG&A as % gross profit


76.9


80.3



Operating margin %


2.4


1.9



Pretax margin %


2.0


1.6










INTEREST EXPENSE:







 Floorplan interest 


$      (769)


$      (727)


5.8

 Floorplan assistance 


258


-


100.0

 Net floorplan expense 


$      (511)


$      (727)


(29.7)

 Other interest expense, net 


$      (960)


$      (507)


89.3








(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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Additional Information - Brazil

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 142,940


$ 187,139


(23.6)

Used vehicle retail sales


29,915


27,802


7.6

Used vehicle wholesale sales


4,773


8,633


(44.7)

Total used


34,688


36,435


(4.8)

Parts and service


19,200


19,841


(3.2)

Finance and insurance


2,890


2,605


10.9

Total


$ 199,718


$ 246,020


(18.8)








GROSS MARGIN %:







New vehicle retail sales


6.8


8.0



Used vehicle retail sales


6.1


4.0



Used vehicle wholesale sales


8.0


10.2



Total used


6.3


5.5



Parts and service


41.9


38.2



Finance and insurance


100.0


100.0



Total


11.4


11.0










GROSS PROFIT:







New vehicle retail sales


$     9,710


$   14,879


(34.7)

Used vehicle retail sales


1,814


1,113


63.0

Used vehicle wholesale sales


383


878


(56.4)

Total used


2,197


1,991


10.3

Parts and service


8,048


7,579


6.2

Finance and insurance


2,890


2,605


10.9

Total


$   22,845


$   27,054


(15.6)








UNITS SOLD:







Retail new vehicles sold


4,145


5,337


(22.3)

Retail used vehicles sold


1,294


1,182


9.5

Wholesale used vehicles sold


574


881


(34.8)

Total used


1,868


2,063


(9.5)








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   34,485


$   35,064


(1.7)

Used vehicle retail


$   23,118


$   23,521


(1.7)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,343


$     2,788


(16.0)

Used vehicle retail sales


1,402


942


48.8

Used vehicle wholesale sales


667


997


(33.1)

Total used


1,176


965


21.9

Finance and insurance (per retail unit)


$        531


$        400


32.8








OTHER: (1)







SG&A expenses


$   21,732


$   21,769


(0.2)

SG&A as % revenues


10.9


8.8



SG&A as % gross profit


95.1


80.5



Operating margin %


0.3


2.0



Pretax margin %


(0.7)


1.3










INTEREST EXPENSE:







 Floorplan interest 


$   (1,632)


$   (1,807)


(9.7)

 Floorplan assistance 


-


-


-

 Net floorplan expense 


$   (1,632)


$   (1,807)


(9.7)

 Other interest expense, net 


$      (259)


$          24


(1,179.2)










Six Months Ended June 30,



2014


2013 (2)


% Change

REVENUES:







New vehicle retail sales


$ 268,623


$ 239,917


12.0

Used vehicle retail sales


57,848


35,897


61.1

Used vehicle wholesale sales


9,830


11,750


(16.3)

Total used


67,678


47,647


42.0

Parts and service


36,838


26,227


40.5

Finance and insurance


5,115


3,197


60.0

Total


$ 378,254


$ 316,988


19.3








GROSS MARGIN %:







New vehicle retail sales


6.4


8.0



Used vehicle retail sales


6.2


4.3



Used vehicle wholesale sales


8.0


9.3



Total used


6.5


5.5



Parts and service


43.0


39.2



Finance and insurance


100.0


100.0



Total


11.2


11.2










GROSS PROFIT:




-



New vehicle retail sales


$   17,183


$   19,301


(11.0)

Used vehicle retail sales


3,586


1,552


131.1

Used vehicle wholesale sales


788


1,090


(27.7)

Total used


4,374


2,642


65.6

Parts and service


15,835


10,290


53.9

Finance and insurance


5,115


3,197


60.0

Total


$   42,507


$   35,430


20.0








UNITS SOLD:







Retail new vehicles sold


8,202


6,828


20.1

Retail used vehicles sold


2,689


1,576


70.6

Wholesale used vehicles sold


1,247


1,116


11.7

Total used


3,936


2,692


46.2








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   32,751


$   35,137


(6.8)

Used vehicle retail


$   21,513


$   22,777


(5.6)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,095


$     2,827


(25.9)

Used vehicle retail sales


1,334


985


35.4

Used vehicle wholesale sales


632


977


(35.3)

Total used


1,111


981


13.3

Finance and insurance (per retail unit)


$        470


$        380


23.7








OTHER: (1)







SG&A expenses


$   40,422


$   28,471


42.0

SG&A as % revenues


10.7


9.0



SG&A as % gross profit


95.1


80.4



Operating margin %


0.3


2.0



Pretax margin %


(0.7)


1.2










INTEREST EXPENSE:







 Floorplan interest 


$   (3,528)


$   (2,569)


37.3

 Floorplan assistance 


-


-


-

 Net floorplan expense 


$   (3,528)


$   (2,569)


37.3

 Other interest income, net 


$        (58)


$        (36)


61.1








(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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.



(2)

Results are for the period from the date of acquisition (February 28, 2013) through June 30, 2013.

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 1,466,064


$ 1,376,219


6.5

Used vehicle retail sales


577,250


534,804


7.9

Used vehicle wholesale sales


94,971


83,316


14.0

Total used


672,221


618,120


8.8

Parts and service


283,207


260,950


8.5

Finance and insurance


90,146


79,821


12.9

Total


$ 2,511,638


$ 2,335,110


7.6








GROSS MARGIN %:







New vehicle retail sales


5.5


5.8



Used vehicle retail sales


7.9


8.1



Used vehicle wholesale sales


1.3


0.6



Total used


7.0


7.1



Parts and service


53.4


52.5



Finance and insurance


100.0


100.0



Total


14.7


14.6










GROSS PROFIT:







New vehicle retail sales


$      80,846


$      80,365


0.6

Used vehicle retail sales


45,666


43,505


5.0

Used vehicle wholesale sales


1,241


512


142.4

Total used


46,907


44,017


6.6

Parts and service


151,249


137,071


10.3

Finance and insurance


90,146


79,821


12.9

Total


$    369,148


$    341,274


8.2








UNITS SOLD:







Retail new vehicles sold


42,456


41,531


2.2

Retail used vehicles sold


26,721


25,634


4.2

Wholesale used vehicles sold


13,230


13,072


1.2

Total used


39,951


38,706


3.2








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,531


$      33,137


4.2

Used vehicle retail


$      21,603


$      20,863


3.5








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,904


$        1,935


(1.6)

Used vehicle retail sales


1,709


1,697


0.7

Used vehicle wholesale sales


94


39


141.0

Total used


1,174


1,137


3.3

Finance and insurance (per retail unit)


$        1,303


$        1,188


9.7








OTHER: (1)







SG&A expenses


$    269,946


$    248,316


8.7

SG&A as % revenues


10.7


10.6



SG&A as % gross profit


73.1


72.8



Operating margin %


3.5


3.6



Pretax margin %


2.6


2.7










INTEREST EXPENSE:







 Floorplan interest 


$    (10,329)


$    (10,873)


(5.0)

 Floorplan assistance 


11,534


10,010


15.2

 Net floorplan (expense) income 


$        1,205


$         (863)


239.6

 Other interest expense, net 


$    (12,567)


$      (9,570)


31.3










Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 2,734,900


$ 2,486,454


10.0

Used vehicle retail sales


1,127,147


1,006,203


12.0

Used vehicle wholesale sales


184,144


157,867


16.6

Total used


1,311,291


1,164,070


12.6

Parts and service


552,524


498,460


10.8

Finance and insurance


173,786


149,958


15.9

Total


$ 4,772,501


$ 4,298,942


11.0








GROSS MARGIN %:







New vehicle retail sales


5.4


5.8



Used vehicle retail sales


7.8


8.3



Used vehicle wholesale sales


2.4


1.9



Total used


7.1


7.4



Parts and service


53.0


52.6



Finance and insurance


100.0


100.0



Total


14.8


14.9










GROSS PROFIT:







New vehicle retail sales


$    147,752


$    143,000


3.3

Used vehicle retail sales


88,467


83,781


5.6

Used vehicle wholesale sales


4,353


2,934


48.4

Total used


92,820


86,715


7.0

Parts and service


292,912


262,089


11.8

Finance and insurance


173,786


149,959


15.9

Total


$    707,270


$    641,763


10.2








UNITS SOLD:







Retail new vehicles sold


80,205


74,627


7.5

Retail used vehicles sold


53,598


48,872


9.7

Wholesale used vehicles sold


26,014


24,407


6.6

Total used


79,612


73,279


8.6








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,099


$      33,318


2.3

Used vehicle retail


$      21,030


$      20,589


2.1








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,842


$        1,916


(3.9)

Used vehicle retail sales


1,651


1,714


(3.7)

Used vehicle wholesale sales


167


120


39.2

Total used


1,166


1,183


(1.4)

Finance and insurance (per retail unit)


$        1,299


$        1,214


7.0








OTHER: (1)







SG&A expenses


$    527,504


$    475,003


11.1

SG&A as % revenues


11.1


11.0



SG&A as % gross profit


74.6


74.0



Operating margin %


3.3


3.5



Pretax margin %


2.4


2.6










INTEREST EXPENSE:







 Floorplan interest 


$    (21,242)


$    (20,237)


5.0

 Floorplan assistance 


21,351


18,183


17.4

 Net floorplan (expense) income 


$           109


$      (2,054)


105.3

 Other interest expense, net 


$    (23,080)


$    (18,812)


22.7








(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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Additional Information - Same Store U.S. (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 1,106,285


$ 1,041,504


6.2

Used vehicle retail sales


440,854


435,111


1.3

Used vehicle wholesale sales


64,025


53,763


19.1

Total used


504,879


488,874


3.3

Parts and service


227,172


215,467


5.4

Finance and insurance


78,181


71,744


9.0

Total


$ 1,916,517


$ 1,817,589


5.4








GROSS MARGIN %:







New vehicle retail sales


5.2


5.5



Used vehicle retail sales


8.1


8.6



Used vehicle wholesale sales


1.9


0.9



Total used


7.3


7.7



Parts and service


54.0


53.6



Finance and insurance


100.0


100.0



Total


15.4


15.5










GROSS PROFIT:







New vehicle retail sales


$      57,615


$      57,091


0.9

Used vehicle retail sales


35,809


37,299


(4.0)

Used vehicle wholesale sales


1,192


462


158.0

Total used


37,001


37,761


(2.0)

Parts and service


122,599


115,414


6.2

Finance and insurance


78,181


71,744


9.0

Total


$    295,396


$    282,010


4.7








UNITS SOLD:







Retail new vehicles sold


32,231


31,297


3.0

Retail used vehicles sold


20,955


21,215


(1.2)

Wholesale used vehicles sold


9,883


9,453


4.5

Total used


30,838


30,668


0.6








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,324


$      33,278


3.1

Used vehicle retail


$      21,038


$      20,510


2.6








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,788


$        1,824


(2.0)

Used vehicle retail sales


1,709


1,758


(2.8)

Used vehicle wholesale sales


121


49


146.9

Total used


1,200


1,231


(2.5)

Finance and insurance (per retail unit)


$        1,470


$        1,366


7.6








OTHER:(2)







SG&A expenses


$    208,805


$    198,731


5.1

SG&A as % revenues


10.9


10.9



SG&A as % gross profit


70.7


70.5



Operating margin %


4.1


4.2












Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 2,058,721


$ 1,963,058


4.9

Used vehicle retail sales


865,179


838,917


3.1

Used vehicle wholesale sales


124,920


108,883


14.7

Total used


990,099


947,800


4.5

Parts and service


444,027


421,248


5.4

Finance and insurance


151,873


136,248


11.5

Total


$ 3,644,720


$ 3,468,354


5.1








GROSS MARGIN %:







New vehicle retail sales


5.1


5.5



Used vehicle retail sales


8.1


8.8



Used vehicle wholesale sales


2.8


2.4



Total used


7.5


8.0



Parts and service


53.5


53.3



Finance and insurance


100.0


100.0



Total


15.6


15.7










GROSS PROFIT:







New vehicle retail sales


$    105,410


$    107,155


(1.6)

Used vehicle retail sales


70,471


73,648


(4.3)

Used vehicle wholesale sales


3,507


2,576


36.1

Total used


73,978


76,224


(2.9)

Parts and service


237,416


224,556


5.7

Finance and insurance


151,873


136,248


11.5

Total


$    568,677


$    544,183


4.5








UNITS SOLD:







Retail new vehicles sold


60,347


58,566


3.0

Retail used vehicles sold


42,156


41,549


1.5

Wholesale used vehicles sold


19,403


18,638


4.1

Total used


61,559


60,187


2.3








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,115


$      33,519


1.8

Used vehicle retail


$      20,523


$      20,191


1.6








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,747


$        1,830


(4.5)

Used vehicle retail sales


1,672


1,773


(5.7)

Used vehicle wholesale sales


181


138


31.2

Total used


1,202


1,266


(5.1)

Finance and insurance (per retail unit)


$        1,482


$        1,361


8.9








OTHER: (2)







SG&A expenses


$    411,766


$    392,941


4.8

SG&A as % revenues


11.3


11.3



SG&A as % gross profit


72.4


72.2



Operating margin %


3.8


3.9










(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)

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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Additional Information - Same Store U.K. (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 131,803


$ 110,473


19.3

Used vehicle retail sales


73,260


58,429


25.4

Used vehicle wholesale sales


21,549


17,958


20.0

Total used


94,809


76,387


24.1

Parts and service


20,206


17,024


18.7

Finance and insurance


4,501


3,544


27.0

Total


$ 251,319


$ 207,428


21.2








GROSS MARGIN %:







New vehicle retail sales


6.9


6.5



Used vehicle retail sales


6.7


6.9



Used vehicle wholesale sales


(1.3)


(3.4)



Total used


4.9


4.5



Parts and service


56.1


56.3



Finance and insurance


100.0


100.0



Total


11.7


11.4










GROSS PROFIT:







New vehicle retail sales


$     9,040


$     7,148


26.5

Used vehicle retail sales


4,930


4,048


21.8

Used vehicle wholesale sales


(281)


(614)


(54.2)

Total used


4,649


3,434


35.4

Parts and service


11,331


9,585


18.2

Finance and insurance


4,501


3,544


27.0

Total


$   29,521


$   23,711


24.5








UNITS SOLD:







Retail new vehicles sold


3,626


3,605


0.6

Retail used vehicles sold


2,720


2,524


7.8

Wholesale used vehicles sold


2,195


2,251


(2.5)

Total used


4,915


4,775


2.9








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   36,349


$   30,644


18.6

Used vehicle retail


$   26,934


$   23,149


16.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,493


$     1,983


25.7

Used vehicle retail sales


1,813


1,604


13.0

Used vehicle wholesale sales


(128)


(273)


(53.1)

Total used


946


719


31.6

Finance and insurance (per retail unit)


$        709


$        578


22.7








OTHER:(2)







SG&A expenses


$   22,316


$   18,563


20.2

SG&A as % revenues


8.9


8.9



SG&A as % gross profit


75.6


78.3



Operating margin %


2.5


2.2












Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 254,063


$ 205,298


23.8

Used vehicle retail sales


132,804


103,394


28.4

Used vehicle wholesale sales


39,297


31,722


23.9

Total used


172,101


135,116


27.4

Parts and service


38,588


31,795


21.4

Finance and insurance


8,484


6,297


34.7

Total


$ 473,236


$ 378,506


25.0








GROSS MARGIN %:







New vehicle retail sales


6.8


6.7



Used vehicle retail sales


5.9


6.1



Used vehicle wholesale sales


0.3


(1.7)



Total used


4.6


4.2



Parts and service


55.3


53.7



Finance and insurance


100.0


100.0



Total


11.6


11.3










GROSS PROFIT:







New vehicle retail sales


$   17,210


$   13,781


24.9

Used vehicle retail sales


7,830


6,265


25.0

Used vehicle wholesale sales


131


(531)


124.7

Total used


7,961


5,734


38.8

Parts and service


21,351


17,069


25.1

Finance and insurance


8,484


6,297


34.7

Total


$   55,006


$   42,881


28.3








UNITS SOLD:







Retail new vehicles sold


6,955


6,432


8.1

Retail used vehicles sold


4,773


4,252


12.3

Wholesale used vehicles sold


3,919


3,694


6.1

Total used


8,692


7,946


9.4








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   36,530


$   31,918


14.4

Used vehicle retail


$   27,824


$   24,317


14.4








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,474


$     2,143


15.4

Used vehicle retail sales


1,640


1,473


11.3

Used vehicle wholesale sales


33


(144)


122.9

Total used


916


722


26.9

Finance and insurance (per retail unit)


$        723


$        589


22.8








OTHER: (2)







SG&A expenses


$   41,977


$   34,457


21.8

SG&A as % revenues


8.9


9.1



SG&A as % gross profit


76.3


80.4



Operating margin %


2.4


1.9










(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)

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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Additional Information - Same Store Brazil (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$      141,658


$      187,139


(24.3)

Used vehicle retail sales


29,373


27,802


5.7

Used vehicle wholesale sales


4,773


8,633


(44.7)

Total used


34,146


36,435


(6.3)

Parts and service


19,027


19,841


(4.1)

Finance and insurance


2,891


2,605


11.0

Total


$      197,722


$      246,020


(19.6)








GROSS MARGIN %:







New vehicle retail sales


6.6


8.0



Used vehicle retail sales


6.0


4.0



Used vehicle wholesale sales


8.0


10.2



Total used


6.3


5.5



Parts and service


41.9


38.2



Finance and insurance


100.0


100.0



Total


11.3


11.0










GROSS PROFIT:







New vehicle retail sales


$          9,316


$        14,879


(37.4)

Used vehicle retail sales


1,758


1,113


58.0

Used vehicle wholesale sales


383


878


(56.4)

Total used


2,141


1,991


7.5

Parts and service


7,974


7,579


5.2

Finance and insurance


2,891


2,605


11.0

Total


$        22,322


$        27,054


(17.5)








UNITS SOLD:







Retail new vehicles sold


4,087


5,337


(23.4)

Retail used vehicles sold


1,271


1,182


7.5

Wholesale used vehicles sold


561


881


(36.3)

Total used


1,832


2,063


(11.2)








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$        34,661


$        35,064


(1.2)

Used vehicle retail


$        23,110


$        23,521


(1.7)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$          2,279


$          2,788


(18.3)

Used vehicle retail sales


1,383


942


46.8

Used vehicle wholesale sales


683


997


(31.5)

Total used


1,169


965


21.1

Finance and insurance (per retail unit)


$             540


$             400


35.0








OTHER:(2)







SG&A expenses


$        21,491


$        21,769


(1.3)

SG&A as % revenues


10.9


8.8



SG&A as % gross profit


96.3


80.5



Operating margin %


0.2


2.0












Six Months Ended June 30,



2014


2013 (3)


% Change

REVENUES:







New vehicle retail sales


$      181,207


$      239,917


(24.5)

Used vehicle retail sales


36,366


35,897


1.3

Used vehicle wholesale sales


6,040


11,750


(48.6)

Total used


42,406


47,647


(11.0)

Parts and service


25,062


26,227


(4.4)

Finance and insurance


3,481


3,197


8.9

Total


$      252,156


$      316,988


(20.5)








GROSS MARGIN %:







New vehicle retail sales


6.5


8.0



Used vehicle retail sales


6.0


4.3



Used vehicle wholesale sales


8.1


9.3



Total used


6.3


5.5



Parts and service


42.0


39.2



Finance and insurance


100.0


100.0



Total


11.3


11.2










GROSS PROFIT:







New vehicle retail sales


$        11,715


$        19,301


(39.3)

Used vehicle retail sales


2,195


1,552


41.4

Used vehicle wholesale sales


492


1,090


(54.9)

Total used


2,687


2,642


1.7

Parts and service


10,523


10,290


2.3

Finance and insurance


3,481


3,197


8.9

Total


$        28,406


$        35,430


(19.8)








UNITS SOLD:







Retail new vehicles sold


5,330


6,828


(21.9)

Retail used vehicles sold


1,605


1,576


1.8

Wholesale used vehicles sold


721


1,116


(35.4)

Total used


2,326


2,692


(13.6)








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$        33,998


$        35,137


(3.2)

Used vehicle retail


$        22,658


$        22,777


(0.5)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$          2,198


$          2,827


(22.2)

Used vehicle retail sales


1,368


985


38.9

Used vehicle wholesale sales


682


977


(30.2)

Total used


1,155


981


17.7

Finance and insurance (per retail unit)


$             502


$             380


32.1








OTHER: (2)







SG&A expenses


$        27,206


$        28,471


(4.4)

SG&A as % revenues


10.8


9.0



SG&A as % gross profit


95.8


80.4



Operating margin %


0.2


2.0










(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)

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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.



(3)

Results are for the period from the date of acquisition (February 28, 2013) through June 30, 2013.

 

Group 1 Automotive, Inc.

Additional Information - Same Store Consolidated (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 1,379,746


$ 1,339,116


3.0

Used vehicle retail sales


543,487


521,342


4.2

Used vehicle wholesale sales


90,347


80,354


12.4

Total used


633,834


601,696


5.3

Parts and service


266,405


252,332


5.6

Finance and insurance


85,573


77,893


9.9

Total


$ 2,365,558


$ 2,271,037


4.2








GROSS MARGIN %:







New vehicle retail sales


5.5


5.9



Used vehicle retail sales


7.8


8.1



Used vehicle wholesale sales


1.4


0.9



Total used


6.9


7.2



Parts and service


53.3


52.5



Finance and insurance


100.0


100.0



Total


14.7


14.7










GROSS PROFIT:







New vehicle retail sales


$      75,971


$      79,118


(4.0)

Used vehicle retail sales


42,497


42,460


0.1

Used vehicle wholesale sales


1,294


726


78.2

Total used


43,791


43,186


1.4

Parts and service


141,904


132,578


7.0

Finance and insurance


85,573


77,893


9.9

Total


$    347,239


$    332,775


4.3








UNITS SOLD:







Retail new vehicles sold


39,944


40,239


(0.7)

Retail used vehicles sold


24,946


24,921


0.1

Wholesale used vehicles sold


12,639


12,585


0.4

Total used


37,585


37,506


0.2








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,542


$      33,279


3.8

Used vehicle retail


$      21,787


$      20,920


4.1








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,902


$        1,966


(3.3)

Used vehicle retail sales


1,704


1,704


-

Used vehicle wholesale sales


102


58


75.9

Total used


1,165


1,151


1.2

Finance and insurance (per retail unit)


$        1,319


$        1,195


10.4








OTHER:(2)







SG&A expenses


$    252,612


$    239,063


5.7

SG&A as % revenues


10.7


10.5



SG&A as % gross profit


72.7


71.8



Operating margin %


3.6


3.7












Six Months Ended June 30,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$ 2,493,991


$ 2,408,273


3.6

Used vehicle retail sales


1,034,349


978,208


5.7

Used vehicle wholesale sales


170,257


152,355


11.8

Total used


1,204,606


1,130,563


6.5

Parts and service


507,677


479,270


5.9

Finance and insurance


163,838


145,742


12.4

Total


$ 4,370,112


$ 4,163,848


5.0








GROSS MARGIN %:







New vehicle retail sales


5.4


5.8



Used vehicle retail sales


7.8


8.3



Used vehicle wholesale sales


2.4


2.1



Total used


7.0


7.5



Parts and service


53.0


52.6



Finance and insurance


100.0


100.0



Total


14.9


14.9










GROSS PROFIT:







New vehicle retail sales


$    134,335


$    140,237


(4.2)

Used vehicle retail sales


80,496


81,465


(1.2)

Used vehicle wholesale sales


4,130


3,135


31.7

Total used


84,626


84,600


0.0

Parts and service


269,290


251,915


6.9

Finance and insurance


163,838


145,742


12.4

Total


$    652,089


$    622,494


4.8








UNITS SOLD:







Retail new vehicles sold


72,632


71,826


1.1

Retail used vehicles sold


48,534


47,377


2.4

Wholesale used vehicles sold


24,043


23,448


2.5

Total used


72,577


70,825


2.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$      34,337


$      33,529


2.4

Used vehicle retail


$      21,312


$      20,647


3.2








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$        1,850


$        1,952


(5.2)

Used vehicle retail sales


1,659


1,720


(3.5)

Used vehicle wholesale sales


172


134


28.4

Total used


1,166


1,194


(2.3)

Finance and insurance (per retail unit)


$        1,352


$        1,223


10.5








OTHER: (2)







SG&A expenses


$    480,949


$    455,869


5.5

SG&A as % revenues


11.0


10.9



SG&A as % gross profit


73.8


73.2



Operating margin %


3.5


3.6










(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)

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. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.S.

(Unaudited)

(Dollars in thousands, except per share amounts)

















Three Months Ended June 30,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$        227,506


$        210,820


7.9


Pre-tax adjustments:







 Catastrophic events 

(1,676)


(11,092)




 Net gain on real estate and dealership transactions 

510


8,249




 Legal settlements 

(442)


-




Adjusted SG&A (1)

$225,898


$207,977


8.6








SG&A AS % REVENUES:







Unadjusted

11.0


11.2




Adjusted (1)

11.0


11.1










SG&A AS % GROSS PROFIT:







Unadjusted

71.8


72.6




Adjusted (1)

71.3


71.6










OPERATING MARGIN %







Unadjusted

3.8


3.8




Adjusted(1), (2)

4.0


4.0










PRETAX MARGIN %:







Unadjusted

1.7


2.8




Adjusted (1), (3)

3.0


3.0










SAME STORE SG&A RECONCILIATION:














As reported

$        210,923


$        210,023


0.4


  Pre-tax adjustments:







 Catastrophic events 

(1,676)


(11,092)




 Net gain on real estate and dealership transactions 

-


(200)




 Legal settlements 

(442)


-




Adjusted Same Store SG&A (1)

$        208,805


$        198,731


5.1








SAME STORE SG&A AS % REVENUES:







Unadjusted

11.0


11.6




Adjusted (1)

10.9


10.9

















SAME STORE SG&A AS % GROSS PROFIT:







Unadjusted

71.4


74.5




Adjusted (1)

70.7


70.5

















SAME STORE OPERATING MARGIN %:







Unadjusted

3.9


3.5




Adjusted (1), (4)

4.1


4.2












Six Months Ended June 30,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$        443,902


$        420,304


5.6


Pre-tax adjustments:







Acquisition costs

-


(5,159)




Catastrophic events

(1,676)


(11,900)




Net gain on real estate and dealership transactions

510


8,823




Legal settlements

(442)


-




Adjusted SG&A(1)

$        442,294


$        412,068


7.3








SG&A AS % REVENUES:







Unadjusted

11.4


11.7




Adjusted (1)

11.4


11.4










SG&A AS % OF GROSS PROFIT:







Unadjusted

73.2


74.6




Adjusted (1)

72.9


73.1










OPERATING MARGIN %:







Unadjusted

3.7


3.5




Adjusted (1), (2)

3.8


3.8










PRETAX MARGIN %:







Unadjusted

2.1


2.5




Adjusted (1), (3)

2.8


2.8










SAME STORE SG&A RECONCILIATION:














As reported

$        413,884


$        410,200


0.9


  Pre-tax adjustments:







 Catastrophic events 

(1,676)


(11,900)




 Acquisition costs 

-


(5,159)




 Net gain on real estate and dealership transactions 

-


(200)




 Legal settlements 

(442)


-




Adjusted Same Store SG&A (1)

$        411,766


$        392,941


4.8








SAME STORE SG&A AS % REVENUES:







Unadjusted

11.4


11.8




Adjusted (1)

11.3


11.3










SAME STORE SG&A AS % GROSS PROFIT:







Unadjusted

72.8


75.4




Adjusted (1)

72.4


72.2










SAME STORE OPERATING MARGIN %:







Unadjusted

3.7


3.4




Adjusted (1), (4)

3.8


3.9










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $1,721 for the three and six months ended June 30, 2014, and $609 for the three and six months ended June 30, 2013.



(3)

Excludes the impact of SG&A reconciling items above, as well as loss on redemption of long-term debt of $23,614 for the three and six months ended June 30, 2014, non-cash asset impairment charges of $1,721 for the three and six months ended June 30, 2014, and $609 for the three and six months ended June 30, 2013.



(4)

Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $1,721 for the three and six months ended June 30, 2014, and $609 and $607 for the three and six months ended June 30, 2013, respectively.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.K.

(Unaudited)

(Dollars in thousands, except per share amounts)










Six Months Ended June 30,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$ 44,788


$ 34,606


29.4


Pre-tax adjustments:







Acquisition costs

-


(142)




Adjusted SG&A (1)

$ 44,788


$ 34,464


30.0








SG&A AS % REVENUES:














Unadjusted

9.0


9.1




Adjusted (1)

9.0


9.1










SG&A AS % OF GROSS PROFIT:














Unadjusted

76.9


80.6




Adjusted (1)

76.9


80.3










OPERATING MARGIN %:














Unadjusted

2.4


1.9




Adjusted (1), (2)

2.4


1.9










PRETAX MARGIN %:














Unadjusted

2.0


1.5




Adjusted (1), (2)

2.0


1.6










SAME STORE SG&A RECONCILIATION:














As reported

$ 41,977


$ 34,599


21.3


  Pre-tax adjustments:







Acquisition costs

-


(142)




Adjusted Same Store SG&A (1)

$ 41,977


$ 34,457


21.8








SAME STORE SG&A AS % REVENUES:














Unadjusted

8.9


9.1




Adjusted (1)

8.9


9.1










SAME STORE SG&A AS % GROSS PROFIT:














Unadjusted

76.3


80.7




Adjusted (1)

76.3


80.4










SAME STORE OPERATING MARGIN %:














Unadjusted

2.4


1.9




Adjusted (1), (2)

2.4


1.9










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations.



(2)

Excludes the impact of SG&A reconciling items above.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Brazil

(Unaudited)

(Dollars in thousands)










Three Months Ended June 30,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$ 22,148


$ 21,769


1.7


Pre-tax adjustments:







Foreign transaction tax

(416)


-




Adjusted SG&A(1)

$ 21,732


$ 21,769


(0.2)








SG&A AS % REVENUES:







Unadjusted

11.1


8.8




Adjusted (1)

10.9


8.8










SG&A AS % GROSS PROFIT:







Unadjusted

96.9


80.5




Adjusted (1)

95.1


80.5










OPERATING MARGIN %







Unadjusted

0.1


2.0




Adjusted (1), (2)

0.3


2.0










PRETAX MARGIN %:







Unadjusted

(0.9)


1.3




Adjusted (1), (3)

(0.7)


1.3










SAME STORE SG&A RECONCILIATION:














As reported

$ 21,907


$ 21,769


0.6


  Pre-tax adjustments:







Foreign transaction tax

(416)


-




Adjusted Same Store SG&A (1)

$ 21,491


$ 21,769


(1.3)








SAME STORE SG&A AS % REVENUES:







Unadjusted

11.1


8.8




Adjusted (1)

10.9


8.8










SAME STORE SG&A AS % GROSS PROFIT:







Unadjusted

98.1


80.5




Adjusted (1)

96.3


80.5










SAME STORE OPERATING MARGIN %:







Unadjusted

(0.1)


2.0




Adjusted (1), (2)

0.2


2.0












Six Months Ended June 30,



2014


2013 (4)


% Change

SG&A RECONCILIATION:














As reported

$ 40,838


$ 29,682


37.6


Pre-tax adjustments:







Acquisition costs

-


(1,211)




Foreign transaction tax

(416)


-




Adjusted SG&A(1)

$ 40,422


$ 28,471


42.0








SG&A AS % REVENUES:







Unadjusted

10.8


9.4




Adjusted (1)

10.7


9.0










SG&A AS % OF GROSS PROFIT:







Unadjusted

96.1


83.8




Adjusted (1)

95.1


80.4










OPERATING MARGIN %:







Unadjusted

0.1


1.6




Adjusted (1), (2)

0.3


2.0










PRETAX MARGIN %:







Unadjusted

(0.8)


0.6




Adjusted (1), (3)

(0.7)


1.2










SAME STORE SG&A RECONCILIATION:














As reported

$ 27,622


$ 29,682


(6.9)


  Pre-tax adjustments:







Acquisition costs

-


(1,211)




Foreign transaction tax

(416)


-




Adjusted Same Store SG&A (1)

$ 27,206


$ 28,471


(4.4)








SAME STORE SG&A AS % REVENUES:







Unadjusted

11.0


9.4




Adjusted (1)

10.8


9.0










SAME STORE SG&A AS % GROSS PROFIT:







Unadjusted

97.2


83.8




Adjusted (1)

95.8


80.4










SAME STORE OPERATING MARGIN %:







Unadjusted

-


1.6




Adjusted (1), (2)

0.2


2.0










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above.



(3)

Excludes the impact of SG&A reconciling items above, as well as the other expense, net of $789, for the period from the date of acquisition (February 28, 2013) through June 30, 2013.



(4)

Results are for the period from the date of acquisition through June 30, 2013.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Consolidated

(Unaudited)

(Dollars in thousands, except per share amounts)

















Three Months Ended June 30,



2014


2013


% Change

NET INCOME RECONCILIATION:







As reported

$   16,862


$   37,388


(54.9)


After-tax adjustments:







Catastrophic events(6)

1,039


6,757




Net gain on real estate and dealership transactions (7)

(316)


(4,785)




Non-cash asset impairment charges (8)

1,067


369




Loss on redemption of long-term debt(9)

20,778


-




Legal settlements (10)

274


-




Foreign transaction tax (11)

274


-




Adjusted net income (1)

$   39,978


$   39,729


0.6




ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$   39,978


$   39,729


0.6


Less: Adjusted earnings allocated to participating securities

$     1,456


$     1,692


(13.9)


Adjusted net income available to diluted common shares

$   38,522


$   38,037


1.3








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$       0.62


$       1.43


(56.6)


After-tax adjustments:







Catastrophic events

0.04


0.26




Net gain on real estate and dealership transactions

(0.01)


(0.18)




Non-cash asset impairment charges

0.04


0.01




Loss on redemption of long-term debt

0.76


-




Legal settlements

0.01


-




Foreign transaction tax

0.01


-




Adjusted diluted income per share (1)

$       1.47


$       1.52


(3.3)








SG&A RECONCILIATION:














As reported

$ 271,970


$ 251,159


8.3


Pre-tax adjustments:







 Catastrophic events  

(1,676)


(11,092)




 Net gain on real estate and dealership transactions 

510


8,249




 Legal settlements 

(442)


-




 Foreign transaction tax 

(416)


-




Adjusted SG&A (1)

$ 269,946


$ 248,316


8.7








SG&A AS % REVENUES:







Unadjusted

10.8


10.8




Adjusted (1)

10.7


10.6










SG&A AS % GROSS PROFIT:







Unadjusted

73.7


73.6




Adjusted (1)

73.1


72.8










OPERATING MARGIN %







Unadjusted

3.4


3.5




Adjusted (1),(2)

3.5


3.6










PRETAX MARGIN %:







Unadjusted

1.5


2.6




Adjusted (1),(3)

2.6


2.7










SAME STORE SG&A RECONCILIATION:







As reported

$ 255,146


$ 250,355


1.9


Pre-tax adjustments:







Catastrophic events

(1,676)


(11,092)




Net gain on real estate and dealership transactions

-


(200)




Legal settlements

(442)


-




Foreign transaction tax

(416)


-




Adjusted Same Store SG&A (1)

$ 252,612


$ 239,063


5.7








SAME STORE SG&A AS % REVENUES:







Unadjusted

10.8


11.0




Adjusted (1)

10.7


10.5










SAME STORE SG&A AS % GROSS PROFIT:







Unadjusted

73.5


75.2




Adjusted (1)

72.7


71.8










SAME STORE OPERATING MARGIN %:







Unadjusted

3.4


3.2




Adjusted (1)

3.6


3.7



















Six Months Ended June 30,



2014


2013


% Change

NET INCOME RECONCILIATION:







As reported

$   48,165


$   59,506


(19.1)


After-tax adjustments:







Acquisition costs (5)

-


6,968




Catastrophic events(6)

1,039


7,261




Net gain on real estate and dealership transactions (7)

(316)


(5,141)




Non-cash asset impairment charges (8)

1,067


369




Loss on redemption of long-term debt(9)

20,778


-




Legal settlements (10)

274


-




Foreign transaction tax (11)

274


-




Adjusted net income (1)

$   71,281


$   68,963


3.4








ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$   71,281


$   68,963


3.4


Less: Adjusted earnings allocated to participating securities

$     2,613


$     2,925


(10.7)


Adjusted net income available to diluted common shares

$   68,668


$   66,038


4.0








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$       1.80


$       2.32


(22.4)


After-tax adjustments:







Acquisition costs 

-


0.27




Catastrophic events

0.04


0.28




Net gain on real estate and dealership transactions

(0.01)


(0.19)




Non-cash asset impairment charges

0.04


0.01




Loss on redemption of long-term debt 

0.77


-




Legal settlements 

0.01


-




Foreign transaction tax 

0.01


-




Adjusted diluted income per share (1)

$       2.66


$       2.69


(1.12)








SG&A RECONCILIATION:














As reported

$ 529,528


$ 484,592


9.3


Pre-tax adjustments:







 Acquisition costs 

-


(6,512)




 Catastrophic events 

(1,676)


(11,900)




 Net gain on real estate and dealership transactions 

510


8,823




 Legal settlements 

(442)


-




 Foreign transaction tax 

(416)


-




Adjusted SG&A (1)

$ 527,504


$ 475,003


11.1








SG&A AS % REVENUES:







Unadjusted

11.1


11.3




Adjusted (1)

11.1


11.0










SG&A AS % OF GROSS PROFIT:







Unadjusted

74.9


75.5




Adjusted (1)

74.6


74.0










OPERATING MARGIN %:







Unadjusted

3.3


3.2




Adjusted (1),(2)

3.3


3.5










PRETAX MARGIN %:







Unadjusted

1.8


2.3




Adjusted (1),(3)

2.4


2.6










SAME STORE SG&A RECONCILIATION:














As reported

$ 483,483


$ 474,481


1.9


Pre-tax adjustments:







 Acquisition costs 

-


(6,512)




 Catastrophic events 

(1,676)


(11,900)




 Net gain on real estate and dealership transactions 

-


(200)




 Legal settlements 

(442)


-




 Foreign transaction tax 

(416)


-




Adjusted Same Store SG&A (1)

$ 480,949


$ 455,869


5.5








SAME STORE SG&A AS % REVENUES:







Unadjusted

11.1


11.4




Adjusted (1)

11.0


10.9










SAME STORE SG&A AS % OF GROSS PROFIT:







Unadjusted

74.1


76.2




Adjusted (1)

73.8


73.2










SAME STORE OPERATING MARGIN %:







Unadjusted

3.4


3.1




Adjusted (1),(4)

3.5


3.6

















(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges for all periods.



(3)

Excludes the impact of SG&A reconciling items above, as well as loss on redemption of long-term debt of $23,614 for the three and six months ended June 30, 2014, non-cash asset impairment charges of $1,721 for the three and six months ended June 30, 2014, and non-cash asset impairment charges of $609 for the three and six months ended June 30, 2013.



(4)

Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $1,721 for the three and six months ended June 30, 2014, respectively, and $609 and $607 for the three and six months ended June 30, 2013, respectively.



(5)

Adjustment is net of tax benefit of  $2,394 for the six months ended June 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.



(6)

Adjustment is net of tax benefit of $637 for the three and six months ended June 30, 2014, and $4,335 and $4,639 for the three and six month ended June 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(7)

Adjustment is net of tax provision of $194 for the three and six months ended June 30, 2014 and $3,464 and $3,682 for the three and six months ended June 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(8)

Adjustment is net of tax benefit of $654 for the three and six months ended June 30, 2014, and $240 for the three and six months ended June 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.



(9)

Adjustment is net of tax benefit of $2,836 for the three and six months ended June 30, 2014, calculated utilizing the applicable federal and state tax rates for the adjustment.



 (10)

Adjustment is net of tax benefit of $168 for the three and six months ended June 30, 2014, calculated utilizing the applicable federal and state tax rates for the adjustment.



 (11)

Adjustment is net of tax benefit of $141 for the three and six months ended June 30, 2014, calculated utilizing the applicable federal and state tax rates for the adjustment.

 

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