SOURCE: Group 1 Automotive, Inc.

Group 1 Automotive, Inc.

February 10, 2011 07:00 ET

Group 1 Automotive's Strong New Vehicle Sales Drive 25 Percent Fourth-Quarter Revenue Growth; Full-Year New Vehicle Sales Grow 17 Percent -- Nearly Triple the Industry Growth Rate

HOUSTON, TX--(Marketwire - February 10, 2011) - Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported a 2010 fourth-quarter adjusted net income increase of 43.4 percent to $14.7 million, or $0.64 per diluted share, for the quarter ended Dec. 31. Full-year 2010 adjusted net income increased 49.0 percent to $62.2 million, or $2.67 per diluted share.

On a GAAP basis (see attached reconciliation for reported adjustments), including $4.1 million of net after-tax adjustments, fourth-quarter net income was $10.6 million, or $0.46 per diluted share, and, including $11.9 million of net after-tax adjustments, full-year net income was $50.3 million, or $2.16 per diluted share.

Total company revenues for the quarter increased 25.0 percent to $1.4 billion. The revenue growth was primarily driven by a 24.2 percent increase in retail unit sales. Finance and insurance revenues grew 29.3 percent on the higher retail units sold and increased penetration rates. In addition, the parts and service business continued to show exceptional growth, as revenues expanded 9.1 percent from the prior-year period.

Fourth-Quarter Operating Highlights

  • New vehicle revenues increased 26.3 percent on a 25.4 percent increase in unit sales, outpacing industry retail unit sales growth of 16.4 percent.
  • Used vehicle revenues were 31.1 percent higher, reflecting 22.4 percent and 34.0 percent increases in used retail and wholesale units sold, respectively.
  • Gross profit increased 14.2 percent, to $217.0 million, on 12.3 percent and 19.3 percent growth in retail new and used vehicle profits, respectively.
  • Parts and service gross profit expanded 7.5 percent on the 9.1 percent higher revenues.
  • Finance and insurance gross profit per retail unit grew 4.1 percent to $1,075.
  • Selling, general and administrative (SG&A) expenses as a percent of gross profit improved 190 basis points, to 78.7 percent from the prior-year period.

"We were very pleased with our strong sales performance to close 2010," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Our sales increases in new and used vehicles were far above industry average, and our parts and service growth of more than 9 percent is the culmination of several years of focus and investment in this part of our business."

Full-Year Highlights

  • Total revenues grew 21.7 percent, to $5.5 billion.
  • New vehicle revenues increased 21.4 percent on 17.2 percent higher unit sales, nearly tripling the industry's 6.3 percent retail sales increase.
  • Total used vehicle revenues grew 32.3 percent, as the company retailed 22.1 percent and wholesaled 20.6 percent more vehicles.
  • Parts and service revenues increased 6.2 percent, demonstrating Group 1's focus on improving processes in this segment of the business.
  • Total gross profit expanded 13.0 percent, to $877.0 million, reflecting profit growth in all segments.
  • Adjusted selling, general and administrative expenses grew at a slower pace than gross profit, resulting in a 140 basis-point improvement, to 78.6 percent.

"In 2009, Group 1's corporate priorities were cash preservation and cost reduction," said Hesterberg. "We executed a cost reduction plan that reduced our SG&A expense structure by nearly $120 million. Group 1's goal in 2010 was to leverage that lean cost structure with a concentrated sales effort. The total revenue increase of almost 22 percent for the year indicates that we were highly successful. Most gratifying is that we demonstrated significant growth in all sales segments, highlighted by the 32 percent increase in used vehicle revenues. Relative to new vehicle sales, we far outpaced the national average performance for most brands we sell with Chevrolet up 31 percent, Nissan up 29 percent, Ford up 27 percent, as well as Toyota, where we were up 12 percent versus Toyota's near-flat national sales results."

Balance Sheet
New vehicle inventory increased $34.4 million from Sept. 30, to $572.0 million as of Dec. 31. The company ended the quarter with immediately available funds of $149.0 million and available liquidity of $382.7 million.

As previously announced in January, Group 1 successfully restructured its mortgage facility and entered into new five- to seven-year term loan agreements of approximately $188.6 million. The agreements may be expanded, allowing the company to manage its real estate portfolio with favorable rates as it grows the company.

In addition, Group 1 previously announced that several of its interest-rate swap contracts expired in December, and that the net effect of these expired contracts and the restructured mortgage agreements are estimated to reduce pretax interest expense by approximately $3.8 million in 2011.

Corporate Development Update
During the fourth quarter, Group 1 terminated eight domestic franchises that included Mercury and Pontiac franchises related to the brand discontinuations by the respective manufacturers.

For the full year, Group 1 acquired 10 franchises with total estimated annual revenues of $256.2 million and disposed of 11 franchises with trailing-12-month revenues of $83.1 million in 2010.

Fourth-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the fourth-quarter financial results and the company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. 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: 888.401.4669
International: 719.325.2218
Participant Passcode: 6818164

A telephonic replay will be available following the call through Feb. 17 by dialing:

Domestic: 888.203.1112
International: 719.457.0820
Replay Passcode: 6818164

About Group 1 Automotive, Inc.
Group 1 owns and operates 100 automotive dealerships, 129 franchises, and 25 collision service centers in the United States and the United Kingdom that offer 30 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 and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "may" or "will" and similar expressions. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. 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, whether as a result of new information, future developments or otherwise, except as may be required by law.


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


                                        Three Months Ended December 31,
                                     ------------------------------------
                                        2010         2009       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $   832,714  $   659,058        26.3 %
Used vehicle retail sales                310,663      241,269        28.8
Used vehicle wholesale sales              58,877       40,532        45.3
Parts and service                        191,242      175,341         9.1
Finance and insurance                     44,256       34,216        29.3
                                     -----------  -----------  ----------
      Total revenues                   1,437,752    1,150,416        25.0

COST OF SALES:
New vehicle retail sales                 786,479      617,897        27.3
Used vehicle retail sales                285,212      219,940        29.7
Used vehicle wholesale sales              59,268       41,559        42.6
Parts and service                         89,772       80,973        10.9
                                     -----------  -----------  ----------
      Total cost of sales              1,220,731      960,369        27.1

                                     -----------  -----------  ----------
GROSS PROFIT                             217,021      190,047        14.2
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 170,839      154,235        10.8
DEPRECIATION AND
 AMORTIZATION EXPENSE                      6,519        6,287         3.7
ASSET IMPAIRMENTS                          7,719       18,050       (57.2)
                                     -----------  -----------  ----------
OPERATING INCOME                          31,944       11,475       178.4

OTHER INCOME (EXPENSE):
Floorplan interest expense                (8,890)      (8,003)       11.1
Other interest expense, net               (6,952)      (7,218)       (3.7)
Gain (loss) on redemption of
 long-term debt                                -            -           -
Other expense, net                             -           (8)     (100.0)
                                     -----------  -----------  ----------
INCOME (LOSS) BEFORE INCOME TAXES         16,102       (3,754)      528.9

INCOME TAX (PROVISION) BENEFIT            (5,533)       1,802      (407.0)

                                     -----------  -----------  ----------
NET INCOME (LOSS)                    $    10,569  $    (1,952)      641.4 %
                                     ===========  ===========  ==========

DILUTED INCOME (LOSS) PER SHARE      $      0.46  $     (0.08)      675.0 %

Weighted average diluted shares
 outstanding                              23,027       23,577        (2.3)%



                                       Twelve Months Ended December 31,
                                     ------------------------------------
                                        2010         2009       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $ 3,086,807  $ 2,543,031        21.4 %
Used vehicle retail sales              1,271,039      970,614        31.0
Used vehicle wholesale sales             215,530      153,068        40.8
Parts and service                        767,004      722,565         6.2
Finance and insurance                    168,789      136,429        23.7
                                     -----------  -----------  ----------
      Total revenues                   5,509,169    4,525,707        21.7

COST OF SALES:
New vehicle retail sales               2,909,012    2,388,797        21.8
Used vehicle retail sales              1,156,035      872,580        32.5
Used vehicle wholesale sales             212,833      150,764        41.2
Parts and service                        354,256      337,729         4.9
                                     -----------  -----------  ----------
      Total cost of sales              4,632,136    3,749,870        23.5

                                     -----------  -----------  ----------
GROSS PROFIT                             877,033      775,837        13.0
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 693,635      621,048        11.7
DEPRECIATION AND
 AMORTIZATION EXPENSE                     26,455       25,828         2.4
ASSET IMPAIRMENTS                         10,840       20,887       (48.1)
                                     -----------  -----------  ----------
OPERATING INCOME                         146,103      108,074        35.2

OTHER INCOME (EXPENSE):
Floorplan interest expense               (34,110)     (32,345)        5.5
Other interest expense, net              (27,217)     (29,075)       (6.4)
Gain (loss) on redemption of
 long-term debt                           (3,872)       8,211      (147.2)
Other expense, net                             -          (14)     (100.0)
                                     -----------  -----------  ----------
INCOME (LOSS) BEFORE INCOME TAXES         80,904       54,851        47.5

INCOME TAX (PROVISION) BENEFIT           (30,600)     (20,006)       53.0

                                     -----------  -----------  ----------
NET INCOME (LOSS)                    $    50,304  $    34,845        44.4 %
                                     ===========  ===========  ==========

DILUTED INCOME (LOSS) PER SHARE      $      2.16  $      1.49        45.0 %

Weighted average diluted shares
 outstanding                              23,317       23,325        (0.0)%




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


                                      December 31,  December 31,
                                          2010          2009      % Change
                                      ------------  ------------  --------
                                      (Unaudited)
ASSETS:

CURRENT ASSETS:
  Cash and cash equivalents           $     19,843  $     13,221      50.1%
  Contracts in transit and
   vehicle receivables, net                113,846        86,500      31.6
  Accounts and notes receivable, net        75,623        62,496      21.0
  Inventories                              777,771       596,743      30.3
  Deferred income taxes                     14,819        14,653       1.1
  Prepaid expenses and other
   current assets                           17,332        48,425     (64.2)
                                      ------------  ------------  --------
      Total current assets               1,019,234       822,038      24.0
PROPERTY AND EQUIPMENT, net                506,288       475,828       6.4
GOODWILL AND INTANGIBLE
 FRANCHISE RIGHTS                          666,656       658,281       1.3
OTHER ASSETS                                 9,786        13,267     (26.2)
                                      ------------  ------------  --------
      Total assets                    $  2,201,964  $  1,969,414      11.8%
                                      ============  ============  ========

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
  Floorplan notes payable -
   credit facility                    $    690,051  $    491,892      40.3%
     Offset account related to
      floorplan notes payable -
      credit facility                     (129,211)      (71,573)     80.5
  Floorplan notes payable -
   manufacturer affiliates                 103,345       115,180     (10.3)
  Current maturities of mortgage
   facility                                 42,600        10,511     305.3
  Current maturities of
   long-term debt                           10,589         3,844     175.5
  Current liabilities from
   interest rate risk management
   activities                                1,098        10,412     (89.5)
  Accounts payable                          92,799        72,276      28.4
  Accrued expenses                          83,663        86,271      (3.0)
                                      ------------  ------------  --------
      Total current liabilities            894,934       718,813      24.5
2.25% CONVERTIBLE SENIOR NOTES
 (aggregate principal of $182,753 at
 December 31, 2010 and
 December 31, 2009)                        138,155       131,932       4.7
3.00% CONVERTIBLE SENIOR NOTES
 (aggregate principal of $115,000 at
 December 31, 2010)                         74,365             -     100.0
8.25% SENIOR SUBORDINATED NOTES                  -        73,267    (100.0)
MORTGAGE FACILITY, net of current
 maturities                                      -       182,216    (100.0)
OTHER REAL ESTATE RELATED AND
 LONG-TERM DEBT, net of current
 maturities                                161,611        19,040     748.8
CAPITAL LEASE OBLIGATIONS RELATED
 TO REAL ESTATE, net of current
 maturities                                 38,819        37,686       3.0
DEFERRED INCOME TAXES                       58,970        33,932      73.8
LIABILITIES FROM INTEREST RATE
 RISK MANAGEMENT ACTIVITIES                 16,426        20,151     (18.5)
OTHER LIABILITIES                           31,036        26,633      16.5
DEFERRED REVENUES                            3,280         5,588     (41.3)

STOCKHOLDERS' EQUITY:
  Common stock                                 261           262      (0.4)
  Additional paid-in capital               363,966       346,055       5.2
  Retained earnings                        519,843       471,932      10.2
  Accumulated other
   comprehensive loss                      (18,755)      (26,256)    (28.6)
  Treasury stock                           (80,947)      (71,837)     12.7
                                      ------------  ------------  --------
      Total stockholders' equity           784,368       720,156       8.9
                                      ------------  ------------  --------
      Total liabilities and
       stockholders' equity           $  2,201,964  $  1,969,414      11.8%
                                      ============  ============  ========




                         Group 1 Automotive, Inc.
 Consolidated Statements of Adjusted Cash Flows from Operating Activities
                                (Unaudited)
                              (In thousands)


                                            Three Months Ended December 31,
                                               ---------------------------
                                                 2010      2009   % Change
                                               --------  --------  -------

Net income (loss)                              $ 10,569  $ (1,952)   641.4%
Adjustments to reconcile net income (loss)
 to net cash provided by operating activities:
  Asset impairments                               7,719    18,050    (57.2)
  Depreciation and amortization                   6,519     6,287      3.7
  Deferred income taxes                           1,050     6,568    (84.0)
  (Gain) loss on redemption of long-term debt         -         -        -
  (Gain) loss on disposition of assets and
   franchise                                     (2,322)      254 (1,014.2)
  Stock-based compensation                        2,437     1,502     62.3
  Amortization of debt discount and issue costs   3,986     1,617    146.5
  Other                                             (30)      457   (106.6)
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Inventories                                   (21,302) (130,150)   (83.6)
  Floorplan notes payable - credit facility      33,350   117,450    (71.6)
  Floorplan notes payable - manufacturer
   affiliates                                      (299)   25,309   (101.2)
  Contracts-in-transit and vehicle receivables  (21,330)  (19,409)     9.9
  Accounts and notes receivable                  (9,097)  (10,014)    (9.2)
  Prepaid expenses and other assets                (138)   (6,459)   (97.9)
  Deferred revenues                                (549)   (1,155)   (52.5)
  Accounts payable and accrued expenses           6,506    (1,003)   748.7
                                               --------  --------  -------
Adjusted net cash provided by operating
 activities                                    $ 17,069  $  7,352    132.2%
                                               --------  --------  -------



                                           Twelve Months Ended December 31,
                                               ---------------------------
                                                 2010      2009   % Change
                                               --------  --------  -------

Net income (loss)                              $ 50,304  $ 34,845     44.4%
Adjustments to reconcile net income (loss)
 to net cash provided by operating activities:
  Asset impairments                              10,840    20,887    (48.1)
  Depreciation and amortization                  26,455    25,828      2.4
  Deferred income taxes                          23,274    29,646    (21.5)
  (Gain) loss on redemption of long-term debt     3,872    (8,211)   147.2
  (Gain) loss on disposition of assets and
   franchise                                        848       248    241.9
  Stock-based compensation                        9,942     8,869     12.1
  Amortization of debt discount and issue costs  10,322     7,030     46.8
  Other                                             824      (402)   305.0
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Inventories                                  (174,249)  242,996   (171.7)
  Floorplan notes payable - credit facility     198,159  (246,659)   180.3
  Floorplan notes payable - manufacturer
   affiliates                                   (10,580)  (14,145)   (25.2)
  Contracts-in-transit and vehicle receivables  (27,218)   16,500   (265.0)
  Accounts and notes receivable                 (13,844)   10,851   (227.6)
  Prepaid expenses and other assets               6,922       845    719.2
  Deferred revenues                              (2,308)   (4,632)   (50.2)
  Accounts payable and accrued expenses          16,130   (16,481)   197.9
                                               --------  --------  -------
Adjusted net cash provided by operating
 activities                                   $ 129,693  $108,015     20.1%
                                               --------  --------  -------




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


                                             Three Months   Twelve Months
                                                Ended           Ended
                                             December 31,    December 31,
                                            --------------  --------------
                                             2010    2009    2010    2009
                                            ------  ------  ------  ------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
   Region                 Geographic Market
   Eastern                Massachusetts       12.2%   14.9%   14.3%   15.1%
                          New Jersey           5.9     6.3     6.3     6.5
                          New York             3.9     4.4     3.8     4.1
                          Georgia              3.8     3.9     3.9     3.7
                          New Hampshire        3.7     4.3     4.0     4.2
                          Louisiana            3.6     2.8     3.2     3.1
                          South Carolina       1.9     0.3     1.3     0.3
                          Mississippi          1.7     1.7     1.7     1.8
                          Alabama              1.1     0.8     1.2     0.7
                          Maryland             0.8     0.9     0.8     0.9
                          Florida              0.7     2.0     1.2     1.7
                                            ------  ------  ------  ------
                                              39.3    42.3    41.7    42.1

   Central                Texas               32.6    31.8    31.2    32.1
                          Oklahoma             7.4     8.0     7.8     8.3
                          Kansas               0.9     1.2     0.9     1.2
                                            ------  ------  ------  ------
                                              40.9    41.0    39.9    41.6

   Western                California          14.5    13.9    13.7    14.0

   International          United Kingdom       5.3     2.8     4.7     2.3
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

NEW VEHICLE UNIT SALES BRAND MIX:
   Toyota/Scion/Lexus                         35.5%   38.0%   35.5%   36.6%
   BMW/Mini                                   13.3    10.8    11.9     9.8
   Nissan/Infiniti                            12.6    12.6    14.1    12.8
   Honda/Acura                                11.6    11.4    12.0    12.6
   Ford                                        7.4     8.1     7.8     7.9
   Mercedes-Benz                               6.3     7.4     5.8     5.9
   GM                                          4.3     4.3     4.0     3.8
   Chrysler                                    3.3     2.7     3.0     5.0
   Other                                       5.7     4.7     5.9     5.6
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

NEW VEHICLE UNIT SALES OTHER MIX:
   Import                                     55.1%   55.7%   57.5%   57.8%
   Luxury                                     30.1    29.5    27.8    25.7
   Domestic                                   14.8    14.8    14.7    16.5
                                            ------  ------  ------  ------
                                             100.0%  100.0%  100.0%  100.0%

   Car                                        56.4%   57.3%   58.2%   58.6%
   Truck                                      43.6    42.7    41.8    41.4
                                            ------  ------  ------  ------
                                             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,
                                     -------------------------------------
                                         2010         2009       % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $   832,714  $   659,058        26.3 %

   Used vehicle retail sales             310,663      241,269        28.8
   Used vehicle wholesale sales           58,877       40,532        45.3
                                     -----------  -----------
       Total used                        369,540      281,801        31.1
   Parts and service                     191,242      175,341         9.1
   Finance and insurance                  44,256       34,216        29.3
                                     -----------  -----------
       Total                         $ 1,437,752  $ 1,150,416        25.0 %

GROSS MARGIN:
   New vehicle retail sales                  5.6%         6.2%

   Used vehicle retail sales                 8.2          8.8
   Used vehicle wholesale sales             (0.7)        (2.5)
       Total used                            6.8          7.2
   Parts and service                        53.1         53.8
   Finance and insurance                   100.0        100.0
       Total                                15.1%        16.5%

GROSS PROFIT:
   New vehicle retail sales          $    46,235  $    41,161        12.3 %

   Used vehicle retail sales              25,451       21,329        19.3
   Used vehicle wholesale sales             (391)      (1,027)      (61.9)
                                     -----------  -----------
       Total used                         25,060       20,302        23.4
   Parts and service                     101,470       94,368         7.5
   Finance and insurance                  44,256       34,216        29.3
                                     -----------  -----------
       Total                         $   217,021  $   190,047        14.2 %

UNITS SOLD:
   Retail new vehicles sold               25,383       20,240        25.4 %

   Retail used vehicles sold              15,771       12,886        22.4
   Wholesale used vehicles sold            8,808        6,571        34.0
                                     -----------  -----------
       Total used                         24,579       19,457        26.3 %

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     1,821  $     2,034       (10.5)%

   Used vehicle retail sales               1,614        1,655        (2.5)
   Used vehicle wholesale sales              (44)        (156)      (71.8)
       Total used                          1,020        1,043        (2.2)
   Finance and insurance
    (per retail unit)                $     1,075  $     1,033         4.1 %

OTHER (1):
   SG&A expenses                     $   170,839  $   153,233        11.5 %
   SG&A as % revenues                       11.9%        13.3%
   SG&A as % gross profit                   78.7%        80.6%
   Operating margin                          2.8%         2.7%
   Pretax margin                             1.7%         1.3%

FLOORPLAN EXPENSE:
   Floorplan interest                $    (8,890) $    (8,003)       11.1 %
   Floorplan assistance                    6,162        5,009        23.0
                                     -----------  -----------
       Net floorplan expense         $    (2,728) $    (2,994)       (8.9)%




                                       Twelve Months Ended December 31,
                                     -------------------------------------
                                         2010         2009       % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $ 3,086,807  $ 2,543,031        21.4 %

   Used vehicle retail sales           1,271,039      970,614        31.0
   Used vehicle wholesale sales          215,530      153,068        40.8
                                     -----------  -----------
       Total used                      1,486,569    1,123,682        32.3
   Parts and service                     767,004      722,565         6.2
   Finance and insurance                 168,789      136,429        23.7
                                     -----------  -----------
       Total                         $ 5,509,169  $ 4,525,707        21.7 %

GROSS MARGIN:
   New vehicle retail sales                  5.8%         6.1%

   Used vehicle retail sales                 9.0         10.1
   Used vehicle wholesale sales              1.3          1.5
       Total used                            7.9          8.9
   Parts and service                        53.8         53.3
   Finance and insurance                   100.0        100.0
       Total                                15.9%        17.1%

GROSS PROFIT:
   New vehicle retail sales          $   177,795  $   154,234        15.3 %

   Used vehicle retail sales             115,004       98,034        17.3
   Used vehicle wholesale sales            2,697        2,304        17.1
                                     -----------  -----------
       Total used                        117,701      100,338        17.3
   Parts and service                     412,748      384,836         7.3
   Finance and insurance                 168,789      136,429        23.7
                                     -----------  -----------
       Total                         $   877,033  $   775,837        13.0 %

UNITS SOLD:
   Retail new vehicles sold               97,511       83,182        17.2 %

   Retail used vehicles sold              66,001       54,067        22.1
   Wholesale used vehicles sold           33,524       27,793        20.6
                                     -----------  -----------
       Total used                         99,525       81,860        21.6 %

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     1,823  $     1,854        (1.7)%

   Used vehicle retail sales               1,742        1,813        (3.9)
   Used vehicle wholesale sales               80           83        (3.6)
       Total used                          1,183        1,226        (3.5)
   Finance and insurance
    (per retail unit)                $     1,032  $       994         3.8 %

OTHER (1):
   SG&A expenses                     $   689,320  $   620,749        11.0 %
   SG&A as % revenues                       12.5%        13.7%
   SG&A as % gross profit                   78.6%        80.0%
   Operating margin                          2.9%         2.9%
   Pretax margin                             1.8%         1.5%

FLOORPLAN EXPENSE:
   Floorplan interest                $   (34,110) $   (32,345)        5.5 %
   Floorplan assistance                   23,998       20,039        19.8
                                     -----------  -----------
       Net floorplan expense         $   (10,112) $   (12,306)      (17.8)%

(1) These amounts have been adjusted to exclude the impact of certain items
    to provide additional information regarding the performance of our
    operations and improve period-to-period comparability. Refer to our
    Reconciliation of Certain Non-GAAP Financial Measures for a description
    of the aforementioned adjustments.





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


                                        Three Months Ended December 31,
                                     ------------------------------------
                                         2010         2009      % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $   791,481  $   648,137        22.1 %
   Used vehicle retail sales             294,301      238,001        23.7
   Used vehicle wholesale sales           55,119       39,839        38.4
                                     -----------  -----------
       Total used                        349,420      277,840        25.8
   Parts and service                     185,648      171,001         8.6
   Finance and insurance                  43,190       33,783        27.8
                                     -----------  -----------
       Total                         $ 1,369,739  $ 1,130,761        21.1 %

GROSS MARGIN:
   New vehicle retail sales                  5.5%         6.3%
   Used vehicle retail sales                 8.3          8.9
   Used vehicle wholesale sales             (0.3)        (2.4)
       Total used                            6.9          7.3
   Parts and service                        53.0         54.0
   Finance and insurance                   100.0        100.0
       Total                                15.3%        16.5%

GROSS PROFIT:
   New vehicle retail sales          $    43,751  $    40,735         7.4 %
   Used vehicle retail sales              24,362       21,101        15.5
   Used vehicle wholesale sales             (182)        (947)      (80.8)
                                     -----------  -----------
       Total used                         24,180       20,154        20.0
   Parts and service                      98,457       92,281         6.7
   Finance and insurance                  43,190       33,783        27.8
                                     -----------  -----------
       Total                         $   209,578  $   186,953        12.1 %

UNITS SOLD:
   Retail new vehicles sold               24,080       19,919        20.9 %
   Retail used vehicles sold              15,027       12,699        18.3
   Wholesale used vehicles sold            8,330        6,454        29.1
                                     -----------  -----------
       Total used                         23,357       19,153        21.9 %

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     1,817  $     2,045       (11.1)%
   Used vehicle retail sales               1,621        1,662        (2.5)
   Used vehicle wholesale sales              (22)        (147)      (85.0)
       Total used                          1,035        1,052        (1.6)
   Finance and insurance
    (per retail unit)                $     1,104  $     1,036         6.6 %

OTHER:
   SG&A expenses                     $   163,801  $   149,716         9.4 %
   SG&A as % revenues                       12.0%        13.2%
   SG&A as % gross profit                   78.2%        80.1%
   Operating margin                          2.5%         2.4%

FLOORPLAN EXPENSE:
   Floorplan interest                $    (8,736) $    (7,873)       11.0 %
   Floorplan assistance                    6,039        4,888        23.5
                                     -----------  -----------
       Net floorplan expense         $    (2,697) $    (2,985)       (9.6)%




                                       Twelve Months Ended December 31,
                                     ------------------------------------
                                         2010         2009      % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $ 2,961,961  $ 2,494,827        18.7 %
   Used vehicle retail sales           1,208,687      948,785        27.4
   Used vehicle wholesale sales          202,243      149,530        35.3
                                     -----------  -----------
       Total used                      1,410,930    1,098,315        28.5
   Parts and service                     745,840      702,811         6.1
   Finance and insurance                 165,598      133,765        23.8
                                     -----------  -----------
       Total                         $ 5,284,329  $ 4,429,718        19.3 %

GROSS MARGIN:
   New vehicle retail sales                  5.7%         6.1%
   Used vehicle retail sales                 9.2         10.1
   Used vehicle wholesale sales              1.5          1.6
       Total used                            8.1          8.9
   Parts and service                        53.8         53.4
   Finance and insurance                   100.0        100.0
       Total                                16.1%        17.1%

GROSS PROFIT:
   New vehicle retail sales          $   169,717  $   152,252        11.5 %
   Used vehicle retail sales             110,707       95,780        15.6
   Used vehicle wholesale sales            3,115        2,417        28.9
                                     -----------  -----------
       Total used                        113,822       98,197        15.9
   Parts and service                     401,377      375,169         7.0
   Finance and insurance                 165,598      133,765        23.8
                                     -----------  -----------
       Total                         $   850,514  $   759,383        12.0 %

UNITS SOLD:
   Retail new vehicles sold               93,491       81,599        14.6 %
   Retail used vehicles sold              63,123       52,654        19.9
   Wholesale used vehicles sold           31,956       27,115        17.9
                                     -----------  -----------
       Total used                         95,079       79,769        19.2 %

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     1,815  $     1,866        (2.7)%
   Used vehicle retail sales               1,754        1,819        (3.6)
   Used vehicle wholesale sales               97           89         9.0
       Total used                          1,197        1,231        (2.8)
   Finance and insurance
    (per retail unit)                $     1,057  $       996         6.1 %

OTHER:
   SG&A expenses                     $   663,960  $   603,366        10.0 %
   SG&A as % revenues                       12.6%        13.6%
   SG&A as % gross profit                   78.1%        79.5%
   Operating margin                          2.9%         2.9%

FLOORPLAN EXPENSE:
   Floorplan interest                $   (33,520) $   (31,966)        4.9 %
   Floorplan assistance                   23,675       19,510        21.3
                                     -----------  -----------
       Net floorplan expense         $    (9,845) $   (12,456)      (21.0)%

(1) Same store amounts include the results for the identical months in each
    period presented in the comparison, commencing with the first full
    month we owned the dealership and, in the case of dispositions, ending
    with the last full month we owned it. Same store results also include
    the activities of our corporate office.




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



                                         Three Months Ended December 31,
                                         --------------------------------
NET INCOME RECONCILIATION:                  2010        2009     % Change
                                         ----------  ----------  --------
   As reported                           $   10,569  $   (1,952)    641.4 %
     After-tax Adjustments:
       Non-Cash asset impairment
        charges (2)                           4,947      11,557
       Mortgage debt refinance
        charges (3)                               -           -
       Loss on dealership
        dispositions (4)                          -         651
       Loss (gain) on debt
        redemption (5)                            -           -
       Severance costs related to
        UK-dealership acquisitions (6)            -           -
       Income tax benefit related to
        discrete items (7)                     (810)          -
       Gain on sale of real estate (8)            -           -
                                         ----------  ----------
         Adjusted net income (1)         $   14,706  $   10,256      43.4 %

DILUTED INCOME PER SHARE
 RECONCILIATION (11):
   As reported                           $     0.46  $    (0.08)    675.0 %
     After-tax Adjustments:
       Non-Cash asset impairment charges       0.22        0.49
       Mortgage debt refinance charges            -           -
       Loss on dealership dispositions            -        0.02
       Loss (gain) on debt redemption             -           -
       Severance costs related to
        UK-dealership acquisitions                -           -
       Income tax benefit related to
        discrete items                        (0.04)          -
       Gain on sale of real estate                -           -
                                         ----------  ----------
         Adjusted diluted income
          per share (1)                  $     0.64  $     0.43      48.8 %

SG&A RECONCILIATION:
   As reported                           $  170,839  $  154,235      10.8 %
     Pre-tax Adjustments:
       Loss on dealership dispositions            -      (1,002)
       Severance costs related to
        UK-dealership acquisitions                -           -
       Gain on sale of real estate                -           -
                                         ----------  ----------
         Adjusted SG&A (1)               $  170,839  $  153,233      11.5 %

SG&A AS % REVENUES:

   Unadjusted                                  11.9 %      13.4 %
   Adjusted (1)                                11.9 %      13.3 %

SG&A AS % OF GROSS PROFIT:

   Unadjusted                                  78.7 %      81.2 %
   Adjusted (1)                                78.7 %      80.6 %

OPERATING MARGIN:

   Unadjusted                                   2.2 %       1.0 %
   Adjusted (1), (9)                            2.8 %       2.7 %

PRETAX MARGIN:

   Unadjusted                                   1.1 %      (0.3)%
   Adjusted (1), (10)                           1.7 %       1.3 %



                                         Three Months Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES     --------------------------------
 RECONCILIATION:                            2010        2009     % Change
                                         ----------  ----------  --------
   Net cash provided by (used in)
    operating activities                 $  (16,281) $ (110,098)    (85.2)%
       Change in floorplan notes
        payable-credit facility,
        excluding floorplan offset
        account                              33,350     117,450
                                         ----------  ----------
         Adjusted net cash provided
          by operating activities (1)    $   17,069  $    7,352     132.2 %




                                         Twelve Months Ended December 31,
                                         --------------------------------
NET INCOME RECONCILIATION:                  2010        2009     % Change
                                         ----------  ----------  --------
   As reported                           $   50,304  $   34,845      44.4 %
     After-tax Adjustments:
       Non-Cash asset impairment
        charges (2)                           6,930      13,283
       Mortgage debt refinance
        charges (3)                               -         331
       Loss on dealership
        dispositions (4)                      3,698         200
       Loss (gain) on debt
        redemption (5)                        2,458      (5,299)
       Severance costs related to
        UK-dealership acquisitions (6)          405           -
       Income tax benefit related to
        discrete items (7)                     (810)     (1,604)
       Gain on sale of real estate (8)         (761)          -
                                         ----------  ----------
         Adjusted net income (1)         $   62,224  $   41,756      49.0 %

DILUTED INCOME PER SHARE
 RECONCILIATION (11):
   As reported                           $     2.16  $     1.49      45.0 %
     After-tax Adjustments:
       Non-Cash asset impairment charges       0.30        0.57
       Mortgage debt refinance charges            -        0.01
       Loss on dealership dispositions         0.15        0.01
       Loss (gain) on debt redemption          0.10       (0.22)
       Severance costs related to
        UK-dealership acquisitions             0.02           -
       Income tax benefit related to
        discrete items                        (0.03)      (0.07)
       Gain on sale of real estate            (0.03)          -
                                         ----------  ----------
         Adjusted diluted income
          per share (1)                  $     2.67  $     1.79      49.2 %

SG&A RECONCILIATION:
   As reported                           $  693,635  $  621,048      11.7 %
     Pre-tax Adjustments:
       Loss on dealership dispositions       (5,053)       (299)
       Severance costs related to
        UK-dealership acquisitions             (562)          -
       Gain on sale of real estate            1,300           -
                                         ----------  ----------
         Adjusted SG&A (1)               $  689,320  $  620,749      11.0 %

SG&A AS % REVENUES:

   Unadjusted                                  12.6 %      13.7 %
   Adjusted (1)                                12.5 %      13.7 %

SG&A AS % OF GROSS PROFIT:

   Unadjusted                                  79.1 %      80.0 %
   Adjusted (1)                                78.6 %      80.0 %

OPERATING MARGIN:

   Unadjusted                                   2.7 %       2.4 %
   Adjusted (1), (9)                            2.9 %       2.9 %

PRETAX MARGIN:

   Unadjusted                                   1.5 %       1.2 %
   Adjusted (1), (10)                           1.8 %       1.5 %


                                         Twelve Months Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES     --------------------------------
 RECONCILIATION:                            2010        2009     % Change
                                         ----------  ----------  --------
   Net cash provided by (used in)
    operating activities                 $  (68,466) $  354,674    (119.3)%
       Change in floorplan notes
        payable-credit facility,
        excluding floorplan offset
        account                             198,159    (246,659)
                                         ----------  ----------
         Adjusted net cash provided
          by operating activities (1)    $  129,693  $  108,015      20.1 %


(1) We believe that these adjusted financial measures are relevant and
     useful to investors because they provide additional information
     regarding the performance of our operations and improve
     period-to-period comparability. These measures are not measures of
     financial performance under GAAP. Accordingly, they should not be
     considered as substitutes for their unadjusted counterparts, which
     are 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 financial statements calculated in
     accordance with GAAP. Therefore, we typically use these adjusted
     numbers in conjunction with our GAAP results to address these
     limitations.

 (2) Adjustments are net of tax benefit of $2,772 and $3,910 for the three
     and twelve months ended December 31, 2010, and $6,493 and $7,509 for
     the three and twelve months ended December 31, 2009, respectively,
     calculated utilizing the applicable federal and state tax rates for
     the adjustment.

 (3) Adjustment is net of a tax benefit of $203 for the twelve months ended
     December 31, 2009, calculated utilizing the applicable federal and
     state tax rates for the adjustment.

 (4) Adjustments are net of tax benefit of $1,355 for the twelve months
     ended December 31, 2010 and $351 and $99 for the three and twelve
     months ended December 31, 2009, calculated utilizing the applicable
     federal and state tax rates for the adjustment.

 (5) Adjustments are net of tax benefit of $1,414 for the twelve months
     ended December 31, 2010 and tax provision of $3,446 for the twelve
     months ended December 31, 2009, respectively, calculated utilizing the
     applicable federal and state tax rates for the adjustment.

 (6) Adjustment is net of a tax benefit of $157 for the twelve months ended
     December 31, 2010, calculated utilizing the applicable UK corporate
     tax rate for the adjustment.

 (7) The $0.8 million income tax benefit for the three months ended
     December 31, 2010 relates to the tax deductibility of goodwill written
     off in conjunction with the termination of a franchise, and the
     $1.6 million income tax benefit for the twelve months ended
     December 31, 2009 relates to a tax election made for prior periods.

 (8) Adjustment is net of a tax provision of $539 for the twelve months
     ended December 31, 2010, calculated utilizing the applicable federal
     and state tax rate for the adjustment.

 (9) Excludes the impact of non-cash asset impairment charges, loss on
     dealership dispositions, severance costs related to UK-dealership
     acquisitions, and gain on sale of real estate.

(10) Excludes the impact of non-cash asset impairment charges, mortgage
     debt refinance charges, loss on dealership dispositions, gain/loss on
     debt redemption, severance costs related to UK-dealership
     acquisitions, and gain on sale of real estate.

(11) The sum of the quarterly income per share amounts may not equal the
     year-to-date amount reported, as per share amounts are computed
     independently for each quarter and for the year-to-date, based on the
     respective weighted average common shares outstanding.

Contact Information

  • Investor contacts:
    Kim Paper Canning, Manager, Investor Relations | Group 1 Automotive Inc. |
    713-647-5741 | Email Contact

    Media contacts:
    Pete DeLongchamps, Vice President, Manufacturer Relations and Public
    Affairs | Group 1 Automotive Inc. | 713-647-5770 |
    Email Contact
    or
    Clint Woods, Pierpont Communications, Inc. | 713-627-2223 |
    Email Contact