0001031203-16-000065.txt : 20161020 0001031203-16-000065.hdr.sgml : 20161020 20161020070152 ACCESSION NUMBER: 0001031203-16-000065 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20161020 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161020 DATE AS OF CHANGE: 20161020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GROUP 1 AUTOMOTIVE INC CENTRAL INDEX KEY: 0001031203 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 760506313 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13461 FILM NUMBER: 161943506 BUSINESS ADDRESS: STREET 1: 800 GESSNER STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 713-647-5700 MAIL ADDRESS: STREET 1: 800 GESSNER STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77024 8-K 1 a20163rdquarterearningsrel.htm 8-K Document


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
FORM 8-K
  
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 20, 2016
  
Group 1 Automotive, Inc.
(Exact name of Registrant as specified in its charter)
 
  
Delaware
 
1-13461
 
76-0506313
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
800 Gessner, Suite 500
Houston, Texas 77024
(Address of principal executive offices) (Zip code)
(713) 647-5700
(Registrant’s telephone number including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¬
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¬
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¬
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 40.14d-2(b))
¬
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 






Item 2.02     Results of Operations and Financial Condition.

On October 20, 2016, Group 1 Automotive, Inc., a Delaware corporation, issued a press release announcing its financial results for the three and nine months ended September 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
As provided in General Instruction B.2. of Form 8-K, the information in this Item 2.02 (including the press release attached as Exhibit 99.1 and incorporated by reference in this Item 2.02) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01    Financial Statements and Exhibits.

99.1        Press release of Group 1 Automotive, Inc., dated as of October 20, 2016.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
 
 
 
Group 1 Automotive, Inc.
 
 
 
October 20, 2016
 
By:
 
/s/ John C. Rickel
Date
 
 
 
John C. Rickel, Senior Vice President and Chief Financial Officer






INDEX TO EXHIBITS
 

99.1         Press release of Group 1 Automotive, Inc., dated as of October 20, 2016.



 EX-99.1 2 exhibit991-3rdqtr2016.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

gp1logo.gif

FOR IMMEDIATE RELEASE

Group 1 Automotive Reports Third Quarter 2016 Results
HOUSTON, Oct 20, 2016 - Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported third quarter 2016 net income of $35.4 million, diluted earnings per common share of $1.65, adjusted net income (a non-GAAP measure) of $42.0 million, and adjusted diluted earnings per common share (a non-GAAP measure) of $1.96.

As shown in the attached non-GAAP reconciliation tables, the 2016 third quarter adjusted results exclude approximately $6.6 million of net after-tax adjustments, or $0.31 per share, for non-core items. These adjustments primarily consist of non-cash asset impairment charges of approximately $6.7 million after-tax, or $0.32 per share; catastrophic losses (primarily storm damage) of approximately $281 thousand after-tax, or $0.01 per share; foreign transaction tax expense of approximately $274 thousand after-tax, or $0.01 per share; and, were partially offset by dealership transaction net gains of approximately $700 thousand, or $0.03 per share.

“Our third quarter earnings were negatively impacted by ongoing sales weakness in our energy-dependent markets, especially Texas and Oklahoma, and some slight market weakness in the U.K. due to uncertainty associated with Brexit,” said Earl J. Hesterberg, Group 1's president and chief executive officer. “While our U.K. sales decreased in July and August, we did see recovery in September, but not enough to offset the weakness that occurred immediately following the vote. Additionally, the weakening pound, versus the dollar, lowered this quarter’s earnings per share by about four cents. Within the U.S. results, we were encouraged by another quarter of improving new vehicle margins and the progress we have made in reducing new vehicle inventory during the quarter, with days’ supply improving nine days from second-quarter levels to 74 days’ supply at quarter end.”

Consolidated Results for Third Quarter 2016 (year-over-year comparable basis)
For ease of comparison, we have included constant currency metrics (a non-GAAP measure) both below (shown in parenthesis) and in the financial tables that follow:

▪
Total revenue increased 0.8 percent (3.3 percent) to a third-quarter record of $2.8 billion; total gross profit grew 2.1 percent (4.0 percent) to $406.7 million.
▪
New vehicle revenues decreased 0.8 percent (but increased 1.6 percent on a constant currency basis) driven by a 3.2 percent decrease in unit sales. New vehicle gross profit improved 1.2 percent (3.8 percent) to $80.4 million.
▪
Retail used vehicle revenues increased 2.2 percent (4.8 percent) on 1.6 percent higher unit sales. Retail used vehicle gross profit decreased 1.3 percent (but increased 0.5 percent on a constant currency basis) to $46.0 million.
▪
Parts and service gross profit increased 4.2 percent (6.1 percent) on revenue growth of 5.3 percent (7.1 percent). Same Store parts and service gross profit increased 1.2 percent (2.5 percent) on revenue growth of 2.6 percent (3.8 percent). U.S. Same Store parts and service gross profit increased 2.4 percent on revenue growth of 3.4 percent.
▪
Same Store Finance and Insurance (F&I) gross profit per retail unit (PRU) increased 4.0 percent (5.0 percent) to $1,421. U.S. F&I gross profit PRU increased $73 to $1,588.
▪
On a GAAP basis, Selling, General and Administrative (SG&A) expenses as a percent of gross profit increased 100 basis points to 73.5 percent. Adjusted SG&A expenses as a percent of gross profit increased 110 basis points to 73.6 percent.




Segment Results for Third Quarter 2016 (year-over-year comparable basis)
▪
United States:
The Company’s U.S. operations accounted for 80.6 percent of total revenues and 85.3 percent of total gross profit. Total U.S. revenues were $2.3 billion, a decrease of 2.9 percent, driven by a 5.5 percent decrease in retail new vehicle revenue. While new vehicle sales volume decreased, new vehicle gross profit per unit sold grew $154, or 9.5 percent per unit, to $1,783 and total gross profit of $346.7 million was only down 0.5 percent. New vehicle inventory improved 9 days from second-quarter levels and ended the quarter at 74 days’ supply.

On a GAAP basis, SG&A expenses as a percent of gross profit improved 30 basis points to 71.1 percent and operating margin decreased 40 basis points to 3.4 percent. Adjusted SG&A expenses as a percent of gross profit and adjusted operating margin both improved 10 basis points to 71.3 percent and 3.9, respectively.

▪
United Kingdom:
The Company’s U.K. operations accounted for 15.4 percent of total revenues and 11.7 percent of total gross profit. Total U.K. revenues increased 33.2 percent (56.7 percent) to $436.0 million, and gross profit increased 31.0 percent (54.2 percent) to $47.5 million. Revenue growth was primarily driven by the acquisition of the Spire dealer group in February of this year. On a constant currency basis, Same Store total revenue increased 5.5 percent, driven by a 6.1 percent increase in new vehicle revenues, 7.9 percent increase in parts and service revenues, and a 15.0 percent increase in F&I gross profit PRU.

On a Same Store GAAP basis, SG&A expenses as a percent of gross profit and operating margin both improved 10 basis points to 77.5 percent and 2.2 percent, respectively. On a Same Store basis, adjusted SG&A expenses as a percent of gross profit improved 10 basis points to 77.5 percent and adjusted operating margin was unchanged at 2.2 percent.

▪
Brazil:
The Company’s Brazilian operations accounted for 4.0 percent of total revenues and 3.1 percent of total gross profit. The Company’s Same Store new vehicle revenue declined 24.2 percent on a constant currency basis in a continued weak economic environment. Year-to-date, Brazil’s new vehicle industry volumes have declined about 23 percent. For the quarter, Same Store total revenue was down 18.7 percent on a constant currency basis, as F&I gross profit PRU growth of 44.3 percent and parts and service revenue growth of 2.0 percent partially offset the decline in new and used vehicles.

The Company continues to improve its used vehicle operations in Brazil, with used vehicle retail margins improving 360 basis points to 7.6 percent and total used vehicle gross profit increasing $0.7 million or 69.7 percent on a constant currency basis.
    
Corporate Development
During the third quarter of 2016, the Company divested two dealerships in the U.S., which included Hyundai of Escondido, California and Ira Porsche of Danvers, Massachusetts. In October 2016, the Company divested Honda of Van Nuys, California. In total, these dealerships generated approximately $120 million in trailing-twelve-month revenues. These divestitures are consistent with Group 1’s portfolio management strategy.

Additionally, in the U.S., during third quarter of 2016, the Company was awarded a Porsche open point in El Paso, Texas. The store’s opening is targeted for late 2017. The Company will provide expected annual revenues for this franchise when its opening is announced.

In October 2016, in the U.K., the Company acquired the Ford Basingstoke and Ford Newbury dealerships, which are located southwest and west of London, respectively and are contiguous with Group 1’s existing U.K. Ford operations. These stores, which will be rebranded as Think Ford Basingstoke and Think Ford Newbury, are expected to generate approximately $65 million in annualized revenues.




Share Repurchase Authorization

During the third quarter of 2016, the Company repurchased 244,205 shares at an average price of $50.61 for a total of $12.4 million, which were previously announced purchases in July 2016. As of October 20, 2016, $22.4 million remains available under the Company’s prior common stock share repurchase authorization. Year to date, the Company has repurchased 2.3 million shares representing a 10 percent reduction from the previously announced share count as of December 31, 2015. Purchases may be made from time to time in the open market or in privately negotiated transactions, based on market conditions, legal requirements and other corporate considerations and subject to Board approval and covenant restrictions.

THIRD QUARTER EARNINGS CONFERENCE CALL DETAILS
The Company’s senior management will host a conference call today at 9 a.m. ET to discuss the third 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 through this link: http://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
Conference ID:    6474498

A telephonic replay will be available following the call through October 27, 2016 by dialing:

Domestic:     1-877-344-7529
International:     1-412-317-0088
Replay ID:    10094717

ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 160 automotive dealerships, 211 franchises, and 37 collision centers in the United States, the United Kingdom and Brazil that offer 32 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Investors please visit www.group1corp.com, www.group1auto.com, www.group1collision.com, www.facebook.com/group1auto, and www.twitter.com/group1auto, where Group 1 discloses additional information about the Company, its business, and its results of operations.

FORWARD-LOOKING STATEMENTS
Certain statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These 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,” “plans,” “believes,” “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 the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

NON-GAAP FINANCIAL MEASURES
This press release and the attached financial tables contain certain non-GAAP financial performance measures as defined under SEC rules, such as adjusted net income and adjusted earnings per share from continuing operations, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. Management believes that these non-GAAP financial performance measures improve the transparency of the Company’s disclosure, present useful information to investors, and provide a meaningful presentation of the Company’s results from its core business operations excluding the impact of items not related to the Company’s ongoing core business operations, and improve the period-to-period comparability of the Company’s results from its core business operations.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than United States dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.

SOURCE: Group 1 Automotive, Inc.

Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
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 September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,587,952

 
$
1,601,213

 
(0.8
)
 
Used vehicle retail sales
 
702,620

 
687,637

 
2.2

 
Used vehicle wholesale sales
 
104,218

 
100,483

 
3.7

 
Parts and service
 
319,676

 
303,557

 
5.3

 
Finance and insurance
 
108,710

 
107,679

 
1.0

 
Total revenues
 
2,823,176

 
2,800,569

 
0.8

 
COST OF SALES:
 
 
 
 
 
 
 
New vehicle retail sales
 
1,507,517

 
1,521,721

 
(0.9
)
 
Used vehicle retail sales
 
656,652

 
641,055

 
2.4

 
Used vehicle wholesale sales
 
106,077

 
102,318

 
3.7

 
Parts and service
 
146,262

 
137,093

 
6.7

 
Total cost of sales
 
2,416,508

 
2,402,187

 
0.6

 
GROSS PROFIT
 
406,668

 
398,382

 
2.1

 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
299,006

 
289,012

 
3.5

 
DEPRECIATION AND AMORTIZATION EXPENSE
 
12,891

 
11,811

 
9.1

 
ASSET IMPAIRMENTS
 
10,855

 
916

 
1,085.0

 
OPERATING INCOME
 
83,916

 
96,643

 
(13.2
)
 
OTHER EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
(11,135
)
 
(9,685
)
 
15.0

 
Other interest expense, net
 
(17,094
)
 
(13,922
)
 
22.8

 
INCOME BEFORE INCOME TAXES
 
55,687

 
73,036

 
(23.8
)
 
PROVISION FOR INCOME TAXES
 
(20,321
)
 
(27,775
)
 
(26.8
)
 
NET INCOME
 
$
35,366

 
$
45,261

 
(21.9
)
 
Less: Earnings allocated to participating securities
 
$
1,426

 
$
1,729

 
(17.5
)
 
Earnings available to diluted common shares
 
$
33,940

 
$
43,532

 
(22.0
)
 
DILUTED EARNINGS PER SHARE
 
$
1.65

 
$
1.88

 
(12.2
)
 
Weighted average dilutive common shares outstanding
 
20,578

 
23,137

 
(11.1
)
 
Weighted average participating securities
 
872

 
925

 
(5.7
)
 
Total weighted average shares outstanding
 
21,450

 
24,062

 
(10.9
)
 





 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
4,538,562

 
$
4,468,200

 
1.6

 
Used vehicle retail sales
 
2,106,569

 
1,993,124

 
5.7

 
Used vehicle wholesale sales
 
302,089

 
302,186

 
—

 
Parts and service
 
950,341

 
888,939

 
6.9

 
Finance and insurance
 
316,419

 
307,454

 
2.9

 
Total revenues
 
8,213,980

 
7,959,903

 
3.2

 
COST OF SALES:
 
 
 
 
 
 
 
New vehicle retail sales
 
4,305,252

 
4,242,847

 
1.5

 
Used vehicle retail sales
 
1,963,136

 
1,854,361

 
5.9

 
Used vehicle wholesale sales
 
302,551

 
302,276

 
0.1

 
Parts and service
 
437,153

 
406,580

 
7.5

 
Total cost of sales
 
7,008,092

 
6,806,064

 
3.0

 
GROSS PROFIT
 
1,205,888

 
1,153,839

 
4.5

 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
891,692

 
841,050

 
6.0

 
DEPRECIATION AND AMORTIZATION EXPENSE
 
38,067

 
35,441

 
7.4

 
ASSET IMPAIRMENTS
 
12,812

 
1,955

 
555.3

 
OPERATING INCOME
 
263,317

 
275,393

 
(4.4
)
 
OTHER EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
(33,737
)
 
(29,046
)
 
16.2

 
Other interest expense, net
 
(50,729
)
 
(42,061
)
 
20.6

 
INCOME BEFORE INCOME TAXES
 
178,851

 
204,286

 
(12.5
)
 
PROVISION FOR INCOME TAXES
 
(62,614
)
 
(76,901
)
 
(18.6
)
 
NET INCOME
 
$
116,237

 
$
127,385

 
(8.8
)
 
Less: Earnings allocated to participating securities
 
$
4,651

 
$
4,905

 
(5.2
)
 
Earnings available to diluted common shares
 
$
111,586

 
$
122,480

 
(8.9
)
 
DILUTED EARNINGS PER SHARE
 
$
5.22

 
$
5.26

 
(0.8
)
 
Weighted average dilutive common shares outstanding
 
21,364
 
23,298
 
(8.3
)
 
Weighted average participating securities
 
895
 
934
 
(4.2
)
 
Total weighted average shares outstanding
 
22,259
 
24,232
 
(8.1
)
 





Group 1 Automotive, Inc.
 
Consolidated Balance Sheets
 
(Unaudited)
 
(Dollars in thousands)
 
 
 
September 30, 2016
 
December 31, 2015
 
% Increase/(Decrease)
 
ASSETS:
 
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
22,918

 
$
13,037

 
75.8

 
Contracts in transit and vehicle receivables, net
 
206,292

 
252,438

 
(18.3
)
 
Accounts and notes receivable, net
 
156,294

 
157,768

 
(0.9
)
 
Inventories, net
 
1,687,379

 
1,737,751

 
(2.9
)
 
Prepaid expenses and other current assets
 
25,555

 
27,376

 
(6.7
)
 
Total current assets
 
2,098,438

 
2,188,370

 
(4.1
)
 
PROPERTY AND EQUIPMENT, net
 
1,118,785

 
1,033,981

 
8.2

 
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS
 
1,190,906

 
1,162,503

 
2.4

 
OTHER ASSETS
 
12,935

 
11,862

 
9.0

 
Total assets
 
$
4,421,064

 
$
4,396,716

 
0.6

 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
 
Floorplan notes payable - credit facility and other
 
$
1,110,104

 
$
1,265,719

 
(12.3
)
 
Offset account related to floorplan notes payable - credit facility
 
(59,684
)
 
(110,759
)
 
(46.1
)
 
Floorplan notes payable - manufacturer affiliates
 
387,770

 
389,071

 
(0.3
)
 
Offset account related to floorplan notes payable - manufacturer affiliates
 
(22,500
)
 
(25,500
)
 
(11.8
)
 
Current maturities of long-term debt and short-term financing
 
62,349

 
54,991

 
13.4

 
Accounts payable
 
354,957

 
280,423

 
26.6

 
Accrued expenses
 
193,553

 
185,323

 
4.4

 
Total current liabilities
 
2,026,549

 
2,039,268

 
(0.6
)
 
5.00% SENIOR NOTES (principal of $550,000 at September 30, 2016 and December 31, 2015, respectively)
 
540,075

 
538,933

 
0.2

 
5.25% SENIOR NOTES (principal of $300,000 at September 30, 2016 and December 31, 2015, respectively)
 
295,455

 
295,156

 
0.1

 
REAL ESTATE RELATED AND OTHER LONG-TERM DEBT, net of current maturities
 
352,548

 
317,290

 
11.1

 
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities
 
44,639

 
48,155

 
(7.3
)
 
DEFERRED INCOME TAXES
 
148,001

 
136,644

 
8.3

 
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES
 
45,040

 
31,153

 
44.6

 
OTHER LIABILITIES
 
81,785

 
71,865

 
13.8

 
STOCKHOLDERS' EQUITY:
 
 
 
 
 
 
 
Common stock
 
257

 
257

 
—

 
Additional paid-in capital
 
287,018

 
291,092

 
(1.4
)
 
Retained earnings
 
1,027,393

 
926,169

 
10.9

 
Accumulated other comprehensive loss
 
(157,446
)
 
(137,984
)
 
14.1

 
Treasury stock
 
(270,250
)
 
(161,282
)
 
67.6

 
Total stockholders' equity
 
886,972

 
918,252

 
(3.4
)
 
Total liabilities and stockholders' equity
 
$
4,421,064

 
$
4,396,716

 
0.6

 





Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
September 30,
 
September 30,
 
 
 
 
2016 (%)
 
2015 (%)
 
2016 (%)
 
2015 (%)
 
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
 
 
 
 
 
 
 
 
Region
Geographic Market
 
 
 
 
 
 
 
 
 
East
Massachusetts
 
5.0

 
6.0

 
4.9

 
6.1

 
 
Georgia
 
4.6

 
4.5

 
4.2

 
4.6

 
 
Florida
 
2.5

 
2.3

 
2.5

 
2.0

 
 
New Hampshire
 
2.0

 
2.1

 
1.9

 
2.0

 
 
New Jersey
 
1.7

 
2.3

 
1.6

 
2.3

 
 
Louisiana
 
1.6

 
1.5

 
1.5

 
1.6

 
 
Mississippi
 
1.5

 
1.5

 
1.5

 
1.5

 
 
South Carolina
 
1.3

 
1.4

 
1.4

 
1.4

 
 
Alabama
 
1.0

 
0.6

 
0.9

 
0.7

 
 
Maryland
 
0.5

 
0.5

 
0.5

 
0.5

 
 
 
 
21.7

 
22.7

 
20.9

 
22.7

 
 
 
 
 
 
 
 
 
 
 
 
West
Texas
 
36.2

 
38.6

 
36.4

 
38.4

 
 
California
 
9.4

 
9.5

 
9.3

 
9.7

 
 
Oklahoma
 
6.6

 
7.8

 
6.9

 
7.7

 
 
Kansas
 
1.6

 
2.0

 
1.8

 
2.1

 
 
Louisiana
 
0.6

 
0.7

 
0.6

 
0.7

 
 
 
 
54.4

 
58.6

 
55.0

 
58.6

 
 
 
 
 
 
 
 
 
 
 
 
International
United Kingdom
 
18.6

 
11.1

 
18.2

 
11.0

 
 
Brazil
 
5.3

 
7.6

 
5.9

 
7.7

 
 
 
 
100.0

 
100.0

 
100.0

 
100.0

 
NEW VEHICLE UNIT SALES BRAND MIX:
 
 
 
 
 
 
 
 
 
Toyota/Scion/Lexus
 
25.3

 
26.6

 
24.7

 
26.6

 
BMW/MINI
 
13.2

 
11.3

 
13.3

 
11.4

 
Volkswagen/Audi/Porsche
 
11.3

 
7.7

 
10.9

 
7.0

 
Ford/Lincoln
 
10.8

 
11.6

 
11.1

 
11.6

 
Honda/Acura
 
9.9

 
11.1

 
10.2

 
10.9

 
Chevrolet/GMC/Buick/Cadillac
 
7.3

 
7.8

 
7.6

 
7.5

 
Nissan
 
7.0

 
8.0

 
7.0

 
8.4

 
Hyundai/Kia
 
4.3

 
5.4

 
4.4

 
5.8

 
Mercedes-Benz/smart/Sprinter
 
4.2

 
3.8

 
4.1

 
4.1

 
Chrysler/Dodge/Jeep/RAM
 
4.1

 
4.6

 
4.1

 
4.6

 
Other
 
2.6

 
2.1

 
2.6

 
2.1

 
 
 
 
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 September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,254,421

 
$
1,327,049

 
(5.5
)
 
Used vehicle retail sales
 
575,551

 
577,426

 
(0.3
)
 
Used vehicle wholesale sales
 
74,821

 
74,161

 
0.9

 
Total used
 
650,372

 
651,587

 
(0.2
)
 
Parts and service
 
271,635

 
264,979

 
2.5

 
Finance and insurance
 
98,295

 
99,952

 
(1.7
)
 
Total
 
$
2,274,723

 
$
2,343,567

 
(2.9
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
 
4.9

 
4.7

 
 
 
Used vehicle retail sales
 
6.8

 
7.1

 
 
 
Used vehicle wholesale sales
 
(2.0
)
 
(2.5
)
 
 
 
Total used
 
5.8

 
6.0

 
 
 
Parts and service
 
54.8

 
55.4

 
 
 
Finance and insurance
 
100.0

 
100.0

 
 
 
Total
 
15.2

 
14.9

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
61,886

 
$
62,428

 
(0.9
)
 
Used vehicle retail sales
 
39,193

 
41,053

 
(4.5
)
 
Used vehicle wholesale sales
 
(1,514
)
 
(1,855
)
 
18.4

 
Total used
 
37,679

 
39,198

 
(3.9
)
 
Parts and service
 
148,866

 
146,737

 
1.5

 
Finance and insurance
 
98,295

 
99,952

 
(1.7
)
 
Total
 
$
346,726

 
$
348,315

 
(0.5
)
 
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
 
34,700

 
38,331

 
(9.5
)
 
Retail used vehicles sold
 
27,201

 
27,664

 
(1.7
)
 
Wholesale used vehicles sold
 
11,005

 
11,733

 
(6.2
)
 
Total used
 
38,206

 
39,397

 
(3.0
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
 
$
36,150

 
$
34,621

 
4.4

 
Used vehicle retail
 
$
21,159

 
$
20,873

 
1.4

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,783

 
$
1,629

 
9.5

 
Used vehicle retail sales
 
1,441

 
1,484

 
(2.9
)
 
Used vehicle wholesale sales
 
(138
)
 
(158
)
 
12.7

 
Total used
 
986

 
995

 
(0.9
)
 
Finance and insurance (per retail unit)
 
$
1,588

 
$
1,515

 
4.8

 
OTHER:
 
 
 
 
 
 
 
SG&A expenses
 
$
246,501

 
$
248,771

 
(0.9
)
 
Adjusted SG&A expenses (1)
 
$
247,227

 
$
248,771

 
(0.6
)
 
SG&A as % revenues
 
10.8

 
10.6

 
 
 
Adjusted SG&A as % revenues (1)
 
10.9

 
10.6

 
 
 
SG&A as % gross profit
 
71.1

 
71.4

 
 
 
Adjusted SG&A as % gross profit (1)
 
71.3

 
71.4

 
 
 
Operating margin %
 
3.4

 
3.8

 
 
 
Adjusted operating margin % (1)
 
3.9

 
3.8

 
 
 
Pretax margin %
 
2.3

 
2.9

 
 
 
Adjusted pretax margin % (1)
 
2.8

 
2.9

 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
$
(9,979
)
 
$
(8,964
)
 
11.3

 
Floorplan assistance
 
12,824

 
13,344

 
(3.9
)
 
Net floorplan income (expense)
 
$
2,845

 
$
4,380

 
(35.0
)
 
Other interest income (expense), net
 
$
(15,710
)
 
$
(12,737
)
 
23.3

 




 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
3,558,127

 
$
3,693,777

 
(3.7
)
 
Used vehicle retail sales
 
1,709,595

 
1,661,932

 
2.9

 
Used vehicle wholesale sales
 
205,755

 
217,032

 
(5.2
)
 
Total used
 
1,915,350

 
1,878,964

 
1.9

 
Parts and service
 
805,618

 
771,986

 
4.4

 
Finance and insurance
 
284,644

 
284,787

 
(0.1
)
 
Total
 
$
6,563,739

 
$
6,629,514

 
(1.0
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
 
5.0

 
4.8

 
 
 
Used vehicle retail sales
 
7.2

 
7.3

 
 
 
Used vehicle wholesale sales
 
(0.3
)
 
(0.1
)
 
 
 
Total used
 
6.4

 
6.5

 
 
 
Parts and service
 
54.6

 
54.8

 
 
 
Finance and insurance
 
100.0

 
100.0

 
 
 
Total
 
15.6

 
15.2

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
177,674

 
$
175,549

 
1.2

 
Used vehicle retail sales
 
122,832

 
121,906

 
0.8

 
Used vehicle wholesale sales
 
(643
)
 
(167
)
 
(285.0
)
 
Total used
 
122,189

 
121,739

 
0.4

 
Parts and service
 
439,526

 
422,912

 
3.9

 
Finance and insurance
 
284,644

 
284,787

 
(0.1
)
 
Total
 
$
1,024,033

 
$
1,004,987

 
1.9

 
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
 
98,692

 
106,651

 
(7.5
)
 
Retail used vehicles sold
 
80,888

 
79,647

 
1.6

 
Wholesale used vehicles sold
 
30,894

 
33,542

 
(7.9
)
 
Total used
 
111,782

 
113,189

 
(1.2
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
 
$
36,053

 
$
34,634

 
4.1

 
Used vehicle retail
 
$
21,135

 
$
20,866

 
1.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,800

 
$
1,646

 
9.4

 
Used vehicle retail sales
 
1,519

 
1,531

 
(0.8
)
 
Used vehicle wholesale sales
 
(21
)
 
(5
)
 
(320.0
)
 
Total used
 
1,093

 
1,076

 
1.6

 
Finance and insurance (per retail unit)
 
$
1,585

 
$
1,529

 
3.7

 
OTHER:
 
 
 
 
 
 
 
SG&A expenses
 
$
737,730

 
$
718,607

 
2.7

 
Adjusted SG&A expenses (1)
 
$
733,683

 
$
717,708

 
2.2

 
SG&A as % revenues
 
11.2

 
10.8

 
 
 
Adjusted SG&A as % revenues (1)
 
11.2

 
10.8

 
 
 
SG&A as % gross profit
 
72.0

 
71.5

 
 
 
Adjusted SG&A as % gross profit (1)
 
71.6

 
71.4

 
 
 
Operating margin %
 
3.7

 
3.8

 
 
 
Adjusted operating margin % (1)
 
3.9

 
3.9

 
 
 
Pretax margin %
 
2.5

 
2.9

 
 
 
Adjusted pretax margin % (1)
 
2.8

 
2.9

 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
$
(30,428
)
 
$
(26,440
)
 
15.1

 
Floorplan assistance
 
36,176

 
36,503

 
(0.9
)
 
Net floorplan income (expense)
 
$
5,748

 
$
10,063

 
(42.9
)
 
Other interest income (expense), net
 
$
(46,581
)
 
$
(38,534
)
 
20.9

 
(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 the description of aforementioned adjustments.




Group 1 Automotive, Inc.
 
Additional Information - U.K.
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
256,143

 
$
180,967

 
41.5

 
66.3

 
Used vehicle retail sales
106,856

 
89,321

 
19.6

 
41.2

 
Used vehicle wholesale sales
28,586

 
24,859

 
15.0

 
35.6

 
Total used
135,442

 
114,180

 
18.6

 
40.0

 
Parts and service
35,682

 
26,193

 
36.2

 
60.8

 
Finance and insurance
8,708

 
6,091

 
43.0

 
68.2

 
Total
$
435,975

 
$
327,431

 
33.2

 
56.7

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.5

 
6.1

 
 
 
 
 
Used vehicle retail sales
4.9

 
5.2

 
 
 
 
 
Used vehicle wholesale sales
(1.4
)
 
(0.3
)
 
 
 
 
 
Total used
3.6

 
4.0

 
 
 
 
 
Parts and service
55.7

 
55.6

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
10.9

 
11.1

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
14,031

 
$
11,060

 
26.9

 
48.7

 
Used vehicle retail sales
5,265

 
4,631

 
13.7

 
34.3

 
Used vehicle wholesale sales
(404
)
 
(73
)
 
(453.4
)
 
(558.6
)
 
Total used
4,861

 
4,558

 
6.6

 
25.9

 
Parts and service
19,892

 
14,554

 
36.7

 
61.3

 
Finance and insurance
8,708

 
6,091

 
43.0

 
68.2

 
Total
$
47,492

 
$
36,263

 
31.0

 
54.2

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
8,468

 
5,213

 
62.4

 
 
 
Retail used vehicles sold
4,800

 
3,582

 
34.0

 
 
 
Wholesale used vehicles sold
3,689

 
2,791

 
32.2

 
 
 
Total used
8,489

 
6,373

 
33.2

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
30,248

 
$
34,715

 
(12.9
)
 
2.4

 
Used vehicle retail
$
22,262

 
$
24,936

 
(10.7
)
 
5.4

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,657

 
$
2,122

 
(21.9
)
 
(8.5
)
 
Used vehicle retail sales
1,097

 
1,293

 
(15.2
)
 
0.2

 
Used vehicle wholesale sales
(110
)
 
(26
)
 
(323.1
)
 
(398.3
)
 
Total used
573

 
715

 
(19.9
)
 
(5.5
)
 
Finance and insurance (per retail unit)
$
656

 
$
693

 
(5.3
)
 
11.5

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
39,609

 
$
28,124

 
40.8

 
66.2

 
SG&A as % revenues
9.1

 
8.6

 
 
 
 
 
SG&A as % gross profit
83.4

 
77.6

 
 
 
 
 
Operating margin %
1.4

 
2.1

 
 
 
 
 
Adjusted operating margin % (1)
1.4

 
2.2

 
 
 
 
 
Pretax margin %
0.9

 
1.6

 
 
 
 
 
Adjusted pretax margin % (1)
0.9

 
1.7

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(1,083
)
 
$
(625
)
 
73.3

 
104.3

 
Floorplan assistance
154

 
201

 
(23.4
)
 
(9.7
)
 
Net floorplan income (expense)
$
(929
)
 
$
(424
)
 
119.1

 
158.6

 
Other interest income (expense), net
$
(1,299
)
 
$
(780
)
 
66.5

 
96.7

 




 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
764,707

 
$
492,424

 
55.3

 
70.8

 
Used vehicle retail sales
339,800

 
269,629

 
26.0

 
38.6

 
Used vehicle wholesale sales
93,985

 
78,692

 
19.4

 
31.2

 
Total used
433,785

 
348,321

 
24.5

 
36.9

 
Parts and service
110,180

 
76,983

 
43.1

 
57.6

 
Finance and insurance
26,991

 
17,411

 
55.0

 
70.6

 
Total
$
1,335,663

 
$
935,139

 
42.8

 
57.1

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.7

 
6.3

 
 
 
 
 
Used vehicle retail sales
5.1

 
5.3

 
 
 
 
 
Used vehicle wholesale sales
0.1

 
(0.5
)
 
 
 
 
 
Total used
4.0

 
4.0

 
 
 
 
 
Parts and service
55.2

 
55.0

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
11.1

 
11.2

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
43,347

 
$
30,802

 
40.7

 
54.7

 
Used vehicle retail sales
17,329

 
14,164

 
22.3

 
34.3

 
Used vehicle wholesale sales
54

 
(385
)
 
114.0

 
105.5

 
Total used
17,383

 
13,779

 
26.2

 
38.2

 
Parts and service
60,845

 
42,345

 
43.7

 
58.3

 
Finance and insurance
26,991

 
17,411

 
55.0

 
70.6

 
Total
$
148,566

 
$
104,337

 
42.4

 
56.6

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
23,694

 
14,408

 
64.5

 
 
 
Retail used vehicles sold
14,401

 
10,863

 
32.6

 
 
 
Wholesale used vehicles sold
11,328

 
8,682

 
30.5

 
 
 
Total used
25,729

 
19,545

 
31.6

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
32,274

 
$
34,177

 
(5.6
)
 
3.9

 
Used vehicle retail
$
23,596

 
$
24,821

 
(4.9
)
 
4.5

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,829

 
$
2,138

 
(14.5
)
 
(5.9
)
 
Used vehicle retail sales
1,203

 
1,304

 
(7.7
)
 
1.3

 
Used vehicle wholesale sales
5

 
(44
)
 
111.4

 
104.2

 
Total used
676

 
705

 
(4.1
)
 
5.0

 
Finance and insurance (per retail unit)
$
709

 
$
689

 
2.9

 
13.1

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
119,154

 
$
81,528

 
46.2

 
61.0

 
Adjusted SG&A expenses (1)
$
118,593

 
$
81,320

 
45.8

 
60.7

 
SG&A as % revenues
8.9

 
8.7

 
 
 
 
 
Adjusted SG&A as % revenues (1)
8.9

 
8.7

 
 
 
 
 
SG&A as % gross profit
80.2

 
78.1

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
79.8

 
77.9

 
 
 
 
 
Operating margin %
1.8

 
2.1

 
 
 
 
 
Adjusted operating margin % (1)
1.9

 
2.1

 
 
 
 
 
Pretax margin %
1.3

 
1.6

 
 
 
 
 
Adjusted pretax margin % (1)
1.3

 
1.7

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(3,137
)
 
$
(1,689
)
 
85.7

 
105.0

 
Floorplan assistance
643

 
584

 
10.1

 
19.9

 
Net floorplan income (expense)
$
(2,494
)
 
$
(1,105
)
 
125.7

 
150.0

 
Other interest income (expense), net
$
(3,966
)
 
$
(2,339
)
 
69.6

 
86.8

 
(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 the description of aforementioned adjustments.
(2) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




 
Group 1 Automotive, Inc.
 
Additional Information - Brazil
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
 
REVENUES:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
77,388

 
$
93,197

 
(17.0
)
 
(22.9
)
 
 
Used vehicle retail sales
20,213

 
20,890

 
(3.2
)
 
(10.3
)
 
 
Used vehicle wholesale sales
811

 
1,463

 
(44.6
)
 
(47.5
)
 
 
Total used
21,024

 
22,353

 
(5.9
)
 
(12.7
)
 
 
Parts and service
12,359

 
12,385

 
(0.2
)
 
(7.5
)
 
 
Finance and insurance
1,707

 
1,636

 
4.3

 
(5.1
)
 
 
Total
$
112,478

 
$
129,571

 
(13.2
)
 
(19.4
)
 
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
6.4

 
 
 
 
 
 
Used vehicle retail sales
7.5

 
4.3

 
 
 
 
 
 
Used vehicle wholesale sales
7.3

 
6.4

 
 
 
 
 
 
Total used
7.5

 
4.4

 
 
 
 
 
 
Parts and service
37.7

 
41.8

 
 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
 
Total
11.1

 
10.7

 
 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,518

 
$
6,004

 
(24.8
)
 
(29.8
)
 
 
Used vehicle retail sales
1,510

 
898

 
68.2

 
56.3

 
 
Used vehicle wholesale sales
59

 
93

 
(36.6
)
 
(39.9
)
 
 
Total used
1,569

 
991

 
58.3

 
47.2

 
 
Parts and service
4,656

 
5,173

 
(10.0
)
 
(16.5
)
 
 
Finance and insurance
1,707

 
1,636

 
4.3

 
(5.1
)
 
 
Total
$
12,450

 
$
13,804

 
(9.8
)
 
(16.3
)
 
 
UNITS SOLD:
 
 
 
 
 
 
 
 
 
Retail new vehicles sold
2,429

 
3,582

 
(32.2
)
 
 
 
 
Retail used vehicles sold
1,011

 
1,245

 
(18.8
)
 
 
 
 
Wholesale used vehicles sold
333

 
402

 
(17.2
)
 
 
 
 
Total used
1,344

 
1,647

 
(18.4
)
 
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
 
New vehicle retail
$
31,860

 
$
26,018

 
22.5

 
13.8

 
 
Used vehicle retail
$
19,993

 
$
16,779

 
19.2

 
10.5

 
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,860

 
$
1,676

 
11.0

 
3.6

 
 
Used vehicle retail sales
1,494

 
721

 
107.2

 
92.4

 
 
Used vehicle wholesale sales
177

 
231

 
(23.4
)
 
(27.4
)
 
 
Total used
1,167

 
602

 
93.9

 
80.4

 
 
Finance and insurance (per retail unit)
$
496

 
$
339

 
46.3

 
33.2

 
 
OTHER:
 
 
 
 
 
 
 
 
 
SG&A expenses
$
12,896

 
$
12,117

 
6.4

 
(1.2
)
 
 
Adjusted SG&A expenses (1)
$
12,622

 
$
12,117

 
4.2

 
(3.3
)
 
 
SG&A as % revenues
11.5

 
9.4

 
 
 
 
 
 
Adjusted SG&A as % revenues (1)
11.2

 
9.4

 
 
 
 
 
 
SG&A as % gross profit
103.6

 
87.8

 
 
 
 
 
 
Adjusted SG&A as % gross profit (1)
101.4

 
87.8

 
 
 
 
 
 
Operating margin %
(0.6
)
 
0.8

 
 
 
 
 
 
Adjusted operating margin % (1)
(0.4
)
 
1.0

 
 
 
 
 
 
Pretax margin %
(0.8
)
 
0.4

 
 
 
 
 
 
Adjusted pretax margin % (1)
(0.5
)
 
0.6

 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(73
)
 
$
(96
)
 
(24.0
)
 
(31.8
)
 
 
Floorplan assistance
—

 
—

 
—

 
—

 
 
Net floorplan income (expense)
$
(73
)
 
$
(96
)
 
(24.0
)
 
(31.8
)
 
 
Other interest income (expense), net
$
(85
)
 
$
(405
)
 
(79.0
)
 
(80.0
)
 





 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
215,728

 
$
281,999

 
(23.5
)
 
(14.1
)
 
Used vehicle retail sales
57,174

 
61,563

 
(7.1
)
 
5.2

 
Used vehicle wholesale sales
2,349

 
6,462

 
(63.6
)
 
(58.0
)
 
Total used
59,523

 
68,025

 
(12.5
)
 
(0.8
)
 
Parts and service
34,543

 
39,970

 
(13.6
)
 
(2.6
)
 
Finance and insurance
4,784

 
5,256

 
(9.0
)
 
2.0

 
Total
$
314,578

 
$
395,250

 
(20.4
)
 
(10.4
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.7

 
6.7

 
 
 
 
 
Used vehicle retail sales
5.7

 
4.4

 
 
 
 
 
Used vehicle wholesale sales
5.4

 
7.1

 
 
 
 
 
Total used
5.7

 
4.6

 
 
 
 
 
Parts and service
37.1

 
42.8

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
10.6

 
11.3

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
12,289

 
$
19,002

 
(35.3
)
 
(27.0
)
 
Used vehicle retail sales
3,272

 
2,693

 
21.5

 
34.4

 
Used vehicle wholesale sales
127

 
462

 
(72.5
)
 
(68.3
)
 
Total used
3,399

 
3,155

 
7.7

 
19.3

 
Parts and service
12,817

 
17,102

 
(25.1
)
 
(15.2
)
 
Finance and insurance
4,784

 
5,256

 
(9.0
)
 
2.0

 
Total
$
33,289

 
$
44,515

 
(25.2
)
 
(15.8
)
 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
7,636

 
10,071

 
(24.2
)
 
 
 
Retail used vehicles sold
3,465

 
3,403

 
1.8

 
 
 
Wholesale used vehicles sold
855

 
1,269

 
(32.6
)
 
 
 
Total used
4,320

 
4,672

 
(7.5
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
28,251

 
$
28,001

 
0.9

 
13.3

 
Used vehicle retail
$
16,500

 
$
18,091

 
(8.8
)
 
3.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,609

 
$
1,887

 
(14.7
)
 
(3.8
)
 
Used vehicle retail sales
944

 
791

 
19.3

 
32.0

 
Used vehicle wholesale sales
149

 
364

 
(59.1
)
 
(52.9
)
 
Total used
787

 
675

 
16.6

 
29.1

 
Finance and insurance (per retail unit)
$
431

 
$
390

 
10.5

 
23.8

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
34,808

 
$
40,915

 
(14.9
)
 
(3.8
)
 
Adjusted SG&A expenses (1)
$
34,162

 
$
40,915

 
(16.5
)
 
(5.6
)
 
SG&A as % revenues
11.1

 
10.4

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.9

 
10.4

 
 
 
 
 
SG&A as % gross profit
104.6

 
91.9

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
102.6

 
91.9

 
 
 
 
 
Operating margin %
(0.9
)
 
0.3

 
 
 
 
 
Adjusted operating margin % (1)
(0.5
)
 
0.6

 
 
 
 
 
Pretax margin %
(1.0
)
 
(0.2
)
 
 
 
 
 
Adjusted pretax margin % (1)
(0.7
)
 
—

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(172
)
 
$
(917
)
 
(81.2
)
 
(78.1
)
 
Floorplan assistance
—

 
—

 
—

 
—

 
Net floorplan income (expense)
$
(172
)
 
$
(917
)
 
(81.2
)
 
(78.1
)
 
Other interest income (expense), net
$
(182
)
 
$
(1,188
)
 
(84.7
)
 
(81.6
)
 
(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 the description of aforementioned adjustments.
(2) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




Group 1 Automotive, Inc.
 
Additional Information - Consolidated
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,587,952

 
$
1,601,213

 
(0.8
)
 
1.6

 
Used vehicle retail sales
702,620

 
687,637

 
2.2

 
4.8

 
Used vehicle wholesale sales
104,218

 
100,483

 
3.7

 
8.8

 
Total used
806,838

 
788,120

 
2.4

 
5.3

 
Parts and service
319,676

 
303,557

 
5.3

 
7.1

 
Finance and insurance
108,710

 
107,679

 
1.0

 
2.2

 
Total
$
2,823,176

 
$
2,800,569

 
0.8

 
3.3

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.0

 
 
 
 
 
Used vehicle retail sales
6.5

 
6.8

 
 
 
 
 
Used vehicle wholesale sales
(1.8
)
 
(1.8
)
 
 
 
 
 
Total used
5.5

 
5.7

 
 
 
 
 
Parts and service
54.2

 
54.8

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
14.4

 
14.2

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
80,435

 
$
79,492

 
1.2

 
3.8

 
Used vehicle retail sales
45,968

 
46,582

 
(1.3
)
 
0.5

 
Used vehicle wholesale sales
(1,859
)
 
(1,835
)
 
(1.3
)
 
(5.7
)
 
Total used
44,109

 
44,747

 
(1.4
)
 
0.3

 
Parts and service
173,414

 
166,464

 
4.2

 
6.1

 
Finance and insurance
108,710

 
107,679

 
1.0

 
2.2

 
Total
$
406,668

 
$
398,382

 
2.1

 
4.0

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
45,597

 
47,126

 
(3.2
)
 
 
 
Retail used vehicles sold
33,012

 
32,491

 
1.6

 
 
 
Wholesale used vehicles sold
15,027

 
14,926

 
0.7

 
 
 
Total used
48,039

 
47,417

 
1.3

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
34,826

 
$
33,977

 
2.5

 
5.0

 
Used vehicle retail
$
21,284

 
$
21,164

 
0.6

 
3.1

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,764

 
$
1,687

 
4.6

 
7.3

 
Used vehicle retail sales
1,392

 
1,434

 
(2.9
)
 
(1.1
)
 
Used vehicle wholesale sales
(124
)
 
(123
)
 
(0.8
)
 
(4.9
)
 
Total used
918

 
944

 
(2.8
)
 
(1.0
)
 
Finance and insurance (per retail unit)
$
1,383

 
$
1,352

 
2.3

 
3.6

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
299,006

 
$
289,012

 
3.5

 
5.6

 
Adjusted SG&A expenses (1)
$
299,458

 
$
289,012

 
3.6

 
5.8

 
SG&A as % revenues
10.6

 
10.3

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.6

 
10.3

 
 
 
 
 
SG&A as % gross profit
73.5

 
72.5

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
73.6

 
72.5

 
 
 
 
 
Operating margin %
3.0

 
3.5

 
 
 
 
 
Adjusted operating margin % (1)
3.3

 
3.5

 
 
 
 
 
Pretax margin %
2.0

 
2.6

 
 
 
 
 
Adjusted pretax margin % (1)
2.3

 
2.6

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(11,135
)
 
$
(9,685
)
 
15.0

 
16.9

 
Floorplan assistance
12,979

 
13,545

 
(4.2
)
 
(4.2
)
 
Net floorplan income (expense)
$
1,844

 
$
3,860

 
(52.2
)
 
(57.1
)
 
Other interest income (expense), net
$
(17,094
)
 
$
(13,922
)
 
22.8

 
24.4

 




 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,538,562

 
$
4,468,200

 
1.6

 
3.9

 
Used vehicle retail sales
2,106,569

 
1,993,124

 
5.7

 
7.8

 
Used vehicle wholesale sales
302,089

 
302,186

 
—

 
3.1

 
Total used
2,408,658

 
2,295,310

 
4.9

 
7.2

 
Parts and service
950,341

 
888,939

 
6.9

 
8.7

 
Finance and insurance
316,419

 
307,454

 
2.9

 
4.0

 
Total
$
8,213,980

 
$
7,959,903

 
3.2

 
5.4

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.0

 
 
 
 
 
Used vehicle retail sales
6.8

 
7.0

 
 
 
 
 
Used vehicle wholesale sales
(0.2
)
 
—

 
 
 
 
 
Total used
5.9

 
6.0

 
 
 
 
 
Parts and service
54.0

 
54.3

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
14.7

 
14.5

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
233,310

 
$
225,353

 
3.5

 
6.1

 
Used vehicle retail sales
143,433

 
138,763

 
3.4

 
4.8

 
Used vehicle wholesale sales
(462
)
 
(90
)
 
(413.3
)
 
(432.4
)
 
Total used
142,971

 
138,673

 
3.1

 
4.6

 
Parts and service
513,188

 
482,359

 
6.4

 
8.0

 
Finance and insurance
316,419

 
307,454

 
2.9

 
4.0

 
Total
$
1,205,888

 
$
1,153,839

 
4.5

 
6.2

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
130,022

 
131,130

 
(0.8
)
 
 
 
Retail used vehicles sold
98,754

 
93,913

 
5.2

 
 
 
Wholesale used vehicles sold
43,077

 
43,493

 
(1.0
)
 
 
 
Total used
141,831

 
137,406

 
3.2

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
34,906

 
$
34,075

 
2.4

 
4.8

 
Used vehicle retail
$
21,331

 
$
21,223

 
0.5

 
2.5

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,794

 
$
1,719

 
4.4

 
7.1

 
Used vehicle retail sales
1,452

 
1,478

 
(1.8
)
 
(0.3
)
 
Used vehicle wholesale sales
(11
)
 
(2
)
 
(450.0
)
 
(437.5
)
 
Total used
1,008

 
1,009

 
(0.1
)
 
1.3

 
Finance and insurance (per retail unit)
$
1,383

 
$
1,366

 
1.2

 
2.3

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
891,692

 
$
841,050

 
6.0

 
8.0

 
Adjusted SG&A expenses (1)
$
886,439

 
$
839,943

 
5.5

 
7.5

 
SG&A as % revenues
10.9

 
10.6

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.8

 
10.6

 
 
 
 
 
SG&A as % gross profit
73.9

 
72.9

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
73.5

 
72.8

 
 
 
 
 
Operating margin %
3.2

 
3.5

 
 
 
 
 
Adjusted operating margin % (1)
3.4

 
3.5

 
 
 
 
 
Pretax margin %
2.2

 
2.6

 
 
 
 
 
Adjusted pretax margin % (1)
2.4

 
2.6

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(33,737
)
 
$
(29,046
)
 
16.2

 
17.4

 
Floorplan assistance
36,818

 
37,087

 
(0.7
)
 
(0.7
)
 
Net floorplan income (expense)
$
3,081

 
$
8,041

 
(61.7
)
 
(66.1
)
 
Other interest income (expense), net
$
(50,729
)
 
$
(42,061
)
 
20.6

 
21.7

 
(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 the description of aforementioned adjustments.
(2) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




Group 1 Automotive, Inc.
Additional Information - Same Store U.S. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
1,240,952

 
$
1,297,598

 
(4.4
)
 
Used vehicle retail sales
567,275

 
565,381

 
0.3

 
Used vehicle wholesale sales
73,940

 
71,204

 
3.8

 
Total used
641,215

 
636,585

 
0.7

 
Parts and service
267,909

 
258,996

 
3.4

 
Finance and insurance
96,809

 
98,577

 
(1.8
)
 
Total
$
2,246,885

 
$
2,291,756

 
(2.0
)
 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
4.9

 
4.8

 
 
 
Used vehicle retail sales
6.8

 
7.1

 
 
 
Used vehicle wholesale sales
(2.0
)
 
(2.3
)
 
 
 
Total used
5.8

 
6.1

 
 
 
Parts and service
54.8

 
55.3

 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
Total
15.2

 
14.9

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
60,920

 
$
61,638

 
(1.2
)
 
Used vehicle retail sales
38,719

 
40,358

 
(4.1
)
 
Used vehicle wholesale sales
(1,460
)
 
(1,605
)
 
9.0

 
Total used
37,259

 
38,753

 
(3.9
)
 
Parts and service
146,738

 
143,344

 
2.4

 
Finance and insurance
96,809

 
98,577

 
(1.8
)
 
Total
$
341,726

 
$
342,312

 
(0.2
)
 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
34,435

 
37,403

 
(7.9
)
 
Retail used vehicles sold
26,915

 
27,164

 
(0.9
)
 
Wholesale used vehicles sold
10,887

 
11,340

 
(4.0
)
 
Total used
37,802

 
38,504

 
(1.8
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
36,038

 
$
34,692

 
3.9

 
Used vehicle retail
$
21,077

 
$
20,814

 
1.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
$
1,769

 
$
1,648

 
7.3

 
Used vehicle retail sales
1,439

 
1,486

 
(3.2
)
 
Used vehicle wholesale sales
(134
)
 
(142
)
 
5.6

 
Total used
986

 
1,006

 
(2.0
)
 
Finance and insurance (per retail unit)
$
1,578

 
$
1,527

 
3.3

 
OTHER:
 
 
 
 
 
 
SG&A expenses
$
243,405

 
$
242,056

 
0.6

 
Adjusted SG&A expenses (2)
$
242,955

 
$
242,056

 
0.4

 
SG&A as % revenues
10.8

 
10.6

 
 
 
Adjusted SG&A as % revenues (2)
10.8

 
10.6

 
 
 
SG&A as % gross profit
71.2

 
70.7

 
 
 
Adjusted SG&A as % gross profit (2)
71.1

 
70.7

 
 
 
Operating margin %
3.4

 
3.9

 
 
 
Adjusted operating margin % (2)
3.9

 
3.9

 
 
 





 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
3,483,544

 
$
3,615,137

 
(3.6
)
 
Used vehicle retail sales
1,670,922

 
1,628,417

 
2.6

 
Used vehicle wholesale sales
200,066

 
209,686

 
(4.6
)
 
Total used
1,870,988

 
1,838,103

 
1.8

 
Parts and service
788,935

 
753,477

 
4.7

 
Finance and insurance
278,883

 
281,040

 
(0.8
)
 
Total
$
6,422,350

 
$
6,487,757

 
(1.0
)
 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
5.0

 
4.8

 
 
 
Used vehicle retail sales
7.2

 
7.4

 
 
 
Used vehicle wholesale sales
(0.2
)
 
0.1

 
 
 
Total used
6.4

 
6.5

 
 
 
Parts and service
54.5

 
54.8

 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
Total
15.6

 
15.2

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
173,001

 
$
171,974

 
0.6

 
Used vehicle retail sales
120,081

 
119,995

 
0.1

 
Used vehicle wholesale sales
(372
)
 
151

 
(346.4
)
 
Total used
119,709

 
120,146

 
(0.4
)
 
Parts and service
429,838

 
412,640

 
4.2

 
Finance and insurance
278,883

 
281,040

 
(0.8
)
 
Total
$
1,001,431

 
$
985,800

 
1.6

 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
97,163

 
104,424

 
(7.0
)
 
Retail used vehicles sold
79,587

 
78,292

 
1.7

 
Wholesale used vehicles sold
30,367

 
32,651

 
(7.0
)
 
Total used
109,954

 
110,943

 
(0.9
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
35,853

 
$
34,620

 
3.6

 
Used vehicle retail
$
20,995

 
$
20,799

 
0.9

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
$
1,781

 
$
1,647

 
8.1

 
Used vehicle retail sales
1,509

 
1,533

 
(1.6
)
 
Used vehicle wholesale sales
(12
)
 
5

 
(340.0
)
 
Total used
1,089

 
1,083

 
0.6

 
Finance and insurance (per retail unit)
$
1,578

 
$
1,538

 
2.6

 
OTHER: 
 
 
 
 
 
 
SG&A expenses
$
722,654

 
$
700,646

 
3.1

 
Adjusted SG&A expenses (2)
$
716,366

 
$
698,331

 
2.6

 
SG&A as % revenues
11.3

 
10.8

 
 
 
Adjusted SG&A as % revenues (2)
11.2

 
10.8

 
 
 
SG&A as % gross profit
72.2

 
71.1

 
 
 
Adjusted SG&A as % gross profit (2)
71.5

 
70.8

 
 
 
Operating margin %
3.7

 
3.9

 
 
 
Adjusted operating margin % (2)
3.9

 
4.0

 
 
 
(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.




Group 1 Automotive, Inc.
Additional Information - Same Store U.K. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
163,396

 
$
180,967

 
(9.7
)
 
6.1

 
Used vehicle retail sales
79,243

 
89,321

 
(11.3
)
 
4.7

 
Used vehicle wholesale sales
20,785

 
24,859

 
(16.4
)
 
(1.4
)
 
Total used
100,028

 
114,180

 
(12.4
)
 
3.4

 
Parts and service
23,952

 
26,193

 
(8.6
)
 
7.9

 
Finance and insurance
6,087

 
6,091

 
(0.1
)
 
17.6

 
Total
$
293,463

 
$
327,431

 
(10.4
)
 
5.5

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.9

 
6.1

 
 
 
 
 
Used vehicle retail sales
5.3

 
5.2

 
 
 
 
 
Used vehicle wholesale sales
(0.3
)
 
(0.3
)
 
 
 
 
 
Total used
4.1

 
4.0

 
 
 
 
 
Parts and service
55.3

 
55.6

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
11.3

 
11.1

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
9,559

 
$
11,059

 
(13.6
)
 
1.3

 
Used vehicle retail sales
4,189

 
4,632

 
(9.6
)
 
6.8

 
Used vehicle wholesale sales
(66
)
 
(73
)
 
9.6

 
(8.0
)
 
Total used
4,123

 
4,559

 
(9.6
)
 
6.8

 
Parts and service
13,246

 
14,554

 
(9.0
)
 
7.4

 
Finance and insurance
6,087

 
6,091

 
(0.1
)
 
17.6

 
Total
$
33,015

 
$
36,263

 
(9.0
)
 
7.2

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
5,293

 
5,213

 
1.5

 
 
 
Retail used vehicles sold
3,702

 
3,582

 
3.4

 
 
 
Wholesale used vehicles sold
2,824

 
2,791

 
1.2

 
 
 
Total used
6,526

 
6,373

 
2.4

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
30,870

 
$
34,715

 
(11.1
)
 
4.5

 
Used vehicle retail
$
21,405

 
$
24,936

 
(14.2
)
 
1.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,806

 
$
2,121

 
(14.9
)
 
(0.2
)
 
Used vehicle retail sales
1,132

 
1,293

 
(12.5
)
 
3.4

 
Used vehicle wholesale sales
(23
)
 
(26
)
 
11.5

 
(6.7
)
 
Total used
632

 
715

 
(11.6
)
 
4.3

 
Finance and insurance (per retail unit)
$
677

 
$
693

 
(2.3
)
 
15.0

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
25,588

 
$
28,130

 
(9.0
)
 
7.3

 
SG&A as % revenues
8.7

 
8.6

 
 
 
 
 
SG&A as % gross profit
77.5

 
77.6

 
 
 
 
 
Operating margin %
2.2

 
2.1

 
 
 
 
 
Adjusted operating margin % (2)
2.2

 
2.2

 
 
 
 
 





 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
503,611

 
$
492,424

 
2.3

 
12.4

 
Used vehicle retail sales
261,228

 
269,629

 
(3.1
)
 
6.4

 
Used vehicle wholesale sales
70,361

 
78,692

 
(10.6
)
 
(1.9
)
 
Total used
331,589

 
348,321

 
(4.8
)
 
4.5

 
Parts and service
76,063

 
76,983

 
(1.2
)
 
8.7

 
Finance and insurance
19,186

 
17,411

 
10.2

 
21.2

 
Total
$
930,449

 
$
935,139

 
(0.5
)
 
9.3

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
6.0

 
6.3

 
 
 
 
 
Used vehicle retail sales
5.3

 
5.3

 
 
 
 
 
Used vehicle wholesale sales
0.5

 
(0.5
)
 
 
 
 
 
Total used
4.3

 
4.0

 
 
 
 
 
Parts and service
55.2

 
55.0

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
11.4

 
11.2

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
30,430

 
$
30,796

 
(1.2
)
 
8.6

 
Used vehicle retail sales
13,795

 
14,163

 
(2.6
)
 
6.9

 
Used vehicle wholesale sales
346

 
(384
)
 
190.1

 
198.8

 
Total used
14,141

 
13,779

 
2.6

 
12.7

 
Parts and service
42,001

 
42,344

 
(0.8
)
 
9.1

 
Finance and insurance
19,186

 
17,411

 
10.2

 
21.2

 
Total
$
105,758

 
$
104,330

 
1.4

 
11.4

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
15,296

 
14,408

 
6.2

 
 
 
Retail used vehicles sold
11,413

 
10,863

 
5.1

 
 
 
Wholesale used vehicles sold
8,884

 
8,682

 
2.3

 
 
 
Total used
20,297

 
19,545

 
3.8

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
32,924

 
$
34,177

 
(3.7
)
 
5.9

 
Used vehicle retail
$
22,889

 
$
24,821

 
(7.8
)
 
1.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,989

 
$
2,137

 
(6.9
)
 
2.3

 
Used vehicle retail sales
1,209

 
1,304

 
(7.3
)
 
1.8

 
Used vehicle wholesale sales
39

 
(44
)
 
188.6

 
196.5

 
Total used
697

 
705

 
(1.1
)
 
8.5

 
Finance and insurance (per retail unit)
$
718

 
$
689

 
4.2

 
14.6

 
OTHER: 
 
 
 
 
 
 
 
 
SG&A expenses
$
80,868

 
$
81,546

 
(0.8
)
 
9.1

 
Adjusted SG&A expenses (2)
$
80,307

 
$
81,338

 
(1.3
)
 
8.6

 
SG&A as % revenues
8.7

 
8.7

 
 
 
 
 
Adjusted SG&A as % revenues (2)
8.6

 
8.7

 
 
 
 
 
SG&A as % gross profit
76.5

 
78.2

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
75.9

 
78.0

 
 
 
 
 
Operating margin %
2.3

 
2.1

 
 
 
 
 
Adjusted operating margin % (2)
2.4

 
2.1

 
 
 
 
 
(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) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




Group 1 Automotive, Inc.
Additional Information - Same Store Brazil (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
71,750

 
$
87,962

 
(18.4
)
 
(24.2
)
 
Used vehicle retail sales
18,757

 
18,600

 
0.8

 
(6.5
)
 
Used vehicle wholesale sales
811

 
1,019

 
(20.4
)
 
(24.5
)
 
Total used
19,568

 
19,619

 
(0.3
)
 
(7.5
)
 
Parts and service
11,557

 
10,500

 
10.1

 
2.0

 
Finance and insurance
1,651

 
1,390

 
18.8

 
7.8

 
Total
$
104,526

 
$
119,471

 
(12.5
)
 
(18.7
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.9

 
6.4

 
 
 
 
 
Used vehicle retail sales
7.6

 
4.0

 
 
 
 
 
Used vehicle wholesale sales
7.3

 
6.7

 
 
 
 
 
Total used
7.5

 
4.1

 
 
 
 
 
Parts and service
37.9

 
42.8

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
11.2

 
10.3

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,213

 
$
5,649

 
(25.4
)
 
(30.4
)
 
Used vehicle retail sales
1,417

 
739

 
91.7

 
78.0

 
Used vehicle wholesale sales
59

 
68

 
(13.2
)
 
(18.8
)
 
Total used
1,476

 
807

 
82.9

 
69.7

 
Parts and service
4,382

 
4,494

 
(2.5
)
 
(9.6
)
 
Finance and insurance
1,651

 
1,390

 
18.8

 
7.8

 
Total
$
11,722

 
$
12,340

 
(5.0
)
 
(11.8
)
 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
2,261

 
3,254

 
(30.5
)
 
 
 
Retail used vehicles sold
950

 
1,045

 
(9.1
)
 
 
 
Wholesale used vehicles sold
304

 
300

 
1.3

 
 
 
Total used
1,254

 
1,345

 
(6.8
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
31,734

 
$
27,032

 
17.4

 
9.1

 
Used vehicle retail
$
19,744

 
$
17,799

 
10.9

 
2.8

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,863

 
$
1,736

 
7.3

 
0.2

 
Used vehicle retail sales
1,492

 
707

 
111.0

 
95.8

 
Used vehicle wholesale sales
194

 
227

 
(14.5
)
 
(19.9
)
 
Total used
1,177

 
600

 
96.2

 
82.1

 
Finance and insurance (per retail unit)
$
514

 
$
323

 
59.1

 
44.3

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
12,105

 
$
10,100

 
19.9

 
11.3

 
Adjusted SG&A expenses (2)
$
11,831

 
$
10,100

 
17.1

 
8.8

 
SG&A as % revenues
11.6

 
8.5

 
 
 
 
 
Adjusted SG&A as % revenues (2)
11.3

 
8.5

 
 
 
 
 
SG&A as % gross profit
103.3

 
81.9

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
100.9

 
81.9

 
 
 
 
 
Operating margin %
(0.6
)
 
1.5

 
 
 
 
 
Adjusted operating margin % (2)
(0.3
)
 
1.6

 
 
 
 
 





 
Nine Months Ended September 30,
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
204,560

 
$
266,408

 
(23.2
)
 
(13.5
)
 
Used vehicle retail sales
54,321

 
56,160

 
(3.3
)
 
10.1

 
Used vehicle wholesale sales
2,058

 
5,052

 
(59.3
)
 
(52.5
)
 
Total used
56,379

 
61,212

 
(7.9
)
 
4.9

 
Parts and service
33,005

 
35,089

 
(5.9
)
 
6.5

 
Finance and insurance
4,661

 
4,789

 
(2.7
)
 
9.8

 
Total
$
298,605

 
$
367,498

 
(18.7
)
 
(8.2
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
6.8

 
 
 
 
 
Used vehicle retail sales
5.8

 
4.2

 
 
 
 
 
Used vehicle wholesale sales
6.9

 
7.3

 
 
 
 
 
Total used
5.9

 
4.4

 
 
 
 
 
Parts and service
37.7

 
43.5

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
10.8

 
11.1

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
11,789

 
$
18,055

 
(34.7
)
 
(26.1
)
 
Used vehicle retail sales
3,158

 
2,331

 
35.5

 
51.2

 
Used vehicle wholesale sales
141

 
368

 
(61.7
)
 
(55.5
)
 
Total used
3,299

 
2,699

 
22.2

 
36.7

 
Parts and service
12,444

 
15,266

 
(18.5
)
 
(7.4
)
 
Finance and insurance
4,661

 
4,789

 
(2.7
)
 
9.8

 
Total
$
32,193

 
$
40,809

 
(21.1
)
 
(10.8
)
 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
7,265

 
9,165

 
(20.7
)
 
 
 
Retail used vehicles sold
3,312

 
2,948

 
12.3

 
 
 
Wholesale used vehicles sold
760

 
998

 
(23.8
)
 
 
 
Total used
4,072

 
3,946

 
3.2

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
28,157

 
$
29,068

 
(3.1
)
 
9.1

 
Used vehicle retail
$
16,401

 
$
19,050

 
(13.9
)
 
(2.0
)
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,623

 
$
1,970

 
(17.6
)
 
(6.8
)
 
Used vehicle retail sales
954

 
791

 
20.6

 
34.6

 
Used vehicle wholesale sales
186

 
369

 
(49.6
)
 
(41.5
)
 
Total used
810

 
684

 
18.4

 
32.4

 
Finance and insurance (per retail unit)
$
441

 
$
395

 
11.6

 
25.7

 
OTHER: 
 
 
 
 
 
 
 
 
SG&A expenses
$
31,984

 
$
34,543

 
(7.4
)
 
5.0

 
Adjusted SG&A expenses (2)
$
31,710

 
$
34,543

 
(8.2
)
 
4.2

 
SG&A as % revenues
10.7

 
9.4

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.6

 
9.4

 
 
 
 
 
SG&A as % gross profit
99.4

 
84.6

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
98.5

 
84.6

 
 
 
 
 
Operating margin %
(0.4
)
 
1.4

 
 
 
 
 
Adjusted operating margin % (2)
(0.1
)
 
1.4

 
 
 
 
 
(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) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




Group 1 Automotive, Inc.
 
Additional Information - Same Store Consolidated (1)
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,476,098

 
$
1,566,527

 
(5.8
)
 
(4.3
)
 
Used vehicle retail sales
665,275

 
673,302

 
(1.2
)
 
0.7

 
Used vehicle wholesale sales
95,536

 
97,082

 
(1.6
)
 
2.2

 
Total used
760,811

 
770,384

 
(1.2
)
 
0.9

 
Parts and service
303,418

 
295,689

 
2.6

 
3.8

 
Finance and insurance
104,547

 
106,058

 
(1.4
)
 
(0.6
)
 
Total
$
2,644,874

 
$
2,738,658

 
(3.4
)
 
(1.8
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.0

 
 
 
 
 
Used vehicle retail sales
6.7

 
6.8

 
 
 
 
 
Used vehicle wholesale sales
(1.5
)
 
(1.7
)
 
 
 
 
 
Total used
5.6

 
5.7

 
 
 
 
 
Parts and service
54.2

 
54.9

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
14.6

 
14.3

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
74,692

 
$
78,346

 
(4.7
)
 
(2.9
)
 
Used vehicle retail sales
44,325

 
45,729

 
(3.1
)
 
(1.6
)
 
Used vehicle wholesale sales
(1,467
)
 
(1,610
)
 
8.9

 
7.9

 
Total used
42,858

 
44,119

 
(2.9
)
 
(1.4
)
 
Parts and service
164,366

 
162,392

 
1.2

 
2.5

 
Finance and insurance
104,547

 
106,058

 
(1.4
)
 
(0.6
)
 
Total
$
386,463

 
$
390,915

 
(1.1
)
 
0.1

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
41,989

 
45,870

 
(8.5
)
 
 
 
Retail used vehicles sold
31,567

 
31,791

 
(0.7
)
 
 
 
Wholesale used vehicles sold
14,015

 
14,431

 
(2.9
)
 
 
 
Total used
45,582

 
46,222

 
(1.4
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
35,154

 
$
34,151

 
2.9

 
4.6

 
Used vehicle retail
$
21,075

 
$
21,179

 
(0.5
)
 
1.4

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,779

 
$
1,708

 
4.2

 
6.0

 
Used vehicle retail sales
1,404

 
1,438

 
(2.4
)
 
(0.9
)
 
Used vehicle wholesale sales
(105
)
 
(112
)
 
6.3

 
5.1

 
Total used
940

 
955

 
(1.6
)
 
—

 
Finance and insurance (per retail unit)
$
1,421

 
$
1,366

 
4.0

 
5.0

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
281,098

 
$
280,286

 
0.3

 
1.6

 
Adjusted SG&A expenses (2)
$
280,374

 
$
280,286

 
—

 
1.4

 
SG&A as % revenues
10.6

 
10.2

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.6

 
10.2

 
 
 
 
 
SG&A as % gross profit
72.7

 
71.7

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
72.5

 
71.7

 
 
 
 
 
Operating margin %
3.1

 
3.6

 
 
 
 
 
Adjusted operating margin % (2)
3.6

 
3.6

 
 
 
 
 




 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
Constant Currency (3) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,191,715

 
$
4,373,969

 
(4.2
)
 
(2.4
)
 
Used vehicle retail sales
1,986,471

 
1,954,206

 
1.7

 
3.4

 
Used vehicle wholesale sales
272,485

 
293,430

 
(7.1
)
 
(4.7
)
 
Total used
2,258,956

 
2,247,636

 
0.5

 
2.3

 
Parts and service
898,003

 
865,549

 
3.7

 
5.1

 
Finance and insurance
302,730

 
303,240

 
(0.2
)
 
0.7

 
Total
$
7,651,404

 
$
7,790,394

 
(1.8
)
 
(0.1
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.0

 
 
 
 
 
Used vehicle retail sales
6.9

 
7.0

 
 
 
 
 
Used vehicle wholesale sales
—

 
—

 
 
 
 
 
Total used
6.1

 
6.1

 
 
 
 
 
Parts and service
53.9

 
54.3

 
 
 
 
 
Finance and insurance
100.0

 
100.0

 
 
 
 
 
Total
14.9

 
14.5

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
215,220

 
$
220,825

 
(2.5
)
 
(0.5
)
 
Used vehicle retail sales
137,034

 
136,489

 
0.4

 
1.7

 
Used vehicle wholesale sales
115

 
135

 
(14.8
)
 
27.5

 
Total used
137,149

 
136,624

 
0.4

 
1.7

 
Parts and service
484,283

 
470,250

 
3.0

 
4.2

 
Finance and insurance
302,730

 
303,240

 
(0.2
)
 
0.7

 
Total
$
1,139,382

 
$
1,130,939

 
0.7

 
2.0

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
119,724

 
127,997

 
(6.5
)
 
 
 
Retail used vehicles sold
94,312

 
92,103

 
2.4

 
 
 
Wholesale used vehicles sold
40,011

 
42,331

 
(5.5
)
 
 
 
Total used
134,323

 
134,434

 
(0.1
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
35,011

 
$
34,172

 
2.5

 
4.3

 
Used vehicle retail
$
21,063

 
$
21,218

 
(0.7
)
 
0.9

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,798

 
$
1,725

 
4.2

 
6.4

 
Used vehicle retail sales
1,453

 
1,482

 
(2.0
)
 
(0.7
)
 
Used vehicle wholesale sales
3

 
3

 
—

 
34.9

 
Total used
1,021

 
1,016

 
0.5

 
1.8

 
Finance and insurance (per retail unit)
$
1,414

 
$
1,378

 
2.6

 
3.5

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
835,506

 
$
816,735

 
2.3

 
3.8

 
Adjusted SG&A expenses (2)
$
828,383

 
$
814,212

 
1.7

 
3.3

 
SG&A as % revenues
10.9

 
10.5

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.8

 
10.5

 
 
 
 
 
SG&A as % gross profit
73.3

 
72.2

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
72.7

 
72.0

 
 
 
 
 
Operating margin %
3.3

 
3.6

 
 
 
 
 
Adjusted operating margin % (2)
3.6

 
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.
(3) We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.




Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - U.S.
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
246,501

 
$
248,771

 
(0.9
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(450
)
 
—

 
 
 
 
Gain (loss) on real estate and dealership transactions
1,176

 
—

 
 
 
 
Adjusted SG&A (1)
$
247,227

 
$
248,771

 
(0.6
)
 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.8

 
10.6

 
 
 
 
Adjusted (1)
10.9

 
10.6

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
71.1

 
71.4

 
 
 
 
Adjusted (1)
71.3

 
71.4

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.4

 
3.8

 
 
 
 
Adjusted (1),(2)
3.9

 
3.8

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.3

 
2.9

 
 
 
 
Adjusted (1),(2)
2.8

 
2.9

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
243,405

 
$
242,056

 
0.6

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(450
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
242,955

 
$
242,056

 
0.4

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.8

 
10.6

 
 
 
 
Adjusted (1)
10.8

 
10.6

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
71.2

 
70.7

 
 
 
 
Adjusted (1)
71.1

 
70.7

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.4

 
3.9

 
 
 
 
Adjusted (1),(3)
3.9

 
3.9

 
 
 
 
 
 
 
 
 
 
 




 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
737,730

 
$
718,607

 
2.7

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(5,873
)
 
(951
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
1,856

 
1,052

 
 
 
 
Acquisition costs
(30
)
 
—

 
 
 
 
Legal settlements
—

 
(1,000
)
 
 
 
 
Adjusted SG&A (1)
$
733,683

 
$
717,708

 
2.2

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.2

 
10.8

 
 
 
 
Adjusted (1)
11.2

 
10.8

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.0

 
71.5

 
 
 
 
Adjusted (1)
71.6

 
71.4

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.7

 
3.8

 
 
 
 
Adjusted (1),(2)
3.9

 
3.9

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.5

 
2.9

 
 
 
 
Adjusted (1),(2)
2.8

 
2.9

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
722,654

 
$
700,646

 
3.1

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(5,873
)
 
(951
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
(385
)
 
(364
)
 
 
 
 
Acquisition costs
(30
)
 
—

 
 
 
 
Legal settlements
—

 
(1,000
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
716,366

 
$
698,331

 
2.6

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.3

 
10.8

 
 
 
 
Adjusted (1)
11.2

 
10.8

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.2

 
71.1

 
 
 
 
Adjusted (1)
71.5

 
70.8

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.7

 
3.9

 
 
 
 
Adjusted (1),(3)
3.9

 
4.0

 
 
 
 
 
 
 
 
 
 
 
(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 U.S. GAAP, but are instead considered non-GAAP financial performance measures.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable U.S. 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 $10,856 and $12,389 for the three and nine months ended September 30, 2016 and $288 and $786 for the three and nine months ended September 30, 2015.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $10,776 and $12,310 for the three and nine months ended September 30, 2016 and $288 and $786 for the three and nine months ended September 30, 2015.
 







Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - U.K.
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.4

 
2.1

 
 
 
 
Adjusted (1),(2)
1.4

 
2.2

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
0.9

 
1.6

 
 
 
 
Adjusted (1),(2)
0.9

 
1.7

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.2

 
2.1

 
 
 
 
Adjusted (1),(3)
2.2

 
2.2

 
 
 
 
 
 
 
 
 
 
 




 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
119,154

 
$
81,528

 
46.2

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
—

 
(208
)
 
 
 
 
Acquisition costs
(561
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
118,593

 
$
81,320

 
45.8

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
8.9

 
8.7

 
 
 
 
Adjusted (1)
8.9

 
8.7

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
80.2

 
78.1

 
 
 
 
Adjusted (1)
79.8

 
77.9

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.8

 
2.1

 
 
 
 
Adjusted (1),(2)
1.9

 
2.1

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.3

 
1.6

 
 
 
 
Adjusted (1),(2)
1.3

 
1.7

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
80,868

 
$
81,546

 
(0.8
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
—

 
(208
)
 
 
 
 
Acquisition costs
(561
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
80,307

 
$
81,338

 
(1.3
)
 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
8.7

 
8.7

 
 
 
 
Adjusted (1)
8.6

 
8.7

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
76.5

 
78.2

 
 
 
 
Adjusted (1)
75.9

 
78.0

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.3

 
2.1

 
 
 
 
Adjusted (1),(3)
2.4

 
2.1

 
 
 
 
 
 
 
 
 
 
 
(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 U.S. GAAP, but are instead considered non-GAAP financial performance measures.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable U.S. 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 $333 for the three and nine months ended September 30, 2015.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $333 for the three and nine months ended September 30, 2015.
 




Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - Brazil
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
12,896

 
$
12,117

 
6.4

 
 
Pre-tax adjustments:
 
 
 
 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
12,622

 
$
12,117

 
4.2

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.5

 
9.4

 
 
 
 
Adjusted (1)
11.2

 
9.4

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
103.6

 
87.8

 
 
 
 
Adjusted (1)
101.4

 
87.8

 
 
 
OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
(0.6
)
 
0.8

 
 
 
 
Adjusted (1),(2)
(0.4
)
 
1.0

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(0.8
)
 
0.4

 
 
 
 
Adjusted (1),(2)
(0.5
)
 
0.6

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
12,105

 
$
10,100

 
19.9

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
11,831

 
$
10,100

 
17.1

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.6

 
8.5

 
 
 
 
Adjusted (1)
11.3

 
8.5

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
103.3

 
81.9

 
 
 
 
Adjusted (1)
100.9

 
81.9

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(0.6
)
 
1.5

 
 
 
 
Adjusted (1),(3)
(0.3
)
 
1.6

 
 
 
 
 
 
 
 
 
 
 





 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
34,808

 
$
40,915

 
(14.9
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Gain (loss) on real estate and dealership transactions
(372
)
 
—

 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
34,162

 
$
40,915

 
(16.5
)
 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.1

 
10.4

 
 
 
 
Adjusted (1)
10.9

 
10.4

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
104.6

 
91.9

 
 
 
 
Adjusted (1)
102.6

 
91.9

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(0.9
)
 
0.3

 
 
 
 
Adjusted (1),(2)
(0.5
)
 
0.6

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(1.0
)
 
(0.2
)
 
 
 
 
Adjusted (1),(2)
(0.7
)
 
—

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
31,984

 
$
34,543

 
(7.4
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
31,710

 
$
34,543

 
(8.2
)
 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.7

 
9.4

 
 
 
 
Adjusted (1)
10.6

 
9.4

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
99.4

 
84.6

 
 
 
 
Adjusted (1)
98.5

 
84.6

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(0.4
)
 
1.4

 
 
 
 
Adjusted (1),(3)
(0.1
)
 
1.4

 
 
 
 
 
 
 
 
 
 
 
(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 U.S. GAAP, but are instead considered non-GAAP financial performance measures.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable U.S. 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 $423 for the nine months ended September 30, 2016 and $298 and $839 for the three and nine months ended September 30, 2015.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $423 for the nine months ended September 30, 2016 and $215 for the three and nine months ended September 30, 2015.
 




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,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
NET INCOME RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
35,366

 
$
45,261

 
(21.9
)
 
 
  Adjustments:
 
 
 
 
 
 
 
Catastrophic events
 
 
 
 
 
 
 
Pre-tax
450

 
—

 
 
 
 
Tax impact
(169
)
 
—

 
 
 
 
(Gain) loss on real estate and dealership transactions
 
 
 
 
 
 
 
Pre-tax
(1,114
)
 
—

 
 
 
 
Tax impact
418

 
—

 
 
 
 
Foreign transaction tax
 
 
 
 
 
 
 
Pre-tax
274

 
—

 
 
 
 
Tax impact
—

 
—

 
 
 
 
Non-cash asset impairment
 
 
 
 
 
 
 
Pre-tax
10,793

 
916

 
 
 
 
Tax impact
(4,047
)
 
(140
)
 
 
 
 
Adjusted net income (1)
$
41,971

 
$
46,037

 
(8.8
)
 
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
COMMON SHARES RECONCILIATION:
 
 
 
 
 
Adjusted net income (1)
$
41,971

 
$
46,037

 
(8.8
)
 
 
Less: Adjusted earnings allocated to participating securities
1,695

 
1,759

 
(3.6
)
 
 
Adjusted net income available to diluted common shares (1)
$
40,276

 
$
44,278

 
(9.0
)
 
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1.65

 
$
1.88

 
(12.2
)
 
 
  After-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
0.01

 
—

 
 
 
 
Gain (loss) on real estate and dealership transactions
(0.03
)
 
—

 
 
 
 
Foreign transaction tax
0.01

 
—

 
 
 
 
Non-cash asset impairment
0.32

 
0.03

 
 
 
 
Adjusted diluted income per share (1)
$
1.96

 
$
1.91

 
2.6

 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
299,006

 
$
289,012

 
3.5

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(450
)
 
—

 
 
 
 
Gain (loss) on real estate and dealership transactions
1,176

 
—

 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
299,458

 
$
289,012

 
3.6

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.3

 
 
 
 
Adjusted (1)
10.6

 
10.3

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
73.5

 
72.5

 
 
 




 
Adjusted (1)
73.6

 
72.5

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.0

 
3.5

 
 
 
 
Adjusted (1),(2)
3.3

 
3.5

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.0

 
2.6

 
 
 
 
Adjusted (1),(2)
2.3

 
2.6

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
281,098

 
$
280,286

 
0.3

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(450
)
 
—

 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
280,374

 
$
280,286

 
—

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.2

 
 
 
 
Adjusted (1)
10.6

 
10.2

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.7

 
71.7

 
 
 
 
Adjusted (1)
72.5

 
71.7

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.1

 
3.6

 
 
 
 
Adjusted (1),(3)
3.6

 
3.6

 
 
 




 
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
% Increase/(Decrease)
 
NET INCOME RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
116,237

 
$
127,385

 
(8.8
)
 
 
  Adjustments:
 
 
 
 
 
 
 
Catastrophic events
 
 
 
 
 
 
 
Pre-tax
5,873

 
951

 
 
 
 
Tax impact
(2,207
)
 
(359
)
 
 
 
 
(Gain) loss on real estate and dealership transactions
 
 
 
 
 
 
 
Pre-tax
(1,000
)
 
(1,052
)
 
 
 
 
Tax impact
672

 
452

 
 
 
 
Severance costs
 
 
 
 
 
 
 
Pre-tax
—

 
208

 
 
 
 
Tax impact
—

 
(41
)
 
 
 
 
Acquisition costs
 
 
 
 
 
 
 
Pre-tax
591

 
—

 
 
 
 
Tax impact
(11
)
 
—

 
 
 
 
Legal settlements
 
 
 
 
 
 
 
Pre-tax
—

 
1,000

 
 
 
 
Tax impact
—

 
(390
)
 
 
 
 
Foreign transaction tax
 
 
 
 
 
 
 
Pre-tax
274

 
—

 
 
 
 
Tax impact
—

 
—

 
 
 
 
Non-cash asset impairment
 
 
 
 
 
 
 
Pre-tax
12,327

 
1,958

 
 
 
 
Tax impact
(4,634
)
 
(334
)
 
 
 
 
Foreign deferred income tax benefit
 
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
 
Tax impact
(1,686
)
 
—

 
 
 
 
Adjusted net income (1)
$
126,436

 
$
129,778

 
(2.6
)
 
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
COMMON SHARES RECONCILIATION:
 
 
 
 
 
Adjusted net income (1)
$
126,436

 
$
129,778

 
(2.6
)
 
 
Less: Adjusted earnings allocated to participating securities
5,061

 
4,997

 
1.3

 
 
Adjusted net income available to diluted common shares (1)
$
121,375

 
$
124,781

 
(2.7
)
 
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
 
 
As reported
$
5.22

 
$
5.26

 
(0.8
)
 
 
After-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
0.16

 
0.02

 
 
 
 
Gain (loss) on real estate and dealership transactions
(0.01
)
 
(0.02
)
 
 
 
 
Severance costs
—

 
0.01

 
 
 
 
Acquisition costs including related tax impact
0.02

 
—

 
 
 
 
Legal settlements
—

 
0.02

 
 
 
 
Foreign transaction tax
0.01

 
—

 
 
 
 
Non-cash asset impairment
0.35

 
0.07

 
 
 
 
Foreign deferred income tax benefit
(0.07
)
 
—

 
 
 
 
Adjusted diluted income per share (1)
$
5.68

 
$
5.36

 
6.0

 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
891,692

 
$
841,050

 
6.0

 




 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(5,873
)
 
(951
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
1,485

 
1,052

 
 
 
 
Severance costs
—

 
(208
)
 
 
 
 
Acquisition costs
(591
)
 
—

 
 
 
 
Legal settlements
—

 
(1,000
)
 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
886,439

 
$
839,943

 
5.5

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.9

 
10.6

 
 
 
 
Adjusted (1)
10.8

 
10.6

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
73.9

 
72.9

 
 
 
 
Adjusted (1)
73.5

 
72.8

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.2

 
3.5

 
 
 
 
Adjusted (1),(2)
3.4

 
3.5

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.2

 
2.6

 
 
 
 
Adjusted (1),(2)
2.4

 
2.6

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
835,506

 
$
816,735

 
2.3

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(5,873
)
 
(951
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
(385
)
 
(364
)
 
 
 
 
Severance costs
—

 
(208
)
 
 
 
 
Acquisition costs
(591
)
 
—

 
 
 
 
Legal settlements
—

 
(1,000
)
 
 
 
 
Foreign transaction tax
(274
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
828,383

 
$
814,212

 
1.7

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.9

 
10.5

 
 
 
 
Adjusted (1)
10.8

 
10.5

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
73.3

 
72.2

 
 
 
 
Adjusted (1)
72.7

 
72.0

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.3

 
3.6

 
 
 
 
Adjusted (1),(3)
3.6

 
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 U.S. GAAP, but are instead considered non-GAAP financial performance measures.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable U.S. 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 Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $10,856 and $12,389 for the three and nine months ended September 30, 2016 $288 and $786 for the three and nine months ended September 30, 2015.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $10,776 and $12,310 for the three and nine months ended September 30, 2016 and $288 and $786 for the three and nine months ended September 30, 2015.
 


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