keybanc capital markets... n international, fortune 500 company with market cap of $2.0 billion...
TRANSCRIPT
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December 8-9, 2015
‘VALUE DRIVEN’
KeyBanc Capital Markets2015 Consumer Conference
Copyright © 2015 Group 1 Automotive, Inc. All rights reserved.
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www.group1auto.com
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.
2
Forward Looking Statement
www.group1auto.com
Company Overview
Page 2 of 38
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www.group1auto.com
n International, Fortune 500 company with Market Cap of $2.0 Billion (period ended September 30, 2015)
n Third largest dealership group in the U.S. retailing approximately 275,000 new and used vehicles annually
n Committed management team with more than 100 years of automotive retailing and OEM experience
n Unlike most other automotive retailers, Group 1 has no major controlling shareholder or owner
n Well positioned for growth
n 5 consecutive years of double-digit revenue growth
n Compound annual growth rate (CAGR) of earnings per share (EPS) has grown 19.0% since 3Q10
What Sets Group 1 Apart?
4
Source: Automotive News
Top 10 U.S. auto retailers by revenue ($mm, FY 2014)
Revenue ($mm)
19,109
17,177
9,938 9,197 8,608 7,088
5,868 5,403 3,934 3,311
Auto
Na
tion
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$5,509 $6,080 $7,476 $8,919 $9,938 $10,499
2010 2011 2012 2013 2014 LTM
www.group1auto.com
Geographic Footprint
5
U.K. England: § 17 Dealerships§ 11% of NV Unit
Sales
Folsom Lake (1) Folso
Los Angeles Metro (3) Los A
San Diego (5) San D
Houston Metro (17)
Tulsa (4)
Lubbock (6)
Shreveport (1)
New Orleans (3) Beaumont (6)
Atlanta (2)
Mobile (2)
New ONew ONew ONew O
Gulfport (3)
ta (2)Columbia (1)
Augusta (1) AugusAugusAugusAugusAugusAugusHilton Head (1)
rleans (3)
Pensacola / Panama City (3)
Annapolis (2)
New Hampshire (3)
Boston Metro (7)
Rock Hill (1)
e (2)Columbus (4)
Kansas City (4)
Freehold (2) FreehFreehFreehAtlantic City (4)
BRAZIL Mato Grosso do Sul, Sao Paulo & Parana: § 19 Dealerships§ 7% of NV Unit
Sales
UNITED STATES – 14 States 117 Dealerships
Dallas Metro (9)
Amarillo (1)
Austin (5)
San Antonio (3)
Oklahoma City (9)
El Paso (3)
EAST REGION 23% of NV Unit Sales
WEST REGION 59% of NV Unit Sales
Note: Locations as of October 27, 2015
WORLDWIDE:
§ 153 Dealerships
§ 200 Franchises
§ 35 Collision Centers
§ 32 Brands
Miami (1)
Page 3 of 38
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www.group1auto.com
Geographic Diversity
6
U.S. 82%
U.K. 11%
Brazil 7%
U.S. East 23%
U.S. West 59%
0%
20%
40%
60%
80%
100%
120%
New Vehicle Unit Sales
Geographic Diversity - 3Q15 (New Vehicle Unit Sales)
TX 48%
CA 12%
OK 9%
MA 7%
GA 6%
NJ 3%
FL 3%
KS 2%
LA 2%
NH 2%
MS 2%
SC 2%
AL 1%
MD 1%
United States - 3Q15
www.group1auto.com
Geographic Diversity - Texas
7
Texas 39%
U.K. 11%
Brazil 7%
U.S. East 23%
U.S. West 59%
0%
20%
40%
60%
80%
100%
120%
New Vehicle Unit Sales
Geographic Diversity - 3Q15 (New Vehicle Unit Sales)
Houston Metro 20%
Dallas Metro 7%
Austin 4%
Lubbock-Amarillo
4%
San Antonio
2%
El Paso 2%
n Texas New Vehicle Unit Sales Up 7.2% in 3Q15 on a Same Store basis
Page 4 of 38
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www.group1auto.com
Texas: Not All Oil
1Source: Wall Street Journal, Plunging Oil Prices Test Texas’ Economic Boom, January 4, 2015
§ “Health-care and social-services companies made up 10.4% of jobs in the greater Houston area in 2013, compared with 5.9% in 1985, according to Labor Department data.”
1
§ “Roughly 4.3% of jobs in
the county were in the oil-and-gas industry last year.”
1
1
8
www.group1auto.com
Well-Balanced Brand Portfolio
Brand Mix – 3Q15 (New Vehicle Unit Sales)
The Company’s brand
diversity allows it to reduce
the risk of changing
consumer preferences
9
ThTh
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www.group1auto.com
Business Mix Comp – 3Q15
3Q15 Revenue & Gross Profit
10
Total Company Parts & Service Gross Profit Covers 95-100% of
Total Company Fixed Costs and Parts & Service Selling Expenses
United States United Kingdom Brazil TOTAL
Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue
57%
18%
55%
30%
72%
44% 57%
20%
28%
11%
35%
13%
17%
7%
28%
11%
11%
42%
8%
40%
10%
37%
11%
42%
4%
29%
2% 17%
1%
12% 4%
27%
New Vehicles Used Vehicles Parts & Service Finance & Insurance
www.group1auto.com
New Vehicles Overview
New vehicle revenue ($mm) New vehicle gross profit per retail unit
11
*Constant Exchange Rate for 3Q15
1 Same store sales growth is for YTD 2015 on a local currency basis
*2,289
$3,087 $3,403
$4,291
$5,225 $5,742
$5,954
2010 2011 2012 2013 2014 LTM
$3,087 $3,403
$4,291
*2*2*2*2*2*2*2*2*2*2*2,2,2,2,2,2,2,2,2,2,2,2,2,28989898989898989898989
1,691
2,466
2,198
1,803
1,629
2,122
1,676
1,687
U.S.
U.K.
Brazil
Total3Q15
3Q14
*$2,268
*$1,771
*$2,565
For the year ended December 31, LTM
2010 2011 2012 2013 2014 9/30/2015
Revenue $3,087 $3,403 $4,291 $5,225 $5,742 $5,954
Gross profit $178 $210 $247 $290 $311 $309
New vehicles (units) 97,511 102,022 128,550 155,866 166,896 173,327
Average price per retail unit $31,656 $33,352 $33,381 $33,522 $34,402 $34,349
Average gross profit per retail unit $1,823 $2,062 $1,925 $1,860 $1,865 $1,780
Same store sales revenue growth 18.7% 6.4% 16.3% 6.0% 4.3% 7.5% 1
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Used Vehicles Overview
12
Used vehicle revenue ($mm) Retail used vehicle gross profit per retail unit
*Constant Exchange Rate for 3Q15
1 Same store sales growth is for YTD 2015 on a local currency basis
$1,434
$721
$1,293
$1,484
$1,540
$1,566
$1,572
$1,535
Total
Brazil
UK
US
3Q15
3Q14*$1,459
*$1,113
*$1,391
$1,487 $1,668
$2,045
$2,372
$2,704 $2,972
2010 2011 2012 2013 2014 LTM
$1,487 $1,668
For the year ended December 31, LTM
2010 2011 2012 2013 2014 9/30/2015
Retail used vehicles (units) 66,001 70,475 85,366 98,813 109,873 121,412
Average price per used retail vehicle $19,258 $20,100 $20,581 $20,639 $21,160 $21,208
Average gross profit per used retail vehicle $1,742 $1,767 $1,710 $1,628 $1,579 $1,478
Average gross profit per used wholesale vehicle $80 $113 $56 ($4) $42 ($14)
Used vehicle gross profit ($mm) $118 $129 $149 $161 $174 $179
Retail same store revenue growth 27.4% 7.9% 14.8% 6.0% 14.0% 12.1% 1
www.group1auto.com
Parts & Service Overview
13
P&S revenue and gross margin ($mm) 3Q15 P&S revenue ($mm)
n Parts & service segment provides a stable base of free cash flow through economic cycles
n Using Customer Management Software (CMS) and technology to improve efficiencies and closing rates
n Enhancing customer touch points to improve retention / attacking points of defection
n Leveraging scale
n Improving collision business
n Strategic emphasis on customer service is driving growth above sector average in this important segment
n Focused on adding human capacity—year-to-date, the Company has added 143 net technicians in the U.S., which is a +7% increase
Group 1 U.S. parts and service gross profit vs. U.S. SAAR
Source: LMC Automotive, Company filings
Growth by Same Store (as reported)
Units (mm) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 L.C.**
Customer Pay 2.0% 0.5% 0.9% 0.6% -2.1% 1.1% -1.0% 3.0%
Warranty 5.2% 7.6% 20.7% 10.3% 14.4% 10.9% 7.8% 10.4%
Wholesale 14.0% 16.6% 14.0% 10.3% 2.1% 5.1% 4.9% 6.0%
Collision (incl. parts) 11.6% 5.2% 3.7% 12.2% 9.4% 14.4% 9.2% 12.1%
% Growth* 6.3% 5.6% 7.4% 6.0% 3.4% 5.5% 3.3% 6.3%
*Same store, as reported **Local Currency Constant Exchange Rate for 3Q15
$767 $814 $880
$1,011 $1,126
$1,170
53.8% 52.3% 52.4% 52.5% 52.8% 53.8%
2010 2011 2012 2013 2014 LTM
Revenue Gross margin
43% 51% 64%
44%
21% 22%
16%
21%
22% 16% 6%
21%
14% 11% 14% 14%
U.S. U.K. Brazil Total
Customer pay Warranty Wholesale Collision (incl. parts)
$265 $26 $12 $304
5
10
15
20
$0
$50
$100
$150
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
GPI U.S. P&S gross profit ($mm)
U.S. SAAR (mm)
Page 7 of 38
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www.group1auto.com
Finance & Insurance Overview
F&I revenue ($mm) F&I gross profit per retail unit ($)
F&I profitability growth accomplished via focus on people and processes:
n Consolidation of lender base
n Consumer financing at pre-recession availability and with sub-prime financing improving
n Integrating compliance, training and benchmarking to offer a consistent and transparent experience for internal and external customers
n Proactively addressed CFPB concerns with rollout of NADA’s Fair Credit Compliance Policy
& Program in 2Q14, which enhances automotive lending practices
14
■
■
$528*
$744*
$1,379* ■
$1,032 $1,135 $1,215 $1,223
$1,324 $1,366
$427 $529
$664 $615 $746
$689
$416 $511
$390
$1,064 $1,165
$1,249 $1,371
$1,468 $1,529
$300
$500
$700
$900
$1,100
$1,300
$1,500
2010 2011 2012 2013 2014 YTDSep-15
Consolidated U.K. Only
BRL Only U.S. Only
$169 $196
$260 $311
$367 $403
2010 2011 2012 2013 2014 LTM
$169 $196
*Constant Exchange Rate for 3Q15
FY2011 FY2012 FY2013 FY2014 Consol. US UK Brazil
Finance 70% 71% 69% 67% 67% 73% 45% 31%
VSC 36% 37% 34% 34% 34% 40% 4% 1%
Gap Ins. 22% 22% 22% 24% 27% 28% 28% 0%
Maintenance 8% 8% 8% 9% 10% 12% 0% 0%
Sealant 12% 14% 15% 18% 19% 19% 31% 0%Gross Profit PRU 1,135$ 1,215$ 1,223$ 1,324$ 1,366$ 1,529$ 689$ 390$
F&I Penetration Rates (Actual)
2015 YTD
www.group1auto.com
Total U.S. Vehicle Profitability
U.S. New Vehicle Profitability ($) U.S. Used Vehicle Profitability ($)
15
1,057 1,172 1,276 1,438 1,559 1,640
1,794 2,037 1,870
1,762 1,785 1,646
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2010 2011 2012 2013 2014 3Q YTD
NV GP PRU NV F&I GP PRU
3,200 3,344 3,286
2,851 3,209 3,146
1,074 1,155 1,210 1,272 1,336 1,380
1,748 1,775 1,701 1,664 1,598 1,531
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2010 2011 2012 2013 2014 3Q YTD
UV GP PRU UV F&I GP PRU
2,822 2,929 2,911 2,936 2,934 2,911
Page 8 of 38
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www.group1auto.com
Financial Overview
www.group1auto.com
Consolidated Financial Results
17
Financial Results - Consolidated
($ in millions, except per share amounts)
3Q15 3Q14 Change L.C. 2
FY15 FY14 Change L.C. 2
Revenues 2,800.6$ 2,626.4$ 6.6% 10.2% 7,959.9$ 7,398.9$ 7.6% 10.7%
Gross Profit 398.4$ 374.7$ 6.3% 9.0% 1,153.8$ 1,082.0$ 6.6% 9.0%
Adj. SG&A as a % of Gross Profit (1) 72.5% 73.9% (140) 72.8% 74.4% (160)
Adusted Operating Margin (1) 3.5% 3.3% 20 3.5% 3.3% 20
Adjusted EBITDA (1) 99.7$ 87.2$ 14.3% 284.8$ 245.7$ 15.9%
Total Interest Expense 23.6$ 23.7$ (0.1)$ 71.1$ 68.0$ 3.1$
Adjusted Net Income (1)
46.0$ 39.8$ 15.7% 129.8$ 111.1$ 16.8%
Adjusted Diluted EPCS (1)
1.91$ 1.57$ 21.7% 5.36$ 4.22$ 27.0%
(1) See appendix for GAAP reconciliation
(2) Local currency basis
Page 9 of 38
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Financial Results by Segment
18
Financial Results - U.S.
($ in millions)
3Q15 3Q14 Change FY15 FY14 Change
Revenues 2,343.6$ 2,175.6$ 7.7% 6,629.5$ 6,070.8$ 9.2%
Gross Profit 348.3$ 321.9$ 8.2% 1,005.0$ 928.4$ 8.2%
Adj. SG&A as a % of Gross Profit (1) 71.4% 72.9% (150) 71.4% 72.9% (150)
Adusted Operating Margin (1) 3.8% 3.6% 20 3.9% 3.7% 20
Total Interest Expense 21.7$ 20.8$ 0.9$ 65.0$ 59.8$ 5.2$
Adjusted Pretax Margin (1) 2.9% 2.6% 30 2.9% 2.7% 20
(1) See appendix for GAAP reconciliation
www.group1auto.com
Financial Results by Segment
19
Financial Results - U.K.
($ in millions)
3Q15 3Q14 Change L.C. 2
FY15 FY14 Change L.C. 2
Revenues 327.4$ 252.2$ 29.8% 39.6% 935.1$ 751.2$ 24.5% 35.6%
Gross Profit 36.3$ 29.8$ 21.5% 30.5% 104.3$ 88.1$ 18.4% 29.0%
Adj. SG&A as a % of Gross Profit (1) 77.6% 74.7% 290 77.9% 76.1% 180
Adusted Operating Margin (1) 2.2% 2.7% (50) 2.1% 2.5% (40)
Total Interest Expense 1.4$ 0.9$ 0.5$ 4.0$ 2.6$ 1.4$
Adjusted Pretax Margin (1) 1.7% 2.3% (60) 1.7% 2.1% (40)
(1) See appendix for GAAP reconciliation
(2) Local currency basis
Financial Results - Brazil
($ in millions)
3Q15 3Q14 Change L.C. 2
FY15 FY14 Change L.C. 2
Revenues 129.6$ 198.6$ -34.8% 0.5% 395.2$ 576.9$ -31.5% -6.0%
Gross Profit 13.8$ 22.9$ -39.8% -7.2% 44.5$ 65.4$ -32.0% -6.8%
Adj. SG&A as a % of Gross Profit (1) 87.8% 86.9% 90 91.9% 92.2% (30)
Adusted Operating Margin (1) 1.0% 1.2% (20) 0.6% 0.6% -
Total Interest Expense 0.5$ 2.0$ (1.5)$ 2.1$ 5.6$ (3.5)$
Adjusted Pretax Margin (1) 0.6% 0.2% 40 0.0% -0.4% 40
(1) See appendix for GAAP reconciliation
(2) Local currency basis
Page 10 of 38
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Same Store Financial Results
20
Same Store Financial Results - Consolidated
$ in thousands
9/30/2015 9/30/2014 Change L.C. 1
9/30/2015 9/30/2014 Change L.C. 1
Revenues:
New vehicle retail 1,514,167$ 1,463,601$ 3.5% 7.5% 4,159,629$ 4,069,351$ 2.2% 5.6%
Used vehicle retail 650,459 595,477 9.2% 12.1% 1,836,722 1,682,086 9.2% 11.7%
Used vehicle wholesale 87,497 96,628 (9.4)% (7.1)% 263,687 271,300 (2.8)% 0.0%
Total used 737,956$ 692,105$ 6.6% 9.4% 2,100,409$ 1,953,386$ 7.5% 10.1%
Parts and service 288,631 279,378 3.3% 6.3% 835,668 802,947 4.1% 6.6%
Finance and insurance 103,835 95,158 9.1% 10.5% 289,347 264,342 9.5% 10.7%
Total 2,644,589$ 2,530,242$ 4.5% 8.0% 7,385,053$ 7,090,026$ 4.2% 7.1%
Gross Profit 379,443$ 363,263$ 4.5% 7.1% 1,076,441$ 1,040,829$ 3.4% 5.7%
1 Local currency basis
Three Months Ended Nine Months Ended
www.group1auto.com
Total Revenue & EPS Growth
21
* CAGR calculation compares 3Q15 to 3Q10
1,1
91.2
1,4
18.5
1,4
61.8
1,4
37.8
1,4
09.3
1,4
74.1
1,5
70.4
1,6
25.9
1,6
64.7
1,8
95.8
1,9
76.6
1,9
39.0
1,9
63.8
2,3
35.1
2,3
40.1
2,2
79.5
2,2
60.9
2,5
11.6
2,6
26.4
2,5
38.9
2,4
32.9
2,7
26.5
2,8
00.6
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Total Revenue ($ in millions)
FY10 = $5.5B FY11 = $6.1B FY12 = $7.5B FY13 = $8.9B FY14 = $9.9B
0.4
3
0.7
3
0.8
0
0.6
2
0.6
4
1.0
3
1.0
1
0.9
4
0.9
7
1.2
5
1.3
2
0.9
9
1.1
6
1.5
2
1.2
0
1.0
8
1.1
9
1.4
7
1.5
7
1.6
7
1.4
7
1.9
8
1.9
1
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Adjusted EPS (1)
(1) See appendix for Adjusted EPS reconciliation
FY10 = $2.59 FY12= $4.53 FY11 = $3.62 FY13= $4.96 FY14= $5.87
Page 11 of 38
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Diluted Share Count
26,342
25,792
25,428
26,242
24,432
23,466 23,446
23,315 23,137
21,000
22,000
23,000
24,000
25,000
26,000
27,000
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
GPI Shares (in thousands)
24,432
23,46623,446
1523,31523
2Q14: GPI repurchased 80% of its 3% Convertible Notes, reducing share count by approximately 1.9 million.
3Q14: GPI repurchased the remaining 3% Convertible Notes and extinguished all of the 2.25% Convertible Notes, reducing share count by approximately 800 thousand.
YTD Sept-15: GPI repurchased approximately 850,000
shares at an average price of $83.67 during the first nine months of 2015.
$74.56* $68.16* $65.11* $74.67* $78.06* $83.87*
*Average share price for the quarter
22
$82.21* $85.48* $90.01*
www.group1auto.com
Balance Sheet
Page 12 of 38
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Senior Notes
n December 3, 2015 – The Company announced a $300 million offering of 5.25% senior unsecured notes with a maturity date of December 15, 2023.
n The offering is expected to close on December 8, 2015.
n The Company intends to use the net proceeds from the offering to repay amounts outstanding under the acquisition line of its revolving credit facility and for general corporate purposes.
n Full year net incremental interest expense of $10.5 million1.
n Available liquidity of $192 million as of September 30, 2015 increases to roughly $487 million.
24
1 assumes proceeds in excess of acquisition line paydown are invested in floorplan offset account at 1.75%
www.group1auto.com
Summary Balance Sheet
25
Summary Balance Sheet
$ in thousands
As of As of
9/30/2015 12/31/2014
Cash and cash equivalents (1)
21,968$ 40,975$
Contracts In Transit and vehicle receivables, net 205,636$ 237,448$
Inventories, net 1,634,421$ 1,556,705$
Total current assets 2,044,790$ 2,035,219$
Total assets 4,292,050$ 4,141,492$
Floorplan notes payable 1,525,170$ 1,450,902$
Offset account related to credit facility (1)
(48,074)$ (62,116)$
Other current liabilities 504,751$ 533,413$
Total current liabilities 1,981,847$ 1,922,199$
Long-Term Debt, net of
current maturities 1,084,161$ 1,008,837$
Total stockholder's equity 969,328$ 978,010$
(1) Available cash of $70.0 million is total of cash and cash equivalents plus the U.S. offset account related to f loorplan
credit facilities. The U.S. offset account is amount of excess cash that is used to paydow n floorplan credit facilities but
can be immediately redraw n against inventory.
Page 13 of 38
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Debt Maturity
26
As of September 30, 2015
(in millions) Maturity
Date Actual
Available
Liquidity Pro-Forma
Available
Liquidity
Cash and cash equivalents 22.0$ 22.0$ 22.0$ 22.0$
Short-Term Debt
Inventory Financing (1) 2018 1,275.1$ 48.1$ 1,118.0$ 205.2$
Other Vehicles Financing (2) 202.0 202.0
Current Maturities - Long-Term Debt 56.0 56.0
1,533.1$ 48.1$ 1,376.0$ 205.2$
Available Cash 70.0 (4) 227.2 (5)
Long-Term Debt
Acquisition Line of Credit (1,3) 2018 138.2 122.0 - 260.2
5.00% Senior Unsecured Notes 2022 541.0 541.0
(Face: $550.0 Million)
5.25% Senior Unsecured Notes 2024 - 295.4
(Face: $300.0 Million)
Mortgage Facility 2016 - 2018 24.6 24.6
Real Estate 2016 - 2034 372.4 372.4
Other 2017 8.0 8.0
Total Long-Term Debt 1,084.2$ 1,241.4$
Total Debt 2,617.2$ 2,617.2$
192.0$ 487.4$
1)
2)
3)
4)
5)
Note: May not foot due to rounding.
Available cash of $70.0 million is total of cash and cash equivalents plus the U.S. offset account related to f loorplan credit facilities. The U.S. offset account is
amount of excess cash that is used to paydow n floorplan credit facilities but can be immediately redraw n against inventory.
Available cash of $227.2 million is total of cash and cash equivalents plus the U.S. offset account related to f loorplan credit facilities. The U.S. offset account is
amount of excess cash that is used to paydow n floorplan credit facilities but can be immediately redraw n against inventory.
As of September 30, 2015
Pro-Forma
The capacity under the f loorplan and acquisition tranches of our credit facility can be redesignated w ithin the overall $1.7 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 aff iliates for rental vehicle f inancing and foreign inventories not associated w ith any of the Company’s domestic credit facilities.
The available liquidity balance at September 30, 2015 considers the $45.7 million of letters of credit outstanding.
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Growth Outlook
Page 14 of 38
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Factors Driving U.S. Auto Sales Growth
n Age of car park exceeds 11 years – above trend
n Financing is back to pre-recession levels Ø Aggressive loan to value; approval rates for prime and near prime customers
rising
n Used vehicle prices remain robust Ø Helps consumers in terms of trade-in values; allows for more aggressive
leasing
n Number of licensed drivers is on the rise
n Falling oil prices are helping consumer discretionary income
Pent-up demand driving purchase decisions
28
www.group1auto.com
U.S. SAAR
15.2
15.6
17.0
17.4 17.2
16.8 16.7
16.9 17.0
16.6 16.2
13.2
10.4
11.6
12.8
14.5
15.6
16.5
17.2
9.0
12.0
15.0
18.0
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5Y
TD
AV
G
Source: LMC Automotive – U.S. New Vehicle Unit Sales
United States (New Vehicle Unit Sales)
29
Page 15 of 38
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n Acquisitions that clear return hurdles (10%-15% after-tax discounted cash flows)
n Return cash to stockholders
Ø Quarterly Cash Dividend
§ $0.21 per share
Ø 2015 YTD Share Repurchases:
§ ~850,000 shares at average price of $83.67
Ø Repurchase Authorization:
§ As of September 30, 2015, $28.3 million remains under Board authorization of $100.0 million
Cash Prioritization
30
*Based on average 2014 share price of $75.23
www.group1auto.com
$80 $160 $100
2014 $135 $20 $85 $55 $15 $225 $135 $225
3Q
Acquisition Strategy
31
n Group 1 is well positioned to take advantage of acquisition opportunities and grow scale in existing markets (U.S., U.K., and Brazil)
n The Company targets acquisitions that clear return hurdles (10% - 15% after tax discounted cash flow)
Ford –U.K. Toyota / Nissan / BMW / MINI / Renault / Peugeot Land Rover / Jaguar
–Brazil
$1.3 billion
Ac
qu
isit
ion
s
(Es
tim
ate
d A
nn
ua
l R
eve
nu
es
) ($
mm
)
$177 $650 $80 $60 $200 $150 2013
3Q 2Q 4Q
$910 million
1Q 2Q 4Q
$10 $5
1Q
2015 $340 million YTD*
Audi
–Dallas-Fort Worth, TX
Audi
–North Miami Beach, FL
*As of October 27, 2015
3Q 2Q 1Q
Mercedes-Benz / Sprinter / Smart
–Georgetown, TX
Page 16 of 38
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n 2014 CapEx of $95 million
n 2015 CapEx projected to be less than $125 million
Ø Working with our manufacturer partners to limit spending
Capital Expenditures
32
($ in millions)
$16 $20 $22 $22 $23 $24 $27
$50
$30
$70
$53
$29
$40
$62
$69
$95
$44
2007 2008 2009 2010 2011 2012 2013 2014 2015
YTD
Capital Expenditures
Maintenance CapEx
Depreciation & Amortization Expense
www.group1auto.com
n GPI is shifting toward owning its real estate
Ø GPI views control of dealership real estate as a strong strategic asset
Ø Ownership means better flexibility and lower cost
n As of September 30, 2015, the Company owns approximately $775 million of
real estate (46% of dealership locations) financed through approximately $400
million of mortgage debt
n During 2014, GPI purchased approximately $140 million of real estate, of which
$41 million of real estate was converted from leased to owned properties
n The Company looks for opportunistic real estate acquisitions in strategic
locations and markets
Real Estate Strategy
33
Leased vs. owned properties
Dealership property breakdown by region (as of September 30, 2015)
Dealerships
Geographic Location Owned Leased
United States 58 59
United Kingdom 13 4
Brazil -- 19
Total 71 82
32% 36% 40% 43%
46% 46%
68% 64% 60%
57% 54% 54% 100
109 121
148 150 153
2010 2011 2012 2013 2014 Sep-15
Leased Owned
Page 17 of 38
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Conclusion
www.group1auto.com
n Well-balanced portfolio (geography, business mix and brands)
n Profitability of different business units through the cycle
Ø Model proved itself during recession
n Streamlined business -- generating cash
n Strong balance sheet
n Continue to drive growth through acquisitions
n Operational growth and leverage
Ø New vehicle sales growth in U.S.
Ø Opportunity to drive growth in used vehicle and Parts & Service with process improvements in all markets
Ø Finance & Insurance initiatives should drive further growth in the U.K. and Brazil
Ø Continued leverage opportunities as gross profit increases
n Experienced, successful and driven management team
Why GPI?
35
Page 18 of 38
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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
www.group1auto.com
Appendix
Page 19 of 38
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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)
§ 30+ 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 (July 2004)
§ 30+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: General Motors Corporation; BMW of North America; Advantage BMW
in Houston
Wade D. Hubbard – Vice President, Fixed Operations (May 2006)
§ 35+ Years Industry Experience
§ Automotive Industry Experience: Gulf States Toyota; BMW North America;
DaimlerChrysler Corp./Mercedes-Benz; Nissan Motor Corporation USA; Ford Motor Company
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
Operating Management Team - Corporate
38
www.group1auto.com
n Frank Grese Jr. – Regional Vice President, West Region (December 2004)
Ø 40+ Years Industry Experience
Ø Manufacturer and Automotive Retailing Experience: Ford Motor Company; Nissan Motor Corporation in U.S.A.; AutoNation; Van Tuyl
n Daryl Kenningham – Regional Vice President, East Region (July 2011)
Ø 25+ Years Industry Experience
Ø Manufacturer and Automotive Retailing Experience: Gulf States Toyota; Nissan Motor Corporation; Ascent Automotive
n Ian Twinley – Regional Vice President, United Kingdom (March 2007)
Ø 30+ Years Industry Experience
Ø Manufacturer and Automotive Retailing Experience: Chandlers Garage Holdings Ltd.; John Grose Group; Ford Motor Company
n Lincoln da Cunha Pereira Filho – Regional Vice President, Brazil; Director; Chairman, UAB Motors (February 2013)
Ø 15+ Years Industry Experience
Ø Automotive-related Experience: UAB Motors Participacoes S.A.; Public Auto Group; Automotive Racing
Operating Management Team - Field
39
Page 20 of 38
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n Primary exposure is short-term interest rate changes; key exposure is one-month LIBOR
n Group 1 has mitigated the majority of its risk exposure for rising interest rates through a combination of the swaps, fixed rate debt, and manufacturer floorplan assistance
n Manufacturer floorplan assistance offsets a portion of interest rate impact
Ø As interest rates go up, typically manufactures offer additional interest assistance to offset the variance
Ø 84% of variable inventory financing is eligible for floorplan assistance as used vehicle; rental and some foreign financing are not eligible for floorplan assistance
Ø Interest assistance is recognized in new vehicle gross profit, not in interest expense
Actual Variable %
Vehicle Financing $1,477.1 92.8%
Real Estate & Other Debt $599.2 64.3%
Senior Notes (1) $550.0 0.00%
SWAPS (2) $550.0
(1) Face Value (2) SWAPS range from $50-$750 million through 2021, see slide 40 for more details
Interest Rate Variability
40
www.group1auto.com
SWAPS: Interest Expense Impact
41
2013 2014 2015 2016 2017 2018 2019 2020 2021
Average Swap Balance 450$ 450$ 550$ 550$ 750$ 750$ 650$ 300$ 50$
Interest Expense 11$ 11$ - - - - - - -
Average Interest Rate 2.64% 2.63% 2.57% 2.76% 2.62% 2.68% 2.55% 2.68% 2.35%
$'s in millions
INTEREST RATE SWAP LAYERS
Page 21 of 38
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Brazil
www.group1auto.com
BRAZIL
Sao Paulo
Parana
Mato Grosso do
Sul
n 19 Dealerships / 23 Franchises
Ø 4 BMW;
2 Jaguar;
2 Land Rover;
1 Mercedes-Benz;
2 MINI;
4 Nissan;
2 Peugeot;
2 Toyota;
4 Honda
Group 1 is aligned with growing brands in Brazil
Brazil Locations
43
Mato Grosso do Sul Locations
§ Campo Grande
Parana Locations
§ Curitiba § Londrina § Cascavel
Sao Paulo Locations
§ Sao Paulo § Sao Jose dos Campos § Santo Andre § Sao Caetano do Sul § Sao Bernardo do Campo
Page 22 of 38
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U.K.
www.group1auto.com
Chelmsford (1)
Southend (1)
Chingford (1) Chin
Harold
Wood (1)
Hindhead (1) Hind
Brighton (1) (1)
Hailsham (1)
Bracknell (1) BracBrac
Farnborough (2)
Guildford (1)
Farnboro
GuilGuil
Worthing (1) Wort
Wokingham (1)
Stansted (2)
Cambridge (1) Bedford (1) BedfBedf
ChelChel
SoutHaro
WoodLONDON
UNITED KINGDOM – England 17 Dealerships
U.K. Locations
45
Page 23 of 38
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Reconciliations See following section for reconciliations of data denoted within this presentation
-
EB
ITD
A R
EC
ON
CIL
IAT
ION
:
20
15
20
14
20
15
20
14
Net
inco
me
45
.3$
26
.2$
12
7.4
$
7
4.3
$
Lo
ss o
n r
edem
pti
on o
f lo
ng-t
erm
deb
t-
22
.8
- 4
6.4
Oth
er i
nte
rest
exp
ense
, net
(1
)1
3.9
1
3.2
4
2.1
3
6.3
Dep
reci
atio
n a
nd
am
ort
izat
ion e
xp
ense
11
.8
10
.7
35
.4
31
.4
No
n-c
ash a
sset
im
pai
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9
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1.1
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eran
ce c
ost
s-
0.4
0
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astr
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hic
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ts-
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1
.0
2.8
Net
gai
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n r
eal
esta
te a
nd
dea
lers
hip
tra
nsa
ctio
ns
- (1
4.3
)
(1.1
)
(14
.8)
Leg
al s
ettl
emen
ts-
- 1
.0
0.4
Fo
reig
n t
ransa
ctio
n t
ax-
- -
0.4
Inco
me
tax e
xp
ense
27
.81
7.7
76
.95
6.9
Ad
just
ed E
BIT
DA
(2
)9
9.7
$
8
7.2
$
2
84
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$
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e (l
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ree M
on
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Page 25 of 38
-
NE
T I
NC
OM
E (
LO
SS
) R
EC
ON
CIL
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:T
hree M
on
ths
En
ded
:
03
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As
rep
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ed
7,9
81
$
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Aft
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(1
) :
No
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mp
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- 9
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(Gai
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loss
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(76
1)
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)
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)
(Gai
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loss
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8-
- -
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- -
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Inco
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rel
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10
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Les
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DIL
UT
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S (
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)
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RE
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NC
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N:
Th
ree M
on
ths
En
ded
:
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06
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.10
09
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.10
12
.31
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03
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.12
06
.30
.12
09
.30
.12
12
.31
.12
As
rep
ort
ed
0.3
2$
0.5
2$
0.7
9$
0.4
5$
0.6
4$
1.0
3$
0.9
1$
0.9
0$
0.9
7$
1.2
0$
1.3
2$
0.7
0$
A
fter
-tax
Ad
just
men
ts:
No
n-c
ash
ass
et i
mp
airm
ent
char
ges
- 0
.04
0
.04
0
.21
- -
0.1
0
0.0
2-
0.0
1
- 0
.18
Mo
rtgag
e d
ebt
refi
nan
ce c
har
ges
-
- -
- -
- -
- -
- -
-
(Gai
n)
loss
on
rea
l es
tate
an
d d
eale
rsh
ip t
ran
sact
ion
s-
0.1
5
(0.0
3)
-
- -
- -
- (0
.03
)
- (0
.01
)
(Gai
n)
loss
on
rep
urc
has
e o
f lo
ng-t
erm
deb
t0
.11
-
- -
- -
- -
- -
- -
Inco
me
tax
ben
efit
rel
ated
to
tax
ele
ctio
ns
for
pri
or
per
iod
s-
- -
(0.0
4)
- -
- -
- -
- -
Cat
astr
op
hic
even
ts-
- -
- -
- -
- -
0.0
7
- 0
.05
Sev
eran
ce c
ost
s -
0.0
2
- -
- -
- -
- -
- 0
.02
Acq
uis
itio
n c
ost
s in
clu
din
g r
elat
ed t
ax i
mp
act
- -
- -
- -
- -
- -
- 0
.05
Val
uat
ion
all
ow
ance
fo
r ce
rtai
n d
efer
red
tax
ass
ets
- -
- -
- -
- -
- -
- -
Leg
al s
ettl
emen
ts-
- -
- -
- -
0.0
2-
- -
-
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
Ad
just
ed d
ilu
ted
in
com
e p
er s
har
e (2
)0
.43
$
0.7
3$
0.8
0$
0.6
2$
0.6
4$
1.0
3$
1.0
1$
0.9
4$
0.9
7$
1.2
5$
1.3
2$
0.9
9$
Wei
gh
ted
aver
age
dil
uti
ve
com
mo
n s
har
es o
uts
tan
din
g2
3,1
56
23
,10
82
2,4
33
22
,46
72
2,7
36
22
,65
12
2,2
19
22
,04
02
2,5
32
22
,51
32
2,4
58
23
,24
4
Par
tici
pat
ing S
ecu
riti
es1
,40
51
,37
41
,49
51
,28
41
,45
01
,39
31
,39
21
,27
61
,20
91
,31
71
,24
51
,09
1
To
tal
wei
gh
ted
aver
age
shar
es o
uts
tan
din
g2
4,5
61
24
,48
22
3,9
28
23
,75
12
4,1
86
24
,04
42
3,6
11
23
,31
62
3,7
41
23
,83
02
3,7
03
24
,33
5
(1)
(2)
Grou
p 1
Au
tom
oti
ve, In
c.
Recon
cil
iati
on
of
Certa
in N
on
-GA
AP
Fin
an
cia
l M
ea
sures
(Un
au
dit
ed
, in
th
ou
san
ds)
Ad
just
ed n
et i
nco
me
(2)
Tax
im
pac
t o
f fo
reig
n d
edu
ctib
le g
oo
dw
ill
Tax
im
pac
t o
f fo
reig
n d
edu
ctib
le g
oo
dw
ill
Fo
reig
n t
ran
sact
ion
tax
Fo
reig
n t
ran
sact
ion
tax
Ref
er t
o s
epar
ate
reco
nci
liat
ion
s o
f ce
rtai
n n
on
-GA
AP
fin
anci
al m
easu
res
wit
hin
th
e re
spec
tive
qu
arte
rly e
arn
ings
rele
ase
sch
edu
les
for
spec
ific
tax
ben
efit
or
tax
pro
vis
ion
info
rmat
ion
.
We
bel
ieve
that
th
ese
adju
sted
fin
anci
al m
easu
res
are
rele
van
t an
d u
sefu
l to
in
ves
tors
bec
ause
th
ey p
rovid
e ad
dit
ion
al i
nfo
rmat
ion
reg
ard
ing t
he
per
form
ance
of
ou
r o
per
atio
ns
and
imp
rove
per
iod
-to
-per
iod
co
mp
arab
ilit
y. T
hes
e m
easu
res
are
no
t m
easu
res
of
fin
anci
al p
erfo
rman
ce u
nd
er G
AA
P. A
cco
rdin
gly
, th
ey s
ho
uld
no
t b
e co
nsi
der
ed a
s su
bst
itu
tes
for
thei
r
un
adju
sted
co
un
terp
arts
, w
hic
h a
re p
rep
ared
in
acc
ord
ance
wit
h G
AA
P. A
lth
ou
gh
we
fin
d t
hes
e n
on
-GA
AP
res
ult
s u
sefu
l in
eval
uat
ing t
he
per
form
ance
of
ou
r b
usi
nes
s, o
ur
reli
ance
on
th
ese
mea
sure
s is
lim
ited
bec
ause
th
e ad
just
men
ts o
ften
hav
e a
mat
eria
l im
pac
t o
n o
ur
fin
anci
al s
tate
men
ts c
alcu
late
d i
n a
cco
rdan
ce w
ith
GA
AP
. T
her
efo
re, w
e ty
pic
ally
use
th
ese
adju
sted
nu
mb
ers
in c
on
jun
ctio
n w
ith
ou
r G
AA
P r
esu
lts
to a
dd
ress
th
ese
lim
itat
ion
s.
Page 26 of 38
-
NE
T I
NC
OM
E (
LO
SS
) R
EC
ON
CIL
IAT
ION
:
As
rep
ort
ed
Aft
er-t
ax A
dju
stm
ents
(1
) :
No
n-c
ash
ass
et i
mp
airm
ent
char
ges
Mo
rtgag
e d
ebt
refi
nan
ce c
har
ges
(Gai
n)
loss
on
rea
l es
tate
an
d d
eale
rsh
ip t
ran
sact
ion
s
(Gai
n)
loss
on
rep
urc
has
e o
f lo
ng-t
erm
deb
t
Inco
me
tax
ben
efit
rel
ated
to
tax
ele
ctio
ns
for
pri
or
per
iod
s
Cat
astr
op
hic
even
ts
Sev
eran
ce c
ost
s
Acq
uis
itio
n c
ost
s in
clu
din
g r
elat
ed t
ax i
mp
act
Val
uat
ion
all
ow
ance
fo
r ce
rtai
n d
efer
red
tax
ass
ets
Leg
al s
ettl
emen
ts
AD
JU
ST
ED
NE
T I
NC
OM
E A
TT
RIB
UT
AB
LE
TO
DIL
UT
ED
CO
MM
ON
SH
AR
ES
RE
CO
NC
ILIA
TIO
N:
Ad
just
ed n
et i
nco
me
Les
s: A
dju
sted
ear
nin
gs
allo
cate
d t
o p
arti
cip
atin
g s
ecu
riti
es
Ad
just
ed n
et i
nco
me
avai
lab
le t
o d
ilu
ted
co
mm
on
sh
ares
DIL
UT
ED
EA
RN
ING
S (
LO
SS
)
PE
R S
HA
RE
RE
CO
NC
ILIA
TIO
N:
As
rep
ort
ed
A
fter
-tax
Ad
just
men
ts:
No
n-c
ash
ass
et i
mp
airm
ent
char
ges
Mo
rtgag
e d
ebt
refi
nan
ce c
har
ges
(Gai
n)
loss
on
rea
l es
tate
an
d d
eale
rsh
ip t
ran
sact
ion
s
(Gai
n)
loss
on
rep
urc
has
e o
f lo
ng-t
erm
deb
t
Inco
me
tax
ben
efit
rel
ated
to
tax
ele
ctio
ns
for
pri
or
per
iod
s
Cat
astr
op
hic
even
ts
Sev
eran
ce c
ost
s
Acq
uis
itio
n c
ost
s in
clu
din
g r
elat
ed t
ax i
mp
act
Val
uat
ion
all
ow
ance
fo
r ce
rtai
n d
efer
red
tax
ass
ets
Leg
al s
ettl
emen
ts
Ad
just
ed d
ilu
ted
in
com
e p
er s
har
e (2
)
Wei
gh
ted
aver
age
dil
uti
ve
com
mo
n s
har
es o
uts
tan
din
g
Par
tici
pat
ing S
ecu
riti
es
To
tal
wei
gh
ted
aver
age
shar
es o
uts
tan
din
g
Ad
just
ed n
et i
nco
me
(2)
Tax
im
pac
t o
f fo
reig
n d
edu
ctib
le g
oo
dw
ill
Tax
im
pac
t o
f fo
reig
n d
edu
ctib
le g
oo
dw
ill
Fo
reig
n t
ran
sact
ion
tax
Fo
reig
n t
ran
sact
ion
tax
Th
ree M
on
ths
En
ded
:
03
.31
.13
06
.30
.13
09
.30
.13
12
.31
.13
03
.31
.14
06
.30
.14
09
.30
.14
12
.31
.14
03
.31
.15
06
.30
.15
09
.30
.15
22
,11
8$
37
,38
8$
32
,76
5$
21
,72
1$
31
,30
3$
16
,86
2$
26
,16
2$
18
,67
7$
35
,81
5$
46
,31
0$
45
,26
1$
- 3
69
34
93
,31
9-
1,0
67
6,5
59
19
,87
8-
84
87
76
- -
- -
- -
- -
- -
-
(35
6)
(4,7
85
)(2
30
)
- -
(31
6)
(8
,57
2)
1,5
50
- (6
01
)
-
- -
- -
- 2
0,7
78
17
,93
4-
- -
-
- -
- -
- -
- -
- -
-
50
46
,75
71
58
- -
1,0
39
67
1-
- 5
93
-
- -
45
42
37
- -
38
83
85
- 1
67
-
6,9
68
- (6
30
)
- -
- -
18
8-
- -
- -
- 3
,62
9-
- -
- -
- -
- -
- -
- 2
74
- -
- 6
10
-
- -
- -
- 2
74
- -
- -
-
- -
- -
- -
(3,3
58
)-
- -
-
29
,23
4$
39
,72
9$
32
,86
6$
28
,90
6$
31
,30
3$
39
,97
8$
39
,78
4$
40
,67
8$
35
,81
5$
47
,92
7$
46
,03
7$
29
,23
4$
39
,72
9$
32
,86
6$
28
,90
6$
31
,30
3$
39
,97
8$
39
,78
4$
40
,67
8$
35
,81
5$
47
,92
7$
46
,03
7$
1,2
33
1,6
92
1,3
24
1,0
57
1,1
56
1,4
56
1,5
20
1,5
29
1,3
88
1,8
55
1,7
59
28
,00
1$
38
,03
7$
31
,54
2$
27
,84
9$
30
,14
7$
38
,52
2$
38
,26
4$
39
,14
9$
34
,42
7$
46
,07
2$
44
,27
8$
Th
ree M
on
ths
En
ded
:
03
.31
.13
06
.30
.13
09
.30
.13
12
.31
.13
03
.31
.14
06
.30
.14
09
.30
.14
12
.31
.14
03
.31
.15
06
.30
.15
09
.30
.15
0.8
8$
1.4
3$
1.1
9$
0.8
1$
1.1
9$
0.6
2$
1.0
3$
0.7
7$
1.4
7$
1.9
1$
1.8
8$
- 0
.01
0
.01
0
.12
- 0
.04
0
.26
0
.81
- 0
.04
0
.03
- -
- -
- -
- -
- -
-
(0.0
1)
(0.1
8)
(0
.01
)
- -
(0.0
1)
(0
.34
)
0.0
6-
(0.0
3)
-
- -
- -
- 0
.76
0
.71
-
- -
-
- -
- -
- -
- -
- -
-
0.0
2
0.2
6
0.0
1
- -
0.0
4
0.0
3
- -
0.0
2
-
- -
0.0
2
0.0
1-
- 0
.01
0
.02
- 0
.01
-
0.2
7
- (0
.02
)
- -
- -
0.0
1-
- -
- -
- 0
.14
- -
- -
- -
-
- -
- -
- 0
.01
-
- -
0.0
3
-
- -
- -
- 0
.01
-
- -
- -
- -
- -
- -
(0.1
3)
-
- -
-
1.1
6$
1.5
2$
1.2
0$
1.0
8$
1.1
9$
1.4
7$
1.5
7$
1.6
7$
1.4
7$
1.9
8$
1.9
1$
24
,11
32
4,9
80
26
,34
22
5,7
92
25
,42
82
6,2
42
24
,43
22
3,4
66
23
,44
62
3,3
15
23
,13
7
1,0
72
1,1
12
1,1
00
98
39
63
98
69
71
92
59
32
94
49
25
25
,18
52
6,0
92
27
,44
22
6,7
75
26
,39
12
7,2
28
25
,40
32
4,3
91
24
,37
82
4,2
59
24
,06
2
(1)
(2)
Grou
p 1
Au
tom
oti
ve, In
c.
Recon
cil
iati
on
of
Certa
in N
on
-GA
AP
Fin
an
cia
l M
ea
sures
(Un
au
dit
ed
, in
th
ou
san
ds)
Ref
er t
o s
epar
ate
reco
nci
liat
ion
s o
f ce
rtai
n n
on
-GA
AP
fin
anci
al m
easu
res
wit
hin
th
e re
spec
tive
qu
arte
rly e
arn
ings
rele
ase
sch
edu
les
for
spec
ific
tax
ben
efit
or
tax
pro
vis
ion
in
form
atio
n.
We
bel
ieve
that
th
ese
adju
sted
fin
anci
al m
easu
res
are
rele
van
t an
d u
sefu
l to
in
ves
tors
bec
ause
th
ey p
rovid
e ad
dit
ion
al i
nfo
rmat
ion
reg
ard
ing t
he
per
form
ance
of
ou
r
op
erat
ion
s an
d i
mp
rove
per
iod
-to
-per
iod
co
mp
arab
ilit
y. T
hes
e m
easu
res
are
no
t m
easu
res
of
fin
anci
al p
erfo
rman
ce u
nd
er G
AA
P. A
cco
rdin
gly
, th
ey s
ho
uld
no
t b
e
con
sid
ered
as
sub
stit
ute
s fo
r th
eir
un
adju
sted
co
un
terp
arts
, w
hic
h a
re p
rep
ared
in
acc
ord
ance
wit
h G
AA
P. A
lth
ou
gh
we
fin
d t
hes
e n
on
-GA
AP
res
ult
s u
sefu
l in
eval
uat
ing t
he
per
form
ance
of
ou
r b
usi
nes
s, o
ur
reli
ance
on
th
ese
mea
sure
s is
lim
ited
bec
ause
th
e ad
just
men
ts o
ften
hav
e a
mat
eria
l im
pac
t o
n o
ur
fin
anci
al s
tate
men
ts
calc
ula
ted
in
acc
ord
ance
wit
h G
AA
P. T
her
efo
re, w
e ty
pic
ally
use
th
ese
adju
sted
nu
mb
ers
in c
on
jun
ctio
n w
ith
ou
r G
AA
P r
esu
lts
to a
dd
ress
th
ese
lim
itat
ion
s.
Page 27 of 38
-
Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - U.S.
(Unaudited) (Dollars in thousands)
Three Months Ended September 30,2015 2014 % Change
SG&A RECONCILIATION:
As reported $ 248,771 $ 221,645 12.2
Pre-tax adjustments:
Catastrophic events — (1,099)
Gain (loss) on real estate and dealership transactions — 14,303
Adjusted SG&A (1) $ 248,771 $ 234,849 5.9
SG&A AS % REVENUES:
Unadjusted 10.6 10.2
Adjusted (1) 10.6 10.8SG&A AS % GROSS PROFIT:
Unadjusted 71.4 68.8
Adjusted (1) 71.4 72.9OPERATING MARGIN %:
Unadjusted 3.8 4.0
Adjusted (1),(2) 3.8 3.6PRETAX MARGIN %:
Unadjusted 2.9 2.0
Adjusted (1),(3) 2.9 2.6
SAME STORE SG&A RECONCILIATION:
As reported $ 239,585 $ 225,236 6.4
Pre-tax adjustments:
Catastrophic events — (1,099)
Gain (loss) on real estate and dealership transactions — (23)
Adjusted Same Store SG&A (1) $ 239,585 $ 224,114 6.9
SAME STORE SG&A AS % REVENUES:
Unadjusted 10.7 10.7
Adjusted (1) 10.7 10.7
SAME STORE SG&A AS % GROSS PROFIT:
Unadjusted 71.5 72.1
Adjusted (1) 71.5 71.7
SAME STORE OPERATING MARGIN %:
Unadjusted 3.8 3.7
Adjusted (1),(4) 3.8 3.8
Page 28 of 38
-
Nine Months Ended September 30,2015 2014 % Change
SG&A RECONCILIATION:As reported $ 718,607 $ 665,547 8.0 Pre-tax adjustments:
Catastrophic events (951) (2,775)Gain (loss) on real estate and dealership transactions 1,052 14,812Legal settlements (1,000) (442)
Adjusted SG&A (1) $ 717,708 $ 677,142 6.0
SG&A AS % REVENUES:Unadjusted 10.8 11.0Adjusted (1) 10.8 11.2
SG&A AS % GROSS PROFIT:Unadjusted 71.5 71.7Adjusted (1) 71.4 72.9
OPERATING MARGIN %:Unadjusted 3.8 3.8Adjusted (1),(2) 3.9 3.7
PRETAX MARGIN %:Unadjusted 2.9 2.0Adjusted (1),(3) 2.9 2.7
SAME STORE SG&A RECONCILIATION:As reported $ 678,188 $ 644,041 5.3 Pre-tax adjustments:
Catastrophic events (951) (2,775)Gain (loss) on real estate and dealership transactions (364) (23)Legal settlements (1,000) (442)
Adjusted Same Store SG&A (1) $ 675,873 $ 640,801 5.5SAME STORE SG&A AS % REVENUES:
Unadjusted 10.9 11.1Adjusted (1) 10.9 11.0
SAME STORE SG&A AS % GROSS PROFIT:Unadjusted 71.7 72.1Adjusted (1) 71.4 71.7
SAME STORE OPERATING MARGIN %:Unadjusted 3.8 3.8Adjusted (1),(4) 3.9 3.9
(1) We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are notmeasures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directlycomparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improve thetransparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-periodcomparability 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 $288 and $786 for the three and nine monthsended September 30, 2015, respectively, and $4,252 and $5,973 for the three and nine months ended September 30, 2014, respectively.
(3) Excludes the impact of SG&A reconciling items above, loss on redemption of long-term debt of $22,790 and $46,403 for the three and nine monthsended September 30, 2014, respectively, as well as non-cash asset impairment charges of $288 and $786 for the three and nine months ended September30, 2015 and $4,252 and $5,973 for the three and nine months ended September 30, 2014, respectively.
(4) Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $288 and $786 for the three andnine months ended September 30, 2015, respectively, and $293 and $2,014 for the three and nine months ended September 30, 2014, respectively.
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Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - U.K.
(Unaudited) (Dollars in thousands)
Three Months Ended September 30,2015 2014 % Change
OPERATING MARGIN %:Unadjusted 2.1 2.7Adjusted (1),(3) 2.2 2.7
PRETAX MARGIN %:Unadjusted 1.6 2.3Adjusted (1),(3) 1.7 2.3
SAME STORE OPERATING MARGIN %:Unadjusted 2.4 2.7Adjusted (1),(3) 2.5 2.7
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Nine Months Ended September 30,
2015 2014 % Change
SG&A RECONCILIATION:
As reported $ 81,528 $ 67,063 21.6
Pre-tax adjustments:
Severance costs (208) —
Adjusted SG&A (1) $ 81,320 $ 67,063 21.3
SG&A AS % REVENUES:
Unadjusted 8.7 8.9
Adjusted (1) 8.7 8.9
SG&A AS % GROSS PROFIT:
Unadjusted 78.1 76.1
Adjusted (1) 77.9 76.1
OPERATING MARGIN %:
Unadjusted 2.1 2.5
Adjusted (1),(2) 2.1 2.5
PRETAX MARGIN %:
Unadjusted 1.6 2.1
Adjusted (1),(2) 1.7 2.1
SAME STORE OPERATING MARGIN %:
Unadjusted 2.3 2.5
Adjusted (1),(3) 2.4 2.5
(1) We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are notmeasures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the mostdirectly comparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improvethe transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-periodcomparability of our results from our core business operations.
(2) Excludes the impact of SG&A reconciling item above, as well as non-cash asset impairment charges of $333 for the three and nine months endedSeptember 30, 2015.
(3) Excludes the impact of non-cash asset impairment charges of $333 for the three and nine months ended September 30, 2015.
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Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - Brazil
(Unaudited) (Dollars in thousands)
Three Months Ended September 30,2015 2014 % Change
SG&A RECONCILIATION:As reported $ 12,117 $ 20,313 (40.3)Pre-tax adjustments:
Severance costs — (393)
Adjusted SG&A (1) $ 12,117 $ 19,920 (39.2)
SG&A AS % REVENUES:Unadjusted 9.4 10.2Adjusted (1) 9.4 10.0
SG&A AS % GROSS PROFIT:Unadjusted 87.8 88.6Adjusted (1) 87.8 86.9
OPERATING MARGIN %Unadjusted 0.8 (1.6)Adjusted (1),(2) 1.0 1.2
PRETAX MARGIN %:Unadjusted 0.4 (2.6)
Adjusted (1),(2) 0.6 0.2SAME STORE SG&A RECONCILIATION:
As reported $ 11,911 $ 17,566 (32.2) Pre-tax adjustments:
Severance costs — (289)
Adjusted Same Store SG&A (1) $ 11,911 $ 17,277 (31.1)SAME STORE SG&A AS % REVENUES:
Unadjusted 9.5 9.7Adjusted (1) 9.5 9.6
SAME STORE SG&A AS % GROSS PROFIT:Unadjusted 89.0 84.1Adjusted (1) 89.0 82.7
SAME STORE OPERATING MARGIN %:Unadjusted 0.7 1.6Adjusted (1),(3) 0.9 1.8
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Nine Months Ended September 30,
2015 2014 % ChangeSG&A RECONCILIATION:
As reported $ 40,915 $ 61,151 (33.1) Pre-tax adjustments:
Severance costs — (393)Foreign transaction tax — (416)
Adjusted SG&A (1) $ 40,915 $ 60,342 (32.2)
SG&A AS % REVENUES:Unadjusted 10.4 10.6Adjusted (1) 10.4 10.5
SG&A AS % GROSS PROFIT:Unadjusted 91.9 93.4Adjusted (1) 91.9 92.2
OPERATING MARGIN %:Unadjusted 0.3 (0.4)Adjusted (1),(2) 0.6 0.6
PRETAX MARGIN %:Unadjusted (0.2) (1.4)Adjusted (1),(2) — (0.4)
SAME STORE SG&A RECONCILIATION:
As reported $ 39,429 $ 53,441 (26.2)
Pre-tax adjustments:
Severance costs — (289)
Foreign transaction tax — (416)
Adjusted Same Store SG&A (1) $ 39,429 $ 52,736 (25.2)
SAME STORE SG&A AS % REVENUES:
Unadjusted 10.3 10.1
Adjusted (1) 10.3 9.9
SAME STORE SG&A AS % GROSS PROFIT:
Unadjusted 90.7 90.1
Adjusted (1) 90.7 88.9
SAME STORE OPERATING MARGIN %:
Unadjusted 0.6 0.8
Adjusted (1),(3) 0.7 1.0
(1) We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are notmeasures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directlycomparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improve thetransparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-periodcomparability 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 $298 and $839 for the three and nine monthsended September 30, 2015, respectively, and $5,121 for the three and nine months ended September 30, 2014.
(3) Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $298 for the three and nine monthsended September 30, 2015.
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Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended September 30,2015 2014 % Change
NET INCOME RECONCILIATION:
As reported $ 45,261 $ 26,162 73.0
After-tax adjustments:
Catastrophic events (5) — 671
(Gain) loss on real estate and dealership transactions (6) — (8,572)
Severance costs (7) — 388
Non-cash asset impairment (10) 776 6,559
Loss on extinguishment of long-term debt (11) — 17,934
Non-deductible goodwill — (3,358)
Adjusted net income (1) $ 46,037 $ 39,784 15.7
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTEDCOMMON SHARES RECONCILIATION:
Adjusted net income (1) $ 46,037 $ 39,784 15.7
Less: Adjusted earnings allocated to participating securities 1,759 1,520 15.7
Adjusted net income available to diluted common shares (1) $ 44,278 $ 38,264 15.7DILUTED INCOME PER COMMON SHARE RECONCILIATION:
As reported $ 1.88 $ 1.03 82.5
After-tax adjustments:
Catastrophic events — 0.03
Gain (loss) on real estate and dealership transactions — (0.34)
Severance costs — 0.01
Non-cash asset impairment 0.03 0.26
Loss on extinguishment of long-term debt — 0.71
Non-deductible goodwill — (0.13)
Adjusted diluted income per share (1) $ 1.91 $ 1.57 21.7SG&A RECONCILIATION:
As reported $ 289,012 $ 264,233 9.4
Pre-tax adjustments:
Catastrophic events — (1,099)
Gain (loss) on real estate and dealership transactions — 14,303
Severance costs — (393)
Adjusted SG&A (1) $ 289,012 $ 277,044 4.3
SG&A AS % REVENUES:
Unadjusted 10.3 10.1
Adjusted (1) 10.3 10.5SG&A AS % GROSS PROFIT:
Unadjusted 72.5 70.5
Adjusted (1) 72.5 73.9OPERATING MARGIN %:
Unadjusted 3.5 3.4Adjusted (1),(2) 3.5 3.3
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PRETAX MARGIN %:
Unadjusted 2.6 1.7
Adjusted (1),(3) 2.6 2.4
SAME STORE SG&A RECONCILIATION:
As reported $ 274,596 $ 265,080 3.6
Pre-tax adjustments:
Catastrophic events — (1,099)
Gain (loss) on real estate and dealership transactions — (23)
Severance costs — (289)
Adjusted Same Store SG&A (1) $ 274,596 $ 263,669 4.1
SAME STORE SG&A AS % REVENUES:
Unadjusted 10.4 10.5
Adjusted (1) 10.4 10.4
SAME STORE SG&A AS % GROSS PROFIT:
Unadjusted 72.4 73.0
Adjusted (1) 72.4 72.6
SAME STORE OPERATING MARGIN %:
Unadjusted 3.5 3.5
Adjusted (1),(4) 3.5 3.5
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Nine Months Ended September 30,2015 2014 % Change
NET INCOME RECONCILIATION:
As reported $ 127,385 $ 74,327 71.4
After-tax adjustments:
Catastrophic events (5) 593 1,710
(Gain) loss on real estate and dealership transactions (6) (601) (8,887)
Severance costs (7) 167 388
Legal settlements (8) 610 274
Foreign transaction tax (9) — 274
Non-cash asset impairment (10) 1,624 7,626
Loss on extinguishment of long-term debt (11) — 38,711
Non-deductible goodwill — (3,358)
Adjusted net income (1) $ 129,778 $ 111,065 16.8
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTEDCOMMON SHARES RECONCILIATION:
Adjusted net income (1) $ 129,778 $ 111,065 16.8
Less: Adjusted earnings allocated to participating securities 4,997 4,126 21.1
Adjusted net income available to diluted common shares (1) $ 124,781 $ 106,939 16.7DILUTED INCOME PER COMMON SHARE RECONCILIATION:
As reported $ 5.26 $ 2.82 86.5
After-tax adjustments:
Catastrophic events 0.02 0.07
Gain (loss) on real estate and dealership transactions (0.02) (0.33)
Severance costs 0.01 0.01
Legal settlements 0.02 0.01
Foreign transaction tax — 0.01
Non-cash asset impairment 0.07 0.29
Loss on extinguishment of long-term debt — 1.47
Non-deductible goodwill — (0.13)
Adjusted diluted income per share (1) $ 5.36 $ 4.22 27.0SG&A RECONCILIATION:
As reported $ 841,050 $ 793,761 6.0
Pre-tax adjustments:
Catastrophic events (951) (2,775)
Gain (loss) on real estate and dealership transactions 1,053 14,812
Severance costs (208) (393)
Legal settlements (1,000) (442)
Foreign transaction tax — (416)
Adjusted SG&A (1) $ 839,944 $ 804,547 4.4
SG&A AS % REVENUES:
Unadjusted 10.6 10.7
Adjusted (1) 10.6 10.9SG&A AS % GROSS PROFIT:
Unadjusted 72.9 73.4
Adjusted (1) 72.8 74.4
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OPERATING MARGIN %:Unadjusted 3.5 3.3Adjusted (1),(2) 3.5 3.3
PRETAX MARGIN %:
Unadjusted 2.6 1.8
Adjusted (1),(3) 2.6 2.4
SAME STORE SG&A RECONCILIATION:
As reported $ 784,031 $ 764,546 2.5
Pre-tax adjustments:
Catastrophic events (951) (2,774)
Gain (loss) on real estate and dealership transactions (364) (23)
Severance costs — (289)
Legal settlements (1,000) (442)
Foreign transaction tax — (416)
Adjusted Same Store SG&A (1) $ 781,716 $ 760,602 2.8
SAME STORE SG&A AS % REVENUES:
Unadjusted 10.6 10.8
Adjusted (1) 10.6 10.7
SAME STORE SG&A AS % GROSS PROFIT:
Unadjusted 72.8 73.5
Adjusted (1) 72.6 73.1
SAME STORE OPERATING MARGIN %:
Unadjusted 3.5 3.4
Adjusted (1),(4) 3.5 3.5
(1) We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are notmeasures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directlycomparable GAAP measures. We believe that these adjusted financial measures are rele