United States United Kingdom Brazil
2018 First Quarter Financial Results & Overview
April 26, 2018
www.group1auto.comwww.group1auto.com
Forward Looking Statement
This presentation contains "forward-looking statements“ within the meaning of the Private Securities Litigation Reform
Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. Any
such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositionsand the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We use non-generally accepted accounting principles (“non-GAAP”) financial measures in this presentation. Our reconciliation of non-GAAP financial measures to comparable GAAP measures can be found in the Appendix to this presentation. These non-GAAP measures should not be considered an alternative to GAAP financial measures. 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.
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1Q18 Summary
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§ The company announced strategic initiatives related to used vehiclesand aftersales that began implementation in 1Q18 as follows:
Ø Val-u-Line brand of used vehicles; andØ Flexible work schedules and revised pay plans aimed at increasing service
department employee retention.
§ U.S. same-store increase of 7.7% in used retail units and 2.4% in newunits.
§ The strategic initiatives investment added ~$3 million of cost in thequarter.
§ One-time $500 employee bonus paid to tenured, non-managerial U.S.dealership employees added $3 million of cost.
§ Consolidated tax rate improved to 22.4%, largely as a result of thedecrease in the U.S. corporate rate from 35% to 21%.
§ Acquired 11 franchises that will generate approximately $360 million inannual revenues.
1Q 2018 Summary
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United States United Kingdom Brazil
Company Overview
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§ International, Fortune 500 companywith Market Cap of $1.3 Billion(period ended March 31, 2018)
§ Third largest dealership group in theU.S. retailing over 300,000 new andused vehicles annually
§ Committed senior managementteam with +230 years of automotiveretailing and OEM experience
§ Unlike most other automotiveretailers, Group 1 has no majorcontrolling shareholder or owner
§ Well positioned for growth
Revenue ($mm)
What Sets Group 1 Apart?
Adj. EPS Growth ($)
Top 10 U.S. auto retailers by revenue ($mm, FY 2017)
Source: Automotive News, 2017 Top 150 Dealership Groups, Crain Communications Inc. *Publicly Held; ‡Figures include data for dealerships outside the United States
$21,535 $21,387
$11,124 $10,087 $9,867$8,580
$6,457$5,135 $4,588 $3,033
AutoNationInc.*
Penske Automotive
Group Inc.*‡
GPI Lithia MotorsInc.*
SonicAutomotive
Inc.*
HendrickAutomotive
Group
AsburyAutomotiveGroup Inc.*
Larry H.Miller
Dealerships
Ken GarffAutomotive
Group
PrimeAutomotive
Group
6
$4.53 $4.96 $5.87$6.87
$7.42 $7.73
2012 2013 2014 2015 2016 2017
3 $4.96 $5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5$5.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8.8777777777777777777777777777777777777777777777777777777777777777$6.87
$7.7
‡
$8,919
$9,938 $10,633 $10,888 $11,124 $11,465
2013 2014 2015 2016 2017 LTM Mar-18
,9,9,9,9,9,9,9,9,9191919191919191919
$9,938
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Geographic Footprint
7
U.K.
England:§ 47 Dealerships§ 25% of NV Unit
Sales
Folsom Lake (1)Folso
Los Angeles Metro (2)Los A
San Diego (4)San D
HoustonMetro(17)
Tulsa (4)
Lubbock (6)Shreveport (1)
New Orleans (3)
Beaumont (6)
Atlanta (2)
Mobile (2)Gulfport (3)
Hilton Head (1)
Pensacola / Panama City (3)
Annapolis (2)
New Hampshire (3)
Boston Metro (5)
Rock Hill (1)
PensaPensa
Columbus (4)
Kansas City (4)
Atlantic City (4)
BRAZIL
Mato Grosso do Sul, Paraná, São Paulo, and Santa Catarina§ 17 Dealerships§ 5% of NV Unit
Sales
UNITED STATES – 15 States 117 Dealerships
70% of NV Unit Sales
Dallas Metro (10)
Amarillo (1)
Austin (6)
San Antonio (3)
Oklahoma City (9)
El Paso (5)
*As of April 26, 2018
WORLDWIDE:
§ 181 Dealerships
§ 239 Franchises
§ 48 Collision Centers
§ 32 Brands
Miami (1)
Santa Fe (1) Fe (1)
Albuquerque(1)Albuquerquuerqu Augusta (1)
Columbia (1)
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Geographic Diversity
8
*May not add to 100% due to rounding.
Brazil 5%
U.K. 25%
U.S.70%
New Vehicle Unit Sales
Geographic Diversity - 1Q18(New Vehicle Unit Sales)
TX50%
CA9%
OK9%
MA7%
GA6%
FL4%
NH3%
LA3%
SC2%
NJ2%
KS2%
MS2%
AL1%
MD & NM <1%
United States - 1Q18
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Geographic Diversity – Texas
Texas – 1Q18
9
Texas 35%
Houston16%
Dallas6%
Austin5%
Lubbock-Amarillo
3%
Beaumont2%
El Paso2%
San Antonio1%
Brazil 5%
U.K. 25%
U.S.70%
New Vehicle Unit Sales
Geographic Diversity - 1Q18(New Vehicle Unit Sales)
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Brand Mix – 1Q18*(New Vehicle Unit Sales)
The Company’s brand
diversity allows it to reduce the risk of
changing consumer preferences
Well-Balanced Brand Portfolio
10
*May not add to 100% due to rounding.
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Total Company Parts & Service Gross Profit Covers ≈95% of
Total Company Fixed Costs and Parts & Service Selling Expenses
Business Mix Comp – 1Q18
United KingdomGross ProfitRevenue
Brazil TOTALGross ProfitRevenue Gross ProfitRevenue
United StatesGross ProfitRevenue
52%
16%
54%
26%
62%
29%
53%
17%
30%
10%
36%
12%
25%
13%
31%
11%
14%
45%
8%
42%
11%
43%
12%
45%
4%
29%
2%20%
2%
15%
4%
27%
New Vehicles Used Vehicles Parts & Service Finance & Insurance
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New vehicle revenue ($mm)
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New vehicle gross profit per retail unit
New Vehicles Overview
U.S. new vehicle truck mix U.S. New Vehicle total profit per retail unit with F&I (YoY growth)
($ millions)
$5,225
$5,742 $6,001 $6,046 $6,158
$6,334
2013 2014 2015 2016 2017 LTMMar-18
$5,225
$5,742
$1,862
$1,597
$2,039
$1,808
$1,853
$1,771
$1,829
$1,831
U.S.
U.K.
Brazil
Total
1Q18
1Q17
*Constant Exchange Rate for 1Q18
$1,783*
$1,894*
$1,570*
46%48%
51%
56%
61%64%
2013 2014 2015 2016 2017 2018
$51
$314 $258
$407
$246
$159
$254
$120 $1401.5%
9.7%8.0%
11.9%
7.2%
4.5%
7.3%
3.1%3.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
$0$50
$100$150$200$250$300$350$400
($) NV Total PRU YoY Growth (%) NV Total PRU YoY Growth
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Used vehicle revenue ($mm) Retail used vehicle gross profit per retail unit
Used Vehicle Overview
12.8 14.4 15.4 16.4 17.4
38.8 40.5 42.038.8 39.4
2011 2012 2013 2014 2015
New Vehicle Units Used Vehicle Units
Used market size1 (units in millions) Used market share1
37%
32%
29%
2%
Franchised Dealers
Independent Dealers
Private Party
CarMax
1 Source: WardsAuto Group “U.S. Market Used Vehicle Sales” Report, 2015
$2,372 $2,704
$3,036 $3,160 $3,199 $3,319
2013 2014 2015 2016 2017 LTMMar-18
Wholesale Retail
,372
$1,201
$1,354
$1,093
$1,226
$1,426
$1,602
$968
$1,522
Total
Brazil
UK
US1Q18
1Q17
*Constant Exchange Rate for 1Q18
$1,398*
$1,176*
$972*
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§ Introduction of Val-U-Line, a proprietary brand for older model, higher mileagepre-owned vehicles
§ Expansion of used vehicle sales within existing facility footprints across U.S.non-luxury & some luxury locations
§ Implementation of an all-new internal online buying center
§ Upgrade of internal auction capability and a new transportation infrastructure
Group 1 expects the Val-U-Line brand to capitalize on the Company’s scale, provide
incremental retail volume and grow to represent at least 10 percent of the Company’s used car business, which has historically been approximately 4 percent.
U.S. 1Q18 used vehicle results were as follows:
§ 7.7% same store increase in retail units and 7.6% decrease in wholesale units
Ø Significant shift from wholesale to retail sales in order to maximize front-end and F&I grossprofit opportunities
§ 9% of retail unit sales were Val-u-Line vehicles versus a 4% historical average
Strategic Initiatives: Used Vehicles
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§ The amount of tax due on a vehicle purchase depends on:
Ø Price (cash or financed amount) of the car to be purchased*
Ø Value of a trade-in vehicle, if applicable
Ø State’s sales tax policies
§ In the United Sates, 40 states feature a tax credit on the value of a trade-invehicle, which applies to 12 of the 15 states in which the Companyoperates.
§ Example of “with versus without trade-in” impact on vehicle purchase cost:
15
Trade-In Tax Impact
*In many states, sales tax is not applied to a lease and sales tax credits are not applied to trade-in’s associated with a new car lease.
VEHICLE PURCHASE EXAMPLE: WITH TRADE-IN WITHOUT TRADE-IN
Sales Price $40,000.00 $40,000.00
Trade-In Allowance $25,000.00 n/a
Taxable Amount $15,000.00 $40,000.00
Tax % 6.25% 6.25%
Tax Due $937.50 $2,500.00
COST (Vehicle + Tax): $40,937.50 $42,500.00
TAX IMPACT on NET DIFFERENCE of COST: $1,562.50
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P&S revenue and gross margin ($mm) 1Q18 P&S revenue ($mm)
§ Parts & service segment provides a stable base of free cash flow through economic cycles§ Using Customer Management Software (CMS) and technology to improve efficiencies and closing rates§ Enhancing customer touch points to improve retention / attacking points of defection§ Leveraging scale § Improving collision business§ Strategic emphasis on customer service is driving growth above sector average in this important segment§ Focused on adding human capacity—since March 31, 2017, the Company’s same store, net service advisor headcount has grown +17% in the U.S.
Same store revenue growth*
Parts & Service Overview
4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Customer Pay 6.0% 4.8% 2.3% 3.6% 4.3% 3.5% Warranty 6.9% 8.6% 15.9% 8.6% 8.4% 0.4% Wholesale 0.7% 0.6% 1.9% 6.5% 9.9% 9.9% Collision (incl. parts) 6.3% 4.2% 5.3% 1.9% 5.5% -1.8%
% Growth 5.1% 4.6% 5.3% 5.0% 6.5% 3.3%
* In constant currency, as reported.
Service Retention Trend
$1,011 $1,126 $1,186 $1,261 $1,338 $1,368
52.4% 52.5% 52.8% 54.1% 53.9% 53.7%
2013 2014 2015 2016 2017 LTM Mar-18
Revenue Gross margin
42% 57% 63%45%
21%20% 24%
21%23%
14% 21%14% 9% 13% 13%
U.S. U.K. Brazil Total
Customer pay Warranty Wholesale Collision (incl. parts)
57.4%
61.1%63.1%
65.2%67.1%
68.3% 69.0%
Sep-08 Jan-10 Apr-12 Jun-14 Feb-16 May-17 Dec-17
$285 $53 $12 $350
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§ Adjustment of service personnel compensation structure asfollows to address employee turnover, customer satisfaction, andto add capacity via expanded hours:
Ø Increase to fixed component of service advisor pay
Ø Creation of well-defined career path for advancement
Ø Launch of new, flexible work schedule featuring substantially more days offover the calendar year
Ø Implementation of an in-house Service Advisor University dedicated totraining the Company’s approximately 900 U.S. customer service personnel
§ The flexible work schedule has been implemented at 65 U.S.stores as of March 31, 2018
§ Employee retention rates have improved considerably
Ø Same store service advisor headcount has increased 10% from year-end
Strategic Initiatives: Aftersales
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§ Powertrains are constantly changing to meet CAFÉ requirements and stricter emissionrequirements.
§ Consumers have a wide variety of powertrains to choose from: Internal Combustion (ICE),Hybrid (ICE/EV), Plug-in Hybrid (PHEV), Electric (EV) and 48v Micro-Hybrids.
§ What do those changes mean to our service departments?
Ø According to Edmunds.com, the 5-year maintenance cost of a 2017 Nissan Leaf is $2,865; andthe 5-year maintenance cost of a 2017 Toyota Camry is $3,094, an immaterial difference.
Ø While we do not expect repair costs to materially change, over the next three generations, weexpect that the components of a repair will shift. Batteries, battery coolant, power units,electrically operated engine components and accessories will gradually replace the repairscurrently made to ICE vehicles.
Ø As vehicle complexity continues to increase, it becomes more difficult for do-it-yourself (“DIY”)
and independent service shops to compete against us.
18
New Technology Business Impact
2017 Toyota Camry5-year maintenance cost estimate: $3,094
2017 Nissan Leaf5-year maintenance cost estimate: $2,865
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F&I revenue ($mm) F&I gross profit per retail unit ($)
F&I profitability growth accomplished via focus on people and processes:
n Consolidation of lender base
n Consumer financing at pre-recessionlevels and full credit spectrum available
n Integration of compliance, training andbenchmarking to offer a consistent andtransparent experience for internal andexternal customers
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2014 2015 2016 2017 Consol. US UK Brazil
Finance 67% 67% 67% 65% 65% 72% 46% 35%
VSC 34% 32% 32% 32% 32% 43% 3% 0%
Gap Ins. 24% 27% 28% 29% 29% 29% 34% 0%
Maintenance 9% 10% 11% 12% 11% 16% 0% 0%
Sealant 18% 21% 22% 24% 25% 25% 28% 0%
Gross Profit PRU $1,324 $1,368 $1,397 $1,442 $1,451 $1,718 $780 $597
F&I Penetration Rates (Actual)
2017
Finance & Insurance Overview
F&I gross penetration ($)
($ £ and R$)
$311 $367
$409 $421 $429 $444
2013 2014 2015 2016 2017 LTMMar-18
$311
£394 £454 £482 £533 £562 £560 R$ 914
R$ 1,200 R$ 1,302R$ 1,567
R$ 2,154 R$ 1,939
$1,371 $1,468 $1,525 $1,599 $1,676
$1,718
200
700
1,200
1,700
2,200
2013 2014 2015 2016 2017 YTDMar-18
U.K. Only BRL Only U.S. Only
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Consolidated U.S. Used Vehicle Profitability ($)
*Adjusted, see appendix for GAAP reconciliation.
FULL YEAR RESULTS
$1,637 $1,613 $1,601 $1,595 $1,611 $1,637 $1,682 $1,705 $1,778 $1,701 $1,779 $1,848 $1,851 $1,880 $1,842 $1,928
$1,708 $1,611 $1,629 $1,824 $1,691 $1,758 $1,857 $1,783 $2,049 $1,861 $1,862 $1,851 $1,891 $2,067 $1,921 $1,853
$3,345 $3,225 $3,230 $3,419 $3,301 $3,395 $3,539 $3,488$3,826
$3,562 $3,641 $3,698 $3,742 $3,947 $3,764 $3,781
1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18
NV F&I PRU NV FGP PRU
$1,415 $1,427 $1,394 $1,402 $1,409 $1,480 $1,503 $1,439 $1,472 $1,474 $1,480 $1,493 $1,434 $1,456 $1,465 $1,498
$1,613 $1,502 $1,484 $1,398 $1,498 $1,620 $1,496 $1,441 $1,322 $1,472 $1,522 $1,456 $1,443 $1,291 $1,429 $1,226
$3,028 $2,929 $2,878 $2,800 $2,907 $3,100 $2,999 $2,880 $2,794 $2,946 $3,002 $2,949 $2,877 $2,747 $2,894 $2,724
1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18
UV Rtl F&I PRU UV RTL FGP PRU FULL YEAR RESULTS
U.S. Total Vehicle ProfitabilityConsolidated U.S. New Vehicle Profitability ($)
Group 1 has delivered nine straight quarters with NV total gross profit PRU YoY growth!
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§ On December 22, 2017, the U.S. government enacted comprehensivetax legislation referred to as the Tax Cuts & Jobs Act (the “Tax Act”).
§ Based on components of this legislation that decreased the U.S.federal corporate tax rate from 35 percent to 21 percent, theCompany estimates this change will:
Ø Reduce its effective tax rate from approximately 36 percent to arange of 23-24 percent;
Ø Improve annual cash flow by about $20 million; and
Ø Boost EPS by mid-to-high-teen percentage points.
§ For 1Q18, the Company benefitted by $5.7 million of net income and$0.27 of earnings per share.
21
Tax Reform Impact
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Financial Overview
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Consolidated Financial Results
Financial Results - Consolidated($ in millions, except per share amounts)
1Q18 1Q17 Change C.C. 2
Revenues 2,860.0$ 2,518.8$ 13.5% 10.8%
Gross Profit 419.8$ 383.5$ 9.4% 7.5%
SG&A as a % of Gross Profit 77.3% 75.6% 170
Adj. SG&A as a % of Gross Profit (1) 77.3% 76.0% 130
Operating Margin 2.8% 3.2% -40
Adjusted Operating Margin (1) 2.8% 3.1% -30
EBITDA 81.3$ 81.8$ (0.5)$
Adjusted EBITDA (1) 81.3$ 80.0$ 1.3$
Total Interest Expense 32.9$ 28.9$ 4.0$
Net Income 35.8$ 33.9$ 5.5%
Adjusted Net Income (1)
35.8$ 32.8$ 9.2%
Diluted EPCS 1.70$ 1.58$ 7.6%
Adjusted Diluted EPCS (1)
1.70$ 1.53$ 11.1%
(1) See appendix for GAAP reconciliation
(2) Constant currency basis
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Financial Results by Segment
Financial Results - U.S.($ in millions)
1Q18 1Q17 ChangeRevenues 2,088.5$ 1,967.7$ 6.1%
Gross Profit 335.7$ 320.6$ 4.7%
SG&A as a % of Gross Profit 75.4% 73.7% 170
Adj. SG&A as a % of Gross Profit (1) 75.4% 74.3% 110
Operating Margin 3.3% 3.7% -40
Adusted Operating Margin (1) 3.3% 3.6% -30
Total Interest Expense 29.4$ 27.2$ 2.2$ Pretax Margin 1.9% 2.3% -40
Adjusted Pretax Margin (1) 1.9% 2.2% -30
(1) See appendix for GAAP reconciliation
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Financial Results by Segment
Financial Results - U.K.($ in millions)
1Q18 1Q17 Change C.C. 2
Revenues 660.5$ 450.3$ 46.7% 30.3%
Gross Profit 71.5$ 50.3$ 42.1% 26.2%
SG&A as a % of Gross Profit 83.4% 82.8% 60Operating Margin 1.3% 1.6% -30Total Interest Expense 3.0$ 1.6$ 1.4$ Pretax Margin 0.9% 1.2% -30
Financial Results - Brazil($ in millions)
1Q18 1Q17 Change C.C. 2
Revenues 111.0$ 100.8$ 10.1% 13.9%
Gross Profit 12.6$ 12.6$ 0.0% 3.4%
SG&A as a % of Gross Profit 93.5% 94.1% -60Operating Margin 0.4% 0.4% 0Total Interest Expense 0.5$ 0.2$ 0.3$ Pretax Margin -0.1% 0.2% -30
(2) Constant currency basis
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Same Store Financial Results
Same Store Financial Results - Consolidated$ in thousands
3/31/2018 3/31/2017 Change C.C. 1
Revenues:New vehicle retail 1,407,514$ 1,333,038$ 5.6% 3.5%Used vehicle retail 724,164 658,552 10.0% 7.7%Used vehicle wholesale 92,694 104,046 -10.9% -14.6%
Total used 816,858$ 762,598$ 7.1% 4.6%Parts and service 333,488 318,703 4.6% 3.3%Finance and insurance 106,658 96,154 10.9% 9.8%
Total 2,664,518$ 2,510,493$ 6.1% 4.1%
Gross Profit 397,559$ 382,314$ 4.0% 2.5%
1 Constant currency basis
Three Months Ended
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Balance Sheet
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Summary Balance Sheet
Summary Balance Sheet$ in thousands
As of As of3/31/2018 12/31/2017
Cash and cash equivalents (1)
$33,090 $28,787
Contracts In Transit and vehicle receivables, net $297,885 $306,433
Inventories, net $1,804,177 $1,763,292
Total current assets $2,413,198 $2,329,186
Total assets $5,058,478 $4,871,065
Floorplan notes payable $1,620,056 $1,637,878
Offset account related to credit facility (1)
($98,359) ($109,047)
Other current liabilities $745,461 $669,656
Total current liabilities $2,267,158 $2,198,487
Long-Term Debt, net of
current maturities $1,376,770 $1,318,184
Total stockholder's equity $1,178,079 $1,124,282
(1) Available cash of $131.4 million is total of cash and cash equivalents plus the U.S. offset accounts. The U.S. offset accounts are amount of excess cash that are
used to paydow n floorplan but can be immediately redraw n against inventory.
www.group1auto.com 29
Debt Maturity
Debt Maturity Slide
(in millions) Maturity Date Actual
Available Liquidity
Funding Capacity
Cash and cash equivalents 33.1$ 33.1$
Short-Term Debt
Inventory Financing - Credit Facility (1) 2021 1,087.0$ 74.4$ 1,440.0$
Inventory Financing - Other (2) 434.7 24.0
Current Maturities - Long-Term Debt 58.2
1,579.9$ 98.4$ 1,440.0$
Available Cash 131.4$ (4)
Long-Term Debt
Acquisition Line of Credit (1,3) 2021 28.0 307.5 360.0
5.00% Senior Unsecured Notes 2022 542.5
(Face: $550.0 Million)
5.25% Senior Unsecured Notes 2023 296.3
(Face: $300.0 Million)
Real Estate 2018 - 2034 482.6
Other 2018 - 2034 27.4
Total Long-Term Debt 1,376.8$
Total Debt 2,956.7$
438.9$ 1,800.0$
1)
2)
3)
4) Available cash of $131.4 million is total of cash and cash equivalents plus the U.S. offset accounts. The U.S. offset accounts are amount of excess cash that are used to
paydow n floorplan but can be immediately redraw n against inventory.
As of March 31, 2018
The capacity under the f loorplan and acquisition tranches of our credit facility can be redesignated w ithin the overall $1.8 billion commitment. Further, the borrow ings under
the acquisition tranche may be limited from time to time based upon certain debt covenants.
Borrow ings for new , used, and rental vehicle f inancing not associated w ith the Company ’s domestic syndicated credit facility.
The available liquidity balance at March 31, 2018 considers the $25.0 million of letters of credit outstanding.
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§ Primary exposure is short-term interest rate changes; key exposure is one-month LIBOR
§ Group 1 has mitigated the majority of its risk exposure for rising interest rates through acombination of the swaps, fixed rate debt, and manufacturer floorplan assistance
§ Manufacturer floorplan assistance offsets a portion of interest rate impact:
Ø As interest rates go up, typically manufactures offer additional interest assistance to offset the variance
Ø 83.5% of variable inventory financing is eligible for floorplan assistance as used vehicle; rental andsome foreign financing are not eligible for floorplan assistance
Ø Interest assistance is recognized in new vehicle gross profit, not in interest expense
Actual Variable %
Vehicle Financing $1,521.7 92.4%
Real Estate & Other Debt(3) $596.2 48.4%
Senior Notes (1) $850.0 0.00%
SWAPS (2)(3) $750.0 100%
(1) Face Value(2) SWAPS range from $100-$850 million through 2030, see following slide for more details.(3) Percentage adjusted for $75M of real estate interest rate SWAPS. SWAPS exclude real estate interest rate SWAPS.
Interest Rate Variability
30
www.group1auto.comwww.group1auto.com 31
INTEREST RATE SWAP LAYERS
$'s in millions
2015 2016 2017 2018 2019 2020 2021 2022-2025 2026-2030
Average Swap Balance $550 $550 $750 $750 $850 $500 $375 $125 $100
Interest Expense $13.2 $12.7 $11.8 $6.5 - - - - -
Average Interest Rate 2.57% 2.76% 2.62% 2.68% 2.33% 2.26% 1.78% 1.81% 1.85%
SWAPS: Interest Expense Impact
Note: Amortizing SWAPS associated with specific mortgages are excluded.
2018 interest expense projection reflects three 25-basis-point increases to the LIBOR rate (March, June, and December 2018).
*
*
Page 16 of 38
www.group1auto.com
Growth Outlook
www.group1auto.com
Source: LMC Automotive – U.S. New Vehicle Unit Sales Actuals*Group 1 Estimate for 2018
United States(New Vehicle Unit Sales, in millions)
33
U.S. SAAR
15.215.6
17.017.4 17.2
16.8 16.7 16.9 17.016.6
16.2
13.2
10.4
11.6
12.8
14.5
15.6
16.5
17.4 17.517.2
16.8*
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Page 17 of 38
www.group1auto.comwww.group1auto.com
Adjusted Operating Cash Flow(1)
34
($mm)
(1) See appendix for GAAP reconciliation
$152$159
$203 $207
$244
$272$285
$100
$120
$140
$160
$180
$200
$220
$240
$260
$280
$300
2011 2012 2013 2014 2015 2016 2017
www.group1auto.comwww.group1auto.com
§ Acquisitions that clear return hurdlesØ 10-15% after-tax discounted cash flows
§ Return cash to stockholdersØ Quarterly Cash Dividend
§ $0.26 per share
Ø 2018 Share Repurchases:§ 135,605 shares at average price of $67.83
Ø Repurchase Authorization:§ $40.4 million remains under Board authorization of $75 million
Ø Tax Reform:§ Estimated to provide over $20 million of additional annual cash flow
Cash Prioritization
35Page 18 of 38
www.group1auto.comwww.group1auto.com
2Q
$35 $65 $260 $45
$30 $30 $330 $40 $55
$575
$80 $160 $100
Acquisition Strategy
36
§ Group 1 is well positioned to take advantage of acquisition opportunities and grow scale in existingmarkets (U.S., U.K., and Brazil)
§ The Company targets acquisitions that clear return hurdles (10-15% after-tax discounted cash flow)
Ac
qu
isit
ion
s(E
sti
ma
ted
An
nu
al R
eve
nu
es
)($
mm
)
2015 $340 million
Audi
(TX)
Audi
(FL)
3Q2Q1Q
Mercedes-Benz / Sprinter / Smart
(TX)
20161Q
Audi, BMW / MINI, Jaguar, SEAT, Skoda, VW
(UK)
$20
2Q
BMW, Land
Rover / Jaguar,
Toyota
(Brazil)
$660 million $65
Ford
(UK)
4Q
20172Q
$490 million
BMW
Motorcycles
(Brazil)
Ford
(UK)Nissan
(TX)
1Q 3Q
$5Jaguar, Land Rover, VW, Skoda, Toyota, Vauxhall, Kia
(UK)
Jaguar /
Land Rover
(New Mexico)
*As of April 26, 2018
Audi
(TX)
1Q$405 million YTD*
Land
Rover
(UK)
Audi /
Subaru
(TX)
2018Mercedes-Benz / Smart
(UK)
Toyota
(Brazil)
www.group1auto.comwww.group1auto.com
24,885
23,152
21,170
20,425 20,307
19,000
20,000
21,000
22,000
23,000
24,000
25,000
2014 2015 2016 2017 1Q18
Diluted Common Share Count
37
GPI Weighted Average Common Shares (in thousands)
24,885
23,152
21,170
FY14: In 2Q14, GPI repurchased 80% of its 3% Convertible Notes, reducing share count by approximately 1.9 million. In 3Q14, GPI repurchased the remaining 3% Convertible Notes and extinguished all of the 2.25% Convertible Notes, reducing share count by approximately 800,000.
FY15: GPI repurchased approximately 1.2 million shares.
FY16: GPI repurchased 2.3 million shares representing a 10 percent reduction from the common share count as of December 31, 2015.
FY17: During 2017, GPI repurchased 3% of its float.
1Q18: GPI repurchased 135,605 shares for a total of $9.2 million. As of March 31, 2018, the Company’s outstanding common share count is ≈20.3 million and
$40.4 million remains available under the Company’s prior common stock
share repurchase authorization.
Page 19 of 38
www.group1auto.comwww.group1auto.com
Dividends
$ in millions $ Per Share
38
§ During 1Q17, 2Q17, and 3Q17, the Company paid quarterly cash dividends of $0.24 per share.§ During 4Q17, the Company paid quarterly cash dividends of $0.25 per share.§ During 1Q18, the Company paid quarterly cash dividends of $0.26 per share.
$11
$13
$16$17
$20 $20 $20
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2011 2012 2013 2014 2015 2016 2017
Dividends Paid ($mm)
Dividends Per Share
www.group1auto.com 39
($ in millions)
Capital Expenditures
($ in millions)
$16 $20 $22 $22 $23 $24 $27 $50 $54 $65 $68
$70 $53
$29 $40
$62 $69
$95
$107 $101 $98
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Maintenance CapEx
Capital Expenditures
Depreciation & Amortization Expense
Page 20 of 38
www.group1auto.com
§ GPI is shifting toward owning its real estate:
Ø Control of dealership real estate is a strong strategicasset
Ø Ownership means better flexibility and lower cost
Ø The Company looks for opportunistic real estateacquisitions in strategic locations
§ As of March 31, 2018, the Company owns approximately$1.1 billion of real estate (54% of dealership locations)financed through approximately $470 million of mortgagedebt
§ The Company has options to purchase six additionaldealership properties through 2019.
40
Leased vs. Owned Properties
Dealership property breakdown by region (as of March 31, 2018)
Dealerships
Geographic Location Owned Leased
United States 76 41
United Kingdom 20 27
Brazil 2 14
Total 98 82
Real Estate Strategy
46% 47% 46% 53% 56% 54%
54% 53% 54%47% 44% 46%
150 152 159173 175 180
2013 2014 2015 2016 2017 Mar-18
Leased Owned
www.group1auto.com
Conclusion
Page 21 of 38
www.group1auto.comwww.group1auto.com
§ Well-balanced portfolio (geography, business mix and brands)
§ Profitability of different business units through the cycle
Ø Model proved itself during recession
§ Streamlined business -- generating cash
§ Will significantly benefit from U.S. tax reform legislation
§ Strong balance sheet
§ Opportunistic capital allocation
§ Operational growth and leverage
Ø Opportunity to drive growth in used vehicle and Parts & Service with processimprovements in all markets
Ø New Strategic initiatives launched in the U.S. aimed at growing used vehicles andincreasing aftersales capacity
Ø Finance & Insurance initiatives should drive further growth in the U.K. and Brazil
Ø Continued leverage opportunities as gross profit increases
§ Experienced, successful and driven management team
Why GPI?
42
www.group1auto.com
CORE VALUES
Integrity We conduct ourselves with the highest level of ethics both personally and professionally when we sell to and perform service for our customers without compromising our honesty
Transparency We promote open and honest communication between each other and our customers
Professionalism We set our standards high so that we can exceed expectations and strive for perfection in everything we do
Teamwork We put the interest of the group first, before our individual interests, as we know that success only comes when we work together
Page 22 of 38
United States United Kingdom Brazil
Appendix
www.group1auto.comwww.group1auto.com
Earl J. Hesterberg – President and Chief Executive Officer and Director(April 2005)
§ 35+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: Ford Motor Company; Ford of Europe; Gulf States Toyota; Nissan Motor Corporation in U.S.A.; Nissan Europe
Daryl Kenningham – President, U.S. Operations(July 2011)
§ 35+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: Ascent Automotive; Gulf States Toyota; Nissan Motor Corporation in U.S.A. and Japan
John C. Rickel – Senior Vice President and Chief Financial Officer(December 2005)
§ 30+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: Ford Motor Company; Ford Europe
Frank Grese Jr. – Senior Vice President, Human Resources, Training and Operations Support(December 2004)
§ 40+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: Ford Motor Company; Nissan Motor Corporation in U.S.A.;AutoNation; Van Tuyl
Darryl M. Burman – Senior Vice President and General Counsel(December 2006)
§ 20+ Years Industry Experience
§ Automotive-related Experience: Mergers and Acquisitions; Corporate Finance; Employment and Securities Law – Epstein Becker Green Wickliff & Hall, P.C.; Fant & Burman, L.L.P.
Peter C. DeLongchamps – Senior Vice President, Financial Services and Manufacturer Relations(July 2004)
§ 30+ Years Industry Experience
§ Manufacturer and Automotive Retailing Experience: General Motors Corporation; BMW of North America; Advantage BMW in Houston
Michael Jones – Senior Vice President, Aftersales(April 2007)
§ 40+ Years Industry Experience
§ Automotive-related Experience: Fixed Operations - Asbury Automotive; David McDavid Automotive Group; Ryan Automotive Group
45
Operating Management Team - Corporate
www.group1auto.com
$0
$5
$10
$15
$20
$25
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
GPI Adj. income from continuing operations ($mm)
8
9
10
11
12
13
14
15
16
17U.S. Light Vehicle SAAR (mm)
Profitable Throughout Downturn
1 Total debt + 8x rent expense* See appendix for reconciliations
($mm) 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Quarterly Revenue $1,134 $1,020 $1,109 $1,247 $1,150 $1,191 $1,419 $1,462 $1,438 $1,409 $1,474 $1,570 $1,626
Quarterly Adjusted EBITDA* $16 $21 $31 $42 $29 $31 $41 $45 $37 $39 $55 $54 $51
Quarterly Adjusted EBIT* $10 $15 $24 $35 $23 $24 $34 $38 $31 $33 $48 $47 $44
Quarterly Adjusted Net Income* $1 $5 $10 $17 $10 $10 $18 $19 $15 $16 $25 $24 $22
LTM Adjusted EBITDAR* $183 $163 $149 $162 $174 $183 $194 $196 $205 $213 $225 $233 $247
Total Rent-Adj. Debt1 / Adj. EBITDAR* 5.7x 6.1x 6.4x 5.7x 5.3x 5.1x 4.8x 4.8x 4.7x 4.5x 4.2x 4.1x 3.9x
46
“Cash for clunkers”Collapse of Lehman, new vehicle unit sales declined 26%
Toyota recall
Japan earthquake and tsunami materially disrupt Toyota/Honda production and constrain dealer supply
($mm) (units in mm)
Page 24 of 38
www.group1auto.com
Brazil
www.group1auto.comwww.group1auto.com
BRAZIL
Sao Paulo
Parana
Mato Grosso do Sul
§ 17 Dealerships (22 Franchises):
§ BMW (5)
§ Honda (4)
§ Jaguar (3)
§ Land Rover (3)
§ Toyota (4)
§ MINI (2)
§ Mercedes-Benz (1)
Group 1 is aligned with growing brands in Brazil.
Brazil Locations
48
Mato Grosso do Sul Location§ Campo Grande
Paraná Locations§ Cascavel§ Curitiba§ Londrina§ Maringá
Santa Catarina Location§ Joinville
São Paulo Locations§ Santo Andre§ São Bernardo do Campo§ São Caetano do Sul§ São Jose dos Campos§ São Paulo§ Taubaté
Santa Catarina
*As of April 26, 2018
Page 25 of 38
www.group1auto.com
U.K.
www.group1auto.com 50
UNITED KINGDOM – England47 Dealerships (64 Franchises)
U.K. Locations
Watford (3)
Chelmsford (1)
Stansted (2)
Bedford
(1)
Farnborough (2)
Southend (2)Sout
(3)Watford (3) Chingford (1)
Bracknell (1)
Hindhead (1)
Worthing (1) Hailsham (1)
Harold Wood (1)
Hatfield (3)
Finchley Road (1)
Whetstone (1)
Borehamwood (1)
Kentish Town (1)
Watf
Guildford (1)
Newbury (1)
Basingstoke (1)BasinBasin
Reading (1)
Brighton (1) (1)(1)(1)(1) BrigBrigBrigBrigBrigBrigBrigBrigBrigBrigBrig
Couldson (1)
Bromley (1)(1)(1)(1)(1)(1)(1)(1) Dartford (2)
Maidstone (4)Maid
dson (1)
Sevenoaks (1)
Medway (1)
Sidcup (1)
Wokingham (1)
*As of April 26, 2018
Bury St.
Edmunds (1)Cambridge (2)CambCamb
LONDON
King’s Lynn (1)
Norwich (1)Peterborough (1)
LONDON
Page 26 of 38
United States United Kingdom Brazil
Reconciliations The following section contains reconciliations of data denoted within this presentation.
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($57)
$8
$10
$18
($2)
$8
$13
$19
$11
$15
$25
$21
$21
Pro
visio
n for
incom
e t
axes
10
11
(13)
(39)
66
10
(2)
58
12
69
15
13
13
Oth
er
inte
rest
expense,
net
10
99
97
87
77
67
78
89
9
Non-C
ash a
sset
impairm
ent
charg
es
- -
48
115
-
2 1
18
-
1 2
8 0
0 4
1
Mort
gage d
ebt
refin
ance c
harg
es
- -
- -
- 1
- -
- -
- -
- -
- -
(Gain
) Loss o
n r
eal esta
te a
nd d
eale
rship
tra
nsactions
- 1
0 -
1 (1
)
- 1
- 5
(1)
-
- -
- -
(Gain
) Loss o
f debt
redem
ption
(0)
-
(0)
(1
7)
(7
)
(1)
(1
)
- 4
-
- -
- -
- -
Seve
rance c
osts
- -
- -
- -
- -
- 1
- -
- -
- -
Legal sett
lem
ent
- -
- -
- -
- -
- -
- -
- -
- 1
Ad
just
ed
EB
IT$35
$38
$23
$10
$15
$24
$35
$23
$24
$34
$38
$31
$33
$48
$47
$44
Depre
cia
tion A
mort
ization e
xpense
6 6
7 7
6 6
7 6
6 7
7 7
6 7
7 7
Ad
just
ed
EB
ITD
A$41
$45
$29
$16
$21
$31
$42
$29
$31
$41
$45
$37
$39
$55
$54
$51
G&
A R
ent
Expense
14
13
13
13
13
13
13
13
13
13
13
13
12
12
12
12
Ad
just
ed
EB
ITD
AR
$54
$58
$42
$29
$34
$43
$55
$41
$43
$54
$57
$50
$51
$67
$66
$63
Th
ree
mo
nth
s e
nd
ed
,
Note
: O
ne t
ime c
harg
es a
re p
re-t
ax
52
Page 28 of 38
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De
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ar-
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Ju
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-09
De
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9M
ar-
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Ju
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0S
ep
-10
De
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0M
ar-
11
Ju
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1S
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-11
De
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Net
Incom
e($
57)
$8
$10
$18
($2)
$8
$13
$19
$11
$15
$25
$21
$21
Non-C
ash a
sset
impairm
ent
charg
es
67
- 1
0 12
- 1
1 5
0 0
2 0
Mort
gage d
ebt
refin
ance c
harg
es
- -
0 -
- -
- -
- -
- -
-
(Gain
) Loss o
n r
eal esta
te a
nd d
eale
rship
tra
nsactions
- 1
(1)
-
1 -
4 (1
)
- -
- -
-
(Gain
) Loss o
f debt
redem
ption
(9)
(4
)
(0)
(0
)
- 2
- -
- -
- -
-
Seve
rance c
osts
- -
- -
- -
0 -
- -
- -
-
Incom
e t
ax e
ffect
- -
- (2
)
- -
- -
(1)
- -
- -
Legal S
ett
lem
ent
- -
- -
- -
- -
- -
- -
1
Ad
just
ed
Ne
t In
co
me
$1
$5
$10
$17
$10
$10
$18
$19
$15
$16
$25
$24
$22
Th
ree
mo
nth
s e
nd
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,
53
Page 29 of 38
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54
Op
era
tin
g C
ash
Flo
w R
eco
ncilia
tio
n:
2017
2016
2015
2014
2013
2012
2011
Op
era
tin
g C
ash
Flo
w a
s R
ep
ort
ed
(G
AA
P)
198,9
25
$
384,8
57
141,0
47
198,2
88
52,3
72
(75,3
22)
199,3
16
Change in
flo
orp
lan n
ote
s p
aya
ble
-cre
dit
facili
ties,
exc
ludin
g flo
orp
lan o
ffset account and n
et acquis
ition a
nd
dis
positi
on
88,7
42
(113,1
16)
100,3
02
5,8
81
165,4
04
245,5
44
(1
3,3
50)
Change in
flo
orp
lan n
ote
s p
aya
ble
-manufa
ctu
rer
affili
ate
s
associa
ted w
ith n
et acquis
ition a
nd
dis
positi
on r
ela
ted a
ctiv
ity(3
,000)
-
3,0
00
2,9
70
(1
4,9
53)
(11,0
28)
(33,7
12)
Ad
juste
d O
pe
rati
ng
Cash
Flo
w (
No
n-G
AA
P)
284,6
67
271,7
41
244,3
49
207,1
39
202,8
23
159,1
94
152,2
54
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co
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ilia
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n o
f C
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ain
No
n-G
AA
P F
ina
nc
ial M
ea
su
res
(Un
au
dit
ed
, in
mil
lio
ns)
Page 30 of 38
EBITDA RECONCILIATION:
2018 2017
Net income 35.8$ 33.9$
Other interest expense, net (1)
18.8 17.0
Depreciation and amortization expense 16.3 13.6
Legal settlements - (1.8)
Income tax (benefit) expense 10.4 17.3
Adjusted EBITDA (2)
81.3$ 80.0$
(1)
(2)
May not foot due to rounding
Three Months Ended March 31,
Adjusted EBITDA is defined as income (loss) plus loss on redemption of long-term debt, other interest expense, net, depreciation and
amortization expense, non-cash asset impairment charges, acquisition costs, catastrophic events, net gain on real estate and dealership
transactions, severance, deal costs, legal settlements, foreign transaction tax, and income tax expense (less income tax benefit). While
Adjusted EBITDA should not be construed as a substitute for net income or as a better measure of liquidity than net cash provided by
operating activities, which are determined in accordance with accounting principles generally accepted in the United States of America
(“GAAP”), it is included in our discussion of earnings to provide additional information regarding the amount of cash our business is
generating with respect to our ability to meet future debt services, capital expenditures and working capital requirements. Adjusted
EBITDA should not be used as an indicator of our operating performance. Consistent with industry practices, our management utilizes
Adjusted EBITDA when valuing dealership operations. This measure may not be comparable to similarly titled measures reported by other
companies. The table above shows the calculation of Adjusted EBITDA and reconciles Adjusted EBITDA to the GAAP measurement
income (loss) for the periods presented in the table.
Excludes Floorplan interest expense
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited, in millions)
Page 31 of 38
NE
T I
NC
OM
E (
LO
SS
) R
EC
ON
CIL
IAT
ION
:T
hree M
on
ths
En
ded
:
06.3
0.1
209.3
0.1
212.3
1.1
203.3
1.1
306.3
0.1
309.3
0.1
312.3
1.1
303.3
1.1
406.3
0.1
409.3
0.1
412.3
1.1
403.3
1.1
5
As
report
ed
28,6
25
$
31,3
35
$
17,1
32
$
22,1
18
$
37,3
88
$
32,7
65
$
21,7
21
$
31,3
03
$
16,8
62
$
26,1
62
$
18,6
77
$
35,8
15
$
Aft
er-t
ax A
dju
stm
ents
(1) :
Non-c
ash a
sset
im
pai
rmen
t ch
arges
115
- 4,2
77
-
369
349
3,3
19
-
1,0
67
6,5
59
19,8
78
-
(Gai
n)
loss
on r
eal
esta
te a
nd d
eale
rship
tra
nsa
ctio
ns
(659)
-
(276)
(3
56)
(4
,785)
(2
30)
-
-
(3
16)
(8
,572)
1,5
50
-
(Gai
n)
loss
on r
epurc
has
e of
long-t
erm
deb
t-
--
--
- -
-
20,7
78
17,9
34
-
-
Inco
me
tax b
enef
it r
elat
ed t
o t
ax e
lect
ions
for
pri
or
per
iods
- -
- -
- -
- -
-
- -
-
Cat
astr
ophic
even
ts1,6
58
- 1,2
19
504
6,7
57
158
- -
1,0
39
671
- -
Sev
eran
ce c
ost
s -
- 548
-
- 454
237
-
- 388
385
-
Acq
uis
itio
n c
ost
s in
cludin
g r
elat
ed t
ax i
mpac
t-
- 1,1
11
6,9
68
-
(630)
-
-
-
- 188
-
All
ow
ance
for
cert
ain d
efer
red t
ax a
sset
s an
d u
nce
rtai
n t
ax p
osi
tions
- -
- -
- -
3,6
29
-
- -
- -
Leg
al s
ettl
emen
ts-
- -
-
-
--
-
274
- -
-
- -
- -
- -
- -
274
- -
-
Tax
rat
e ch
anges
- -
- -
- -
- -
- (3
,358)
-
-
29,7
39
$
31,3
35
$
24,0
11
$
29,2
34
$
39,7
29
$
32,8
66
$
28,9
06
$
31,3
03
$
39,9
78
$
39,7
84
$
40,6
78
$
35,8
15
$
AD
JU
ST
ED
NE
T I
NC
OM
E A
TT
RIB
UT
AB
LE
TO
DIL
UT
ED
CO
MM
ON
SH
AR
ES
RE
CO
NC
ILIA
TIO
N:
Adju
sted
net
inco
me
29,7
39
$
31,3
35
$
24,0
11
$
29,2
34
$
39,7
29
$
32,8
66
$
28,9
06
$
31,3
03
$
39,9
78
$
39,7
84
$
40,6
78
$
35,8
15
$
Les
s: A
dju
sted
ear
nin
gs
allo
cate
d t
o p
arti
cipat
ing s
ecuri
ties
1,6
37
1,6
41
1,0
66
1,2
33
1,6
92
1,3
24
1,0
57
1,1
56
1,4
56
1,5
20
1,5
29
1,3
88
Adju
sted
net
inco
me
avai
lable
to d
ilute
d c
om
mon s
har
es28,1
02
$
29,6
94
$
22,9
45
$
28,0
01
$
38,0
37
$
31,5
42
$
27,8
49
$
30,1
47
$
38,5
22
$
38,2
64
$
39,1
49
$
34,4
27
$
DIL
UT
ED
EA
RN
ING
S (
LO
SS
)
PE
R S
HA
RE
RE
CO
NC
ILIA
TIO
N:
Th
ree M
on
ths
En
ded
:
06.3
0.1
209.3
0.1
212.3
1.1
203.3
1.1
306.3
0.1
309.3
0.1
312.3
1.1
303.3
1.1
406.3
0.1
409.3
0.1
412.3
1.1
403.3
1.1
5
As
report
ed
1.2
0$
1.3
2$
0.7
0$
0.8
8$
1.4
3$
1.1
9$
0.8
1$
1.1
9$
0.6
2$
1.0
3$
0.7
7$
1.4
7$
A
fter
-tax
Adju
stm
ents
:
Non-c
ash a
sset
im
pai
rmen
t ch
arges
0.0
1
-
0.1
8
- 0.0
1
0.0
1
0.1
2
- 0.0
4
0.2
6
0.8
1
-
(Gai
n)
loss
on r
eal
esta
te a
nd d
eale
rship
tra
nsa
ctio
ns
(0.0
3)
-
(0.0
1)
(0
.01)
(0.1
8)
(0
.01)
-
-
(0
.01)
(0
.34)
0.0
6
-
(Gai
n)
loss
on r
epurc
has
e of
long-t
erm
deb
t-
- -
-
-
- -
-
0.7
6
0.7
1
-
-
Sev
eran
ce c
ost
s -
- 0.0
2
-
-
0.0
2
0.0
1
-
-
0.0
1
0.0
2
-
Acq
uis
itio
n c
ost
s in
cludin
g r
elat
ed t
ax i
mpac
t-
- 0.0
5
0.2
7
- (0
.02)
-
-
-
- 0.0
1
-
All
ow
ance
for
cert
ain d
efer
red t
ax a
sset
s an
d u
nce
rtai
n t
ax p
osi
tions
- -
-
-
- -
0.1
4
-
-
- -
-
Leg
al s
ettl
emen
ts-
- -
-
-
--
-
0.0
1
- -
-
- -
- -
- -
- -
0.0
1
- -
-
- -
- -
- -
- -
- (0
.13)
-
-
Adju
sted
dil
ute
d i
nco
me
per
shar
e (2
)1.2
5$
1.3
2$
0.9
9$
1.1
6$
1.5
2$
1.2
0$
1.0
8$
1.1
9$
1.4
7$
1.5
7$
1.6
7$
1.4
7$
Wei
ghte
d a
ver
age
dil
uti
ve
com
mon s
har
es o
uts
tandin
g22,5
13
22,4
58
23,2
44
24,1
13
24,9
80
26,3
42
25,7
92
25,4
28
26,2
42
24,4
32
23,4
66
23,4
46
Par
tici
pat
ing s
ecuri
ties
1,3
17
1,2
45
1,0
91
1,0
72
1,1
12
1,1
00
983
963
986
971
925
932
Tota
l w
eighte
d a
ver
age
shar
es o
uts
tandin
g23,8
30
23,7
03
24,3
35
25,1
85
26,0
92
27,4
42
26,7
75
26,3
91
27,2
28
25,4
03
24,3
91
24,3
78
(1)
(2
)
Grou
p 1
Au
tom
oti
ve,
Inc.
Recon
cil
iati
on
of
Certa
in N
on
-GA
AP
Fin
an
cia
l M
easu
res
(Un
au
dit
ed
, in
th
ou
san
ds)
Adju
sted
net
inco
me
(2)
Fore
ign d
efer
red i
nco
me
tax b
enef
it
Fore
ign d
efer
red i
nco
me
tax b
enef
it
Fore
ign t
ransa
ctio
n t
ax
Fore
ign t
ransa
ctio
n t
ax
Tax
rat
e ch
anges
Ref
er t
o s
epar
ate
reco
nci
liat
ions
of
cert
ain n
on-G
AA
P f
inan
cial
mea
sure
s w
ithin
the
resp
ecti
ve
quar
terl
y e
arnin
gs
rele
ase
sched
ule
s fo
r sp
ecif
ic t
ax b
enef
it o
r ta
x p
rovis
ion i
nfo
rmat
ion.
We
bel
ieve
that
thes
e ad
just
ed f
inan
cial
mea
sure
s ar
e re
levan
t an
d u
sefu
l to
inves
tors
bec
ause
they
pro
vid
e ad
dit
ional
info
rmat
ion r
egar
din
g t
he
per
form
ance
of
our
oper
atio
ns
and
impro
ve
per
iod-t
o-p
erio
d c
om
par
abil
ity.
Thes
e m
easu
res
are
not
mea
sure
s of
finan
cial
per
form
ance
under
GA
AP
. A
ccord
ingly
, th
ey s
hould
not
be
consi
der
ed a
s su
bst
itute
s fo
r th
eir
unad
just
ed c
ounte
rpar
ts,
whic
h a
re p
repar
ed i
n a
ccord
ance
wit
h G
AA
P.
Alt
hough w
e fi
nd t
hes
e non-G
AA
P r
esult
s use
ful
in e
val
uat
ing t
he
per
form
ance
of
our
busi
nes
s, o
ur
reli
ance
on
thes
e m
easu
res
is l
imit
ed b
ecau
se t
he
adju
stm
ents
oft
en h
ave
a m
ater
ial
impac
t on o
ur
finan
cial
sta
tem
ents
cal
cula
ted i
n a
ccord
ance
wit
h G
AA
P.
Ther
efore
, w
e ty
pic
ally
use
thes
e
adju
sted
num
ber
s in
conju
nct
ion w
ith o
ur
GA
AP
res
ult
s to
addre
ss t
hes
e li
mit
atio
ns.
Page 32 of 38
NE
T I
NC
OM
E (
LO
SS
) R
EC
ON
CIL
IAT
ION
:
As
report
ed
Aft
er-t
ax A
dju
stm
ents
(1) :
Non-c
ash a
sset
im
pai
rmen
t ch
arges
(Gai
n)
loss
on r
eal
esta
te a
nd d
eale
rship
tra
nsa
ctio
ns
(Gai
n)
loss
on r
epurc
has
e of
long-t
erm
deb
t
Inco
me
tax b
enef
it r
elat
ed t
o t
ax e
lect
ions
for
pri
or
per
iods
Cat
astr
ophic
even
ts
Sev
eran
ce c
ost
s
Acq
uis
itio
n c
ost
s in
cludin
g r
elat
ed t
ax i
mpac
t
All
ow
ance
for
cert
ain d
efer
red t
ax a
sset
s an
d u
nce
rtai
n t
ax p
osi
tions
Leg
al s
ettl
emen
ts
Tax
rat
e ch
anges
AD
JU
ST
ED
NE
T I
NC
OM
E A
TT
RIB
UT
AB
LE
TO
DIL
UT
ED
CO
MM
ON
SH
AR
ES
RE
CO
NC
ILIA
TIO
N:
Adju
sted
net
inco
me
Les
s: A
dju
sted
ear
nin
gs
allo
cate
d t
o p
arti
cipat
ing s
ecuri
ties
Adju
sted
net
inco
me
avai
lable
to d
ilute
d c
om
mon s
har
es
DIL
UT
ED
EA
RN
ING
S (
LO
SS
)
PE
R S
HA
RE
RE
CO
NC
ILIA
TIO
N:
As
report
ed
A
fter
-tax
Adju
stm
ents
:
Non-c
ash a
sset
im
pai
rmen
t ch
arges
(Gai
n)
loss
on r
eal
esta
te a
nd d
eale
rship
tra
nsa
ctio
ns
(Gai
n)
loss
on r
epurc
has
e of
long-t
erm
deb
t
Sev
eran
ce c
ost
s
Acq
uis
itio
n c
ost
s in
cludin
g r
elat
ed t
ax i
mpac
t
All
ow
ance
for
cert
ain d
efer
red t
ax a
sset
s an
d u
nce
rtai
n t
ax p
osi
tions
Leg
al s
ettl
emen
ts
Adju
sted
dil
ute
d i
nco
me
per
shar
e (2
)
Wei
ghte
d a
ver
age
dil
uti
ve
com
mon s
har
es o
uts
tandin
g
Par
tici
pat
ing s
ecuri
ties
Tota
l w
eighte
d a
ver
age
shar
es o
uts
tandin
g
Adju
sted
net
inco
me
(2)
Fore
ign d
efer
red i
nco
me
tax b
enef
it
Fore
ign d
efer
red i
nco
me
tax b
enef
it
Fore
ign t
ransa
ctio
n t
ax
Fore
ign t
ransa
ctio
n t
ax
Tax
rat
e ch
anges
Th
ree M
on
ths
En
ded
:
06.3
0.1
509.3
0.1
512.3
1.1
503.3
1.1
606.3
0.1
609.3
0.1
612.3
1.1
603.3
1.1
76.3
0.1
79.3
0.1
712.3
1.1
73.3
1.1
8
46,3
10
$
45,2
61
$
(3
3,3
87)
$
34,2
91
$
46,5
80
$
35,3
66
$
30,8
28
$
33,9
39
$
39,1
33
$
29,8
81
$
110,4
89
$
35,8
14
$
848
776
72,7
98
315
633
6,7
46
12,7
56
-
- 5,9
47
6,4
64
-
(601)
-
(4,3
57)
212
156
(696)
(2
65)
-
- 497
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
593
- 398
1,6
59
1,7
27
281
- -
393
9,0
22
- -
167
- 220
- -
- 1,2
49
-
- -
353
-
- -
- 578
- -
- -
288
- -
-
- -
- -
- -
- -
- 834
- -
610
- -
- -
- (7
,312)
(1
,137)
-
450
- -
- -
- -
- 274
- -
- -
- -
(73,0
28)
-
- -
- -
(1,6
86)
-
- -
- -
- -
47,9
27
$
46,0
37
$
35,6
72
$
37,0
55
$
47,4
10
$
41,9
71
$
37,2
56
$
32,8
02
$
39,8
14
$
46,6
31
$
44,2
78
$
35,8
14
$
47,9
27
$
46,0
37
$
35,6
72
$
37,0
55
$
47,4
10
$
41,9
71
$
37,2
56
$
32,8
02
$
39,8
14
$
46,6
31
$
44,2
78
$
35,8
14
$
1,8
55
1,7
59
1,3
44
1,4
57
1,9
18
1,6
95
1,4
77
1,2
06
1,4
13
1,6
03
1,4
83
1,2
08
46,0
72
$
44,2
78
$
34,3
28
$
35,5
98
$
45,4
92
$
40,2
76
$
35,7
79
$
31,5
96
$
38,4
01
$
45,0
28
$
42,7
95
$
34,6
06
$
06.3
0.1
509.3
0.1
512.3
1.1
503.3
1.1
606.3
0.1
609.3
0.1
612.3
1.1
603.3
1.1
706.3
0.1
709.3
0.1
712.3
1.1
73.3
1.1
8
1.9
1$
1.8
8$
(1.4
1)
$
1.4
7$
2.1
2$
1.6
5$
1.4
4$
1.5
8$
1.8
4$
1.4
3$
5.2
7$
1.7
0$
0.0
4
0.0
3
3.0
7
0.0
1
0.0
3
0.3
2
0.5
9
-
- 0.2
8
0.3
0
-
(0.0
3)
-
(0.1
8)
0.0
1
0.0
1
(0
.03)
(0
.01)
-
- 0.0
2
-
-
- -
- -
- -
- -
- -
- -
0.0
1
-
0.0
1
- -
- 0.0
6
-
- -
0.0
2
-
- -
-0.0
3
-
- -
- 0.0
1
-
- -
- -
--
- -
- -
- 0.0
4
-
-
0.0
3
-
--
- -
(0.3
4)
(0
.05)
-
0.0
2
- -
- -
- -
- 0.0
1
- -
- -
(3.4
8)
-
- -
- -
(0.0
8)
-
- -
- -
- -
1.9
8$
1.9
1$
1.5
1$
1.5
9$
2.1
6$
1.9
6$
1.7
4$
1.5
3$
1.8
7$
2.2
3$
2.1
1$
1.7
0$
23,3
15
23,1
37
22,7
18
22,4
53
21,0
70
20,5
78
20,5
92
20,6
98
20,5
22
20,2
25
20,2
61
20,3
07
944
925
897
921
892
872
858
818
761
724
708
715
24,2
59
24,0
62
23,6
15
23,3
74
21,9
62
21,4
50
21,4
50
21,5
16
21,2
83
20,9
49
20,9
69
21,0
22
(1)
(2)
Grou
p 1
Au
tom
oti
ve,
Inc.
Recon
cil
iati
on
of
Certa
in N
on
-GA
AP
Fin
an
cia
l M
easu
res
(Un
au
dit
ed
, in
th
ou
san
ds)
Ref
er t
o s
epar
ate
reco
nci
liat
ions
of
cert
ain n
on-G
AA
P f
inan
cial
mea
sure
s w
ithin
the
resp
ecti
ve
quar
terl
y e
arnin
gs
rele
ase
sched
ule
s fo
r sp
ecif
ic t
ax b
enef
it o
r ta
x p
rovis
ion i
nfo
rmat
ion.
We
bel
ieve
that
thes
e ad
just
ed f
inan
cial
mea
sure
s ar
e re
levan
t an
d u
sefu
l to
inves
tors
bec
ause
they
pro
vid
e ad
dit
ional
info
rmat
ion r
egar
din
g t
he
per
form
ance
of
our
oper
atio
ns
and i
mpro
ve
per
iod-t
o-p
erio
d c
om
par
abil
ity.
Thes
e m
easu
res
are
not
mea
sure
s of
finan
cial
per
form
ance
under
GA
AP
. A
ccord
ingly
, th
ey s
hould
not
be
consi
der
ed a
s su
bst
itute
s fo
r th
eir
unad
just
ed
counte
rpar
ts,
whic
h a
re p
repar
ed i
n a
ccord
ance
wit
h G
AA
P.
Alt
hough w
e fi
nd t
hes
e non-G
AA
P r
esult
s use
ful
in e
val
uat
ing t
he
per
form
ance
of
our
busi
nes
s, o
ur
reli
ance
on t
hes
e m
easu
res
is l
imit
ed b
ecau
se t
he
adju
stm
ents
oft
en h
ave
a m
ater
ial
impac
t on o
ur
finan
cial
sta
tem
ents
cal
cula
ted i
n a
ccord
ance
wit
h G
AA
P.
Ther
efore
, w
e ty
pic
ally
use
thes
e ad
just
ed n
um
ber
s in
conju
nct
ion w
ith o
ur
GA
AP
res
ult
s to
addre
ss t
hes
e li
mit
atio
ns.
Page 33 of 38
Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - U.S.
(Unaudited) (Dollars in thousands)
Three Months Ended March 31,
2018 2017% Increase/(Decrease)
SG&A RECONCILIATION:As reported $ 252,941 $ 236,273 7.1 Pre-tax adjustments:
Legal settlements (2) — 1,833
Adjusted SG&A (1) $ 252,941 $ 238,106 6.2SG&A AS % REVENUES:
Unadjusted 12.1 12.0Adjusted (1) 12.1 12.1
SG&A AS % GROSS PROFIT:Unadjusted 75.4 73.7Adjusted (1) 75.4 74.3
OPERATING MARGIN %Unadjusted 3.3 3.7Adjusted (1) 3.3 3.6
PRETAX MARGIN %:Unadjusted 1.9 2.3Adjusted (1) 1.9 2.2
SAME STORE SG&A RECONCILIATION:As reported $ 247,611 $ 236,051 4.9 Pre-tax adjustments:
Legal settlements (2) — 1,833Adjusted Same Store SG&A (1) $ 247,611 $ 237,884 4.1
SAME STORE SG&A AS % REVENUES:Unadjusted 12.1 12.0Adjusted (1) 12.1 12.1
SAME STORE SG&A AS % GROSS PROFIT:Unadjusted 75.1 73.7Adjusted (1) 75.1 74.3
SAME STORE OPERATING MARGIN %Unadjusted 3.4 3.7Adjusted (1) 3.4 3.6
(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selecteditems that the Company believes impact comparability of financial results between reporting periods.
(2) For the three months ended March 31, 2017, the Company recognized a net pre-tax gain related to a settlement with an OEM of $1.8 million.
Page 34 of 38
Group 1 Automotive, Inc.Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended March 31,
2018 2017% Increase/(Decrease)
NET INCOME RECONCILIATION:
As reported
Pretax Net Income $ 46,167 $ 51,196
Income Tax Provision (10,353) (17,257)
Net Income $ 35,814 $ 33,939 5.5
Effective Tax Rate 22.4% 33.7%
Adjustments:
Legal settlements (2)
Pre-tax — (1,833)
Tax impact — 696
Adjusted
Pretax Net Income $ 46,167 $ 49,363
Income Tax Provision (10,353) (16,561)
Adjusted net income (1) $ 35,814 $ 32,802 9.2
Effective Tax Rate 22.4% 33.6%
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTEDCOMMON SHARES RECONCILIATION:
Adjusted net income (1) $ 35,814 $ 32,802 9.2
Less: Adjusted earnings allocated to participating securities 1,208 1,206 0.2
Adjusted net income available to diluted common shares (1) $ 34,606 $ 31,596 9.5DILUTED INCOME PER COMMON SHARE RECONCILIATION:
As reported $ 1.70 $ 1.58 7.6 After-tax adjustments:
Legal settlements (2) — (0.05)Adjusted diluted income per share (1) $ 1.70 $ 1.53 11.1
SG&A RECONCILIATION:As reported $ 324,347 $ 289,779 11.9 Pre-tax adjustments:
Legal settlements (2) — 1,833
Adjusted SG&A (1) $ 324,347 $ 291,612 11.2
Page 35 of 38
SG&A AS % REVENUES:
Unadjusted 11.3 11.5
Adjusted (1) 11.3 11.6SG&A AS % GROSS PROFIT:
Unadjusted 77.3 75.6
Adjusted (1) 77.3 76.0OPERATING MARGIN %
Unadjusted 2.8 3.2Adjusted (1) 2.8 3.1
PRETAX MARGIN %:Unadjusted 1.6 2.0Adjusted (1) 1.6 2.0
SAME STORE SG&A RECONCILIATION:As reported $ 306,200 $ 288,295 6.2 Pre-tax adjustments:
Legal settlements (2) — 1,833Adjusted Same Store SG&A (1) $ 306,200 $ 290,128 5.5
SAME STORE SG&A AS % REVENUES:Unadjusted 11.5 11.5Adjusted (1) 11.5 11.6
SAME STORE SG&A AS % GROSS PROFIT:Unadjusted 77.0 75.4Adjusted (1) 77.0 75.9
SAME STORE OPERATING MARGIN %Unadjusted 2.9 3.2Adjusted (1) 2.9 3.1
(1) See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selecteditems that the Company believes impact comparability of financial results between reporting periods.
(2) For the three months ended March 31, 2017, the Company recognized a net pre-tax gain related to a settlement with an OEM of $1.8 million.
Page 36 of 38
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