Group 1 Automotive Reports Record Full Year 2013 Financial Results - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Group 1 Automotive Reports Record Full Year 2013 Financial Results

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SOURCE Group 1 Automotive, Inc.

Revenue Increases 19.3 Percent to $8.9 Billion

HOUSTON, Feb. 5, 2014 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported 2013 fourth quarter adjusted net income of $28.9 million and adjusted diluted earnings per common share of $1.08 for the period ended December 31, 2013. Full year 2013 adjusted net income increased 20.8 percent, to a record $130.7 million, and adjusted diluted earnings per common share were an all-time high of $4.96.

Fourth Quarter 2013 Results (year-over-year comparable basis unless otherwise noted)

  • Total gross profit grew 14.7 percent on 17.6 percent higher revenues of $2.3 billion.
  • New vehicle revenues increased 16.9 percent on 17.4 percent more unit sales. New vehicle gross profit increased 14.6 percent.
  • Retail used vehicle gross profit increased 7.8 percent on 18.9 percent higher revenues, as the Company retailed 18.3 percent more units.
  • Parts and service gross profit increased 17.1 percent on 15.9 percent higher revenues.  Same Store parts and service revenues grew 7.5 percent.
  • Same Store finance and insurance (F&I) gross profit per retail unit rose 7.4 percent or $96 to $1,388. Within this growth, U.S. Same Store F&I gross profit per retail unit improved $110 to $1,436.
  • SG&A expenses (adjusted) as a percent of gross profit improved 40 basis points to 76.3 percent.  Same Store SG&A (adjusted) as a percent of gross profit improved 70 basis points to 74.9 percent.
  • Operating margin (adjusted) on a Same Store basis improved to 3.2 percent.

Full Year 2013 Results (year-over-year comparable basis unless otherwise noted)

  • Total gross profit grew 15.7 percent on 19.3 percent higher revenues of $8.9 billion.
  • New vehicle gross profit increased 17.2 percent on 21.8 percent higher revenues, as the Company retailed 155,866 new vehicles in 2013.
  • Retail used vehicle gross profit was 10.2 percent higher on a 16.1 percent revenue increase, as the Company retailed 98,813 used units in 2013.
  • Parts and service gross profit rose 15.0 percent on 14.8 percent higher revenues.
  • Same Store parts and service revenue grew 7.4 percent.
  • F&I revenues rose 19.8 percent on 19.1 percent more retail unit sales; gross profit per retail unit was a record-setting $1,223. Same Store F&I profit per retail unit grew to a record $1,345, an increase of $111
  • SG&A expenses (adjusted) as a percent of gross profit improved 60 basis points to 74.8 percent, while Same Store SG&A (adjusted) as a percent of gross profit improved 90 basis points to 73.6 percent.
  • Operating margin (adjusted) on a Same Store basis improved 10 basis points to 3.5 percent.

"Overall, 2013 was a great year for Group 1 Automotive with total revenue growth of 19.3 percent and all-time record net income and earnings per diluted share," said Earl J. Hesterberg, Group 1's president and chief executive officer. "We made significant progress during the year with the completion of multi-year projects to consolidate U.S. transactional accounting and commonize key operating computer systems across all of our U.S. stores.  We continued to deliver sector leading results in our parts and service and F&I operations and added approximately $1 billion in net acquisition revenue during the year.  The combination of all these actions has Group 1 well positioned for another strong year in 2014."

Segment Results for Fourth Quarter 2013 (year-over-year comparable basis unless otherwise noted)

  • United States:

Group 1's U.S. revenues were $1.9 billion, an increase of 3.6 percent.  The revenue growth was driven by a 6.0 percent increase in used vehicle unit sales, an increase of 5.9 percent in parts and service revenue, and an 11.0 percent increase in F&I.  On a same-store basis, parts and service revenue increased 7.8 percent.  The revenue drove gross profit growth of 4.0 percent, reflecting the higher unit retail volumes, expanded parts and service margins of 40 basis points, and an F&I increase of $117, to $1,418 per retail unit.  

On a comparable basis, adjusted SG&A expenses as a percent of gross profit improved 170 basis points to 74.4 percent; both operating and pre-tax margins improved 20 basis points to 3.3 percent and 2.3 percent respectively.  Group 1's U.S. operations accounted for 81.6 percent of total revenues, 84.9 percent of total gross profit and 93.2 percent of the Company's adjusted pretax income.

  • United Kingdom:

Group 1's U.K. operations accounted for 8.7 percent of total revenues, 7.7 percent of total gross profit, and 6.0 percent of the Company's adjusted pretax income.  Reflecting significant acquisition activity over the past year, total revenue increased 38.0 percent to $197.4 million, and gross profit increased 37.5 percent.  Revenue growth was primarily driven by 37.5 percent and 94.3 percent increases in new and used vehicle retail unit sales, respectively.

On a comparable basis, adjusted SG&A expenses as a percent of gross profit improved 250 basis points to 82.7 percent.

  • Brazil:

Group 1's Brazil operations accounted for 9.7 percent of total revenues, 7.4 percent of total gross profit and 0.8 percent of the Company's adjusted pretax income.  Gross profit was $23.8 million on revenues of $221.6 million.  New vehicle sales were the primary revenue contributor at 73.9 percent, while new vehicles and parts and service were the primary gross profit contributors at 43.8 percent and 36.7 percent, respectively.

Adjusted SG&A expenses as a percent of gross profit was at 90.6 percent, operating margin was 0.8 percent and pretax margin was 0.2 percent.

Corporate Development

During the fourth quarter, Group 1 purchased 9 franchises that are expected to generate $350.0 million in estimated annual revenues.  During 2013, Group 1 acquired a total of 38 franchises that are expected to generate $1.3 billion in estimated annual revenues and disposed of 7 franchises that generated $318.9 million of annual revenues.  On January 21, 2014, Group 1 acquired two franchises (Ford and Hyundai) in Escondido, California that are expected to generate $135.0 million in estimated annual revenues.

Share Repurchase Authorization

Group 1 repurchased 55,655 shares of its common stock at an average share price of $63.82 during the fourth quarter of 2013. The Company's remaining common stock share repurchase authorization is $71.4 million.

Fourth Quarter Earnings Conference Call Details

Group 1's senior management will host a conference call today at 9 a.m. ET to discuss the fourth quarter financial results and the Company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/events. A webcast replay will be available for 30 days.

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

Domestic:          

1.877.870.4263

International:      

1.412.317.0790

A telephonic replay will be available following the call through March 5, 2014 at 9:00 a.m. ET by dialing:

Domestic:          

1.877.344.7529

International:      

1.412.317.0088

Replay ID:         

10039697

About Group 1 Automotive, Inc.

Group 1 owns and operates 150 automotive dealerships, 190 franchises, and 37 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles.  Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

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

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions.  In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions.  While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.  Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements.  These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel.  For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com

Media contacts:
Pete DeLongchamps
V.P. Manufacturer Relations and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com


Group 1 Automotive, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)








Three Months Ended December 31,


2013


2012


% Change

REVENUES:






New vehicle retail sales

$1,351,800


$1,156,507


16.9

Used vehicle retail sales

503,397


423,315


18.9

Used vehicle wholesale sales

88,518


69,724


27.0

Parts and service

256,909


221,666


15.9

Finance and insurance

78,868


67,745


16.4

Total revenues

2,279,492


1,938,957


17.6







COST OF SALES:






New vehicle retail sales

1,278,221


1,092,280


17.0

Used vehicle retail sales

467,781


390,284


19.9

Used vehicle wholesale sales

90,113


69,664


29.4

Parts and service

122,056


106,476


14.6

Total cost of sales

1,958,171


1,658,704


18.1







GROSS PROFIT

321,321


280,253


14.7







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

245,401


218,925


12.1







DEPRECIATION AND AMORTIZATION EXPENSE

9,436


8,460


11.5







ASSET IMPAIRMENTS

5,368


6,988


(23.2)







OPERATING INCOME

61,116


45,880


33.2







OTHER EXPENSE:






Floorplan interest expense

(10,740)


(8,372)


28.3

Other interest expense, net

(10,188)


(9,616)


5.9

INCOME BEFORE INCOME TAXES

40,188


27,892


44.1







PROVISION FOR INCOME TAXES

(18,467)


(10,760)


71.6







NET INCOME

$           21,721


$           17,132


26.8

Earnings allocated to participating securities

$              (794)


$              (758)


4.7

Earnings available to diluted common shares

$           20,927


$           16,374


27.8

DILUTED EARNINGS PER SHARE

$               0.81


$               0.70


15.7

Weighted average dilutive common shares outstanding

25,792


23,244


11.0

Weighted average participating securities

983


1,091


(9.9)

Total weighted average shares outstanding

26,775


24,335


10.0














Twelve Months Ended December 31,


2013


2012


% Change

REVENUES:






New vehicle retail sales

$5,224,921


$4,291,098


21.8

Used vehicle retail sales

2,039,428


1,756,918


16.1

Used vehicle wholesale sales

332,185


288,139


15.3

Parts and service

1,010,685


880,070


14.8

Finance and insurance

311,362


259,875


19.8

Total revenues

8,918,581


7,476,100


19.3







COST OF SALES:






New vehicle retail sales

4,935,046


4,043,659


22.0

Used vehicle retail sales

1,878,549


1,610,912


16.6

Used vehicle wholesale sales

332,380


285,695


16.3

Parts and service

480,060


418,582


14.7

Total cost of sales

7,626,035


6,358,848


19.9







GROSS PROFIT

1,292,546


1,117,252


15.7







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

976,856


848,446


15.1







DEPRECIATION AND AMORTIZATION EXPENSE

35,826


31,534


13.6







ASSET IMPAIRMENTS

6542


7276


(10.1)







OPERATING INCOME

273,322


229,996


18.8







OTHER EXPENSE:






Floorplan interest expense

(41,667)


(31,796)


31.0

Other interest expense, net

(38,971)


(37,465)


4.0

Other expense, net

(789)


-


100.0

INCOME BEFORE INCOME TAXES

191,895


160,735


19.4







PROVISION FOR INCOME TAXES

(77,903)


(60,526)


28.7







NET INCOME

$         113,992


$         100,209


13.8

Earnings allocated to participating securities

$           (4,599)


$           (5,062)


(9.1)

Earnings available to diluted common shares

$         109,393


$           95,147


15.0

DILUTED EARNINGS PER SHARE

$               4.32


$               4.19


3.1

Weighted average dilutive common shares outstanding

25,314


22,688


11.6

Weighted average participating securities

1,067


1,215


(12.2)

Total weighted average shares outstanding

26,381


23,903


10.4

 

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)










December 31,


December 31,





2013


2012


% Change



(Unaudited)





 ASSETS: 







 CURRENT ASSETS: 







 Cash and cash equivalents 


$          20,215


$            4,650


334.7

 Contracts in transit and vehicle receivables, net 


225,156


204,396


10.2

 Accounts and notes receivable, net 


135,058


111,228


21.4

 Inventories, net 


1,542,318


1,194,288


29.1

 Deferred income taxes 


21,150


19,750


7.1

 Prepaid expenses and other current assets 


24,041


31,869


(24.6)

 Total current assets 


1,967,938


1,566,181


25.7

 PROPERTY AND EQUIPMENT, net 


796,356


667,768


19.3

 GOODWILL AND INTANGIBLE FRANCHISE RIGHTS 


1,038,808


778,442


33.4

 OTHER ASSETS 


16,376


10,624


54.1

 Total assets 


$     3,819,478


$     3,023,015


26.3








 LIABILITIES AND STOCKHOLDERS' EQUITY: 







 CURRENT LIABILITIES: 







 Floorplan notes payable - credit facility and other 


$     1,143,104


$        968,959


18.0

 Offset account related to floorplan notes payable - credit facility 


(56,198)


(112,261)


(49.9)

 Floorplan notes payable - manufacturer affiliates 


346,572


211,965


63.5

 Current maturities of long-term debt and short-term financing 


36,225


31,358


15.5

 Accounts payable 


254,930


167,439


52.3

 Accrued expenses 


140,543


128,118


9.7

 Total current liabilities 


1,865,176


1,395,578


33.6

 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at December 31, 2013 and December 31, 2012) 


160,334


152,363


5.2

 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at December 31, 2013 and December 31, 2012) 


84,305


80,706


4.5

 MORTGAGE FACILITY, net of current maturities 


64,271


53,643


19.8

 ACQUISITION LINE 


60,000


-


100.0

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


250,958


232,285


8.0

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


43,821


36,019


21.7

 DEFERRED INCOME TAXES 


152,291


94,130


61.8

 LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES 


26,078


43,089


(39.5)

 OTHER LIABILITIES 


47,975


42,413


13.1

 COMMITMENTS AND CONTINGENCIES 







 TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 3.00% CONVERTIBLE SENIOR NOTES 


29,094


32,505


(10.5)

 STOCKHOLDERS' EQUITY: 







 Common stock 


257


258


(0.4)

 Additional paid-in capital 


368,641


332,836


10.8

 Retained earnings 


776,101


677,864


14.5

 Accumulated other comprehensive loss 


(51,677)


(33,057)


56.3

 Treasury stock 


(58,147)


(117,617)


(50.6)

 Total stockholders' equity 


1,035,175


860,284


20.3

 Total liabilities and stockholders' equity 


$     3,819,478


$     3,023,015


26.3

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)














Three Months Ended


Nine Months Ended




December 31,


December 31,




2013 (%)


2012 (%)


2013 (%)


2012 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:








Region

Geographic Market









East

Massachusetts


4.6


6.6


5.6


9.1


New Jersey


4.2


5.4


4.2


5.1


Georgia


3.4


4.0


3.5


3.6


New York


2.8


4.2


2.7


3.3


New Hampshire


2.1


2.6


2.3


2.8


Louisiana


2.1


2.5


2.3


2.5


South Carolina


1.8


2.0


1.6


1.8


Mississippi


1.3


1.8


1.5


2.0


Florida


1.3


1.9


1.3


1.4


Alabama


0.8


1.0


0.8


1.0


Maryland


0.6


0.8


0.6


0.7




25.0


32.8


26.4


33.3











West

Texas


34.5


36.8


32.9


36.7


California


9.2


14.9


10.3


14.6


Oklahoma


7.3


7.5


7.7


7.8


Kansas


2.5


1.5


2.5


1.4


Louisiana


0.7


-


0.4


-




54.2


60.7


53.8


60.5











International

Brazil


13.2


-


11.0


-


United Kingdom


7.6


6.5


8.8


6.2




100.0


100.0


100.0


100.0











NEW VEHICLE UNIT SALES BRAND MIX:









Toyota/Scion/Lexus


25.4


28.6


26.6


30.3

Honda/Acura


12.9


11.0


12.3


11.1

BMW/MINI


12.1


13.0


11.1


11.3

Ford/Lincoln


11.1


9.5


11.6


9.3

Nissan/Infiniti


9.9


10.0


10.2


11.4

Mercedes Benz/smart/Sprinter


5.5


6.7


4.5


5.1

Volkswagen/Audi/Porsche


5.5


6.8


6.3


6.6

Chevrolet/GMC/Buick/Cadillac


5.0


5.2


4.8


5.6

Hyundai/Kia


4.5


3.5


4.6


3.1

Chrysler/Dodge/Jeep/RAM


3.8


4.3


4.0


4.4

Other


4.3


1.4


4.0


1.8




100.0


100.0


100.0


100.0

 

Group 1 Automotive, Inc.

Additional Information - U.S.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 1,088,452


$ 1,078,756


0.9

Used vehicle retail sales


417,443


387,303


7.8

Used vehicle wholesale sales


62,768


57,421


9.3

Total used


480,211


444,724


8.0

Parts and service


219,633


207,449


5.9

Finance and insurance


72,225


65,042


11.0

Total


$ 1,860,521


$ 1,795,971


3.6








GROSS MARGIN %:







New vehicle retail sales


5.2


5.3



Used vehicle retail sales


7.2


8.0



Used vehicle wholesale sales


(2.9)


0.4



Total used


5.9


7.0



Parts and service


52.7


52.3



Finance and insurance


100.0


100.0



Total


14.7


14.6










GROSS PROFIT:







New vehicle retail sales


$ 56,349


$ 57,695


(2.3)

Used vehicle retail sales


30,156


30,808


(2.1)

Used vehicle wholesale sales


(1,830)


237


(872.2)

Total used


28,326


31,045


(8.8)

Parts and service


115,831


108,442


6.8

Finance and insurance


72,225


65,042


11.0

Total


$ 272,731


$ 262,224


4.0








UNITS SOLD:







Retail new vehicles sold


30,836


31,010


(0.6)

Retail used vehicles sold


20,115


18,972


6.0

Wholesale used vehicles sold


10,069


9,207


9.4

Total used


30,184


28,179


7.1








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$ 35,298


$ 34,787


1.5

Used vehicle retail


$ 20,753


$ 20,414


1.7








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$ 1,827


$ 1,861


(1.8)

Used vehicle retail sales


1,499


1,624


(7.7)

Used vehicle wholesale sales


(182)


26


(800.0)

Total used


938


1,102


(14.9)

Finance and insurance (per retail unit)


$ 1,418


$ 1,301


9.0

OTHER: (1)







SG&A expenses


$ 202,951


$ 199,532


1.7

SG&A as % revenues


10.9


11.1



SG&A as % gross profit


74.4


76.1



Operating margin %


3.3


3.1



Pretax margin %


2.3


2.1










INTEREST EXPENSE:







Floorplan interest expense


$ (8,761)


$ (8,095)


8.2

Floorplan assistance


9,994


8,639


15.7

Net floorplan income


$ 1,233


$ 544


126.7

Other interest expense, net


$ (9,991)


$ (9,425)


6.0










Twelve Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$       4,220,913


$       4,004,211


5.4

Used vehicle retail sales


1,728,072


1,623,588


6.4

Used vehicle wholesale sales


236,995


240,789


(1.6)

Total used


1,965,067


1,864,377


5.4

Parts and service


878,951


833,964


5.4

Finance and insurance


288,409


251,458


14.7

Total


$       7,353,340


$       6,954,010


5.7








GROSS MARGIN %:







New vehicle retail sales


5.2


5.6



Used vehicle retail sales


8.2


8.5



Used vehicle wholesale sales


(0.4)


1.2



Total used


7.2


7.5



Parts and service


53.1


52.4



Finance and insurance


100.0


100.0



Total


15.2


15.2










GROSS PROFIT:







New vehicle retail sales


$          220,344


$          225,459


(2.3)

Used vehicle retail sales


142,053


137,306


3.5

Used vehicle wholesale sales


(830)


2,814


(129.5)

Total used


141,223


140,120


0.8

Parts and service


466,439


437,233


6.7

Finance and insurance


288,409


251,458


14.7

Total


$       1,116,415


$       1,054,270


5.9








UNITS SOLD:







Retail new vehicles sold


125,069


120,535


3.8

Retail used vehicles sold


85,365


80,714


5.8

Wholesale used vehicles sold


40,121


39,056


2.7

Total used


125,486


119,770


4.8








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$            33,749


$            33,220


1.6

Used vehicle retail


$            20,243


$            20,115


0.6








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$              1,762


$              1,870


(5.8)

Used vehicle retail sales


1,664


1,701


(2.2)

Used vehicle wholesale sales


(21)


72


(129.2)

Total used


1,125


1,170


(3.8)

Finance and insurance (per retail unit)


$              1,371


$              1,249


9.8








OTHER: (1)







SG&A expenses


$          822,513


$          791,827


3.9

SG&A as % revenues


11.2


11.4



SG&A as % gross profit


73.7


75.1



Operating margin %


3.6


3.4



Pretax margin %


2.6


2.4










INTEREST EXPENSE:







Floorplan interest expense


$          (33,789)


$          (30,736)


9.9

Floorplan assistance


38,285


33,915


12.9

Net floorplan income


$              4,496


$              3,179


41.4

Other interest expense, net


$          (37,983)


$          (36,831)


3.1


(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 - U.K.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 99,499


$ 77,751


28.0

Used vehicle retail sales


58,689


36,012


63.0

Used vehicle wholesale sales


17,395


12,303


41.4

Total used


76,084


48,315


57.5

Parts and service


18,292


14,217


28.7

Finance and insurance


3,486


2,703


29.0

Total


$ 197,361


$ 142,986


38.0








GROSS MARGIN %:







New vehicle retail sales


6.8


8.4



Used vehicle retail sales


7.4


6.2



Used vehicle wholesale sales


(0.6)


(1.4)



Total used


5.5


4.2



Parts and service


56.2


47.5



Finance and insurance


100.0


100.0



Total


12.6


12.6










GROSS PROFIT:







New vehicle retail sales


$ 6,801


$ 6,532


4.1

Used vehicle retail sales


4,334


2,223


95.0

Used vehicle wholesale sales


(113)


(177)


(36.2)

Total used


4,221


2,046


106.3

Parts and service


10,285


6,748


52.4

Finance and insurance


3,486


2,703


29.0

Total


$ 24,793


$ 18,029


37.5








UNITS SOLD:







Retail new vehicles sold


2,961


2,154


37.5

Retail used vehicles sold


2,347


1,208


94.3

Wholesale used vehicles sold


1,963


1,262


55.5

Total used


4,310


2,470


74.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$ 33,603


$ 36,096


(6.9)

Used vehicle retail


$ 25,006


$ 29,811


(16.1)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$ 2,297


$ 3,032


(24.2)

Used vehicle retail sales


1,847


1,840


0.4

Used vehicle wholesale sales


(58)


(140)


(58.6)

Total used


979


828


18.2

Finance and insurance (per retail unit)


$ 657


$ 804


(18.3)

OTHER:(1)







SG&A expenses


$ 20,516


$ 15,363


33.5

SG&A as % revenues


10.4


10.7



SG&A as % gross profit


82.7


85.2



Operating margin %


1.8


1.4



Pretax margin %


1.4


1.1










INTEREST EXPENSE:







Floorplan interest expense


$ (437)


$ (277)


57.8

Floorplan assistance


147


-


100.0

Net floorplan expense


$ (290)


$ (277)


4.7

Other interest expense, net


$ (358)


$ (191)


87.4










Twelve Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 441,537


$ 286,887


53.9

Used vehicle retail sales


221,590


133,330


66.2

Used vehicle wholesale sales


66,077


47,350


39.6

Total used


287,667


180,680


59.2

Parts and service


67,557


46,106


46.5

Finance and insurance


14,028


8,417


66.7

Total


$ 810,789


$ 522,090


55.3








GROSS MARGIN %:







New vehicle retail sales


6.4


7.7



Used vehicle retail sales


6.5


6.5



Used vehicle wholesale sales


(1.3)


(0.8)



Total used


4.7


4.6



Parts and service


55.0


52.6



Finance and insurance


100.0


100.0



Total


11.5


12.1










GROSS PROFIT:







New vehicle retail sales


$   28,442


$   21,980


29.4

Used vehicle retail sales


14,451


8,700


66.1

Used vehicle wholesale sales


(856)


(370)


131.4

Total used


13,595


8,330


63.2

Parts and service


37,156


24,255


53.2

Finance and insurance


14,028


8,417


66.7

Total


$   93,221


$   62,982


48.0








UNITS SOLD:







Retail new vehicles sold


13,699


8,015


70.9

Retail used vehicles sold


9,109


4,652


95.8

Wholesale used vehicles sold


7,735


4,700


64.6

Total used


16,844


9,352


80.1








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$   32,231


$   35,794


(10.0)

Used vehicle retail


$   24,326


$   28,661


(15.1)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$     2,076


$     2,742


(24.3)

Used vehicle retail sales


1,586


1,870


(15.2)

Used vehicle wholesale sales


(111)


(79)


40.5

Total used


807


891


(9.4)

Finance and insurance (per retail unit)


$        615


$        664


(7.4)








OTHER:(1)







SG&A expenses


$   74,636


$   51,010


46.3

SG&A as % revenues


9.2


9.8



SG&A as % gross profit


80.1


81.0



Operating margin %


2.0


1.8



Pretax margin %


1.6


1.5










INTEREST EXPENSE:







Floorplan interest expense


$   (1,589)


$   (1,060)


49.9

Floorplan assistance


258


-


100.0

Net floorplan expense


$   (1,331)


$   (1,060)


25.6

Other interest expense, net


$   (1,157)


$      (634)


82.5


(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 - Brazil

(Unaudited)

(Dollars in thousands, except per unit amounts)








Three Months Ended December

 31, 2013


Twelve Months Ended December

 31, 2013 (2)




REVENUES:





New vehicle retail sales


$                                           163,849


$                                           562,471

Used vehicle retail sales


27,265


89,766

Used vehicle wholesale sales


8,355


29,113

Total used


35,620


118,879

Parts and service


18,984


64,177

Finance and insurance


3,157


8,925

Total


$                                           221,610


$                                           754,452






GROSS MARGIN %:





New vehicle retail sales


6.4


7.3

Used vehicle retail sales


4.1


4.9

Used vehicle wholesale sales


4.2


5.1

Total used


4.1


4.9

Parts and service


46.0


42.1

Finance and insurance


100.0


100.0

Total


10.7


11.0






GROSS PROFIT:





New vehicle retail sales


$                                             10,429


$                                             41,089

Used vehicle retail sales


1,126


4,375

Used vehicle wholesale sales


348


1,491

Total used


1,474


5,866

Parts and service


8,737


27,030

Finance and insurance


3,157


8,925

Total


$                                             23,797


$                                             82,910






UNITS SOLD:





Retail new vehicles sold


5,131


17,098

Retail used vehicles sold


1,420


4,339

Wholesale used vehicles sold


852


2,880

Total used


2,272


7,219






AVERAGE RETAIL SALES PRICE:





New vehicle retail


$                                             31,933


$                                             32,897

Used vehicle retail


$                                             19,201


$                                             20,688






GROSS PROFIT PER UNIT SOLD:





New vehicle retail sales


$                                               2,033


$                                               2,403

Used vehicle retail sales


793


1,008

Used vehicle wholesale sales


408


518

Total used


649


813

Finance and insurance (per retail unit)


$                                                  482


$                                                  416






OTHER: (1)





SG&A expenses


$                                             21,549


$                                             70,297

SG&A as % revenues


9.7


9.3

SG&A as % gross profit


90.6


84.8

Operating margin %


0.8


1.5

Pretax margin %


0.2


0.7






INTEREST EXPENSE:





Floorplan interest expense


$                                             (1,542)


$                                             (6,289)

Floorplan assistance


-


-

Net floorplan expense


$                                              (1,542)


$                                             (6,289)

Other interest income, net


$                                                  161


$                                                  169







(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.


(2) Results are for the period from the date of acquisition (February 28, 2013) through December 31, 2013.

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 1,351,800


$ 1,156,507


16.9

Used vehicle retail sales


503,397


423,315


18.9

Used vehicle wholesale sales


88,518


69,724


27.0

Total used


591,915


493,039


20.1

Parts and service


256,909


221,666


15.9

Finance and insurance


78,868


67,745


16.4

Total


$ 2,279,492


$ 1,938,957


17.6








GROSS MARGIN %:







New vehicle retail sales


5.4


5.6



Used vehicle retail sales


7.1


7.8



Used vehicle wholesale sales


(1.8)


0.1



Total used


5.7


6.7



Parts and service


52.5


52.0



Finance and insurance


100.0


100.0



Total


14.1


14.5










GROSS PROFIT:







New vehicle retail sales


$ 73,579


$ 64,227


14.6

Used vehicle retail sales


35,616


33,031


7.8

Used vehicle wholesale sales


(1,595)


60


(2758.3)

Total used


34,021


33,091


2.8

Parts and service


134,853


115,190


17.1

Finance and insurance


78,868


67,745


16.4

Total


$ 321,321


$ 280,253


14.7








UNITS SOLD:







Retail new vehicles sold


38,928


33,164


17.4

Retail used vehicles sold


23,882


20,180


18.3

Wholesale used vehicles sold


12,884


10,469


23.1

Total used


36,766


30,649


20.0








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$ 34,726


$ 34,872


(0.4)

Used vehicle retail


$ 21,079


$ 20,977


0.5








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$ 1,890


$ 1,937


(2.4)

Used vehicle retail sales


1,491


1,637


(8.9)

Used vehicle wholesale sales


(124)


6


(2166.7)

Total used


925


1,080


(14.4)

Finance and insurance (per retail unit)


$ 1,256


$ 1,270


(1.1)

OTHER: (1)







SG&A expenses


$ 245,016


$ 214,895


14.0

SG&A as % revenues


10.7


11.1



SG&A as % gross profit


76.3


76.7



Operating margin %


2.9


2.9



Pretax margin %


2.0


2.0










INTEREST EXPENSE:







Floorplan interest expense


$ (10,740)


$ (8,372)


28.3

Floorplan assistance


10,141


8,639


17.4

Net floorplan income (expense)


$ (599)


$ 267


(324.3)

Other interest expense, net


$ (10,188)


$ (9,616)


5.9






Twelve Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$       5,224,921


$       4,291,098


21.8

Used vehicle retail sales


2,039,428


1,756,918


16.1

Used vehicle wholesale sales


332,185


288,139


15.3

Total used


2,371,613


2,045,057


16.0

Parts and service


1,010,685


880,070


14.8

Finance and insurance


311,362


259,875


19.8

Total


$       8,918,581


$       7,476,100


19.3








GROSS MARGIN %:







New vehicle retail sales


5.5


5.8



Used vehicle retail sales


7.9


8.3



Used vehicle wholesale sales


(0.1)


0.8



Total used


6.8


7.3



Parts and service


52.5


52.4



Finance and insurance


100.0


100.0



Total


14.5


14.9










GROSS PROFIT:







New vehicle retail sales


$          289,875


$          247,439


17.2

Used vehicle retail sales


160,879


146,006


10.2

Used vehicle wholesale sales


(195)


2,444


(108.0)

Total used


160,684


148,450


8.2

Parts and service


530,625


461,488


15.0

Finance and insurance


311,362


259,875


19.8

Total


$       1,292,546


$       1,117,252


15.7








UNITS SOLD:







Retail new vehicles sold


155,866


128,550


21.2

Retail used vehicles sold


98,813


85,366


15.8

Wholesale used vehicles sold


50,736


43,756


16.0

Total used


149,549


129,122


15.8








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$            33,522


$            33,381


0.4

Used vehicle retail


$            20,639


$            20,581


0.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$              1,860


$              1,925


(3.4)

Used vehicle retail sales


1,628


1,710


(4.8)

Used vehicle wholesale sales


(4)


56


(107.1)

Total used


1,074


1,150


(6.6)

Finance and insurance (per retail unit)


$              1,223


$              1,215


0.7








OTHER: (1)







SG&A expenses


$          967,446


$          842,837


14.8

SG&A as % revenues


10.8


11.3



SG&A as % gross profit


74.8


75.4



Operating margin %


3.2


3.2



Pretax margin %


2.3


2.3










INTEREST EXPENSE:







Floorplan interest expense


$          (41,667)


$          (31,796)


31.0

Floorplan assistance


38,543


33,915


13.6

Net floorplan income (expense)


$            (3,124)


$              2,119


(247.4)

Other interest expense, net


$          (38,971)


$          (37,465)


4.0


(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,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 1,121,091


$ 1,104,558


1.5

Used vehicle retail sales


440,319


407,766


8.0

Used vehicle wholesale sales


75,013


66,714


12.4

Total used


515,332


474,480


8.6

Parts and service


225,173


209,371


7.5

Finance and insurance


71,948


65,405


10.0

Total


$ 1,933,544


$ 1,853,814


4.3








GROSS MARGIN %:







New vehicle retail sales


5.3


5.6



Used vehicle retail sales


7.1


7.8



Used vehicle wholesale sales


(2.5)


0.3



Total used


5.7


6.7



Parts and service


53.0


51.9



Finance and insurance


100.0


100.0



Total


14.5


14.5










GROSS PROFIT:







New vehicle retail sales


$ 59,730


$ 62,085


(3.8)

Used vehicle retail sales


31,430


31,730


(0.9)

Used vehicle wholesale sales


(1,850)


200


(1,025.0)

Total used


29,580


31,930


(7.4)

Parts and service


119,420


108,694


9.9

Finance and insurance


71,948


65,405


10.0

Total


$ 280,678


$ 268,114


4.7








UNITS SOLD:







Retail new vehicles sold


31,487


31,348


0.4

Retail used vehicles sold


20,362


19,279


5.6

Wholesale used vehicles sold


10,741


9,913


8.4

Total used


31,103


29,192


6.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$ 35,605


$ 35,235


1.0

Used vehicle retail


$ 21,625


$ 21,151


2.2








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$ 1,897


$ 1,981


(4.2)

Used vehicle retail sales


1,544


1,646


(6.2)

Used vehicle wholesale sales


(172)


20


(960.0)

Total used


951


1,094


(13.1)

Finance and insurance (per retail unit)


$ 1,388


$ 1,292


7.4

OTHER:(2)







SG&A expenses


$ 210,205


$ 202,653


3.7

SG&A as % revenues


10.9


10.9



SG&A as % gross profit


74.9


75.6



Operating margin %


3.2


3.2








Twelve Months Ended December 31,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$    4,354,540


$    4,107,638


6.0

Used vehicle retail sales


1,794,875


1,693,237


6.0

Used vehicle wholesale sales


276,121


275,011


0.4

Total used


2,070,996


1,968,248


5.2

Parts and service


902,905


840,383


7.4

Finance and insurance


286,837


251,544


14.0

Total


$    7,615,278


$    7,167,813


6.2








GROSS MARGIN %:







New vehicle retail sales


5.3


5.8



Used vehicle retail sales


8.0


8.3



Used vehicle wholesale sales


(0.2)


1.0



Total used


6.9


7.3



Parts and service


53.1


52.4



Finance and insurance


100.0


100.0



Total


15.0


15.0










GROSS PROFIT:







New vehicle retail sales


$       232,638


$       239,221


(2.8)

Used vehicle retail sales


143,457


141,015


1.7

Used vehicle wholesale sales


(494)


2,791


(117.7)

Total used


142,963


143,806


(0.6)

Parts and service


479,882


440,386


9.0

Finance and insurance


286,837


251,544


14.0

Total


$    1,142,320


$    1,074,957


6.3








UNITS SOLD:







Retail new vehicles sold


127,641


122,043


4.6

Retail used vehicles sold


85,616


81,784


4.7

Wholesale used vehicles sold


42,593


41,200


3.4

Total used


128,209


122,984


4.2








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$         34,116


$         33,657


1.4

Used vehicle retail


$         20,964


$         20,704


1.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$           1,823


$           1,960


(7.0)

Used vehicle retail sales


1,676


1,724


(2.8)

Used vehicle wholesale sales


(12)


68


(117.6)

Total used


1,115


1,169


(4.6)

Finance and insurance (per retail unit)


$           1,345


$           1,234


9.0








OTHER: (2)







SG&A expenses


$       840,252


$       801,188


4.9

SG&A as % revenues


11.0


11.2



SG&A as % gross profit


73.6


74.5



Operating margin %


3.5


3.4




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


(2)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.

Reconciliation of Certain Non-GAAP Financial Measures - U.S.

(Unaudited)

(Dollars in thousands, except per share amounts)










Three Months Ended December 31,



2013


2012


% Change

SG&A RECONCILIATION:














As reported

$ 203,336


$ 203,124


0.1


Pre-tax adjustments:







Catastrophic events

-


(1,916)




Net gain on real estate and dealership transactions

-


437




Severance costs associated with restructuring activities

(385)


(336)




Acquisition costs

-


(1,777)




Adjusted SG&A (1)

$202,951


$199,532


1.7








SG&A AS % REVENUES:














Unadjusted

10.9


11.3




Adjusted (1)

10.9


11.1










SG&A AS % GROSS PROFIT:














Unadjusted

74.6


77.5




Adjusted (1)

74.4


76.1










OPERATING MARGIN %














Unadjusted

3.0


2.5




Adjusted(1), (2)

3.3


3.1










PRETAX MARGIN %:














Unadjusted

2.0


1.5




Adjusted (1), (2)

2.3


2.1








Twelve Months Ended December 31,



2013


2012


% Change

SG&A RECONCILIATION:














As reported

$        830,275


$        796,998


4.2


Pre-tax adjustments:







Acquisition costs

(5,159)


(1,777)




Catastrophic events

(12,158)


(4,566)




Net gain on real estate and dealership transactions

10,196


1,508




Severance costs associated with restructuring activities

(641)


(336)




Adjusted SG&A (1)

$822,513


$791,827


3.9








SG&A AS % REVENUES:














Unadjusted

11.3


11.5




Adjusted (1)

11.2


11.4










SG&A AS % OF GROSS PROFIT:














Unadjusted

74.4


75.6




Adjusted (1)

73.7


75.1










OPERATING MARGIN %:














Unadjusted

3.4


3.2




Adjusted (1), (2)

3.6


3.4










PRETAX MARGIN %:














Unadjusted

2.4


2.2




Adjusted (1), (2)

2.6


2.4




(1) We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations.


(2) Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $5,368 and $6,542 for the three and twelve months ended December 31, 2013, and $6,988 and $7,175 for the three and twelve months ended December 31, 2012.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.K.

(Unaudited)

(Dollars in thousands, except per share amounts)










Three Months Ended December 31,



2013


2012


% Change

SG&A RECONCILIATION:














As reported

$   20,516


$  15,801


29.8


Pre-tax adjustments:







Severance costs associated with restructuring activities

-


(438)


-


Adjusted SG&A (1)

$   20,516


$  15,363


33.5








SG&A AS % REVENUES:














Unadjusted

10.4


11.1




Adjusted (1)

10.4


10.7










SG&A AS % GROSS PROFIT:














Unadjusted

82.7


87.6




Adjusted (1)

82.7


85.2










OPERATING MARGIN %














Unadjusted

1.8


1.1




Adjusted (1), (2)

1.8


1.4










PRETAX MARGIN %:














Unadjusted

1.4


0.8




Adjusted (1), (2)

1.4


1.1








Twelve Months Ended December 31,



2013


2012


% Change

SG&A RECONCILIATION:














As reported

$   74,778


$  51,448


45.3


Pre-tax adjustments:







Acquisition costs

(142)


-




Severance costs associated with restructuring activities

-


(438)




Adjusted SG&A (1)

$   74,636


$  51,010


46.3








SG&A AS % REVENUES:














Unadjusted

9.2


9.9




Adjusted (1)

9.2


9.8










SG&A AS % OF GROSS PROFIT:














Unadjusted

80.2


81.7




Adjusted (1)

80.1


81.0










OPERATING MARGIN %:














Unadjusted

2.0


1.8




Adjusted (1), (2)

2.0


1.8










PRETAX MARGIN %:














Unadjusted

1.6


1.4




Adjusted (1), (2)

1.6


1.5





(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations.



(2)

Excludes the impact of SG&A reconciling items above.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Brazil

(Unaudited)

(Dollars in thousands, except per share amounts)






Twelve Months Ended

December 31, 2013 (3)



SG&A RECONCILIATION:






As reported

$                         71,803


Pre-tax adjustments:



Acquisition costs

(1,211)


Severance costs associated with restructuring activities

(295)


Adjusted SG&A (1)

$                         70,297




SG&A AS % REVENUES:






Unadjusted

9.5


Adjusted (1)

9.3




SG&A AS % OF GROSS PROFIT:






Unadjusted

86.6


Adjusted (1)

84.8




OPERATING MARGIN %:






Unadjusted

1.3


Adjusted (1), (2)

1.5




PRETAX MARGIN %:






Unadjusted

0.3


Adjusted (1), (3)

0.7



(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above.



(3)

Excludes the impact of SG&A reconciling items above, as well as the other expense, net of $789, for the period from the date of acquisition (February 28, 2013) through December31, 2013.



(4)

Results are for the period from the date of acquisition through December 31, 2013.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Consolidated

(Unaudited)

(Dollars in thousands, except per share amounts)

















Three Months Ended December 31,

NET INCOME RECONCILIATION:

2013


2012


% Change









As reported

$    21,721


$    17,132


26.8


After-tax adjustments:







Catastrophic events (6)

-


1,219




Net gain on real estate and dealership transactions (7)

-


(276)




Non-cash asset impairment charges (8)

3,319


4,277




Severance costs associated with restructuring activities(9)

237


548




Valuation allowance for certain deferred tax assets

3,629


-




Acquisition costs (5)

-


1,111




Adjusted net income (1)

$    28,906


$    24,011


20.4




ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$    28,906


$    24,011


20.4


Less: Adjusted earnings allocated to participating securities

1,057


1,066


(0.8)


Adjusted net income available to diluted common shares

$    27,849


$    22,945


21.4








DILUTED INCOME PER COMMON SHARE RECONCILIATION:













As reported

$        0.81


$        0.70


15.7


After-tax adjustments:







Catastrophic events 

-


0.05




Net gain on real estate and dealership transactions

-


(0.01)




Non-cash asset impairment charges

0.12


0.18




Severance costs associated with restructuring activities

0.01


0.02




Valuation allowance for certain deferred tax assets

0.14


-




Acquisition costs

-


0.05




Adjusted diluted income per share (1)

$        1.08


$        0.99


9.1








SG&A RECONCILIATION:














As reported

$  245,401


$  218,925


12.1


Pre-tax adjustments:







Catastrophic events 

-


(1,916)




Net gain on real estate and dealership transactions

-


437




Severance costs associated with restructuring activities

(385)


(774)




Acquisition costs

-


(1,777)




Adjusted SG&A (1)

$  245,016


$  214,895


14.0








SG&A AS % REVENUES:














Unadjusted

10.8


11.3




Adjusted (1)

10.7


11.1










SG&A AS % GROSS PROFIT:














Unadjusted

76.4


78.1




Adjusted (1)

76.3


76.7










OPERATING MARGIN %














Unadjusted

2.7


2.4




Adjusted (1), (2)

2.9


2.9








Three Months Ended December 31,

PRETAX MARGIN %:

2013


2012


% Change









Unadjusted

1.8


1.4




Adjusted (1), (3)

2.0


2.0










SAME STORE SG&A RECONCILIATION:














As reported

$  210,590


$  206,529


2.0


Pre-tax adjustments:







Catastrophic events

-


(1,916)




Net gain on real estate and dealership transactions

-


153




Severance costs associated with restructuring activities

(385)


(336)




Acquisition costs

-


(1,777)




Adjusted Same Store SG&A (1)

$  210,205


$  202,653










SAME STORE SG&A AS % REVENUES:














Unadjusted

10.9


11.1




Adjusted (1)

10.9


10.9










SAME STORE SG&A AS % GROSS PROFIT:














Unadjusted

75.0


77.0




Adjusted (1)

74.9


75.6










SAME STORE OPERATING MARGIN %:














Unadjusted

2.9


2.7




Adjusted (1), (4)

3.2


3.2








Twelve Months Ended December 31,

NET INCOME RECONCILIATION:

2013


2012


% Change









As reported

$  113,992


$  100,209


13.8


After-tax adjustments:







Acquisition costs (5)

6,337


1,111




Catastrophic events (6)

7,419


2,877




Net gain on real estate and dealership transactions (7)

(5,370)


(935)




Non-cash asset impairment charges (8)

4,037


4,392




Severance costs associated with restructuring activities (9)

691


548




Valuation allowance for certain deferred tax assets

3,629


-




Adjusted net income(1)

$  130,735


$  108,202


20.8




ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$  130,735


$  108,202


20.8


Less: Adjusted earnings allocated to participating securities

5,276


5,469


(3.5)


Adjusted net income available to diluted common shares

$  125,459


$  102,733


22.1








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$        4.32


$        4.19


3.1


After-tax adjustments:







Acquisition costs 

0.24


0.05




Catastrophic events 

0.28


0.12




Net gain on real estate and dealership transactions

(0.20)


(0.04)




Non-cash asset impairment charges

0.15


0.19




Severance costs associated with restructuring activities

0.03


0.02




Valuation allowance for certain deferred tax assets

0.14


-




Adjusted diluted income per share(1)

$        4.96


$        4.53


9.5








SG&A RECONCILIATION:














As reported

$  976,856


$  848,446


15.1


Pre-tax adjustments:







Acquisition costs

(6,512)


(1,777)




Catastrophic events

(12,158)


(4,566)




Net gain on real estate and dealership transactions

10,196


1,508




Severance costs associated with restructuring activities

(936)


(774)




Adjusted SG&A (1)

$  967,446


$  842,837


14.8








SG&A AS % REVENUES:














Unadjusted

11.0


11.3




Adjusted (1)

10.8


11.3










SG&A AS % OF GROSS PROFIT:














Unadjusted

75.6


75.9




Adjusted (1)

74.8


75.4










OPERATING MARGIN %:














Unadjusted

3.1


3.1




Adjusted (1), (2)

3.2


3.2








Twelve Months Ended December 31,

PRETAX MARGIN %:

2013


2012


% Change









Unadjusted

2.2


2.1




Adjusted (1), (3)

2.3


2.3










SAME STORE SG&A RECONCILIATION:














As reported

$  858,367


$  808,218


6.2


Pre-tax adjustments:







Acquisition costs

(5,301)


(1,777)




Catastrophic events

(12,158)


(4,566)




Net gain on real estate and dealership transactions

(200)


(351)




Severance costs associated with restructuring activities

(456)


(336)




Adjusted Same Store SG&A (1)

$  840,252


$  801,188


4.9








SAME STORE SG&A AS % REVENUES:














Unadjusted

11.3


11.3




Adjusted (1)

11.0


11.2



SAME STORE SG&A AS % OF GROSS PROFIT:














Unadjusted

75.1


75.2




Adjusted (1)

73.6


74.5










SAME STORE OPERATING MARGIN %:














Unadjusted

3.2


3.2




Adjusted (1), (4)

3.5


3.4





(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges for all periods.



(3)

Excludes the impact of SG&A reconciling items above, non-cash asset impairment charges for all periods, as well as the other expense, net of $789, for the twelve months ended December 31, 2013.



(4)

Excludes the impact of Same Store SG&A reconciling items above, as well as Same Store non-cash asset impairment charges of $5,368 and $6,542 for the three and twelve months ended December 31, 2013, respectively, and $4,163 and $4,348 for the three and twelve months ended December 31, 2012, respectively.



(5)

Adjustment is net of tax benefit of $964 for the twelve months ended December 31, 2013, and $666 for the three and twelve months ended December 31, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(6)

Adjustment is net of tax benefit of $4,739 for the twelve months ended December 31, 2013, and $697 and $1,689 for the three and twelve months ended December 31, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(7)

Adjustment is net of tax provision of $4,827 for the twelve months ended December 31, 2013, and $161 and $573 for the three and twelve months ended December 31, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(8)

Adjustment is net of tax benefit of $2,049 and $2,505 for the three and twelve months ended December 31, 2013, respectively, and $2,711 and $2,783 for the three and twelve months ended December 31, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(9)

Adjustment is net of tax benefit of $148 and $245 for the three and twelve months ended December 31, 2013, respectively, and $226 for the three and twelve months ended December 31, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

 

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