SOURCE: Group 1 Automotive, Inc.

Group 1 Automotive, Inc.

February 19, 2009 07:00 ET

Group 1 Automotive Reports 2008 Fourth-Quarter and Full-Year Financial Results

Company in Compliance With All Debt Covenants; Dividend Suspended

HOUSTON, TX--(Marketwire - February 19, 2009) - Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported a 2008 fourth-quarter net loss from continuing operations of $44.5 million, or $1.96 per diluted share. This compares to net income from continuing operations of $6.3 million, or $0.28 per diluted share, in the fourth quarter of 2007. The results for both periods included after-tax non-cash asset impairment charges of $67.2 million, or $2.96 per diluted share, in 2008, and $10.2 million, or $0.46 per diluted share, in 2007. The company also recorded a $20.9 million after tax, or $0.92 per diluted share, gain on debt repurchases during the 2008 fourth quarter. As shown in the attached reconciliation table, excluding the asset impairment charges and the gain on debt repurchases, fourth-quarter profit from continuing operations was $0.08 per diluted share.

Consistent with the massive deterioration in auto industry sales in the fourth-quarter of 2008, (35 percent decline vs. fourth quarter 2007), same-store revenues fell 27.7 percent, to $1.1 billion. The decline reflected a 30.7 percent reduction in new vehicle unit sales that resulted in a 33.1 percent decrease in new vehicle revenues, as well as a 19.6 percent decline in retail used vehicle revenues on 14.5 percent fewer used retail unit sales. Used wholesale revenues also fell 46.4 percent, as the company wholesaled 29.5 percent fewer units.

As a result of the 25.3 percent decline in total units retailed, finance and insurance (F&I) revenues fell 31.8 percent. Gross profit on F&I per unit sold was at $1,014 per unit, down $96, reflecting a reserve associated with potential chargebacks from credit life vendors, as well as lower finance penetration and a decrease in the average amount financed per contract. Parts and service sales remained relatively stable with a 2.4 percent decline in same-store revenues, due primarily to a reduction in wholesale parts sales and domestic-brand customer-pay service business.

Fourth-quarter 2008 same-store gross margin improved 120 basis points from 2007, to 16.5 percent. The gross margin improvement was attributed to a favorable mix shift to the higher-margin parts and service business, partially offset by lower margins on retail vehicle sales.

On a consolidated basis, selling, general and administrative (SG&A) expenses as a percent of gross profit increased 690 basis points, to 85.4 percent, as lower gross profit more than offset the $20.5 million, or 11.4 percent, reduction in SG&A expenses from the prior-year period.

"Although we were able to operate our dealerships at a profitable level in the fourth quarter -- despite the dramatic decline in industry sales volumes -- we have much more to do to align our cost structure with this weak level of consumer new vehicle demand," said Earl J. Hesterberg, Group 1's president and chief executive officer. "The $20.5 million SG&A cost reduction achieved in the fourth quarter represents a positive first step toward the $100 million cost reduction initiative we announced on Jan. 14, 2009. We are making good progress toward this goal and remain confident we will have the vast majority of these reductions in place by March 31, 2009."

Full-Year Results

For the year ended Dec. 31, 2008, Group 1 reported a net loss from continuing operations of $29.5 million, or $1.30 per diluted share. This compares to net income from continuing operations of $69.1 million, or $2.95 per diluted share, in 2007. As shown in the attached reconciliation table, both periods included non-cash asset impairment charges, lease terminations and bond repurchases. Excluding these items, net income was $47.1 million, or $2.08 per diluted share, and $83.7 million, or $3.57 per diluted share, in 2008 and 2007, respectively.

Consolidated revenues fell 9.7 percent, to $5.7 billion. Gross profit decreased 6.0 percent, reflecting decreases in new and used vehicle profits that were partially offset by a 5.9 percent increase in parts and service profit. Selling, general and administrative expenses as a percent of gross profit was up 290 basis points, to 80.8 percent, as the gross profit decline more than offset the 2.6 percent decrease in SG&A expenses from the prior year. On a same-store basis, revenues were down 13.4 percent, reflecting declines in new vehicles, used vehicles and F&I that were partially offset by a 2.1 percent increase in parts and service revenues. Same-store gross margin improved 60 basis points from the prior year, to 16.2 percent, reflecting a favorable change in the business mix.

Dividend

Group 1 announced that it is suspending its cash dividend effective immediately. "Based on continued economic uncertainty, Group 1's board of directors determined that it would be prudent to suspend the cash dividend at this time," said Hesterberg.

Balance Sheet / Debt Covenant Update

Group 1 announced that it is not only compliant with all of its debt covenants as of Dec. 31, but made improvements in its total leverage, fixed charge coverage and current ratios from the prior quarter. During 2008, the company paid down its non-real estate debt by $176.3 million. Further detail may be found on Group 1's website at www.Group1Auto.com.

"We are very focused on protecting our balance sheet," said John C. Rickel, Group 1's chief financial officer. "Given that, we are very pleased with the progress we made during 2008 in reducing our debt levels. We continue, based on the hard work of our operating team, to generate positive cash flow and plan to continue to use those funds to further strengthen our balance sheet during 2009."

Corporate Development Recap and Outlook

Group 1 acquired a total of five franchises expected to generate $90.2 million in estimated annual revenues during the first half of 2008, with no acquisitions made thereafter. The company announced that it does not anticipate completing any acquisitions in 2009.

During the first nine months of 2008, Group 1 disposed of 14 franchises with 12-month revenues of $146.4 million. The company has not disposed of any franchises subsequently.

2009 Full-Year Guidance

Given the continued uncertainty surrounding the overall economy, consumer lending and the automotive industry, Group 1 determined that it is not feasible to issue reliable earnings guidance at this time.

Group 1 did issue the following key assumptions for 2009:

--  Industry seasonally adjusted annual sales rate (SAAR) of 10.5 to 10.8
    million vehicles
--  SG&A expenses as a percent of gross profit at 80 percent to 83.5
    percent, excluding any one-time items, as lower sales revenues are expected
    to offset cost improvements
--  Tax rate of 38.5 percent
--  Estimated average diluted shares outstanding of 23.2 million
--  Capital expenditures of $30 million or less
    

On a same-store basis:

--  Vehicle margins consistent with fourth-quarter 2008 levels
--  Parts and service revenues 1 to 3 percent lower
--  Finance and insurance gross profit at $1,000 to $1,025 per retail unit
    

Fourth-Quarter Earnings Conference Call

Group 1's senior management will host a conference call today at 10 a.m. EST to discuss the fourth-quarter financial results and the company's 2009 outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. A replay will be available for 30 days.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

        Domestic: 877-741-4253
        International: 719-325-4774
        Confirmation code: 3404008

A telephonic replay will be available following the call through March 5 by dialing:

        Domestic: 888-203-1112
        International: 719-457-0820
        Confirmation code: 3404008

About Group 1 Automotive, Inc.

Group 1 owns and operates 100 automotive dealerships, 133 franchises, and 25 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.

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

This press release contains "forward-looking statements," which are statements related to future, not past, events. 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" or "will." Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause 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. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings "Business--Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.

FINANCIAL TABLES TO FOLLOW

                         Group 1 Automotive, Inc.
                  Consolidated Statements of Operations
                                (Unaudited)
                 (In thousands, except per share amounts)

                                        Three Months Ended December 31,
                                     -------------------------------------
                                         2008         2007       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $   655,156  $   938,540       (30.2)%
Used vehicle retail sales                225,528      267,342       (15.6)
Used vehicle wholesale sales              39,850       70,568       (43.5)
Parts and service                        178,658      174,314         2.5
Finance and insurance                     34,543       49,370       (30.0)
                                     -----------  -----------  ----------
      Total revenues                   1,133,735    1,500,134       (24.4)%

COST OF SALES:
New vehicle retail sales                 616,269      877,593       (29.8)%
Used vehicle retail sales                204,584      239,580       (14.6)
Used vehicle wholesale sales              42,523       73,407       (42.1)
Parts and service                         83,307       79,701         4.5
                                     -----------  -----------  ----------
      Total cost of sales                946,683    1,270,281       (25.5)%

                                     -----------  -----------  ----------
GROSS PROFIT                             187,052      229,853       (18.6)%

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 159,822      180,366       (11.4)

DEPRECIATION AND
 AMORTIZATION EXPENSE                      6,603        5,210        26.7

ASSET IMPAIRMENTS                        114,937       16,082       614.7

                                     -----------  -----------  ----------
OPERATING INCOME (LOSS)                  (94,310)      28,195      (434.5)%

OTHER INCOME (EXPENSE):
Floorplan interest expense               (10,741)     (11,916)       (9.9)
Other interest expense, net               (6,813)      (6,415)        6.2
Gain (Loss) on redemption of senior
 subordinated and convertible notes       35,754            -       100.0
Other income, net                              -          179      (100.0)


INCOME (LOSS) FROM CONTINUING
 OPERATIONS
                                     -----------  -----------  ----------
      BEFORE INCOME TAXES                (76,110)      10,043      (857.8)%

PROVISION (BENEFIT) FOR INCOME TAXES     (31,596)       3,713      (951.0)

                                     -----------  -----------  ----------
INCOME (LOSS) FROM CONTINUING
 OPERATIONS                              (44,514)       6,330      (803.2)%

DISCONTINUED OPERATIONS:
Loss related to discontinued
 operations                                    -       (1,314)     (100.0)
Income tax benefit related to loss
 on discontinued operations                    -          455      (100.0)
                                     -----------  -----------  ----------
LOSS RELATED TO DISCONTINUED
 OPERATIONS                                    -         (859)     (100.0)%

                                     -----------  -----------  ----------
NET INCOME (LOSS)                    $   (44,514) $     5,471      (913.6)%
                                     ===========  ===========  ==========

DILUTED EARNINGS (LOSS) PER SHARE:
Earnings (Loss) per share from
 continuing operations               $     (1.96) $      0.28      (800.0)%
Loss per share related to
 discontinued operations                       -        (0.04)     (100.0)
                                     -----------  -----------  ----------
Earnings (Loss) per share            $     (1.96) $      0.24      (916.7)%
                                     ===========  ===========  ==========

Weighted average diluted shares
 outstanding                              22,760       22,445         1.4 %




                                       Twelve Months Ended December 31,
                                     -------------------------------------
                                         2008         2007       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $ 3,392,888  $ 3,914,650       (13.3)%
Used vehicle retail sales              1,090,559    1,132,413        (3.7)
Used vehicle wholesale sales             233,262      310,173       (24.8)
Parts and service                        750,823      699,906         7.3
Finance and insurance                    186,555      203,075        (8.1)
                                     -----------  -----------  ----------
      Total revenues                   5,654,087    6,260,217        (9.7)%

COST OF SALES:
New vehicle retail sales               3,178,132    3,652,328       (13.0)%
Used vehicle retail sales                975,716    1,001,179        (2.5)
Used vehicle wholesale sales             237,604      313,768       (24.3)
Parts and service                        346,974      318,475         8.9
                                     -----------  -----------  ----------
      Total cost of sales              4,738,426    5,285,750       (10.4)%

                                     -----------  -----------  ----------
GROSS PROFIT                             915,661      974,467        (6.0)%

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 739,430      758,877        (2.6)

DEPRECIATION AND
 AMORTIZATION EXPENSE                     25,652       20,438        25.5

ASSET IMPAIRMENTS                        163,023       16,784       871.3

                                     -----------  -----------  ----------
OPERATING INCOME (LOSS)                  (12,444)     178,368      (107.0)%

OTHER INCOME (EXPENSE):
Floorplan interest expense               (46,377)     (46,822)       (1.0)
Other interest expense, net              (28,916)     (22,771)       27.0
Gain (Loss) on redemption of senior
 subordinated and convertible notes       36,629       (1,598)   (2,392.2)
Other income, net                            302          560       (46.1)

INCOME (LOSS) FROM CONTINUING
 OPERATIONS
                                     -----------  -----------  ----------
      BEFORE INCOME TAXES                (50,806)     107,737      (147.2)%

PROVISION (BENEFIT) FOR INCOME TAXES     (21,316)      38,653      (155.1)

                                     -----------  -----------  ----------
INCOME (LOSS) FROM CONTINUING
 OPERATIONS                              (29,490)      69,084      (142.7)%

DISCONTINUED OPERATIONS:
Loss related to discontinued
 operations                               (3,481)      (1,714)      103.1
Income tax benefit related to loss
 on discontinued operations                1,478          582       154.0
                                     -----------  -----------  ----------
LOSS RELATED TO DISCONTINUED
 OPERATIONS                               (2,003)      (1,132)       76.9 %

                                     -----------  -----------  ----------
NET INCOME (LOSS)                    $   (31,493) $    67,952      (146.3)%
                                     ===========  ===========  ==========

DILUTED EARNINGS (LOSS) PER SHARE:
Earnings (Loss) per share from
 continuing operations               $     (1.30) $      2.95      (144.1)%
Loss per share related to
 discontinued operations                   (0.09)       (0.05)       80.0
                                     -----------  -----------  ----------
Earnings (Loss) per share            $     (1.39) $      2.90      (147.9)%
                                     ===========  ===========  ==========

Weighted average diluted shares
 outstanding                              22,671       23,406        (3.1)%







                         Group 1 Automotive, Inc.
                        Consolidated Balance Sheets
                               (Unaudited)
                          (Dollars in thousands)

                                     December 31, December 31,
                                         2008         2007       % Change
                                     -----------  -----------  ----------

ASSETS:

CURRENT ASSETS:
   Cash and cash equivalents         $    23,144  $    34,248       (32.4)%
   Contracts in transit and vehicle
    receivables, net                     102,834      189,400       (45.7)
   Accounts and notes receivable,
    net                                   67,350       82,698       (18.6)
   Inventories                           845,944      878,168        (3.7)
   Assets related to discontinued
    operations                                 -       30,531      (100.0)
   Deferred income taxes                  18,474       18,287         1.0
   Prepaid expenses and other
    current assets                        38,878       29,651        31.1
                                     -----------  -----------  ----------
       Total current assets            1,096,624    1,262,983       (13.2)
PROPERTY AND EQUIPMENT, net              514,891      427,223        20.5
GOODWILL AND OTHER INTANGIBLES           655,784      787,245       (16.7)
OTHER ASSETS                              42,786       28,730        48.9
                                     -----------  -----------  ----------
       Total assets                  $ 2,310,085  $ 2,506,181        (7.8)%
                                     ===========  ===========  ==========

LIABILITIES AND STOCKHOLDERS'
 EQUITY:

CURRENT LIABILITIES:
   Floorplan notes payable - credit
    facility                         $   693,692  $   648,469         7.0 %
   Floorplan notes payable -
    manufacturer affiliates              128,580      170,911       (24.8)
   Current maturities of long-term
    debt                                  13,594       12,260        10.9
   Accounts payable                       74,235      111,458       (33.4)
   Liabilities related to
    discontinued operations                    -       35,180      (100.0)
   Accrued expenses                       94,395      100,000        (5.6)
                                     -----------  -----------  ----------
       Total current liabilities       1,004,496    1,078,278        (6.8)
2.25% CONVERTIBLE SENIOR NOTES           220,609      281,915       (21.7)
8.25% SENIOR SUBORDINATED NOTES           72,962      100,273       (27.2)
MORTGAGE FACILITY, net of current
 maturities                              168,583      124,633        35.3
OTHER REAL ESTATE RELATED AND
 LONG-TERM DEBT, net of current
 maturities                               50,444        6,104       726.4
CAPITAL LEASE OBLIGATIONS RELATED TO
 REAL ESTATE, net of current
 maturities                               39,401       26,913        46.4
ACQUISITION LINE                          50,000      135,000       (63.0)
DEFERRED INCOME TAXES                        227        6,849       (96.7)
LIABILITIES FROM INTEREST RISK
 MANAGEMENT ACTIVITIES                    44,655       16,188       175.9
OTHER LIABILITIES                         27,135       29,016        (6.5)
                                     -----------  -----------  ----------
       Total liabilities before
        deferred revenues              1,678,512    1,805,169        (7.0)
                                     -----------  -----------  ----------

DEFERRED REVENUES                         10,220       16,531       (38.2)

STOCKHOLDERS' EQUITY:
   Common stock                              261          255         2.4
   Additional paid-in capital            287,393      293,675        (2.1)
   Retained earnings                     460,335      502,783        (8.4)
   Accumulated other comprehensive
    loss                                 (38,109)      (9,560)      298.6
   Treasury stock                        (88,527)    (102,672)      (13.8)
                                     -----------  -----------  ----------
       Total stockholders' equity        621,353      684,481        (9.2)
                                     -----------  -----------  ----------
       Total liabilities and
        stockholders' equity         $ 2,310,085  $ 2,506,181        (7.8)%
                                     ===========  ===========  ==========


KEY DEBT COVENANT METRICS: *
   Senior secured leverage ratio
    (must be less than 2.75)                1.49
   Total leverage ratio (must be
    less than 4.50)                         3.46
   Fixed charge coverage ratio (must
    be greater than 1.25)                   1.59
   Current ratio (must be greater
    than 1.15)                              1.18

     * Refer to website, www.group1auto.com, for debt covenant calculation
       definitions.








                         Group 1 Automotive, Inc.
                  Additional Information - Consolidated
                                (Unaudited)


                                             Three Months   Twelve Months
                                                Ended           Ended,
                                             December 31,    December 31,
                                            --------------  --------------
                                             2008    2007    2008    2007
                                            ------  ------  ------  ------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
   Region               Geographic Market
   Eastern              Massachusetts         12.3%   10.7%   12.1%   12.0%
                        New Jersey             5.6     5.9     6.6     5.6
                        New York               4.0     3.0     4.1     2.6
                        New Hampshire          3.2     3.5     3.5     3.7
                        Louisiana              3.8     4.0     3.4     3.9
                        Georgia                3.5     3.1     3.4     3.5
                        Florida                2.3     3.1     2.5     3.5
                        Mississippi            1.2     1.3     1.5     1.5
                        Alabama                0.5     0.8     0.9     0.9
                        Maryland               1.1       -     0.6       -
                        South Carolina         0.3     0.1     0.3       -
                                            ------  ------  ------  ------
                                              37.8    35.5    38.9    37.2

   Central              Texas                 35.3    35.2    32.7    32.6
                        Oklahoma               9.0     9.3     9.4     9.8
                        Kansas                 1.3     1.2     1.3     1.0
                                            ------  ------  ------  ------
                                              45.6    45.7    43.4    43.4

   Western              California            15.1    17.2    16.0    17.8

   International        United Kingdom         1.5     1.6     1.7     1.6
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

NEW VEHICLE UNIT SALES BRAND MIX:
   Toyota/Scion/Lexus                         35.7%   35.8%   35.1%   36.6%
   Honda/Acura                                13.2    12.6    14.0    12.4
   Nissan/Infiniti                            11.0    12.5    12.7    12.5
   Ford                                       10.0    10.9     9.5    11.9
   BMW/Mini                                    9.6     7.6     8.7     6.7
   Chrysler                                    6.4     7.7     6.0     7.7
   Mercedes-Benz                               6.6     4.4     5.9     3.2
   GM                                          4.4     5.5     4.7     5.6
   Other                                       3.1     3.0     3.4     3.4
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

NEW VEHICLE UNIT OTHER MIX:
   Import                                     53.0%   53.5%   56.1%   55.6%
   Luxury                                     27.3    23.8    24.9    23.7
   Domestic                                   19.7    22.7    19.0    20.7
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

   Car                                        54.5%   53.1%   57.3%   53.8%
   Truck                                      45.5    46.9    42.7    46.2
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%







                         Group 1 Automotive, Inc.
                  Additional Information - Consolidated
                                (Unaudited)
              (Dollars in thousands, except per unit amounts)


                                        Three Months Ended December 31,
                                     ------------------------------------
                                         2008         2007       % Change
                                     ----------   -----------  ----------
REVENUES:
   New vehicle retail sales          $  655,156   $   938,540       (30.2)%
   Used vehicle retail sales            225,528       267,342       (15.6)
   Used vehicle wholesale sales          39,850        70,568       (43.5)
                                     ----------   -----------
       Total used                       265,378       337,910       (21.5)
   Parts and service                    178,658       174,314         2.5
   Finance and insurance                 34,543        49,370       (30.0)
                                     ----------   -----------
       Total                         $1,133,735   $ 1,500,134       (24.4)%

GROSS MARGIN:
   New vehicle retail sales                 5.9 %         6.5%
   Used vehicle retail sales                9.3          10.4
   Used vehicle wholesale sales            (6.7)         (4.0)
       Total used                           6.9           7.4
   Parts and service                       53.4          54.3
   Finance and insurance                  100.0         100.0
       Total                               16.5 %        15.3%

GROSS PROFIT (LOSS):
   New vehicle retail sales          $   38,887   $    60,947       (36.2)%
   Used vehicle retail sales             20,944        27,762       (24.6)
   Used vehicle wholesale sales          (2,673)       (2,839)        5.8
                                     ----------   -----------
       Total used                        18,271        24,923       (26.7)
   Parts and service                     95,351        94,613         0.8
   Finance and insurance                 34,543        49,370       (30.0)
                                     ----------   -----------
       Total                         $  187,052   $   229,853       (18.6)%

UNITS SOLD:
   Retail new vehicles sold              21,157        29,760       (28.9)%
   Retail used vehicles sold             13,026        14,838       (12.2)
   Wholesale used vehicles sold           7,168         9,926       (27.8)
                                     ----------   -----------
       Total used                        20,194        24,764       (18.5)%

GROSS PROFIT (LOSS) PER UNIT SOLD:
   New vehicle retail sales          $    1,838   $     2,048       (10.3)%
   Used vehicle retail sales              1,608         1,871       (14.1)
   Used vehicle wholesale sales            (373)         (286)      (30.4)
       Total used                           905         1,006       (10.0)
   Finance and insurance (per retail
    unit)                            $    1,011   $     1,107        (8.7)%

OTHER:
   SG&A expenses                     $  159,822   $   180,366       (11.4)%
   SG&A as % revenues                      14.1 %        12.0%
   SG&A as % gross profit                  85.4 %        78.5%
   Operating margin                        (8.3)%         1.9%
   Pretax margin                           (6.7)%         0.7%

   Floorplan interest                $  (10,741)  $   (11,916)       (9.9)%
   Floorplan assistance                   5,364         8,657       (38.0)
                                     ----------   -----------
       Net floorplan (expense)
        income                       $   (5,377)  $    (3,259)       65.0 %



                                       Twelve Months Ended December 31,
                                     ------------------------------------
                                         2008         2007       % Change
                                     ----------   -----------  ----------
REVENUES:
   New vehicle retail sales          $3,392,888   $ 3,914,650       (13.3)%
   Used vehicle retail sales          1,090,559     1,132,413        (3.7)
   Used vehicle wholesale sales         233,262       310,173       (24.8)
                                     ----------   -----------
       Total used                     1,323,821     1,442,586        (8.2)
   Parts and service                    750,823       699,906         7.3
   Finance and insurance                186,555       203,075        (8.1)
                                     ----------   -----------
       Total                         $5,654,087   $ 6,260,217        (9.7)%

GROSS MARGIN:
   New vehicle retail sales                 6.3 %         6.7%
   Used vehicle retail sales               10.5          11.6
   Used vehicle wholesale sales            (1.9)         (1.2)
       Total used                           8.3           8.8
   Parts and service                       53.8          54.5
   Finance and insurance                  100.0         100.0
       Total                               16.2 %        15.6%

GROSS PROFIT (LOSS):
   New vehicle retail sales          $  214,756   $   262,322       (18.1)%
   Used vehicle retail sales            114,843       131,234       (12.5)
   Used vehicle wholesale sales          (4,342)       (3,595)      (20.8)
                                     ----------   -----------
       Total used                       110,501       127,639       (13.4)
   Parts and service                    403,849       381,431         5.9
   Finance and insurance                186,555       203,075        (8.1)
                                     ----------   -----------
       Total                         $  915,661   $   974,467        (6.0)%

UNITS SOLD:
   Retail new vehicles sold             110,705       129,215       (14.3)%
   Retail used vehicles sold             61,971        65,138        (4.9)
   Wholesale used vehicles sold          36,819        44,289       (16.9)
                                     ----------   -----------
       Total used                        98,790       109,427        (9.7)%

GROSS PROFIT (LOSS) PER UNIT SOLD:
   New vehicle retail sales          $    1,940   $     2,030        (4.4)%
   Used vehicle retail sales              1,853         2,015        (8.0)
   Used vehicle wholesale sales            (118)          (81)      (45.7)
       Total used                         1,119         1,166        (4.0)
   Finance and insurance (per retail
    unit)                            $    1,080   $     1,045         3.3 %

OTHER:
   SG&A expenses                     $  739,430   $   758,877        (2.6)%
   SG&A as % revenues                      13.1 %        12.1%
   SG&A as % gross profit                  80.8 %        77.9%
   Operating margin                        (0.2)%         2.8%
   Pretax margin                           (0.9)%         1.7%

   Floorplan interest                $  (46,377)  $   (46,822)       (1.0)%
   Floorplan assistance                  28,311        37,171       (23.8)
                                     ----------   -----------
       Net floorplan (expense)
        income                       $  (18,066)  $    (9,651)       87.2 %








                         Group 1 Automotive, Inc.
                  Additional Information - Same Store(1)
                                (Unaudited)
              (Dollars in thousands, except per unit amounts)


                                        Three Months Ended December 31,
                                     ------------------------------------
                                         2008         2007       % Change
                                     ----------   -----------  ----------
REVENUES:
   New vehicle retail sales          $  618,917   $   925,334       (33.1)%
   Used vehicle retail sales            212,485       264,137       (19.6)
   Used vehicle wholesale sales          37,540        70,051       (46.4)
                                     ----------   -----------
       Total used                       250,025       334,188       (25.2)
   Parts and service                    167,322       171,390        (2.4)
   Finance and insurance                 33,442        49,007       (31.8)
                                     ----------   -----------
       Total                         $1,069,706   $ 1,479,919       (27.7)%

GROSS MARGIN:
   New vehicle retail sales                 5.9 %         6.5%
   Used vehicle retail sales                9.4          10.4
   Used vehicle wholesale sales            (7.0)         (4.0)
       Total used                           7.0           7.4
   Parts and service                       53.3          54.3
   Finance and insurance                  100.0         100.0
       Total                               16.5 %        15.3%

GROSS PROFIT (LOSS):
   New vehicle retail sales          $   36,457   $    60,088       (39.3)%
   Used vehicle retail sales             20,028        27,433       (27.0)
   Used vehicle wholesale sales          (2,610)       (2,783)        6.2
                                     ----------   -----------
       Total used                        17,418        24,650       (29.3)
   Parts and service                     89,197        93,111        (4.2)
   Finance and insurance                 33,442        49,007       (31.8)
                                     ----------   -----------
       Total                         $  176,514   $   226,856       (22.2)%

UNITS SOLD:
   Retail new vehicles sold              20,397        29,431       (30.7)%
   Retail used vehicles sold             12,574        14,701       (14.5)
   Wholesale used vehicles sold           6,936         9,842       (29.5)
                                     ----------   -----------
       Total used                        19,510        24,543       (20.5)%

GROSS PROFIT (LOSS) PER UNIT SOLD:
   New vehicle retail sales          $    1,787   $     2,042       (12.5)%
   Used vehicle retail sales              1,593         1,866       (14.6)
   Used vehicle wholesale sales            (376)         (283)      (32.9)
       Total used                           893         1,004       (11.1)
   Finance and insurance (per retail
    unit)                            $    1,014   $     1,110        (8.6)%

OTHER:
   SG&A expenses                     $  150,830   $   176,840       (14.7)%
   SG&A as % revenues                      14.1 %        11.9%
   SG&A as % gross profit                  85.4 %        78.0%
   Operating margin                        (5.7)%         2.0%

   Floorplan interest                $  (10,274)  $   (11,681)      (12.0)%
   Floorplan assistance                   5,364         8,492       (36.8)
                                     ----------   -----------
       Net floorplan (expense)
        income                       $   (4,910)  $    (3,189)       54.0 %



                                       Twelve Months Ended December 31,
                                     -------------------------------------
                                         2008         2007       % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $ 3,216,281  $ 3,865,391       (16.8)%
   Used vehicle retail sales           1,025,487    1,113,970        (7.9)
   Used vehicle wholesale sales          217,496      303,974       (28.4)
                                     -----------  -----------
       Total used                      1,242,983    1,417,944       (12.3)
   Parts and service                     700,896      686,700         2.1
   Finance and insurance                 181,624      201,315        (9.8)
                                     -----------  -----------
       Total                         $ 5,341,784  $ 6,171,350       (13.4)%

GROSS MARGIN:
   New vehicle retail sales                  6.3%         6.7%
   Used vehicle retail sales                10.7         11.6
   Used vehicle wholesale sales             (1.8)        (1.0)
       Total used                            8.5          8.9
   Parts and service                        53.8         54.5
   Finance and insurance                   100.0        100.0
       Total                                16.2%        15.6%

GROSS PROFIT (LOSS):
   New vehicle retail sales          $   201,721  $   258,733       (22.0)%
   Used vehicle retail sales             109,548      128,754       (14.9)
   Used vehicle wholesale sales           (3,938)      (3,110)      (26.6)
                                     -----------  -----------
       Total used                        105,610      125,644       (15.9)
   Parts and service                     376,993      374,380         0.7
   Finance and insurance                 181,624      201,315        (9.8)
                                     -----------  -----------
       Total                         $   865,948  $   960,072        (9.8)%

UNITS SOLD:
   Retail new vehicles sold              107,180      127,725       (16.1)%
   Retail used vehicles sold              59,835       64,039        (6.6)
   Wholesale used vehicles sold           35,607       43,460       (18.1)
                                     -----------  -----------
       Total used                         95,442      107,499       (11.2)%

GROSS PROFIT (LOSS) PER UNIT SOLD:
   New vehicle retail sales          $     1,882  $     2,026        (7.1)%
   Used vehicle retail sales               1,831        2,011        (9.0)
   Used vehicle wholesale sales             (111)         (72)      (54.2)
       Total used                          1,107        1,169        (5.3)
   Finance and insurance (per retail
    unit)                            $     1,087  $     1,050         3.5 %

OTHER:
   SG&A expenses                     $   700,191  $   738,564        (5.2)%
   SG&A as % revenues                       13.1%        12.0%
   SG&A as % gross profit                   80.9%        76.9%
   Operating margin                          0.4%         3.0%

   Floorplan interest                $   (44,095) $   (45,577)       (3.3)%
   Floorplan assistance                   28,288       36,288       (22.0)
                                     -----------  -----------
       Net floorplan (expense)
        income                       $   (15,807) $    (9,289)       70.2 %

(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.








                      Group 1 Automotive, Inc.
        Reconciliation of Certain Non-GAAP Financial Measures
                           (Unaudited)
          (Dollars in thousands, except per share amounts)


NET INCOME (LOSS) FROM CONTINUING OPERATIONS RECONCILIATION:

                     Three Months Ended           Twelve Months Ended
                         December 31,                  December 31,
                ----------------------------  ----------------------------
                                        %                             %
                  2008      2007     Change     2008      2007     Change
                --------  --------- -------   --------  --------- -------

As reported     $(44,514) $   6,330  (803.2)% $(29,490) $  69,084  (142.7)%
Adjustments:
  Lease
   Terminations        -          -                668      2,760
  Non-Cash
   Asset
   Impairments
   Charges        67,222     10,198             97,397     10,797
  (Gain) Loss
   on Bond
   Redemption    (20,911)         -            (21,441)     1,023
                --------  ---------           --------  ---------
     Adjusted
      (1)       $  1,797  $  16,528   (89.1)% $ 47,134  $  83,664   (43.7)%


DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS
RECONCILIATION:

                     Three Months Ended           Twelve Months Ended
                         December 31,                  December 31,
                ---------------------------   ---------------------------
                                        %                             %
                  2008       2007    Change     2008       2007    Change
                --------  --------- -------   --------  --------- -------

Earnings Per
 Share from
 Continuing
 Operations     $  (1.96) $    0.28  (800.0)% $  (1.30) $    2.95  (144.1)%
Adjustments:
  Lease
   Terminations        -          -               0.03       0.12
  Non-Cash
   Asset
   Impairments
   Charges          2.96       0.46               4.30       0.46
  (Gain) Loss
   on Bond
   Redemption      (0.92)         -              (0.95)      0.04
                --------  ---------           --------  ---------
     Adjusted
      (1)           0.08  $    0.74   (89.2)% $   2.08  $    3.57   (41.7)%


 (1)  Adjusted net income from continuing operations and adjusted diluted
      earnings per share from continuing operations means net income from
      continuing operations or diluted earnings per share from continuing
      operations, as the case may be, plus the adjustments noted above.
      We use adjusted net income from continuing operations and adjusted
      diluted earnings per share from continuing operations in our
      evaluation of the performance of the company, as we believe that
      they provide additional information regarding the performance of our
      operations.  We believe the presentation of these measures is
      relevant and useful to investors because they improve
      period-to-period  comparability.  Neither of these measures is a
      measure of financial performance under GAAP.  Accordingly, they
      should not be considered as substitutes for net income from
      continuing operations or diluted earnings per share from continuing
      operations prepared in accordance with GAAP.
      Although we find these non-GAAP results useful in evaluating the
      performance of our business, our reliance on these measures is
      limited because the adjustments often have a material impact on our
      net income from continuing operations and diluted earnings per share
      from continuing operations calculated in accordance with GAAP.
      Therefore, we typically use these adjusted numbers in conjunction
      with our GAAP results to address these limitations.

Contact Information

  • AT GROUP 1:
    President and CEO
    Earl J. Hesterberg
    (713) 647-5700

    Senior Vice President and CFO
    John C. Rickel
    (713) 647-5700

    Manager, Investor Relations
    Kim Paper Canning
    (713) 647-5700

    AT Fleishman-Hillard:
    Investors
    John Roper
    (713) 513-9505

    AT Pierpont Communications:
    Media
    Clint L. Woods
    (713) 627-2223