EX-99.1 2 a2018q4exhibit991.htm EXHIBIT 99.1 Exhibit

gp1logoa11.gif                                  Exhibit 99.1                                    

FOR IMMEDIATE RELEASE

Group 1 Automotive Reports Fourth Quarter & Full Year 2018 Financial Results
▪
Delivers All-Time Record Revenue of $11.6 Billion
▪
Repurchased 1.3 Million Shares During Fourth Quarter
HOUSTON, Feb. 5, 2019 - Group 1 Automotive, Inc. (NYSE: GPI), (“Group 1” or the “Company”), an international, Fortune 500 automotive retailer, today reported 2018 fourth quarter net income of $30.7 million; diluted earnings per common share of $1.62; adjusted net income (a non-GAAP measure) of $43.8 million; and adjusted diluted earnings per common share (a non-GAAP measure) of $2.31.
As shown in the attached non-GAAP reconciliation tables, the 2018 fourth quarter adjusted results (non-GAAP measures) exclude approximately $13.1 million of net after-tax adjustments, or $0.69 per common share. These adjustments primarily reflect annual intangible asset testing, which resulted in non-cash franchise rights asset impairments of approximately $12.7 million after-tax, or $0.67 per share.
For the full year of 2018, net income decreased 26.1 percent from the comparable prior-year period, to $157.8 million; and diluted earnings per common share decreased 22.3 percent, to $7.83. Full year 2018 adjusted net income increased 9.8 percent, to $179.6 million; and adjusted diluted earnings per common share increased 15.3 percent, to an all-time high of $8.91. Total revenue grew 4.3 percent to a record $11.6 billion.
Full year and fourth quarter 2017 net after-tax adjustments are primarily explained by exclusion of benefits associated with U.S. tax reform legislation, which generated a gain of $73.0 million, or $3.45 per common share (see attached non-GAAP reconciliation tables for additional details).
“We are pleased with our 2018 performance that resulted in all-time records in revenue of $11.6 billion and adjusted diluted earnings per share of $8.91,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “We faced difficult new vehicle sales comparisons due to unprecedented replacement demand following Hurricane Harvey last year, as well as new vehicle supply shortages this year in the U.K. caused by Worldwide Harmonised Light Vehicle Test Procedure (“WLTP”) legislation. Our strong performance in used vehicles, parts and service, and F&I allowed us to deliver positive Same Store gross profit growth despite these very significant headwinds in our new vehicle business.”
Consolidated Results for Fourth Quarter 2018 (year-over-year comparable basis)
For ease of comparison, we have included constant currency metrics (a non-GAAP measure) both below (shown in parenthesis) and in the financial tables that follow:
▪
Total revenue was nearly flat at $2.9 billion against difficult prior year Hurricane Harvey driven comparisons and continued disruptions in the U.K. from WLTP legislation.
▪
Total gross profit grew 1.5 percent (2.6 percent), to $432.1 million.
▪
New vehicle revenues decreased 5.3 percent (decreased 4.1 percent) on 5.5 percent lower unit sales. New vehicle gross profit decreased 9.2 percent (decreased 7.7 percent), to $81.3 million.
▪
Retail used vehicle revenues increased 8.8 percent (10.0 percent) on 12.8 percent higher unit sales. Retail used vehicle gross profit increased 1.4 percent (2.4 percent), to $41.1 million.
▪
Parts and service gross profit increased 1.3 percent (2.2 percent) on revenue growth of 3.3 percent (4.3 percent).

1

▪
Finance and Insurance (F&I) gross profit PRU increased 5.8 percent (6.8 percent), to $1,582. U.S. F&I gross profit PRU increased $60, or 3.5 percent, to an all-time record of $1,760. Same Store U.S. F&I gross profit PRU increased $70, or 4.1 percent, to an all-time record of $1,767.
▪
Selling, General and Administrative (SG&A) expenses as a percent of gross profit increased 230 basis points, to 75.0 percent. Adjusted SG&A expenses as a percent of gross profit increased 220 basis points, to 74.8 percent.
Consolidated Results for Full Year 2018 (year-over-year comparable basis)
▪
Total revenue increased 4.3 percent (4.1 percent), to a record $11.6 billion.
▪
Total gross profit grew 4.8 percent (4.8 percent).
▪
New vehicle gross profit decreased 3.5 percent (decreased 3.2 percent). The Company retailed 170,517 new vehicles in 2018, which represented a one-percent decrease of new vehicle unit sales from 2017.
▪
Retail used vehicle gross profit increased 4.7 percent (4.4 percent) on a revenue increase of 13.1 percent (12.6 percent). The Company retailed 147,999 used vehicles in 2018, a 13.9 percent increase over 2017.
▪
Parts and service gross profit rose 5.5 percent (5.3 percent) on 5.9 percent (5.8 percent) higher revenues.
▪
F&I revenues rose 9.0 percent (8.9 percent). U.S. F&I gross profit PRU increased $63, to $1,710. U.S. Same Store F&I gross profit PRU increased $66, to $1,707.
▪
SG&A expenses as a percent of gross profit decreased 70 basis points, to 73.8 percent. Adjusted SG&A expenses as a percent of gross profit increased 90 basis points, to 74.6 percent. Adjusted U.S. SG&A expenses as a percent of gross profit increased 80 basis points, to 71.9 percent.
▪
Operating margin decreased 20 basis points to 2.9 percent. Adjusted operating margin decreased 20 basis points to 3.2 percent.
Segment Results for Fourth Quarter 2018 (year-over-year comparable basis)
▪
United States:
The Company’s U.S. operations accounted for 77.9 percent of total revenues and 81.6 percent of total gross profit. Total U.S. revenues were $2.3 billion, a decrease of 0.9 percent, driven by a 4.7 percent decrease in retail new vehicle revenue. New vehicle gross profit PRU decreased $105, or 5.1 percent, to $1,962; and total gross profit grew 0.5 percent, to $352.5 million. New vehicle inventory ended the quarter at 68 days’ supply.
As a reminder, our year-over-year comparisons were significantly influenced by Hurricane Harvey, as our Houston and Beaumont markets’ combined new vehicle unit sales declined 16 percent from the fourth quarter 2017. These two markets represent approximately 26 percent of our U.S. new vehicle sales.
Same Store SG&A expenses as a percent of gross profit increased 150 basis points to 70.5 percent. Adjusted Same Store SG&A expenses as a percent of gross profit increased 130 basis points, to 70.3 percent.
Same Store operating margin decreased 90 basis points to 3.3 percent. Adjusted operating margin decreased 20 basis points, to 4.0 percent.
▪
United Kingdom:
The Company’s U.K. operations accounted for 18.0 percent of total revenues and 15.0 percent of total gross profit. Total U.K. revenues increased 3.2 percent (6.3 percent), to $524.0 million, and were driven by double-digit revenue growth across used vehicles, aftersales, and F&I, despite the new vehicle industry decreasing by four percent. WLTP-related supply disruption continued in the quarter with the biggest impact being in the Audi brand, which historically represents approximately 30 percent of our U.K. new vehicle mix. Audi’s new vehicle industry sales declined 46 percent for the quarter. Total gross profit increased 7.4 percent (11.1 percent), to $64.9 million.
Same Store SG&A expenses as a percent of gross profit increased 240 basis points to 91.6 percent and Same Store operating margin decreased 50 basis points to 0.3 percent.
▪
Brazil:
The Company’s Brazilian operations were profitable during the fourth quarter and accounted for 4.1 percent of total revenues and 3.4 percent of total gross profit. The Company’s Same Store gross profit grew 10.5 percent on a constant currency basis, driven by revenue growth of 44.2 percent in F&I, 11.8 percent in new vehicles, and 5.3

2

percent in aftersales. Same Store F&I gross profit PRU grew 52.6 percent on a constant currency basis.

Same Store SG&A expenses as a percent of gross profit decreased 900 basis points to 83.4 percent. Adjusted Same Store SG&A as a percent of gross profit decreased 570 basis points to 83.4 percent.
Same Store operating margin and Same Store adjusted operating margin increased 650 basis points and 70 basis points respectively, to 1.7 percent.
Share Repurchase Authorization
In the fourth quarter 2018, the Company repurchased 1,313,786 shares at an average price per common share of $57.31 for a total of $75.3 million. For the full year of 2018, the Company repurchased 2,849,652 shares, or approximately 14 percent of the common shares outstanding at the start of the year, at an average price per common share of $63.75 for a total of $181.7 million. As of February 5, 2019, $49.7 million remains available under the Company’s prior common stock share repurchase authorization.
Future repurchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions, and subject to Board approval and covenant restrictions.
Corporate Development
During the fourth quarter 2018, as previously announced, the Company opened the following three add points:
▪
Sterling McCall Acura Sugarland, an add point in greater Houston, Texas, which is expected to generate approximately $40 million in annualized revenues;
▪
Toyota Aricanduva in São Paulo, Brazil, which is expected to generate approximately $25 million in annualized revenues;
▪
Skoda Southend in East London, U.K., which is expected to generate approximately $20 million in annualized revenues.
During the fourth quarter of 2018, the Company disposed of a Vauxhall franchise in Maidstone, southeast of London (U.K.), as well as a Volvo franchise in Columbus, Georgia. In January 2019, the Company disposed of a Hyundai franchise in Kansas City, Kansas, as well as a Mazda franchise in Houston, TX. These four franchises generated approximately $65 million in trailing-twelve-month revenues. The disposals are consistent with Group 1's strategy of actively managing its dealership portfolio to ensure appropriate returns on invested capital.
During 2018, the Company acquired a total of 17 franchises, which are expected to generate an estimated $615 million in annual revenues. The Company disposed of six franchises that generated approximately $195 million in trailing-twelve-month revenues at the time of disposition.
In January 2019, the Company opened Porsche of El Paso in Texas, which is expected to generate $25 million in annualized revenues.
Fourth Quarter 2018 Earnings Conference Call Details
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the fourth 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:    5218141
A telephonic replay will be available following the call through February 12, 2019 by dialing:

3

Domestic:     1-877-344-7529
International:     1-412-317-0088
Replay ID:    10128118

About Group 1 Automotive, Inc.
Group 1 owns and operates 182 automotive dealerships, 237 franchises, and 47 collision centers in the United States, the United Kingdom and Brazil that offer 30 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
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering alternative financial measures not prepared in accordance with GAAP. This includes evaluating measures such as adjusted selling, general and administrative expenses, adjusted net income and adjusted diluted earnings per share. These adjusted measures are not measures of financial performance under U.S. GAAP, but are instead considered non-GAAP financial performance measures. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. We caution investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In our evaluation of results from time to time, we exclude items that do not arise directly from core operations, such as non-cash asset impairment charges, gains and losses on dealership franchise or real estate transactions, and catastrophic weather events such as hail storms, hurricanes, and snow storms. Because these non-core charges and gains materially affect the Company's financial condition or results in the specific period in which they are recognized,

4

management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items.
In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Our management also uses these adjusted measures in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures, and the related reconciliations, because we believe investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures.
In addition, we evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than United States dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com
Media contacts:
Pete DeLongchamps
Senior Vice President, 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


5

Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
 
$
1,572,713

 
$
1,661,309

 
(5.3
)
Used vehicle retail sales
 
771,242

 
709,072

 
8.8

Used vehicle wholesale sales
 
86,122

 
91,809

 
(6.2
)
Parts and service
 
354,744

 
343,510

 
3.3

Finance, insurance and other, net
 
123,991

 
114,705

 
8.1

Total revenues
 
2,908,812

 
2,920,405

 
(0.4
)
COST OF SALES:
 
 
 
 
 
 
New vehicle retail sales
 
1,491,455

 
1,571,774

 
(5.1
)
Used vehicle retail sales
 
730,178

 
668,558

 
9.2

Used vehicle wholesale sales
 
86,009

 
94,199

 
(8.7
)
Parts and service
 
169,104

 
160,199

 
5.6

Total cost of sales
 
2,476,746

 
2,494,730

 
(0.7
)
GROSS PROFIT
 
432,066

 
425,675

 
1.5

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
323,847

 
309,521

 
4.6

DEPRECIATION AND AMORTIZATION EXPENSE
 
17,109

 
15,178

 
12.7

ASSET IMPAIRMENTS
 
16,456

 
9,980

 
64.9

OPERATING INCOME (LOSS)
 
74,654

 
90,996

 
(18.0
)
OTHER EXPENSE:
 
 
 
 
 
 
Floorplan interest expense
 
(16,547
)
 
(13,713
)
 
20.7

Other interest expense, net
 
(18,424
)
 
(18,309
)
 
0.6

INCOME (LOSS) BEFORE INCOME TAXES
 
39,683

 
58,974

 
(32.7
)
BENEFIT (PROVISION) FOR INCOME TAXES
 
(8,965
)
 
51,515

 
(117.4
)
NET INCOME (LOSS)
 
$
30,718

 
$
110,489

 
(72.2
)
Less: Earnings allocated to participating securities
 
$
1,096

 
$
3,718

 
(70.5
)
Earnings available to diluted common shares
 
$
29,622

 
$
106,771

 
(72.3
)
DILUTED EARNINGS PER SHARE
 
$
1.62

 
$
5.27

 
(69.3
)
Weighted average dilutive common shares outstanding
 
18,255

 
20,261

 
(9.9
)
Weighted average participating securities
 
681

 
708

 
(3.8
)
Total weighted average shares outstanding
 
18,936

 
20,969

 
(9.7
)


1

Group 1 Automotive, Inc.
 
Consolidated Statements of Operations
 
(Unaudited)
 
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31,
 
 
 
2018
 
2017
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
6,181,371

 
$
6,157,531

 
0.4

 
Used vehicle retail sales
 
3,166,070

 
2,798,986

 
13.1

 
Used vehicle wholesale sales
 
369,575

 
400,170

 
(7.6
)
 
Parts and service
 
1,416,889

 
1,338,032

 
5.9

 
Finance, insurance and other, net
 
467,453

 
429,002

 
9.0

 
Total revenues
 
11,601,358

 
11,123,721

 
4.3

 
COST OF SALES:
 
 
 
 
 
 
 
New vehicle retail sales
 
5,870,502

 
5,835,526

 
0.6

 
Used vehicle retail sales
 
2,980,142

 
2,621,431

 
13.7

 
Used vehicle wholesale sales
 
367,880

 
402,912

 
(8.7
)
 
Parts and service
 
657,741

 
618,343

 
6.4

 
Total cost of sales
 
9,876,265

 
9,478,212

 
4.2

 
GROSS PROFIT
 
1,725,093

 
1,645,509

 
4.8

 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
1,273,057

 
1,226,195

 
3.8

 
DEPRECIATION AND AMORTIZATION EXPENSE
 
67,070

 
57,936

 
15.8

 
ASSET IMPAIRMENTS
 
43,883

 
19,506

 
125.0

 
OPERATING INCOME (LOSS)
 
341,083

 
341,872

 
(0.2
)
 
OTHER EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
(59,882
)
 
(52,372
)
 
14.3

 
Other interest expense, net
 
(75,798
)
 
(70,497
)
 
7.5

 
INCOME (LOSS) BEFORE INCOME TAXES
 
205,403

 
219,003

 
(6.2
)
 
BENEFIT (PROVISION) FOR INCOME TAXES
 
(47,631
)
 
(5,561
)
 
756.5

 
NET INCOME (LOSS)
 
$
157,772

 
$
213,442

 
(26.1
)
 
Less: Earnings allocated to participating securities
 
$
5,414

 
$
7,511

 
(27.9
)
 
Earnings available to diluted common shares
 
$
152,358

 
$
205,931

 
(26.0
)
 
DILUTED EARNINGS PER SHARE
 
$
7.83

 
$
10.08

 
(22.3
)
 
Weighted average dilutive common shares outstanding
 
19,461
 
20,425
 
(4.7
)
 
Weighted average participating securities
 
697
 
752
 
(7.3
)
 
Total weighted average shares outstanding
 
20,158
 
21,177

 
(4.8
)
 


2

Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
 
 
 
 
 
 
 
As of December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
ASSETS:
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash and cash equivalents
 
$
15,932

 
$
28,787

 
(44.7
)
Contracts in transit and vehicle receivables, net
 
265,660

 
306,433

 
(13.3
)
Accounts and notes receivable, net
 
193,981

 
188,611

 
2.8

Inventories, net
 
1,844,059

 
1,763,293

 
4.6

Prepaid expenses and other current assets
 
82,734

 
42,062

 
96.7

Total current assets
 
2,402,366

 
2,329,186

 
3.1

PROPERTY AND EQUIPMENT, net
 
1,347,835

 
1,318,959

 
2.2

GOODWILL AND INTANGIBLE FRANCHISE RIGHTS
 
1,223,555

 
1,198,666

 
2.1

OTHER ASSETS
 
27,319

 
24,254

 
12.6

Total assets
 
$
5,001,075

 
$
4,871,065

 
2.7

 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
Floorplan notes payable - credit facility and other
 
$
1,292,452

 
$
1,240,695

 
4.2

Offset account related to floorplan notes payable - credit facility
 
(33,637
)
 
(86,547
)
 
(61.1
)
Floorplan notes payable - manufacturer affiliates
 
417,924

 
397,183

 
5.2

Offset account related to floorplan notes payable - manufacturer affiliates
 
(100
)
 
(22,500
)
 
(99.6
)
Current maturities of long-term debt and short-term financing
 
92,967

 
77,609

 
19.8

Current liabilities from interest rate risk management activities
 
115

 
1,996

 
(94.2
)
Accounts payable
 
419,350

 
412,981

 
1.5

Accrued expenses
 
197,494

 
177,070

 
11.5

Total current liabilities
 
2,386,565

 
2,198,487

 
8.6

5.00% SENIOR NOTES (principal of $550,000 at December 31, 2018 and December 31, 2017, respectively)
 
543,730

 
542,063

 
0.3

5.25% SENIOR NOTES (principal of $300,000 at December 31, 2018 and December 31, 2017, respectively)
 
296,735

 
296,151

 
0.2

ACQUISITION LINE
 
31,842

 
26,988

 
18.0

REAL ESTATE RELATED AND OTHER LONG-TERM DEBT, net of current maturities
 
366,723

 
405,950

 
(9.7
)
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities
 
42,459

 
47,032

 
(9.7
)
DEFERRED INCOME TAXES
 
134,683

 
124,404

 
8.3

LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES
 
1,696

 
8,583

 
(80.2
)
OTHER LIABILITIES
 
100,948

 
97,125

 
3.9

STOCKHOLDERS' EQUITY:
 
 
 
 
 

Common stock
 
255

 
255

 
—

Additional paid-in capital
 
292,774

 
291,461

 
0.5

Retained earnings
 
1,394,817

 
1,246,323

 
11.9

Accumulated other comprehensive income (loss)
 
(137,772
)
 
(123,226
)
 
11.8

Treasury stock
 
(454,380
)
 
(290,531
)
 
56.4

Total stockholders' equity
 
1,095,694

 
1,124,282

 
(2.5
)
Total liabilities and stockholders' equity
 
$
5,001,075

 
$
4,871,065

 
2.7


3

Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
December 31,
 
December 31,
 
 
 
2018 (%)
 
2017 (%)
 
2018 (%)
 
2017 (%)
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
 
 
 
 
 
 
 
Region
Geographic Market
 
 
 
 
 
 
 
 
United States
Texas
 
38.6

 
39.2

 
36.4

 
37.0

 
Oklahoma
 
6.7

 
6.0

 
6.3

 
6.1

 
California
 
6.0

 
7.3

 
6.2

 
7.5

 
Massachusetts
 
4.7

 
4.5

 
4.9

 
4.6

 
Georgia
 
4.7

 
4.6

 
4.5

 
4.6

 
Florida
 
2.7

 
2.9

 
2.7

 
2.6

 
Louisiana
 
2.5

 
1.8

 
2.1

 
1.9

 
New Hampshire
 
1.8

 
1.9

 
1.8

 
2.0

 
South Carolina
 
1.9

 
1.6

 
1.6

 
1.4

 
New Jersey
 
1.7

 
1.6

 
1.6

 
1.7

 
Kansas
 
1.3

 
1.4

 
1.4

 
1.6

 
Mississippi
 
1.1

 
1.1

 
1.2

 
1.3

 
Alabama
 
0.7

 
0.8

 
0.7

 
1.0

 
Maryland
 
0.5

 
0.4

 
0.5

 
0.4

 
New Mexico
 
0.2

 
0.1

 
0.2

 
0.1

 
 
 
75.1

 
75.2

 
72.1

 
73.8

 
 
 
 
 
 
 
 
 
 
International
United Kingdom
 
19.0

 
19.5

 
22.7

 
21.3

 
Brazil
 
5.9

 
5.3

 
5.2

 
4.9

 
 
 
100.0

 
100.0

 
100.0

 
100.0

 
 
 
 
 
 
 
 
 
NEW VEHICLE UNIT SALES BRAND MIX:
 
 
 
 
 
 
 
Toyota/Lexus
 
25.9

 
25.4

 
25.2

 
25.3

Volkswagen/Audi/Porsche/SEAT/SKODA
 
11.4

 
13.7

 
13.4

 
13.8

BMW/MINI
 
11.8

 
12.4

 
12.0

 
12.7

Ford/Lincoln
 
10.2

 
11.4

 
10.9

 
11.5

Honda/Acura
 
10.7

 
9.2

 
9.7

 
9.2

Nissan
 
6.5

 
7.0

 
6.5

 
7.4

Chevrolet/GMC/Buick/Cadillac
 
7.1

 
6.3

 
6.1

 
6.2

Mercedes-Benz/smart/Sprinter
 
5.1

 
4.4

 
4.8

 
4.0

Chrysler/Dodge/Jeep/RAM
 
3.7

 
3.9

 
4.0

 
3.9

Hyundai/Kia
 
3.7

 
3.8

 
3.9

 
3.9

Jaguar/Land Rover
 
2.0

 
1.2

 
1.9

 
0.9

Other
 
1.9

 
1.3

 
1.6

 
1.2

 
 
100.0

 
100.0

 
100.0

 
100.0



4

Group 1 Automotive, Inc.
 
Additional Information - U.S.
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,249,434

 
$
1,310,577

 
(4.7
)
 
Used vehicle retail sales
 
579,151

 
540,528

 
7.1

 
Used vehicle wholesale sales
 
41,403

 
50,284

 
(17.7
)
 
Total used
 
620,554

 
590,812

 
5.0

 
Parts and service
 
290,520

 
286,608

 
1.4

 
Finance, insurance and other, net
 
106,032

 
99,200

 
6.9

 
Total
 
$
2,266,540

 
$
2,287,197

 
(0.9
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
 
5.0

 
5.3

 
 
 
Used vehicle retail sales
 
5.6

 
5.9

 
 
 
Used vehicle wholesale sales
 
0.9

 
(4.5
)
 
 
 
Total used
 
5.2

 
5.0

 
 
 
Parts and service
 
52.2

 
53.2

 
 
 
Finance, insurance and other, net
 
100.0

 
100.0

 
 
 
Total
 
15.6

 
15.3

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
62,287

 
$
69,455

 
(10.3
)
 
Used vehicle retail sales
 
32,172

 
31,931

 
0.8

 
Used vehicle wholesale sales
 
364

 
(2,257
)
 
116.1

 
Total used
 
32,536

 
29,674

 
9.6

 
Parts and service
 
151,625

 
152,349

 
(0.5
)
 
Finance, insurance and other, net
 
106,032

 
99,200

 
6.9

 
Total
 
$
352,480

 
$
350,678

 
0.5

 
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
 
31,754

 
33,608

 
(5.5
)
 
Retail used vehicles sold
 
27,887

 
24,735

 
12.7

 
Wholesale used vehicles sold
 
6,832

 
8,194

 
(16.6
)
 
Total used
 
34,719

 
32,929

 
5.4

 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
 
$
39,347

 
$
38,996

 
0.9

 
Used vehicle retail
 
$
20,768

 
$
21,853

 
(5.0
)
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 

 
New vehicle retail sales
 
$
1,962

 
$
2,067

 
(5.1
)
 
Used vehicle retail sales
 
1,154

 
1,291

 
(10.6
)
 
Used vehicle wholesale sales
 
53

 
(275
)
 
119.3

 
Total used
 
937

 
901

 
4.0

 
Finance, insurance and other, net (per retail unit)
 
$
1,778

 
$
1,700

 
4.6

 

5

OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1), (2)
 
$
104,957

 
$
99,200

 
5.8

 
Adjusted Total Revenue (1) 
 
$
2,265,465

 
$
2,287,197

 
(1.0
)
 
Adjusted Total Gross Profit (1)
 
$
351,405

 
$
350,678

 
0.2

 
Adjusted Total Gross Margin (1)
 
15.5

 
15.3

 
 
 
Adjusted Finance, insurance and other, net (per retail unit) (1)
 
$
1,760

 
$
1,700

 
3.5

 
SG&A expenses
 
$
252,634

 
$
242,070

 
4.4

 
Adjusted SG&A expenses (1)
 
$
251,020

 
$
242,070

 
3.7

 
SG&A as % revenues
 
11.1

 
10.6

 
 
 
Adjusted SG&A as % revenues (1)
 
11.1

 
10.6

 
 
 
SG&A as % gross profit
 
71.7

 
69.0

 
 
 
Adjusted SG&A as % gross profit (1)
 
71.4

 
69.0

 
 
 
Operating margin %
 
3.1

 
4.1

 
 
 
Adjusted operating margin % (1)
 
3.8

 
4.2

 
 
 
Pretax margin %
 
1.7

 
2.8

 
 
 
Adjusted pretax margin % (1)
 
2.5

 
2.9

 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
$
(14,723
)
 
$
(12,267
)
 
20.0

 
Floorplan assistance
 
12,621

 
12,952

 
(2.6
)
 
Net floorplan income (expense)
 
$
(2,102
)
 
$
685

 
(406.9
)
 
Other interest expense, net
 
$
(16,464
)
 
$
(16,922
)
 
(2.7
)
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(2) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.


6

Group 1 Automotive, Inc.
Additional Information - U.S.
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
 
$
4,682,820

 
$
4,768,864

 
(1.8
)
Used vehicle retail sales
 
2,306,999

 
2,160,699

 
6.8

Used vehicle wholesale sales
 
178,910

 
250,668

 
(28.6
)
Total used
 
2,485,909

 
2,411,367

 
3.1

Parts and service
 
1,153,257

 
1,124,380

 
2.6

Finance, insurance and other, net
 
401,271

 
375,954

 
6.7

Total
 
$
8,723,257

 
$
8,680,565

 
0.5

GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
 
4.9

 
5.1

 
 
Used vehicle retail sales
 
6.1

 
6.7

 
 
Used vehicle wholesale sales
 
2.1

 
(1.0
)
 
 
Total used
 
5.9

 
5.9

 
 
Parts and service
 
53.4

 
53.6

 
 
Finance, insurance and other, net
 
100.0

 
100.0

 
 
Total
 
15.9

 
15.7

 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
 
$
229,058

 
$
244,286

 
(6.2
)
Used vehicle retail sales
 
141,707

 
144,529

 
(2.0
)
Used vehicle wholesale sales
 
3,751

 
(2,427
)
 
254.6

Total used
 
145,458

 
142,102

 
2.4

Parts and service
 
615,519

 
602,972

 
2.1

Finance, insurance and other, net
 
401,271

 
375,954

 
6.7

Total
 
$
1,391,306

 
$
1,365,314

 
1.9

UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
 
122,873

 
127,141

 
(3.4
)
Retail used vehicles sold
 
111,806

 
101,170

 
10.5

Wholesale used vehicles sold
 
30,625

 
37,662

 
(18.7
)
Total used
 
142,431

 
138,832

 
2.6

AVERAGE RETAIL SALES PRICE:
 

 
 
 
 
New vehicle retail
 
$
38,111

 
$
37,508

 
1.6

Used vehicle retail
 
$
20,634

 
$
21,357

 
(3.4
)
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
 
$
1,864

 
$
1,921

 
(3.0
)
Used vehicle retail sales
 
1,267

 
1,429

 
(11.3
)
Used vehicle wholesale sales
 
122

 
(64
)
 
290.6

Total used
 
1,021

 
1,024

 
(0.3
)
Finance, insurance and other, net (per retail unit)
 
$
1,710

 
$
1,647

 
3.8


7

OTHER:
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1), (2)
 
$
400,196

 
$
382,504

 
4.6

Adjusted Total revenue (1)
 
$
8,722,182

 
$
8,687,115

 
0.4

Adjusted Total gross profit (1)
 
$
1,390,231

 
$
1,371,864

 
1.3

Adjusted Total gross margin (1)
 
15.9

 
15.8

 
 
Adjusted Finance, insurance and other, net (per retail unit) (1)
 
$
1,705

 
$
1,675

 
1.8

SG&A expenses
 
$
982,064

 
$
983,974

 
(0.2
)
Adjusted SG&A expenses (1)
 
$
999,548

 
$
975,497

 
2.5

SG&A as % revenues
 
11.3

 
11.3

 
 
Adjusted SG&A as % revenues (1)
 
11.5

 
11.2

 
 
SG&A as % gross profit
 
70.6

 
72.1

 
 
Adjusted SG&A as % gross profit (1)
 
71.9

 
71.1

 
 
Operating margin %
 
3.6

 
3.7

 
 
Adjusted operating margin % (1)
 
3.9

 
4.0

 
 
Pretax margin %
 
2.2

 
2.4

 
 
Adjusted pretax margin % (1)
 
2.5

 
2.7

 
 
INTEREST EXPENSE:
 
 
 
 
 
 
Floorplan interest expense
 
$
(52,773
)
 
$
(47,221
)
 
11.8

Floorplan assistance
 
46,313

 
47,984

 
(3.5
)
Net floorplan income (expense)
 
$
(6,460
)
 
$
763

 
(946.7
)
Other interest expense, net
 
$
(68,085
)
 
$
(66,493
)
 
2.4


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(2) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.

8

Group 1 Automotive, Inc.
Additional Information - U.K.
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
246,050

 
$
267,785

 
(8.1
)
 
(5.3
)
Used vehicle retail sales
171,004

 
144,415

 
18.4

 
21.9

Used vehicle wholesale sales
39,375

 
37,243

 
5.7

 
8.7

Total used
210,379

 
181,658

 
15.8

 
19.2

Parts and service
52,640

 
45,141

 
16.6

 
20.1

Finance, insurance and other, net
14,955

 
13,263

 
12.8

 
17.0

Total
$
524,024

 
$
507,847

 
3.2

 
6.3

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.7

 
5.7

 
 
 
 
Used vehicle retail sales
4.5

 
4.6

 
 
 
 
Used vehicle wholesale sales
(1.3
)
 
(0.9
)
 
 
 
 
Total used
3.4

 
3.5

 
 
 
 
Parts and service
54.8

 
56.6

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.4

 
11.9

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
14,033

 
$
15,231

 
(7.9
)
 
(4.2
)
Used vehicle retail sales
7,610

 
6,696

 
13.6

 
16.8

Used vehicle wholesale sales
(516
)
 
(322
)
 
(60.2
)
 
(66.2
)
Total used
7,094

 
6,374

 
11.3

 
14.3

Parts and service
28,843

 
25,559

 
12.8

 
16.2

Finance, insurance and other, net
14,955

 
13,263

 
12.8

 
17.0

Total
$
64,925

 
$
60,427

 
7.4

 
11.1

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
8,019

 
8,750

 
(8.4
)
 
 
Retail used vehicles sold
7,148

 
6,188

 
15.5

 
 
Wholesale used vehicles sold
4,742

 
5,089

 
(6.8
)
 
 
Total used
11,890

 
11,277

 
5.4

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
30,683

 
$
30,604

 
0.3

 
3.3

Used vehicle retail
$
23,923

 
$
23,338

 
2.5

 
5.5

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,750

 
$
1,741

 
0.5

 
4.5

Used vehicle retail sales
1,065

 
1,082

 
(1.6
)
 
1.1

Used vehicle wholesale sales
(109
)
 
(63
)
 
(73.0
)
 
(78.3
)
Total used
597

 
565

 
5.7

 
8.4

Finance, insurance and other, net (per retail unit)
$
986

 
$
888

 
11.0

 
15.3


9

OTHER:
 
 
 
 
 
 
 
SG&A expenses
$
58,845

 
$
54,095

 
8.8

 
12.3

SG&A as % revenues
11.2

 
10.7

 
 
 
 
SG&A as % gross profit
90.6

 
89.5

 
 
 
 
Operating margin %
0.4

 
0.8

 
 
 
 
Adjusted operating margin % (1)
0.5

 
0.8

 
 
 
 
Pretax margin %
(0.2
)
 
0.3

 
 
 
 
Adjusted pretax margin % (1)
(0.1
)
 
0.3

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(1,635
)
 
$
(1,304
)
 
25.4

 
29.5

Floorplan assistance
141

 
237

 
(40.5
)
 
(38.6
)
Net floorplan expense
$
(1,494
)
 
$
(1,067
)
 
40.0

 
44.6

Other interest expense, net
$
(1,782
)
 
$
(1,278
)
 
39.4

 
43.9


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


10

Group 1 Automotive, Inc.
Additional Information - U.K.
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,217,135

 
$
1,092,612

 
11.4

 
7.3

Used vehicle retail sales
771,719

 
546,266

 
41.3

 
36.5

Used vehicle wholesale sales
173,783

 
136,847

 
27.0

 
22.6

Total used
945,502

 
683,113

 
38.4

 
33.7

Parts and service
217,594

 
165,755

 
31.3

 
26.9

Finance, insurance and other, net
57,154

 
44,523

 
28.4

 
24.7

Total
$
2,437,385

 
$
1,986,003

 
22.7

 
18.4

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.2

 
5.5

 
 
 
 
Used vehicle retail sales
5.0

 
4.8

 
 
 
 
Used vehicle wholesale sales
(1.6
)
 
(0.9
)
 
 
 
 
Total used
3.8

 
3.7

 
 
 
 
Parts and service
56.5

 
57.3

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
11.5

 
11.3

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
63,579

 
$
60,581

 
4.9

 
1.6

Used vehicle retail sales
38,898

 
26,275

 
48.0

 
42.9

Used vehicle wholesale sales
(2,704
)
 
(1,173
)
 
(130.5
)
 
(127.1
)
Total used
36,194

 
25,102

 
44.2

 
38.9

Parts and service
122,975

 
95,047

 
29.4

 
25.1

Finance, insurance and other, net
57,154

 
44,523

 
28.4

 
24.7

Total
$
279,902

 
$
225,253

 
24.3

 
20.3

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
38,716

 
36,571

 
5.9

 
 
Retail used vehicles sold
31,966

 
24,623

 
29.8

 
 
Wholesale used vehicles sold
21,666

 
18,334

 
18.2

 
 
Total used
53,632

 
42,957

 
24.9

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
31,438

 
$
29,876

 
5.2

 
1.4

Used vehicle retail
$
24,142

 
$
22,185

 
8.8

 
5.2

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,642

 
$
1,657

 
(0.9
)
 
(4.0
)
Used vehicle retail sales
1,217

 
1,067

 
14.1

 
10.0

Used vehicle wholesale sales
(125
)
 
(64
)
 
(95.3
)
 
(92.2
)
Total used
675

 
584

 
15.6

 
11.3

Finance, insurance and other, net (per retail unit)
$
809

 
$
728

 
11.1

 
8.0


11

OTHER:
 
 
 
 
 
 
 
SG&A expenses
$
240,403

 
$
191,570

 
25.5

 
21.4

Adjusted SG&A expenses (1)
$
240,403

 
$
191,282

 
25.7

 
21.6

SG&A as % revenues
9.9

 
9.6

 
 
 
 
Adjusted SG&A as % revenues (1)
9.9

 
9.6

 
 
 
 
SG&A as % gross profit
85.9

 
85.0

 
 
 
 
Adjusted SG&A as % gross profit (1)
85.9

 
84.9

 
 
 
 
Operating margin %
1.1

 
1.3

 
 
 
 
Adjusted operating margin % (1)
1.1

 
1.3

 
 
 
 
Pretax margin %
0.5

 
0.9

 
 
 
 
Adjusted pretax margin % (1)
0.6

 
0.9

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(6,322
)
 
$
(4,727
)
 
33.7

 
29.6

Floorplan assistance
965

 
951

 
1.5

 
(2.3
)
Net floorplan expense
$
(5,357
)
 
$
(3,776
)
 
41.9

 
37.7

Other interest expense, net
$
(6,797
)
 
$
(3,664
)
 
85.5

 
80.7


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


12

Group 1 Automotive, Inc.
Additional Information - Brazil
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1)  % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
77,229

 
$
82,947

 
(6.9
)
 
9.1

Used vehicle retail sales
21,087

 
24,129

 
(12.6
)
 
2.4

Used vehicle wholesale sales
5,344

 
4,282

 
24.8

 
46.5

Total used
26,431

 
28,411

 
(7.0
)
 
9.1

Parts and service
11,584

 
11,761

 
(1.5
)
 
15.4

Finance, insurance and other, net
3,004

 
2,242

 
34.0

 
56.9

Total
$
118,248

 
$
125,361

 
(5.7
)
 
10.5

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
6.4

 
5.8

 
 
 
 
Used vehicle retail sales
6.1

 
7.8

 
 
 
 
Used vehicle wholesale sales
5.0

 
4.4

 
 
 
 
Total used
5.9

 
7.3

 
 
 
 
Parts and service
44.6

 
45.9

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.4

 
11.6

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
4,938

 
$
4,849

 
1.8

 
19.0

Used vehicle retail sales
1,282

 
1,887

 
(32.1
)
 
(20.4
)
Used vehicle wholesale sales
265

 
189

 
40.2

 
64.6

Total used
1,547

 
2,076

 
(25.5
)
 
(12.7
)
Parts and service
5,172

 
5,403

 
(4.3
)
 
12.2

Finance, insurance and other, net
3,004

 
2,242

 
34.0

 
56.9

Total
$
14,661

 
$
14,570

 
0.6

 
17.8

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
2,499

 
2,355

 
6.1

 
 
Retail used vehicles sold
1,064

 
1,092

 
(2.6
)
 
 
Wholesale used vehicles sold
515

 
290

 
77.6

 
 
Total used
1,579

 
1,382

 
14.3

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
30,904

 
$
35,222

 
(12.3
)
 
2.8

Used vehicle retail
$
19,819

 
$
22,096

 
(10.3
)
 
5.1

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,976

 
$
2,059

 
(4.0
)
 
12.2

Used vehicle retail sales
1,205

 
1,728

 
(30.3
)
 
(18.3
)
Used vehicle wholesale sales
515

 
652

 
(21.0
)
 
(7.3
)
Total used
980

 
1,502

 
(34.8
)
 
(23.6
)
Finance, insurance and other, net (per retail unit)
$
843

 
$
650

 
29.7

 
51.8


13

OTHER:
 
 
 
 
 
 
 
SG&A expenses
$
12,368

 
$
13,356

 
(7.4
)
 
8.5

Adjusted SG&A expenses (1)
$
12,368

 
$
12,881

 
(4.0
)
 
12.6

SG&A as % revenues
10.5

 
10.7

 
 
 
 
Adjusted SG&A as % revenues (1)
10.5

 
10.3

 
 
 
 
SG&A as % gross profit
84.4

 
91.7

 
 
 
 
Adjusted SG&A as % gross profit (1)
84.4

 
88.4

 
 
 
 
Operating margin %
1.6

 
(4.7
)
 
 
 
 
Adjusted operating margin % (1)
1.6

 
1.1

 
 
 
 
Pretax margin %
1.3

 
(4.9
)
 
 
 
 
Adjusted pretax margin % (1)
1.3

 
0.9

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(189
)
 
$
(142
)
 
33.1

 
55.4

Floorplan assistance
—

 
—

 
—

 
—

Net floorplan expense
$
(189
)
 
$
(142
)
 
33.1

 
55.4

Other interest expense, net
$
(178
)
 
$
(109
)
 
63.3

 
90.0


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.

14

Group 1 Automotive, Inc.
Additional Information - Brazil
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Twelve Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
281,416

 
$
296,055

 
(4.9
)
 
8.5

Used vehicle retail sales
87,352

 
92,021

 
(5.1
)
 
7.9

Used vehicle wholesale sales
16,882

 
12,655

 
33.4

 
53.9

Total used
104,234

 
104,676

 
(0.4
)
 
13.4

Parts and service
46,038

 
47,897

 
(3.9
)
 
9.7

Finance, insurance and other, net
9,028

 
8,525

 
5.9

 
22.0

Total
$
440,716

 
$
457,153

 
(3.6
)
 
10.0

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
6.5

 
5.8

 
 
 
 
Used vehicle retail sales
6.1

 
7.3

 
 
 
 
Used vehicle wholesale sales
3.8

 
6.8

 
 
 
 
Total used
5.7

 
7.3

 
 
 
 
Parts and service
44.9

 
45.2

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.2

 
12.0

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
18,232

 
$
17,138

 
6.4

 
22.4

Used vehicle retail sales
5,323

 
6,751

 
(21.2
)
 
(10.4
)
Used vehicle wholesale sales
648

 
858

 
(24.5
)
 
(13.0
)
Total used
5,971

 
7,609

 
(21.5
)
 
(10.7
)
Parts and service
20,654

 
21,670

 
(4.7
)
 
8.7

Finance, insurance and other, net
9,028

 
8,525

 
5.9

 
22.0

Total
$
53,885

 
$
54,942

 
(1.9
)
 
12.3

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
8,928

 
8,488

 
5.2

 
 
Retail used vehicles sold
4,227

 
4,140

 
2.1

 
 
Wholesale used vehicles sold
1,596

 
1,148

 
39.0

 
 
Total used
5,823

 
5,288

 
10.1

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
31,521

 
$
34,879

 
(9.6
)
 
3.2

Used vehicle retail
$
20,665

 
$
22,227

 
(7.0
)
 
5.6

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
2,042

 
$
2,019

 
1.1

 
16.3

Used vehicle retail sales
1,259

 
1,631

 
(22.8
)
 
(12.3
)
Used vehicle wholesale sales
406

 
747

 
(45.6
)
 
(37.4
)
Total used
1,025

 
1,439

 
(28.8
)
 
(18.9
)
Finance, insurance and other, net (per retail unit)
$
686

 
$
675

 
1.6

 
17.1


15

OTHER:
 
 
 
 
 
 
 
SG&A expenses
$
50,590

 
$
50,651

 
(0.1
)
 
15.0

Adjusted SG&A expenses (1)
$
46,920

 
$
50,176

 
(6.5
)
 
6.9

SG&A as % revenues
11.5

 
11.1

 
 
 
 
Adjusted SG&A as % revenues (1)
10.6

 
11.0

 
 
 
 
SG&A as % gross profit
93.9

 
92.2

 
 
 
 
Adjusted SG&A as % gross profit (1)
87.1

 
91.3

 
 
 
 
Operating margin %
0.4

 
(0.9
)
 
 
 
 
Adjusted operating margin % (1)
1.2

 
0.7

 
 
 
 
Pretax margin %
—

 
(1.0
)
 
 
 
 
Adjusted pretax margin % (1)
0.8

 
0.6

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(787
)
 
$
(424
)
 
85.6

 
110.6

Floorplan assistance
—

 
—

 
—

 
—

Net floorplan expense
$
(787
)
 
$
(424
)
 
85.6

 
110.6

Other interest expense, net
$
(916
)
 
$
(340
)
 
169.4

 
199.6


(1) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.

16

Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1)  % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,572,713

 
$
1,661,309

 
(5.3
)
 
(4.1
)
Used vehicle retail sales
771,242

 
709,072

 
8.8

 
10.0

Used vehicle wholesale sales
86,122

 
91,809

 
(6.2
)
 
(4.0
)
Total used
857,364

 
800,881

 
7.1

 
8.4

Parts and service
354,744

 
343,510

 
3.3

 
4.3

Finance, insurance and other, net
123,991

 
114,705

 
8.1

 
9.0

Total
$
2,908,812

 
$
2,920,405

 
(0.4
)
 
0.8

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.2

 
5.4

 
 
 
 
Used vehicle retail sales
5.3

 
5.7

 
 
 
 
Used vehicle wholesale sales
0.1

 
(2.6
)
 
 
 
 
Total used
4.8

 
4.8

 
 
 
 
Parts and service
52.3

 
53.4

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
14.9

 
14.6

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
81,258

 
$
89,535

 
(9.2
)
 
(7.7
)
Used vehicle retail sales
41,064

 
40,514

 
1.4

 
2.4

Used vehicle wholesale sales
113

 
(2,390
)
 
104.7

 
105.9

Total used
41,177

 
38,124

 
8.0

 
9.2

Parts and service
185,640

 
183,311

 
1.3

 
2.2

Finance, insurance and other, net
123,991

 
114,705

 
8.1

 
9.0

Total
$
432,066

 
$
425,675

 
1.5

 
2.6

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
42,272

 
44,713

 
(5.5
)
 
 
Retail used vehicles sold
36,099

 
32,015

 
12.8

 
 
Wholesale used vehicles sold
12,089

 
13,573

 
(10.9
)
 
 
Total used
48,188

 
45,588

 
5.7

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
37,205

 
$
37,155

 
0.1

 
1.5

Used vehicle retail
$
21,365

 
$
22,148

 
(3.5
)
 
(2.5
)
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,922

 
$
2,002

 
(4.0
)
 
(2.4
)
Used vehicle retail sales
1,138

 
1,265

 
(10.0
)
 
(9.2
)
Used vehicle wholesale sales
9

 
(176
)
 
105.1

 
106.6

Total used
855

 
836

 
2.3

 
3.3

Finance, insurance and other, net (per retail unit)
$
1,582

 
$
1,495

 
5.8

 
6.8


17

OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1), (2)
$
122,916

 
$
114,705

 
7.2

 
8.1

Adjusted Total revenue (1)
$
2,907,737

 
$
2,920,405

 
(0.4
)
 
0.8

Adjusted Total gross profit (1)
$
430,991

 
$
425,675

 
1.2

 
2.3

Adjusted Total gross margin (1)
14.8

 
14.6

 
 


Adjusted Finance, insurance and other, net (per retail unit) (1)
$
1,568

 
$
1,495

 
4.9

 
5.8

SG&A expenses
$
323,847

 
$
309,521

 
4.6

 
5.9

Adjusted SG&A expenses (1)
$
322,233

 
$
309,046

 
4.3

 
5.6

SG&A as % revenues
11.1

 
10.6

 
 
 
 
Adjusted SG&A as % revenues (1)
11.1

 
10.6

 
 
 
 
SG&A as % gross profit
75.0

 
72.7

 
 
 
 
Adjusted SG&A as % gross profit (1)
74.8

 
72.6

 
 
 
 
Operating margin %
2.6

 
3.1

 
 
 
 
Adjusted operating margin % (1)
3.2

 
3.5

 
 
 
 
Pretax margin %
1.4

 
2.0

 
 
 
 
Adjusted pretax margin % (1)
1.9

 
2.4

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(16,547
)
 
$
(13,713
)
 
20.7

 
21.3

Floorplan assistance
12,761

 
13,189

 
(3.2
)
 
(3.2
)
Net floorplan expense
$
(3,786
)
 
$
(524
)
 
622.5

 
638.1

Other interest expense, net
$
(18,424
)
 
$
(18,309
)
 
(0.6
)
 
1.1


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(2) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.


18

Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Twelve Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
6,181,371

 
$
6,157,531

 
0.4

 
0.3

Used vehicle retail sales
3,166,070

 
2,798,986

 
13.1

 
12.6

Used vehicle wholesale sales
369,575

 
400,170

 
(7.6
)
 
(8.5
)
Total used
3,535,645

 
3,199,156

 
10.5

 
10.0

Parts and service
1,416,889

 
1,338,032

 
5.9

 
5.8

Finance, insurance and other, net
467,453

 
429,002

 
9.0

 
8.9

Total
$
11,601,358

 
$
11,123,721

 
4.3

 
4.1

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.0

 
5.2

 
 
 
 
Used vehicle retail sales
5.9

 
6.3

 
 
 
 
Used vehicle wholesale sales
0.5

 
(0.7
)
 
 
 
 
Total used
5.3

 
5.5

 
 
 
 
Parts and service
53.6

 
53.8

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
14.9

 
14.8

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
310,869

 
$
322,005

 
(3.5
)
 
(3.2
)
Used vehicle retail sales
185,928

 
177,555

 
4.7

 
4.4

Used vehicle wholesale sales
1,695

 
(2,742
)
 
161.8

 
166.9

Total used
187,623

 
174,813

 
7.3

 
7.0

Parts and service
759,148

 
719,689

 
5.5

 
5.3

Finance, insurance and other, net
467,453

 
429,002

 
9.0

 
8.9

Total
$
1,725,093

 
$
1,645,509

 
4.8

 
4.8

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
170,517

 
172,200

 
(1.0
)
 
 
Retail used vehicles sold
147,999

 
129,933

 
13.9

 
 
Wholesale used vehicles sold
53,887

 
57,144

 
(5.7
)
 
 
Total used
201,886

 
187,077

 
7.9

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
36,251

 
$
35,758

 
1.4

 
1.3

Used vehicle retail
$
21,393

 
$
21,542

 
(0.7
)
 
(1.1
)
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,823

 
$
1,870

 
(2.5
)
 
(2.3
)
Used vehicle retail sales
1,256

 
1,367

 
(8.1
)
 
(8.4
)
Used vehicle wholesale sales
31

 
(48
)
 
164.6

 
171.0

Total used
929

 
934

 
(0.5
)
 
(0.8
)
Finance, insurance and other, net (per retail unit)
$
1,468

 
$
1,420

 
3.4

 
3.3


19

OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1), (2)
$
466,378

 
$
435,552

 
7.1

 
7.0

Adjusted Total revenue (1)
$
11,600,283

 
$
11,130,271

 
4.2

 
4.0

Adjusted Total gross profit (1)
$
1,724,018

 
$
1,652,059

 
4.4

 
4.3

Adjusted Total gross margin (1)
14.9

 
14.8

 
 
 

Adjusted Finance, insurance and other, net (per retail unit) (1)
$
1,464

 
$
1,442

 
1.5

 
1.5

SG&A expenses
$
1,273,057

 
$
1,226,195

 
3.8

 
3.8

Adjusted SG&A expenses (1)
$
1,286,871

 
$
1,216,955

 
5.7

 
5.7

SG&A as % revenues
11.0

 
11.0

 
 
 
 
Adjusted SG&A as % revenues (1)
11.1

 
10.9

 
 
 
 
SG&A as % gross profit
73.8

 
74.5

 
 
 
 
Adjusted SG&A as % gross profit (1)
74.6

 
73.7

 
 
 
 
Operating margin %
2.9

 
3.1

 
 
 
 
Adjusted operating margin % (1)
3.2

 
3.4

 
 
 
 
Pretax margin %
1.8

 
2.0

 
 
 
 
Adjusted pretax margin % (1)
2.0

 
2.3

 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
$
(59,882
)
 
$
(52,372
)
 
14.3

 
14.2

Floorplan assistance
47,277

 
48,935

 
(3.4
)
 
(3.5
)
Net floorplan expense
$
(12,605
)
 
$
(3,437
)
 
266.7

 
265.1

Other interest expense, net
$
(75,798
)
 
$
(70,497
)
 
7.5

 
7.4


(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(2) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.



20

Group 1 Automotive, Inc.
Additional Information - Same Store U.S. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
1,219,825

 
$
1,286,220

 
(5.2
)
 
Used vehicle retail sales
564,987

 
531,511

 
6.3

 
Used vehicle wholesale sales
40,580

 
49,224

 
(17.6
)
 
Total used
605,567

 
580,735

 
4.3

 
Parts and service
287,610

 
281,730

 
2.1

 
Finance, insurance and other, net
103,412

 
97,593

 
6.0

 
Total
$
2,216,414

 
$
2,246,278

 
(1.3
)
 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
5.0

 
5.3

 
 
 
Used vehicle retail sales
5.6

 
5.9

 
 
 
Used vehicle wholesale sales
0.9

 
(4.5
)
 
 
 
Total used
5.2

 
5.0

 
 
 
Parts and service
52.1

 
53.2

 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
Total
15.6

 
15.3

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
60,834

 
$
67,832

 
(10.3
)
 
Used vehicle retail sales
31,373

 
31,391

 
(0.1
)
 
Used vehicle wholesale sales
352

 
(2,191
)
 
116.1

 
Total used
31,725

 
29,200

 
8.6

 
Parts and service
149,750

 
149,765

 
—

 
Finance, insurance and other, net
103,412

 
97,593

 
6.0

 
Total
$
345,721

 
$
344,390

 
0.4

 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
30,835

 
33,117

 
(6.9
)
 
Retail used vehicles sold
27,097

 
24,397

 
11.1

 
Wholesale used vehicles sold
6,627

 
8,083

 
(18.0
)
 
Total used
33,724

 
32,480

 
3.8

 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
39,560

 
$
38,839

 
1.9

 
Used vehicle retail
$
20,851

 
$
21,786

 
(4.3
)
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 

 
New vehicle retail sales
$
1,973

 
$
2,048

 
(3.7
)
 
Used vehicle retail sales
1,158

 
1,287

 
(10.0
)
 
Used vehicle wholesale sales
53

 
(271
)
 
119.6

 
Total used
941

 
899

 
4.7

 
Finance, insurance and other, net (per retail unit)
$
1,785

 
$
1,697

 
5.2

 

21

OTHER:
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (2), (3)
$
102,337

 
$
97,593

 
4.9

 
Adjusted Total revenue (2)
$
2,215,339

 
$
2,246,278

 
(1.4
)
 
Adjusted Total gross profit (2)
$
344,646

 
$
344,390

 
0.1

 
Adjusted Total gross margin (2)
15.6

 
15.3

 
 
 
Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,767

 
$
1,697

 
4.1

 
SG&A expenses
$
243,619

 
$
237,470

 
2.6

 
Adjusted SG&A expenses (2)
$
242,332

 
$
237,470

 
2.0

 
SG&A as % revenues
11.0

 
10.6

 
 
 
Adjusted SG&A as % revenues (2)
10.9

 
10.6

 
 
 
SG&A as % gross profit
70.5

 
69.0

 
 
 
Adjusted SG&A as % gross profit (2)
70.3

 
69.0

 
 
 
Operating margin %
3.3

 
4.2

 
 
 
Adjusted operating margin % (2)
4.0

 
4.2

 
 
 

(1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office.
(2) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(3) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.

22

Group 1 Automotive, Inc.
Additional Information - Same Store U.S. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
4,577,539

 
$
4,722,200

 
(3.1
)
 
Used vehicle retail sales
2,255,446

 
2,141,315

 
5.3

 
Used vehicle wholesale sales
173,968

 
247,852

 
(29.8
)
 
Total used
2,429,414

 
2,389,167

 
1.7

 
Parts and service
1,137,841

 
1,113,635

 
2.2

 
Finance, insurance and other, net
391,730

 
371,932

 
5.3

 
Total
$
8,536,524

 
$
8,596,934

 
(0.7
)
 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
4.9

 
5.1

 
 
 
Used vehicle retail sales
6.1

 
6.7

 
 
 
Used vehicle wholesale sales
2.2

 
(1.0
)
 
 
 
Total used
5.9

 
5.9

 
 
 
Parts and service
53.3

 
53.6

 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
Total
16.0

 
15.7

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
223,295

 
$
241,341

 
(7.5
)
 
Used vehicle retail sales
138,623

 
143,287

 
(3.3
)
 
Used vehicle wholesale sales
3,747

 
(2,411
)
 
255.4

 
Total used
142,370

 
140,876

 
1.1

 
Parts and service
606,405

 
597,184

 
1.5

 
Finance, insurance and other, net
391,730

 
371,932

 
5.3

 
Total
$
1,363,800

 
$
1,351,333

 
0.9

 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
120,090

 
126,205

 
(4.8
)
 
Retail used vehicles sold
109,332

 
100,475

 
8.8

 
Wholesale used vehicles sold
29,915

 
37,383

 
(20.0
)
 
Total used
139,247

 
137,858

 
1.0

 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
38,118

 
$
37,417

 
1.9

 
Used vehicle retail
$
20,629

 
$
21,312

 
(3.2
)
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
$
1,859

 
$
1,912

 
(2.8
)
 
Used vehicle retail sales
1,268

 
1,426

 
(11.1
)
 
Used vehicle wholesale sales
125

 
(64
)
 
295.3

 
Total used
1,022

 
1,022

 
—

 
Finance, insurance and other, net (per retail unit)
$
1,707

 
$
1,641

 
4.0

 

23

OTHER: 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (2), (3)
$
390,655

 
$
378,482

 
3.2

 
Adjusted Total revenue (2)
$
8,535,449

 
$
8,603,484

 
(0.8
)
 
Adjusted Total gross profit (2)
$
1,362,725

 
$
1,357,883

 
0.4

 
Adjusted Total gross margin (2)
16.0

 
15.8

 
 
 
Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,703

 
$
1,670

 
2.0

 
SG&A expenses
$
979,531

 
$
973,412

 
0.6

 
Adjusted SG&A expenses (2)
$
974,201

 
$
964,935

 
1.0

 
SG&A as % revenues
11.5

 
11.3

 
 
 
Adjusted SG&A as % revenues (2)
11.4

 
11.2

 
 
 
SG&A as % gross profit
71.8

 
72.0

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

 
71.1

 
 
 
Operating margin %
3.4

 
3.7

 
 
 
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) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(3) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.



24

Group 1 Automotive, Inc.
Additional Information - Same Store U.K. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
218,569

 
$
266,779

 
(18.1
)
 
(15.6
)
Used vehicle retail sales
150,220

 
143,577

 
4.6

 
7.7

Used vehicle wholesale sales
36,527

 
37,013

 
(1.3
)
 
1.5

Total used
186,747

 
180,590

 
3.4

 
6.4

Parts and service
46,881

 
44,619

 
5.1

 
8.2

Finance, insurance and other, net
12,449

 
13,171

 
(5.5
)
 
(2.0
)
Total
$
464,646

 
$
505,159

 
(8.0
)
 
(5.2
)
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
6.2

 
5.7

 
 
 
 
Used vehicle retail sales
4.5

 
4.6

 
 
 
 
Used vehicle wholesale sales
(0.9
)
 
(0.9
)
 
 
 
 
Total used
3.5

 
3.5

 
 
 
 
Parts and service
53.9

 
56.6

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.4

 
11.9

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
13,548

 
$
15,202

 
(10.9
)
 
(7.3
)
Used vehicle retail sales
6,824

 
6,669

 
2.3

 
5.2

Used vehicle wholesale sales
(346
)
 
(325
)
 
(6.5
)
 
(10.9
)
Total used
6,478

 
6,344

 
2.1

 
4.9

Parts and service
25,265

 
25,247

 
0.1

 
3.1

Finance, insurance and other, net
12,449

 
13,171

 
(5.5
)
 
(2.0
)
Total
$
57,740

 
$
59,964

 
(3.7
)
 
(0.5
)
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
7,270

 
8,694

 
(16.4
)
 
 
Retail used vehicles sold
6,246

 
6,121

 
2.0

 
 
Wholesale used vehicles sold
4,366

 
5,031

 
(13.2
)
 
 
Total used
10,612

 
11,152

 
(4.8
)
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 

 
 
New vehicle retail
$
30,065

 
$
30,685

 
(2.0
)
 
1.0

Used vehicle retail
$
24,051

 
$
23,456

 
2.5

 
5.6

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,864

 
$
1,749

 
6.6

 
10.8

Used vehicle retail sales
1,093

 
1,090

 
0.3

 
3.1

Used vehicle wholesale sales
(79
)
 
(65
)
 
(21.5
)
 
(27.8
)
Total used
610

 
569

 
7.2

 
10.2

Finance, insurance and other, net (per retail unit)
$
921

 
$
889

 
3.6

 
7.4

OTHER:
 
 
 
 

 
 
SG&A expenses
$
52,863

 
$
53,493

 
(1.2
)
 
2.0

SG&A as % revenues
11.4

 
10.6

 
 
 
 
SG&A as % gross profit
91.6

 
89.2

 
 
 
 
Operating margin %
0.3

 
0.8

 
 
 
 
Adjusted operating margin % (2)
0.4

 
0.8

 
 
 
 

(1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office.
(2) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


25

Group 1 Automotive, Inc.
Additional Information - Same Store U.K. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Twelve Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
978,873

 
$
1,073,144

 
(8.8
)
 
(11.9
)
Used vehicle retail sales
612,307

 
532,469

 
15.0

 
11.4

Used vehicle wholesale sales
144,303

 
133,483

 
8.1

 
4.6

Total used
756,610

 
665,952

 
13.6

 
10.0

Parts and service
177,079

 
161,723

 
9.5

 
6.1

Finance, insurance and other, net
45,788

 
43,584

 
5.1

 
2.2

Total
$
1,958,350

 
$
1,944,403

 
0.7

 
(2.6
)
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.6

 
5.6

 
 
 
 
Used vehicle retail sales
5.0

 
4.9

 
 
 
 
Used vehicle wholesale sales
(1.3
)
 
(0.8
)
 
 
 
 
Total used
3.8

 
3.8

 
 
 
 
Parts and service
56.1

 
57.4

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
11.7

 
11.4

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
54,607

 
$
59,827

 
(8.7
)
 
(11.4
)
Used vehicle retail sales
30,387

 
26,072

 
16.6

 
12.6

Used vehicle wholesale sales
(1,947
)
 
(1,089
)
 
(78.8
)
 
(75.7
)
Total used
28,440

 
24,983

 
13.8

 
9.9

Parts and service
99,375

 
92,842

 
7.0

 
3.7

Finance, insurance and other, net
45,788

 
43,584

 
5.1

 
2.2

Total
$
228,210

 
$
221,236

 
3.2

 
—

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
31,777

 
35,751

 
(11.1
)
 
 
Retail used vehicles sold
25,090

 
23,940

 
4.8

 
 
Wholesale used vehicles sold
17,883

 
17,871

 
0.1

 
 
Total used
42,973

 
41,811

 
2.8

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
30,804

 
$
30,017

 
2.6

 
(0.9
)
Used vehicle retail
$
24,404

 
$
22,242

 
9.7

 
6.3

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,718

 
$
1,673

 
2.7

 
(0.3
)
Used vehicle retail sales
1,211

 
1,089

 
11.2

 
7.5

Used vehicle wholesale sales
(109
)
 
(61
)
 
(78.7
)
 
(75.6
)
Total used
662

 
598

 
10.7

 
6.9

Finance, insurance and other, net (per retail unit)
$
805

 
$
730

 
10.3

 
7.3


26

OTHER: 
 
 
 
 
 
 
 
SG&A expenses
$
196,899

 
$
186,160

 
5.8

 
2.6

Adjusted SG&A expenses (2)
$
196,899

 
$
185,872

 
5.9

 
2.7

SG&A as % revenues
10.1

 
9.6

 
 
 
 
Adjusted SG&A as % revenues (2)
10.1

 
9.6

 
 
 
 
SG&A as % gross profit
86.3

 
84.1

 
 
 
 
Adjusted SG&A as % gross profit (2)
86.3

 
84.0

 
 
 
 
Operating margin %
1.0

 
1.4

 
 
 
 
Adjusted operating margin % (2)
1.1

 
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) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.

27

Group 1 Automotive, Inc.
Additional Information - Same Store Brazil (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
70,923

 
$
82,946

 
(14.5
)
 
0.2

Used vehicle retail sales
19,845

 
24,129

 
(17.8
)
 
(3.6
)
Used vehicle wholesale sales
5,096

 
4,281

 
19.0

 
39.6

Total used
24,941

 
28,410

 
(12.2
)
 
2.9

Parts and service
11,003

 
11,762

 
(6.5
)
 
9.6

Finance, insurance and other, net
2,763

 
2,243

 
23.2

 
44.2

Total
$
109,630

 
$
125,361

 
(12.5
)
 
2.5

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
6.5

 
5.8

 
 
 
 
Used vehicle retail sales
6.2

 
7.8

 
 
 
 
Used vehicle wholesale sales
5.1

 
4.4

 
 
 
 
Total used
6.0

 
7.3

 
 
 
 
Parts and service
44.1

 
45.9

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.5

 
11.6

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
4,637

 
$
4,849

 
(4.4
)
 
11.8

Used vehicle retail sales
1,240

 
1,887

 
(34.3
)
 
(23.0
)
Used vehicle wholesale sales
258

 
188

 
37.2

 
60.7

Total used
1,498

 
2,075

 
(27.8
)
 
(15.4
)
Parts and service
4,854

 
5,404

 
(10.2
)
 
5.3

Finance, insurance and other, net
2,763

 
2,243

 
23.2

 
44.2

Total
$
13,752

 
$
14,571

 
(5.6
)
 
10.5

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
2,253

 
2,355

 
(4.3
)
 
 
Retail used vehicles sold
1,004

 
1,091

 
(8.0
)
 
 
Wholesale used vehicles sold
457

 
290

 
57.6

 
 
Total used
1,461

 
1,381

 
5.8

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
31,479

 
$
35,221

 
(10.6
)
 
4.7

Used vehicle retail
$
19,766

 
$
22,116

 
(10.6
)
 
4.8

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
2,058

 
$
2,059

 
—

 
16.8

Used vehicle retail sales
1,235

 
1,730

 
(28.6
)
 
(16.4
)
Used vehicle wholesale sales
565

 
648

 
(12.8
)
 
1.9

Total used
1,025

 
1,503

 
(31.8
)
 
(20.1
)
Finance, insurance and other, net (per retail unit)
$
848

 
$
651

 
30.3

 
52.6


28

OTHER:
 
 
 
 
 
 
 
SG&A expenses
$
11,472

 
$
13,459

 
(14.8
)
 
(0.1
)
Adjusted SG&A expenses (2)
$
11,472

 
$
12,984

 
(11.6
)
 
3.6

SG&A as % revenues
10.5

 
10.7

 
 
 
 
Adjusted SG&A as % revenues (2)
10.5

 
10.4

 
 
 
 
SG&A as % gross profit
83.4

 
92.4

 
 
 
 
Adjusted SG&A as % gross profit (2)
83.4

 
89.1

 
 
 
 
Operating margin %
1.7

 
(4.8
)
 
 
 
 
Adjusted operating margin % (2)
1.7

 
1.0

 
 
 
 

(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) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


29

Group 1 Automotive, Inc.
Additional Information - Same Store Brazil (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
Twelve Months Ended December 31,
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
267,261

 
$
293,820

 
(9.0
)
 
3.6

Used vehicle retail sales
84,985

 
90,210

 
(5.8
)
 
6.9

Used vehicle wholesale sales
16,441

 
12,638

 
30.1

 
49.8

Total used
101,426

 
102,848

 
(1.4
)
 
12.2

Parts and service
44,596

 
47,242

 
(5.6
)
 
7.5

Finance, insurance and other, net
8,630

 
8,285

 
4.2

 
19.7

Total
$
421,913

 
$
452,195

 
(6.7
)
 
6.2

GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
6.6

 
5.8

 
 
 
 
Used vehicle retail sales
6.2

 
7.4

 
 
 
 
Used vehicle wholesale sales
3.8

 
6.8

 
 
 
 
Total used
5.8

 
7.4

 
 
 
 
Parts and service
44.5

 
45.7

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
12.3

 
12.0

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
17,516

 
$
17,044

 
2.8

 
18.0

Used vehicle retail sales
5,252

 
6,708

 
(21.7
)
 
(11.1
)
Used vehicle wholesale sales
630

 
857

 
(26.5
)
 
(15.6
)
Total used
5,882

 
7,565

 
(22.2
)
 
(11.6
)
Parts and service
19,844

 
21,584

 
(8.1
)
 
4.6

Finance, insurance and other, net
8,630

 
8,285

 
4.2

 
19.7

Total
$
51,872

 
$
54,478

 
(4.8
)
 
8.9

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
8,369

 
8,390

 
(0.3
)
 
 
Retail used vehicles sold
4,098

 
4,094

 
0.1

 
 
Wholesale used vehicles sold
1,487

 
1,038

 
43.3

 
 
Total used
5,585

 
5,132

 
8.8

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
31,935

 
$
35,020

 
(8.8
)
 
3.8

Used vehicle retail
$
20,738

 
$
22,035

 
(5.9
)
 
6.8

GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
2,093

 
$
2,031

 
3.1

 
18.3

Used vehicle retail sales
1,282

 
1,638

 
(21.7
)
 
(11.2
)
Used vehicle wholesale sales
424

 
826

 
(48.7
)
 
(41.1
)
Total used
1,053

 
1,474

 
(28.6
)
 
(18.8
)
Finance, insurance and other, net (per retail unit)
$
692

 
$
664

 
4.2

 
19.9


30

OTHER: 
 
 
 
 
 
 
 
SG&A expenses
$
48,050

 
$
49,599

 
(3.1
)
 
11.3

Adjusted SG&A expenses (2)
$
45,116

 
$
49,124

 
(8.2
)
 
4.8

SG&A as % revenues
11.4

 
11.0

 
 
 
 
Adjusted SG&A as % revenues (2)
10.7

 
10.9

 
 
 
 
SG&A as % gross profit
92.6

 
91.0

 
 
 
 
Adjusted SG&A as % gross profit (2)
87.0

 
90.2

 
 
 
 
Operating margin %
0.5

 
(0.7
)
 
 
 
 
Adjusted operating margin % (2)
1.2

 
0.9

 
 
 
 

(1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office.
(2) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.

31

Group 1 Automotive, Inc.
Additional Information - Same Store Consolidated (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,509,317

 
$
1,635,945

 
(7.7
)
 
(6.6
)
Used vehicle retail sales
735,052

 
699,217

 
5.1

 
6.2

Used vehicle wholesale sales
82,203

 
90,518

 
(9.2
)
 
(7.1
)
Total used
817,255

 
789,735

 
3.5

 
4.7

Parts and service
345,494

 
338,111

 
2.2

 
3.2

Finance, insurance and other, net
118,624

 
113,007

 
5.0

 
5.8

Total
$
2,790,690

 
$
2,876,798

 
(3.0
)
 
(1.9
)
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.2

 
5.4

 
 
 
 
Used vehicle retail sales
5.4

 
5.7

 
 
 
 
Used vehicle wholesale sales
0.3

 
(2.6
)
 
 
 
 
Total used
4.9

 
4.8

 
 
 
 
Parts and service
52.1

 
53.4

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
15.0

 
14.6

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
79,019

 
$
87,883

 
(10.1
)
 
(8.6
)
Used vehicle retail sales
39,437

 
39,947

 
(1.3
)
 
(0.3
)
Used vehicle wholesale sales
264

 
(2,328
)
 
111.3

 
112.7

Total used
39,701

 
37,619

 
5.5

 
6.7

Parts and service
179,869

 
180,416

 
(0.3
)
 
0.6

Finance, insurance and other, net
118,624

 
113,007

 
5.0

 
5.8

Total
$
417,213

 
$
418,925

 
(0.4
)
 
0.6

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
40,358

 
44,166

 
(8.6
)
 
 
Retail used vehicles sold
34,347

 
31,609

 
8.7

 
 
Wholesale used vehicles sold
11,450

 
13,404

 
(14.6
)
 
 
Total used
45,797

 
45,013

 
1.7

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
37,398

 
$
37,041

 
1.0

 
2.2

Used vehicle retail
$
21,401

 
$
22,121

 
(3.3
)
 
(2.2
)
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,958

 
$
1,990

 
(1.6
)
 
—

Used vehicle retail sales
1,148

 
1,264

 
(9.2
)
 
(8.2
)
Used vehicle wholesale sales
23

 
(174
)
 
113.2

 
114.8

Total used
867

 
836

 
3.7

 
4.9

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

 
$
1,491

 
6.5

 
7.3


32

OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net(2), (3)
$
117,549

 
$
113,007

 
4.0

 
4.8

Adjusted Total revenue (2)
$
2,789,615

 
$
2,876,798

 
(3.0
)
 
(1.9
)
Adjusted Total gross profit (2)
$
416,138

 
$
418,925

 
(0.7
)
 
0.4

Adjusted Total gross margin (2)
14.9

 
14.6

 
 
 

Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,574

 
$
1,491

 
5.6

 
6.3

SG&A expenses
$
307,954

 
$
304,422

 
1.2

 
2.4

Adjusted SG&A expenses (2)
$
306,667

 
$
303,947

 
0.9

 
2.1

SG&A as % revenues
11.0

 
10.6

 
 
 
 
Adjusted SG&A as % revenues (2)
11.0

 
10.6

 
 
 
 
SG&A as % gross profit
73.8

 
72.7

 
 
 
 
Adjusted SG&A as % gross profit (2)
73.7

 
72.6

 
 
 
 
Operating margin %
2.7

 
3.2

 
 
 
 
Adjusted operating margin % (2)
3.3

 
3.5

 
 
 
 

(1) Same Store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same Store results also include the activities of our corporate office.
(2) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(3) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.




33

Group 1 Automotive, Inc.
Additional Information - Same Store Consolidated (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/ (Decrease)
 
Constant Currency (2) % Increase/(Decrease)
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
$
5,823,673

 
$
6,089,164

 
(4.4
)
 
(4.3
)
Used vehicle retail sales
2,952,738

 
2,763,994

 
6.8

 
6.5

Used vehicle wholesale sales
334,712

 
393,973

 
(15.0
)
 
(15.6
)
Total used
3,287,450

 
3,157,967

 
4.1

 
3.8

Parts and service
1,359,516

 
1,322,600

 
2.8

 
2.8

Finance, insurance and other, net
446,148

 
423,801

 
5.3

 
5.3

Total
$
10,916,787

 
$
10,993,532

 
(0.7
)
 
(0.8
)
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.2

 
 
 
 
Used vehicle retail sales
5.9

 
6.4

 
 
 
 
Used vehicle wholesale sales
0.7

 
(0.7
)
 
 
 
 
Total used
5.4

 
5.5

 
 
 
 
Parts and service
53.4

 
53.8

 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
Total
15.1

 
14.8

 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
$
295,418

 
$
318,212

 
(7.2
)
 
(6.9
)
Used vehicle retail sales
174,262

 
176,067

 
(1.0
)
 
(1.2
)
Used vehicle wholesale sales
2,430

 
(2,643
)
 
191.9

 
196.8

Total used
176,692

 
173,424

 
1.9

 
1.8

Parts and service
725,624

 
711,610

 
2.0

 
1.9

Finance, insurance and other, net
446,148

 
423,801

 
5.3

 
5.3

Total
$
1,643,882

 
$
1,627,047

 
1.0

 
1.1

UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
160,236

 
170,346

 
(5.9
)
 
 
Retail used vehicles sold
138,520

 
128,509

 
7.8

 
 
Wholesale used vehicles sold
49,285

 
56,292

 
(12.4
)
 
 
Total used
187,805

 
184,801

 
1.6

 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
$
36,344

 
$
35,746

 
1.7

 
1.7

Used vehicle retail
$
21,316

 
$
21,508

 
(0.9
)
 
(1.2
)
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
$
1,844

 
$
1,868

 
(1.3
)
 
(1.0
)
Used vehicle retail sales
1,258

 
1,370

 
(8.2
)
 
(8.3
)
Used vehicle wholesale sales
49

 
(47
)
 
204.3

 
210.5

Total used
941

 
938

 
0.3

 
0.2

Finance, insurance and other, net (per retail unit)
$
1,493

 
$
1,418

 
5.3

 
5.3


34

OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (2), (3)
$
445,073

 
$
430,351

 
3.4

 
3.4

Adjusted Total revenue (2)
$
10,915,712

 
$
11,000,082

 
(0.8
)
 
(0.8
)
Adjusted Total gross profit (2)
$
1,642,807

 
$
1,633,597

 
0.6

 
0.6

Adjusted Total gross margin (2)
15.0

 
14.9

 
 
 

Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,490

 
$
1,440

 
3.5

 
3.5

SG&A expenses
$
1,224,480

 
$
1,209,171

 
1.3

 
1.4

Adjusted SG&A expenses (2)
$
1,216,215

 
$
1,199,931

 
1.4

 
1.4

SG&A as % revenues
11.2

 
11.0

 
 
 
 
Adjusted SG&A as % revenues (2)
11.1

 
10.9

 
 
 
 
SG&A as % gross profit
74.5

 
74.3

 
 
 
 
Adjusted SG&A as % gross profit (2)
74.0

 
73.5

 
 
 
 
Operating margin %
2.9

 
3.1

 
 
 
 
Adjusted operating margin % (2)
3.3

 
3.4

 
 
 
 

(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) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.
(3) Finance, insurance and other revenue represents fees earned for the financing of vehicle sales transactions and from the sale of insurance and vehicle service contracts. Such amounts are reported net of estimated amounts to be charged back in the future. As a result, finance, insurance and other revenue and gross profit are the same.


35

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - U.S.
(Unaudited)
(Dollars in thousands)
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/ (Decrease)
FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
106,032

 
$
99,200

 
6.9

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
104,957

 
$
99,200

 
5.8

TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
2,266,540

 
$
2,287,197

 
(0.9
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Revenues (1)
$
2,265,465

 
$
2,287,197

 
(1.0
)
TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
352,480

 
$
350,678

 
0.5

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Gross Profit (1)
$
351,405

 
$
350,678

 
0.2

SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
252,634

 
$
242,070

 
4.4

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(605
)
 
—

 
 
 
Gain (loss) on real estate and dealership transactions
(327
)
 
—

 
 
 
Legal settlements
(682
)
 
—

 
 
 
Adjusted SG&A (1)
$
251,020

 
$
242,070

 
3.7

TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
15.6

 
15.3

 
 
 
Adjusted (1)
15.5

 
15.3

 
 
FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,778

 
$
1,700

 
4.6

 
Adjusted (1)
$
1,760

 
$
1,700

 
3.5

SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.1

 
10.6

 
 
 
Adjusted (1)
11.1

 
10.6

 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
71.7

 
69.0

 
 
 
Adjusted (1)
71.4

 
69.0

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
3.1

 
4.1

 
 
 
Adjusted (1), (2)
3.8

 
4.2

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
1.7

 
2.8

 
 
 
Adjusted (1), (2)
2.5

 
2.9

 
 

36

SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
103,412

 
$
97,593

 
6.0

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
102,337

 
$
97,593

 
4.9

SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
2,216,414

 
$
2,246,278

 
(1.3
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Revenues (1)
$
2,215,339

 
$
2,246,278

 
(1.4
)
SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
345,721

 
$
344,390

 
0.4

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Gross Profit (1)
$
344,646

 
$
344,390

 
0.1

SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
243,619

 
$
237,470

 
2.6

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(605
)
 
—

 
 
 
Legal settlements
(682
)
 
—

 
 
 
Adjusted Same Store SG&A (1)
$
242,332

 
$
237,470

 
2.0

SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
15.6

 
15.3

 
 
 
Adjusted (1)
15.6

 
15.3

 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,785

 
$
1,697

 
5.2

 
Adjusted (1)
$
1,767

 
$
1,697

 
4.1

SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.0

 
10.6

 
 
 
Adjusted (1)
10.9

 
10.6

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
70.5

 
69.0

 
 
 
Adjusted (1)
70.3

 
69.0

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
3.3

 
4.2

 
 
 
Adjusted (1), (3)
4.0

 
4.2

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $15,971 for the three months ended December 31, 2018 and $3,236 for the three months ended December 31, 2017.
(3) Excludes the impact of Same Store Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $15,971 for the three months ended December 31, 2018 and $1,514 for the three months ended December 31, 2017.



37

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - U.S.
(Unaudited)
(Dollars in thousands)
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/ (Decrease)
FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
401,271

 
$
375,954

 
6.7

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
400,196

 
$
382,504

 
4.6

TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
8,723,257

 
$
8,680,565

 
0.5

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Revenues (1)
$
8,722,182

 
$
8,687,115

 
0.4

TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,391,306

 
$
1,365,314

 
1.9

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Gross Profit (1)
$
1,390,231

 
$
1,371,864

 
1.3

SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
982,064

 
$
983,974

 
(0.2
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(6,417
)
 
(8,792
)
 
 
 
Gain (loss) on real estate and dealership transactions
25,186

 
(798
)
 
 
 
Legal settlements
(1,285
)
 
1,113

 
 
 
Adjusted SG&A (1)
$
999,548

 
$
975,497

 
2.5

TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
15.9

 
15.7

 
 
 
Adjusted (1)
15.9

 
15.8

 
 
FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,710

 
$
1,647

 
3.8

 
Adjusted (1)
$
1,705

 
$
1,675

 
1.8

SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.3

 
11.3

 
 
 
Adjusted (1)
11.5

 
11.2

 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
70.6

 
72.1

 
 
 
Adjusted (1)
71.9

 
71.1

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
3.6

 
3.7

 
 
 
Adjusted (1), (2)
3.9

 
4.0

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
2.2

 
2.4

 
 
 
Adjusted (1), (2)
2.5

 
2.7

 
 

38

SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
391,730

 
$
371,932

 
5.3

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
390,655

 
$
378,482

 
3.2

SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
8,536,524

 
$
8,596,934

 
(0.7
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Revenues (1)
$
8,535,449

 
$
8,603,484

 
(0.8
)
SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,363,800

 
$
1,351,333

 
0.9

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Gross Profit (1)
$
1,362,725

 
$
1,357,883

 
0.4

SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
979,531

 
$
973,412

 
0.6

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(6,417
)
 
(8,792
)
 
 
 
Gain (loss) on real estate and dealership transactions
2,372

 
(798
)
 
 
 
Legal settlements
(1,285
)
 
1,113

 
 
 
Adjusted Same Store SG&A (1)
$
974,201

 
$
964,935

 
1.0

SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
16.0

 
15.7

 
 
 
Adjusted (1)
16.0

 
15.8

 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,707

 
$
1,641

 
4.0

 
Adjusted (1)
$
1,703

 
$
1,670

 
2.0

SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.5

 
11.3

 
 
 
Adjusted (1)
11.4

 
11.2

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
71.8

 
72.0

 
 
 
Adjusted (1)
71.5

 
71.1

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
3.4

 
3.7

 
 
 
Adjusted (1), (3)
3.9

 
4.0

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $43,398 for the twelve months ended December 31, 2018 and $12,762 for the twelve months ended December 31, 2017.
(3) Excludes the impact of Same Store Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $42,154 for the twelve months ended December 31, 2018 and $11,034 for the twelve months ended December 31, 2017.


39

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - U.K.
(Unaudited)
 (Dollars in thousands)
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/ (Decrease)
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
0.4

 
0.8

 
 
 
Adjusted (1), (2)
0.5

 
0.8

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
(0.2
)
 
0.3

 
 
 
Adjusted (1), (2)
(0.1
)
 
0.3

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
0.3

 
0.8

 
 
 
Adjusted (1), (2)
0.4

 
0.8

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of non-cash asset impairment charges of $485 for the three months ended December 31, 2018.
 


40

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - U.K.
(Unaudited)
 (Dollars in thousands)
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
240,403

 
$
191,570

 
25.5

 
  Pre-tax adjustments:


 


 
 
 
Acquisition costs
—

 
(288
)
 
 
 
Adjusted SG&A (1)
$
240,403

 
$
191,282

 
25.7

SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
9.9

 
9.6

 
 
 
Adjusted (1)
9.9

 
9.6

 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
85.9

 
85.0

 
 
 
Adjusted (1)
85.9

 
84.9

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
1.1

 
1.3

 
 
 
Adjusted (1), (2)
1.1

 
1.3

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
0.5

 
0.9

 
 
 
Adjusted (1), (2)
0.6

 
0.9

 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
196,899

 
$
186,160

 
5.8

 
  Pre-tax adjustments:


 


 
 
 
Acquisition costs
—

 
(288
)
 
 
 
Adjusted Same Store SG&A (1)
$
196,899

 
$
185,872

 
5.9

SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
10.1

 
9.6

 
 
 
Adjusted (1)
10.1

 
9.6

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
86.3

 
84.1

 
 
 
Adjusted (1)
86.3

 
84.0

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
1.0

 
1.4

 
 
 
Adjusted (1), (3)
1.1

 
1.4

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $485 for the twelve months ended December 31, 2018.
(3) Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $485 for the twelve months ended December 31, 2018.





41

Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - Brazil
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
12,368

 
$
13,356

 
(7.4
)
 
 
Severance costs
—

 
(475
)
 
 
 
 
Adjusted SG&A (1)
$
12,368

 
$
12,881

 
(4.0
)
 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.5

 
10.7

 
 
 
 
Adjusted (1)
10.5

 
10.3

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
84.4

 
91.7

 
 
 
 
Adjusted (1)
84.4

 
88.4

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.6

 
(4.7
)
 
 
 
 
Adjusted (1), (2)
1.6

 
1.1

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.3

 
(4.9
)
 
 
 
 
Adjusted (1), (2)
1.3

 
0.9

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
11,472

 
$
13,459

 
(14.8
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
—

 
(475
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
11,472

 
$
12,984

 
(11.6
)
 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.5

 
10.7

 
 
 
 
Adjusted (1)
10.5

 
10.4

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
83.4

 
92.4

 
 
 
 
Adjusted (1)
83.4

 
89.1

 
 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.7

 
(4.8
)
 
 
 
 
Adjusted (1), (3)
1.7

 
1.0

 
 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the three months ended December 31, 2017.
(3) Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the three months ended December 31, 2017.



42

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - Brazil
(Unaudited)
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31,
 
 
2018
 
2017
 
% Increase/ (Decrease)
SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
50,590

 
$
50,651

 
(0.1
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Severance costs
—

 
(475
)
 
 
 
Legal settlements
(3,670
)
 
—

 
 
 
Adjusted SG&A (1)
$
46,920

 
$
50,176

 
(6.5
)
SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.5

 
11.1

 
 
 
Adjusted (1)
10.6

 
11.0

 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
93.9

 
92.2

 
 
 
Adjusted (1)
87.1

 
91.3

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
0.4

 
(0.9
)
 
 
 
Adjusted (1), (2)
1.2

 
0.7

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
—

 
(1.0
)
 
 
 
Adjusted (1), (2)
0.8

 
0.6

 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
48,050

 
$
49,599

 
(3.1
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Severance costs
—

 
(475
)
 
 
 
Legal settlements
(2,934
)
 
—

 
 
 
Adjusted Same Store SG&A (1)
$
45,116

 
$
49,124

 
(8.2
)
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.4

 
11.0

 
 
 
Adjusted (1)
10.7

 
10.9

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
92.6

 
91.0

 
 
 
Adjusted (1)
87.0

 
90.2

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
0.5

 
(0.7
)
 
 
 
Adjusted (1), (3)
1.2

 
0.9

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the twelve months ended December 31, 2017.
(3) Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the twelve months ended December 31, 2017.



43

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited)
 (Dollars in thousands, except per share amounts)
 
 
 
 
 
Three Months Ended December 31,
 
 
2018
 
2017
 
% Increase/(Decrease)
NET INCOME RECONCILIATION:
 
 
 
 
 
 
As reported
 
 
 
 
 
 
  Pretax Net Income
$
39,683

 
$
58,974

 
 
 
  Income Tax Provision
(8,965
)
 
51,515

 
 
 
    Net Income
$
30,718

 
$
110,489

 
(72.2
)
 
      Effective Tax Rate
22.6
%
 
(87.4
)%
 
 
 
Adjustments:
 
 
 
 
 
 
Catastrophic events
 
 
 
 
 
 
Pre-tax
(470
)
 
—

 
 
 
Tax impact
114

 
—

 
 
 
(Gain) loss on real estate and dealership transactions
 
 
 
 
 
 
Pre-tax
327

 
—

 
 
 
Tax impact
(79
)
 
—

 
 
 
Severance costs


 


 
 
 
Pre-tax
—

 
475

 
 
 
Tax impact
—

 
(122
)
 
 
 
Legal settlements


 


 
 
 
Pre-tax
682

 
—

 
 
 
Tax impact
(167
)
 
—

 
 
 
Non-cash asset impairment


 


 
 
 
Pre-tax
16,456

 
9,979

 
 
 
Tax impact
(3,775
)
 
(3,515
)
 
 
 
Tax rate changes


 


 
 
 
Pre-tax
—

 
—

 
 
 
Tax impact
—

 
(73,028
)
 
 
 
Adjusted


 


 
 
 
  Pretax Net Income
$
56,678

 
$
69,428

 
 
 
  Income Tax Provision
(12,872
)
 
(25,150
)
 
 
 
Adjusted net income (1)
$
43,806

 
$
44,278

 
(1.1
)
 
      Effective Tax Rate
22.7
%
 
36.2
 %
 
 
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
 
 
 
 
 
 
COMMON SHARES RECONCILIATION:
 
 
 
 
 
 
Adjusted net income (1)
$
43,806

 
$
44,278

 
(1.1
)
 
Less: Adjusted earnings allocated to participating securities
1,567

 
1,483

 
5.6

 
Adjusted net income available to diluted common shares (1)
$
42,239

 
$
42,795

 
(1.3
)
DILUTED (LOSS) INCOME PER COMMON SHARE RECONCILIATION:
 
 
 
 
 
 
As reported
$
1.62

 
$
5.27

 
(69.3
)
 
  After-tax adjustments:

 

 
 
 
Catastrophic events
(0.02
)
 
—

 
 
 
(Gain) loss on real estate and dealership transactions
0.01

 
—

 
 
 
Severance costs
—

 
0.02

 
 
 
Legal settlements
0.03

 
—

 
 
 
Non-cash asset impairment
0.67

 
0.30

 
 
 
Tax rate changes
—

 
(3.48
)
 
 
 
Adjusted diluted income per share (1)
$
2.31

 
$
2.11

 
9.5


44

FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
123,991

 
$
114,705

 
8.1

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
122,916

 
$
114,705

 
7.2

TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
2,908,812

 
$
2,920,405

 
(0.4
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Revenues (1)
$
2,907,737

 
$
2,920,405

 
(0.4
)
TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
432,066

 
$
425,675

 
1.5

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Gross Profit (1)
$
430,991

 
$
425,675

 
1.2

SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
323,847

 
$
309,521

 
4.6

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(605
)
 
—

 
 
 
Gain (loss) on real estate and dealership transactions
(327
)
 
—

 
 
 
Severance costs
—

 
(475
)
 
 
 
Legal settlements
(682
)
 
—

 
 
 
Adjusted SG&A (1)
$
322,233

 
$
309,046

 
4.3

TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
14.9

 
14.6

 
 
 
Adjusted (1)
14.8

 
14.6

 
 
FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,582

 
$
1,495

 
5.8

 
Adjusted (1)
$
1,568

 
$
1,495

 
4.9

SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.1

 
10.6

 
 
 
Adjusted (1)
11.1

 
10.6

 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
75.0

 
72.7

 
 
 
Adjusted (1)
74.8

 
72.6

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
2.6

 
3.1

 
 
 
Adjusted (1), (2)
3.2

 
3.5

 
 
PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
1.4

 
2.0

 
 
 
Adjusted (1), (2)
1.9

 
2.4

 
 
SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
As reported
$
118,624

 
$
113,007

 
5.0

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
117,549

 
$
113,007

 
4.0

SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
2,790,690

 
$
2,876,798

 
(3.0
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Revenues (1)
$
2,789,615

 
$
2,876,798

 
(3.0
)

45

SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
417,213

 
$
418,925

 
(0.4
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
—

 
 
 
Adjusted Total Gross Profit (1)
$
416,138

 
$
418,925

 
(0.7
)
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
307,954

 
$
304,422

 
1.2

 
  Pre-tax adjustments:


 


 


 
Catastrophic events
(605
)
 
—

 


 
Severance costs
—

 
(475
)
 


 
Legal settlements
(682
)
 
—

 


 
Adjusted Same Store SG&A (1)
$
306,667

 
$
303,947

 
0.9

SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
15.0

 
14.6

 
 
 
Adjusted (1)
14.9

 
14.6

 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,588

 
$
1,491

 
6.5

 
Adjusted (1)
$
1,574

 
$
1,491

 
5.6

SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.0

 
10.6

 
 
 
Adjusted (1)
11.0

 
10.6

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
73.8

 
72.7

 
 
 
Adjusted (1)
73.7

 
72.6

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
2.7

 
3.2

 
 
 
Adjusted (1), (3)
3.3

 
3.5

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $16,456 for the three months ended December 31, 2018 and $9,980 for the three months ended December 31, 2017.
(3) Excludes the impact of Same Store Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $16,456 for the three months ended December 31, 2018 and $8,258 for the three months ended December 31, 2017.


46

Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited)
 (Dollars in thousands, except per share amounts)
 
 
 
 
 
Twelve Months Ended December 31, 2018
 
 
2018
 
2017
 
% Increase/(Decrease)
NET INCOME RECONCILIATION:
 
 
 
 
 
 
As reported
 
 
 
 
 
 
  Pretax Net Income
$
205,403

 
$
219,003

 
 
 
  Income Tax Provision
(47,631
)
 
(5,561
)
 
 
 
    Net Income
$
157,772

 
$
213,442

 
(26.1
)
 
      Effective Tax Rate
23.2
%
 
2.5
%
 
 
 
Adjustments:


 


 
 
 
Catastrophic events


 


 
 
 
Pre-tax
5,342

 
15,342

 
 
 
Tax impact
(1,330
)
 
(5,926
)
 
 
 
(Gain) loss on real estate and dealership transactions


 


 
 
 
Pre-tax
(25,186
)
 
798

 
 
 
Tax impact
6,087

 
(301
)
 
 
 
Severance costs


 


 
 
 
Pre-tax
—

 
475

 
 
 
Tax impact
—

 
(122
)
 
 
 
Acquisition costs


 


 
 
 
Pre-tax
—

 
288

 
 
 
Tax impact
—

 
—

 
 
 
Legal settlements


 


 
 
 
Pre-tax
4,955

 
(1,113
)
 
 
 
Tax impact
(854
)
 
426

 
 
 
Non-cash asset impairment


 


 
 
 
Pre-tax
43,883

 
19,505

 
 
 
Tax impact
(10,368
)
 
(7,094
)
 
 
 
Allowance for uncertain tax positions
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
Tax impact
—

 
834

 
 
 
Tax rate changes
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
Tax impact
(705
)
 
(73,028
)
 
 
 
Adjusted


 


 
 
 
  Pretax Net Income
$
234,397

 
$
254,298

 
 
 
  Income Tax Provision
(54,801
)
 
(90,772
)
 
 
 
Adjusted net income (1)
$
179,596

 
$
163,526

 
9.8

 
      Effective Tax Rate
23.4
%
 
35.7
%
 
 
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
 
 
 
 
 
 
COMMON SHARES RECONCILIATION:
 
 
 
 
 
 
Adjusted net income (1)
$
179,596

 
$
163,526

 
9.8

 
Less: Adjusted earnings allocated to participating securities
6,169

 
5,738

 
7.5

 
Adjusted net income available to diluted common shares (1)
$
173,427

 
$
157,788

 
9.9


47

DILUTED INCOME PER COMMON SHARE RECONCILIATION:
 
 
 
 
 
 
As reported
$
7.83

 
$
10.08

 
(22.3
)
 
  After-tax adjustments:
 
 
 
 
 
 
Catastrophic events
0.20

 
0.45

 
 
 
(Gain) loss on real estate and dealership transactions
(0.95
)
 
0.03

 
 
 
Severance costs
—

 
0.01

 
 
 
Acquisition costs including related tax impact
—

 
0.01

 
 
 
Legal settlements
0.21

 
(0.03
)
 
 
 
Non-cash asset impairment
1.65

 
0.59

 
 
 
Allowance for uncertain tax positions
—

 
0.04

 
 
 
Tax rate changes
(0.03
)
 
(3.45
)
 
 
 
Adjusted diluted income per share (1)
$
8.91

 
$
7.73

 
15.3

FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
As reported
$
467,453

 
$
429,002

 
9.0

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
466,378

 
$
435,552

 
7.1

TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
11,601,358

 
$
11,123,721

 
4.3

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Revenues (1)
$
11,600,283

 
$
11,130,271

 
4.2

TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,725,093

 
$
1,645,509

 
4.8

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Gross Profit (1)
$
1,724,018

 
$
1,652,059

 
4.4

SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,273,057

 
$
1,226,195

 
3.8

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(6,417
)
 
(8,792
)
 
 
 
Gain (loss) on real estate and dealership transactions
25,186

 
(798
)
 
 
 
Severance costs
—

 
(475
)
 
 
 
Acquisition costs
—

 
(288
)
 
 
 
Legal settlements
(4,955
)
 
1,113

 
 
 
Adjusted SG&A (1)
$
1,286,871

 
$
1,216,955

 
5.7

TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
14.9

 
14.8

 
 
 
Adjusted (1)
14.9

 
14.8

 
 
FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,468

 
$
1,420

 
3.4

 
Adjusted (1)
$
1,464

 
$
1,442

 
1.5

SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.0

 
11.0

 
 
 
Adjusted (1)
11.1

 
10.9

 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
73.8

 
74.5

 
 
 
Adjusted (1)
74.6

 
73.7

 
 
OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
2.9

 
3.1

 
 
 
Adjusted (1), (2)
3.2

 
3.4

 
 

48

PRETAX MARGIN %:
 
 
 
 
 
 
Unadjusted
1.8

 
2.0

 
 
 
Adjusted (1), (2)
2.0

 
2.3

 
 
SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
As reported
$
446,148

 
$
423,801

 
5.3

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
445,073

 
$
430,351

 
3.4

SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
As reported
$
10,916,787

 
$
10,993,532

 
(0.7
)
 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Revenues (1)
$
10,915,712

 
$
11,000,082

 
(0.8
)
SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,643,882

 
$
1,627,047

 
1.0

 
  Pre-tax adjustments:
 
 
 
 
 
 
Catastrophic events
(1,075
)
 
6,550

 
 
 
Adjusted Total Gross Profit (1)
$
1,642,807

 
$
1,633,597

 
0.6

SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
As reported
$
1,224,480

 
$
1,209,171

 
1.3

 
  Pre-tax adjustments:


 


 
 
 
Catastrophic events
(6,417
)
 
(8,792
)
 
 
 
Gain (loss) on real estate and dealership transactions
2,372

 
(798
)
 
 
 
Severance costs
—

 
(475
)
 
 
 
Acquisition costs
—

 
(288
)
 
 
 
Legal settlements
(4,220
)
 
1,113

 
 
 
Adjusted Same Store SG&A (1)
$
1,216,215

 
$
1,199,931

 
1.4

SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
Unadjusted
15.1

 
14.8

 
 
 
Adjusted (1)
15.0

 
14.9

 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
Unadjusted
$
1,493

 
$
1,418

 
5.3

 
Adjusted (1)
$
1,490

 
$
1,440

 
3.5

SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
Unadjusted
11.2

 
11.0

 
 
 
Adjusted (1)
11.1

 
10.9

 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
Unadjusted
74.5

 
74.3

 
 
 
Adjusted (1)
74.0

 
73.5

 
 
SAME STORE OPERATING MARGIN %:
 
 
 
 
 
 
Unadjusted
2.9

 
3.1

 
 
 
Adjusted (1), (3)
3.3

 
3.4

 
 

(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
(2) Excludes the impact of Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $43,883 for the twelve months ended December 31, 2018 and $19,506 for twelve months ended December 31, 2017.
(3) Excludes the impact of Same Store Revenues and SG&A reconciling items above, as well as non-cash asset impairment charges of $42,639 for the twelve months ended December 31, 2018 and $17,778 for the twelve months ended December 31, 2017.


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