GROUP 1 AUTOMOTIVE INC - FORM 8-K - EX-99.1 - 2017 4TH QUARTER 8-K EXHIBIT 99.1 - February 8, 2018

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8-K - 2017 4TH QUARTER 8-K - GROUP 1 AUTOMOTIVE INCa20174thquarterearningsrel.htm


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FOR IMMEDIATE RELEASE

Group 1 Automotive Reports Record Fourth Quarter & Full Year 2017 Financial Results
▪
Delivers All-Time Record Revenue of $11.1 Billion for 2017
▪
Strong Cost Control Drives Record Fourth Quarter Results
▪
Benefits $73.0 Million from U.S. Tax Reform Bill

HOUSTON, Feb. 8, 2018 - Group 1 Automotive, Inc. (NYSE: GPI), (“Group 1” or the “Company”), an international, Fortune 500 automotive retailer, today reported 2017 fourth quarter net income of $110.5 million, diluted earnings per common share of $5.27, adjusted net income (a non-GAAP measure) of $44.3 million, and adjusted diluted earnings per common share (a non-GAAP measure) of $2.11.
As shown in the attached non-GAAP reconciliation tables, the 2017 fourth quarter adjusted results (non-GAAP measures) exclude approximately $66.2 million of net after-tax adjustments, or $3.16 per share, for non-core items. These items primarily relate to a reduction in the corporate income tax rate enacted in the U.S. Tax Reform Bill, which benefited the Company in the fourth quarter of 2017 by approximately $73.0 million after-tax, or $3.48 per share. This benefit was partially offset by non-cash asset impairment charges of approximately $6.5 million after-tax, or $0.30 per share.
For the full year of 2017, net income increased 45.1 percent from the comparable prior-year period, to $213.4 million; and diluted earnings per common share increased 51.1 percent, to $10.08. Full year 2017 adjusted net income was nearly flat at $163.5 million; and adjusted diluted earnings per common share increased 4.2 percent, to an all-time high of $7.73. Total revenue grew 2.2 percent (increased 2.7 percent on a constant currency basis), to a record $11.1 billion.
“Despite the headwinds we encountered in the first half of 2017 in our oil-impacted markets and the significant disruptions across our Southeast Texas markets from Hurricane Harvey, we are pleased to have delivered all-time record revenue of $11.1 billion and all-time record adjusted diluted earnings per share of $7.73 for 2017,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Contributing to the record earnings is the impressive work the teams have done on cost control in the U.S. and Brazil during 2017, with the results of those efforts continuing to provide benefits going forward. In addition, our team in the U.K. continues to outperform the market, delivering impressive growth even as the overall market slows. I am pleased with the results in all three regions and believe we are well positioned as we enter 2018.”
Consolidated Results for Fourth Quarter 2017 (year-over-year comparable basis)
For ease of comparison, we have included constant currency metrics (a non-GAAP measure) both below (shown in parenthesis) and in the financial tables that follow:
▪
Total revenue grew 9.2 percent (7.9 percent) to $2.9 billion.
▪
Total gross profit grew 9.4 percent (8.3 percent), to $425.7 million.
▪
New vehicle revenues increased 10.2 percent (9.0 percent) on 6.4 percent higher unit sales. New vehicle gross profit improved 7.8 percent (6.5 percent), to $89.5 million.
▪
Retail used vehicle revenues increased 8.9 percent (7.4 percent) on 5.4 percent higher unit sales. Retail used vehicle gross profit increased 3.8 percent (2.6 percent), to $40.5 million.
▪
Parts and service gross profit increased 9.9 percent (8.9 percent) on revenue growth of 10.5 percent (9.5 percent). Same Store parts and service gross profit increased 6.3 percent (5.5 percent) on revenue growth of 7.3 percent (6.5 percent). U.S. Same Store parts and service gross profit increased 5.3 percent on revenue growth of 6.6 percent.

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▪
Finance and Insurance (F&I) gross profit PRU increased 3.8 percent (3.0 percent), to $1,495. U.S. F&I gross profit PRU increased $56, or 3.4 percent, to an all-time record of $1,700.
▪
Selling, General and Administrative (SG&A) expenses as a percent of gross profit increased 100 basis points, to 72.7 percent. Adjusted SG&A expenses as a percent of gross profit improved 180 basis points, to 72.6 percent.
Consolidated Results for Full Year 2017 (year-over-year comparable basis)
▪
Total revenue increased 2.2 percent (2.7 percent), to a record $11.1 billion.
▪
Total gross profit grew 3.2 percent (3.6 percent).
▪
New vehicle gross profit increased 1.8 percent (2.2 percent) on 1.8 percent (2.3 percent) higher revenues, as the Company retailed 172,200 new vehicles in 2017.
▪
Retail used vehicle gross profit decreased 2.7 percent (decreased 2.1 percent) on a revenue increase of 1.5 percent (2.2 percent). The Company retailed 129,933 used vehicles in 2017, a 0.6 percent increase over 2016.
▪
Parts and service gross profit rose 5.8 percent (6.3 percent) on 6.1 percent (6.4 percent) higher revenues.
▪
Adjusted F&I revenues rose 3.5 percent (3.8 percent). U.S. Adjusted F&I gross PRU increased $76, to $1,675.
▪
SG&A expenses as a percent of gross profit increased 110 basis points, to 74.5 percent. Adjusted SG&A expenses as a percent of gross profit remained flat at 73.7. Adjusted U.S. SG&A expenses as a percent of gross profit improved 60 basis points, to 71.1 percent.
▪
Operating margin and adjusted operating margin remained flat at 3.1 and 3.4 percent, respectively.
Segment Results for Fourth Quarter 2017 (year-over-year comparable basis)
▪
United States:
The Company’s U.S. operations accounted for 78.3 percent of total revenues and 82.4 percent of total gross profit. Total U.S. revenues were $2.3 billion, an increase of 5.4 percent, driven by an 8.5 percent increase in retail new vehicle revenue. New vehicle gross profit PRU grew $18, or 0.9 percent per unit, to $2,067; and total gross profit grew 5.8 percent, to $350.7 million. The Company has delivered new vehicle gross profit PRU growth for seven of the last eight quarters. New vehicle inventory ended the quarter at 64 days’ supply.
Same Store SG&A expenses as a percent of gross profit improved 60 basis points to 68.9 percent and operating margin improved 40 basis points to 4.1 percent. Adjusted Same Store SG&A expenses as a percent of gross profit improved 300 basis points, to an all-time record of 68.9 percent. Adjusted operating margin improved 40 basis points to an all-time record of 4.2 percent.
▪
United Kingdom:
The Company’s U.K. operations accounted for 17.4 percent of total revenues and 14.2 percent of total gross profit. Total U.K. revenues increased 31.1 percent (22.8 percent), to $507.8 million, and were driven by double-digit revenue growth across each business segment, despite the industry decreasing by nearly 13 percent. Total gross profit increased 36.0 percent (27.4 percent), to $60.4 million.
Same Store SG&A expenses as a percent of gross profit improved 30 basis points to 87.1 percent and operating margin improved 10 basis points to 1.1 percent.
▪
Brazil:
The Company’s Brazilian operations were profitable during the fourth quarter and accounted for 4.3 percent of total revenues and 3.4 percent of total gross profit. The Company’s Same Store new vehicle revenue grew 14.7 percent on a constant currency basis, which outpaced the industry’s rebound of 13.5 percent. On a Same Store basis, total revenues grew 13.8 percent, driven by revenue growth of 31.1 percent in F&I, 14.7 percent in new vehicles, 12.2 percent in total used vehicles, and 8.0 percent in parts & service. F&I gross profit PRU grew 18.8 percent.
The Company’s used vehicle operations in Brazil continued to improve during the quarter. On a Same Store constant currency basis, total used vehicle retail margins increased 60 basis points to 7.5 percent and total used vehicle gross profit grew 23.5 percent, on a constant currency basis.

2


Same Store SG&A expenses as a percent of gross profit increased 150 basis points to 92.0 percent. Adjusted Same Store SG&A as a percent of gross profit improved 180 basis points to 88.7 percent.
Share Repurchase Authorization
For the full year of 2017, the Company repurchased 649,298 shares at an average price per common share of $61.75 for a total of $40.1 million. As of February 8, 2018, $49.6 million remains available under the Company’s prior common stock share repurchase authorization.
Future repurchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions, and subject to Board approval and covenant restrictions.
Corporate Development
As previously announced in 2018, the Company:

▪
Opened a Land Rover franchise in Watford, a North London suburb in the U.K., which is expected to generate approximately $35 million in annualized revenues;
▪
Acquired Audi El Paso, which is expected to generate approximately $35 million in annualized revenues; and
▪
Acquired Subaru El Paso, which is expected to generate approximately $30 million in annualized revenues.

During 2017, the Company acquired a total of 20 franchises, which are expected to generate an estimated $490 million in annual revenues. The Company disposed of three franchises that generated approximately $35 million in trailing-twelve-month revenues at the time of disposition.
Corporate Tax Reform
As a result of the U.S. Tax Reform Bill, which was enacted on December 22, 2017, the federal statutory corporate tax rate was reduced from 35 percent to 21 percent. This change allowed the Company to record a tax benefit of $73 million based on the revaluation of its net deferred tax liabilities as of the enactment date. Beginning in 2018, and going forward, the Company estimates this change will reduce its effective tax rate from approximately 36 percent to a range of 23-24 percent, and improve annual cash flow by about $20 million. As a result of this tax savings, the Company announced it will pay a $500 bonus to approximately 6,600 tenured, non-management, dealership employees and support staff on March 1, 2018 at a total cost of approximately $3.3 million. This one-time payment will be reflected in the Company’s first quarter 2018 results.

Fourth Quarter 2017 Earnings Conference Call Details
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the fourth quarter financial results and the Company’s outlook and strategy.
The conference call will be simulcast live on the Internet at www.group1auto.com, then click on ‘Investor Relations’ and then ‘Events’ or through this link: http://www.group1corp.com/events. A webcast replay will be available for 30 days.
The conference call will also be available live by dialing in 15 minutes prior to the start of the call at:
Domestic:     1-888-317-6003
International:     1-412-317-6061
Conference ID:    3198411
A telephonic replay will be available following the call through February 15, 2018 by dialing:
Domestic:     1-877-344-7529
International:     1-412-317-0088

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Replay ID:    10116253

About Group 1 Automotive, Inc.
Group 1 owns and operates 175 automotive dealerships, 230 franchises, and 48 collision centers in the United States, the United Kingdom and Brazil that offer 32 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Investors please visit www.group1corp.com, www.group1auto.com, www.group1collision.com, www.facebook.com/group1auto, and www.twitter.com/group1auto, where Group 1 discloses additional information about the Company, its business, and its results of operations.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering alternative financial measures not prepared in accordance with GAAP. This includes evaluating measures such as adjusted selling, general and administrative expenses, adjusted net income and adjusted diluted earnings per share. These adjusted measures are not measures of financial performance under U.S. GAAP, but are instead considered non-GAAP financial performance measures. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. We caution investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In our evaluation of results from time to time, we exclude items that do not arise directly from core operations, such as non-cash asset impairment charges, gains and losses on dealership franchise or real estate transactions, and catastrophic weather events such as hail storms, hurricanes, and snow storms. Because these non-core charges and gains materially affect the Company's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items.
In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Our management also uses these adjusted measures in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures, and the related reconciliations, because we believe investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. The exclusion of certain

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expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures.
In addition, we evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than United States dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com
Media contacts:
Pete DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com


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Group 1 Automotive, Inc.
 
Consolidated Statements of Operations
 
(Unaudited)
 
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,661,309

 
$
1,507,513

 
10.2

 
Used vehicle retail sales
 
709,072

 
651,144

 
8.9

 
Used vehicle wholesale sales
 
91,809

 
99,774

 
(8.0
)
 
Parts and service
 
343,510

 
310,966

 
10.5

 
Finance, insurance and other, net
 
114,705

 
104,235

 
10.0

 
Total revenues
 
2,920,405

 
2,673,632

 
9.2

 
COST OF SALES:
 
 
 
 
 
 
 
New vehicle retail sales
 
1,571,774

 
1,424,445

 
10.3

 
Used vehicle retail sales
 
668,558

 
612,098

 
9.2

 
Used vehicle wholesale sales
 
94,199

 
103,754

 
(9.2
)
 
Parts and service
 
160,199

 
144,154

 
11.1

 
Total cost of sales
 
2,494,730

 
2,284,451

 
9.2

 
GROSS PROFIT
 
425,675

 
389,181

 
9.4

 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
309,521

 
279,071

 
10.9

 
DEPRECIATION AND AMORTIZATION EXPENSE
 
15,178

 
13,166

 
15.3

 
ASSET IMPAIRMENTS
 
9,980

 
20,027

 
(50.2
)
 
OPERATING INCOME
 
90,996

 
76,917

 
18.3

 
OTHER EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
(13,713
)
 
(11,189
)
 
22.6

 
Other interest expense, net
 
(18,309
)
 
(17,208
)
 
6.4

 
INCOME BEFORE INCOME TAXES
 
58,974

 
48,520

 
21.5

 
BENEFIT (PROVISION) FOR INCOME TAXES
 
51,515

 
(17,692
)
 
391.2

 
NET INCOME
 
$
110,489

 
$
30,828

 
258.4

 
Less: Earnings allocated to participating securities
 
$
3,718

 
$
1,220

 
204.8

 
Earnings available to diluted common shares
 
$
106,771

 
$
29,608

 
260.6

 
DILUTED EARNINGS PER SHARE
 
$
5.27

 
$
1.44

 
266.0

 
Weighted average dilutive common shares outstanding
 
20,261

 
20,592

 
(1.6
)
 
Weighted average participating securities
 
708

 
858

 
(17.5
)
 
Total weighted average shares outstanding
 
20,969

 
21,450

 
(2.2
)
 


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Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
6,157,531

 
$
6,046,075

 
1.8

 
Used vehicle retail sales
 
2,798,986

 
2,757,713

 
1.5

 
Used vehicle wholesale sales
 
400,170

 
401,863

 
(0.4
)
 
Parts and service
 
1,338,032

 
1,261,307

 
6.1

 
Finance, insurance and other, net
 
429,002

 
420,654

 
2.0

 
Total revenues
 
11,123,721

 
10,887,612

 
2.2

 
COST OF SALES:
 
 
 
 
 
 
 
New vehicle retail sales
 
5,835,526

 
5,729,697

 
1.8

 
Used vehicle retail sales
 
2,621,431

 
2,575,234

 
1.8

 
Used vehicle wholesale sales
 
402,912

 
406,305

 
(0.8
)
 
Parts and service
 
618,343

 
581,307

 
6.4

 
Total cost of sales
 
9,478,212

 
9,292,543

 
2.0

 
GROSS PROFIT
 
1,645,509

 
1,595,069

 
3.2

 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
 
1,226,195

 
1,170,763

 
4.7

 
DEPRECIATION AND AMORTIZATION EXPENSE
 
57,936

 
51,234

 
13.1

 
ASSET IMPAIRMENTS
 
19,506

 
32,838

 
(40.6
)
 
OPERATING INCOME
 
341,872

 
340,234

 
0.5

 
OTHER EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
(52,372
)
 
(44,927
)
 
16.6

 
Other interest expense, net
 
(70,497
)
 
(67,936
)
 
3.8

 
INCOME BEFORE INCOME TAXES
 
219,003

 
227,371

 
(3.7
)
 
PROVISION FOR INCOME TAXES
 
(5,561
)
 
(80,306
)
 
(93.1
)
 
NET INCOME
 
$
213,442

 
$
147,065

 
45.1

 
Less: Earnings allocated to participating securities
 
$
7,511

 
$
5,869

 
28.0

 
Earnings available to diluted common shares
 
$
205,931

 
$
141,196

 
45.8

 
DILUTED EARNINGS PER SHARE
 
$
10.08

 
$
6.67

 
51.1

 
Weighted average dilutive common shares outstanding
 
20,425
 
21,170
 
(3.5
)
 
Weighted average participating securities
 
752
 
886
 
(15.1
)
 
Total weighted average shares outstanding
 
21,177
 
22,056
 
(4.0
)
 


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Group 1 Automotive, Inc.
 
Consolidated Balance Sheets
 
(Unaudited)
 
(Dollars in thousands)
 
 
 
December 31, 2017
 
December 31, 2016
 
% Increase/(Decrease)
 
ASSETS:
 
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
28,787

 
$
20,992

 
37.1

 
Contracts in transit and vehicle receivables, net
 
306,433

 
269,508

 
13.7

 
Accounts and notes receivable, net
 
188,611

 
173,364

 
8.8

 
Inventories, net
 
1,763,293

 
1,651,815

 
6.7

 
Prepaid expenses and other current assets
 
42,062

 
34,908

 
20.5

 
Total current assets
 
2,329,186

 
2,150,587

 
8.3

 
PROPERTY AND EQUIPMENT, net
 
1,318,959

 
1,125,883

 
17.1

 
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS
 
1,198,666

 
1,161,639

 
3.2

 
OTHER ASSETS
 
24,254

 
23,794

 
1.9

 
Total assets
 
$
4,871,065

 
$
4,461,903

 
9.2

 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
 
Floorplan notes payable - credit facility and other
 
$
1,240,695

 
$
1,136,654

 
9.2

 
Offset account related to floorplan notes payable - credit facility
 
(86,547
)
 
(59,626
)
 
45.1

 
Floorplan notes payable - manufacturer affiliates
 
397,183

 
392,661

 
1.2

 
Offset account related to floorplan notes payable - manufacturer affiliates
 
(22,500
)
 
(25,500
)
 
(11.8
)
 
Current maturities of long-term debt and short-term financing
 
77,609

 
72,419

 
7.2

 
Current liabilities from interest rate risk management activities
 
1,996

 
3,941

 
(49.4
)
 
Accounts payable
 
412,981

 
356,099

 
16.0

 
Accrued expenses
 
177,070

 
176,469

 
0.3

 
Total current liabilities
 
2,198,487

 
2,053,117

 
7.1

 
5.00% SENIOR NOTES (principal of $550,000 at December 31, 2017 and December 31, 2016, respectively)
 
542,063

 
540,465

 
0.3

 
5.25% SENIOR NOTES (principal of $300,000 at December 31, 2017 and December 31, 2016, respectively)
 
296,151

 
295,591

 
0.2

 
ACQUISITION LINE
 
26,988

 
—

 
100.0

 
REAL ESTATE RELATED AND OTHER LONG-TERM DEBT, net of current maturities
 
405,950

 
333,326

 
21.8

 
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities
 
47,032

 
43,427

 
8.3

 
DEFERRED INCOME TAXES
 
124,404

 
161,502

 
(23.0
)
 
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES
 
8,583

 
20,470

 
(58.1
)
 
OTHER LIABILITIES
 
97,125

 
83,805

 
15.9

 
STOCKHOLDERS' EQUITY:
 
 
 
 
 
 
 
Common stock
 
255

 
257

 
(0.8
)
 
Additional paid-in capital
 
291,461

 
290,899

 
0.2

 
Retained earnings
 
1,246,323

 
1,053,301

 
18.3

 
Accumulated other comprehensive loss
 
(123,226
)
 
(146,944
)
 
(16.1
)
 
Treasury stock
 
(290,531
)
 
(267,313
)
 
8.7

 
Total stockholders' equity
 
1,124,282

 
930,200

 
20.9

 
Total liabilities and stockholders' equity
 
$
4,871,065

 
$
4,461,903

 
9.2

 

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Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
December 31,
 
December 31,
 
 
 
 
2017 (%)
 
2016 (%)
 
2017 (%)
 
2016 (%)
 
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
 
 
 
 
 
 
 
 
Region
Geographic Market
 
 
 
 
 
 
 
 
 
United States
Texas
 
39.2

 
37.1

 
37.0

 
36.5

 
 
California
 
7.3

 
8.6

 
7.5

 
9.1

 
 
Oklahoma
 
6.0

 
6.4

 
6.1

 
6.8

 
 
Georgia
 
4.6

 
4.5

 
4.6

 
4.3

 
 
Massachusetts
 
4.5

 
4.6

 
4.6

 
4.8

 
 
Florida
 
2.9

 
2.8

 
2.6

 
2.6

 
 
New Hampshire
 
1.9

 
2.0

 
2.0

 
1.9

 
 
Louisiana
 
1.8

 
2.0

 
1.9

 
2.1

 
 
New Jersey
 
1.6

 
1.7

 
1.7

 
1.6

 
 
South Carolina
 
1.6

 
1.6

 
1.4

 
1.4

 
 
Kansas
 
1.4

 
1.7

 
1.6

 
1.8

 
 
Mississippi
 
1.1

 
1.3

 
1.3

 
1.5

 
 
Alabama
 
0.8

 
0.9

 
1.0

 
0.9

 
 
Maryland
 
0.4

 
0.5

 
0.4

 
0.5

 
 
New Mexico
 
0.1

 
—

 
0.1

 
—

 
 
 
 
75.2

 
75.7

 
73.8

 
75.8

 
 
 
 
 
 
 
 
 
 
 
 
International
United Kingdom
 
19.5

 
18.7

 
21.3

 
18.4

 
 
Brazil
 
5.3

 
5.6

 
4.9

 
5.8

 
 
 
 
100.0

 
100.0

 
100.0

 
100.0

 

 
 
 
 
 
 
 
 
 
NEW VEHICLE UNIT SALES BRAND MIX:
 
 
 
 
 
 
 
 
Toyota/Scion/Lexus
 
25.4

 
25.8

 
25.3

 
24.9

 
Volkswagen/Audi/Porsche
 
13.2

 
11.2

 
13.0

 
11.0

 
BMW/MINI
 
12.4

 
14.4

 
12.7

 
13.5

 
Ford/Lincoln
 
11.4

 
10.8

 
11.5

 
11.0

 
Honda/Acura
 
9.2

 
8.8

 
9.2

 
9.9

 
Nissan
 
7.0

 
7.5

 
7.4

 
7.1

 
Chevrolet/GMC/Buick/Cadillac
 
6.3

 
7.0

 
6.2

 
7.4

 
Mercedes-Benz/smart/Sprinter
 
4.4

 
4.8

 
4.0

 
4.3

 
Chrysler/Dodge/Jeep/RAM
 
3.9

 
3.6

 
3.9

 
4.0

 
Hyundai/Kia
 
3.8

 
3.6

 
3.9

 
4.2

 
Other
 
3.0

 
2.5

 
2.9

 
2.7

 
 
 
100.0

 
100.0

 
100.0

 
100.0

 


4


Group 1 Automotive, Inc.
 
Additional Information - U.S.
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,310,577

 
$
1,207,922

 
8.5

 
Used vehicle retail sales
 
540,528

 
532,913

 
1.4

 
Used vehicle wholesale sales
 
50,284

 
70,954

 
(29.1
)
 
Total used
 
590,812

 
603,867

 
(2.2
)
 
Parts and service
 
286,608

 
266,033

 
7.7

 
Finance, insurance and other, net
 
99,200

 
93,112

 
6.5

 
Total
 
$
2,287,197

 
$
2,170,934

 
5.4

 
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
 
5.3

 
5.4

 
 
 
Used vehicle retail sales
 
5.9

 
6.2

 
 
 
Used vehicle wholesale sales
 
(4.5
)
 
(3.9
)
 
 
 
Total used
 
5.0

 
5.0

 
 
 
Parts and service
 
53.2

 
53.8

 
 
 
Finance, insurance and other, net
 
100.0

 
100.0

 
 
 
Total
 
15.3

 
15.3

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
69,455

 
$
65,101

 
6.7

 
Used vehicle retail sales
 
31,931

 
32,877

 
(2.9
)
 
Used vehicle wholesale sales
 
(2,257
)
 
(2,796
)
 
19.3

 
Total used
 
29,674

 
30,081

 
(1.4
)
 
Parts and service
 
152,349

 
143,023

 
6.5

 
Finance, insurance and other, net
 
99,200

 
93,112

 
6.5

 
Total
 
$
350,678

 
$
331,317

 
5.8

 
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
 
33,608

 
31,779

 
5.8

 
Retail used vehicles sold
 
24,735

 
24,866

 
(0.5
)
 
Wholesale used vehicles sold
 
8,194

 
10,115

 
(19.0
)
 
Total used
 
32,929

 
34,981

 
(5.9
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail
 
$
38,996

 
$
38,010

 
2.6

 
Used vehicle retail
 
$
21,853

 
$
21,431

 
2.0

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
2,067

 
$
2,049

 
0.9

 
Used vehicle retail sales
 
1,291

 
1,322

 
(2.3
)
 
Used vehicle wholesale sales
 
(275
)
 
(276
)
 
0.4

 
Total used
 
901

 
860

 
4.8

 
Finance, insurance and other, net (per retail unit)
 
$
1,700

 
$
1,644

 
3.4

 
OTHER:
 
 
 
 
 
 
 
SG&A expenses
 
$
242,070

 
$
227,411

 
6.4

 
Adjusted SG&A expenses (1)
 
$
242,070

 
$
238,227

 
1.6

 
SG&A as % revenues
 
10.6

 
10.5

 
 
 
Adjusted SG&A as % revenues (1)
 
10.6

 
11.0

 
 
 
SG&A as % gross profit
 
69.0

 
68.6

 
 
 
Adjusted SG&A as % gross profit (1)
 
69.0

 
71.9

 
 
 
Operating margin %
 
4.1

 
3.8

 
 
 
Adjusted operating margin % (1)
 
4.2

 
3.8

 
 
 
Pretax margin %
 
2.8

 
2.7

 
 
 
Adjusted pretax margin % (1)
 
2.9

 
2.6

 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
$
(12,267
)
 
$
(10,015
)
 
22.5

 
Floorplan assistance
 
12,952

 
12,201

 
6.2

 
Net floorplan income
 
$
685

 
$
2,186

 
(68.7
)
 
Other interest expense, net
 
$
(16,922
)
 
$
(15,740
)
 
7.5

 

5


 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
4,768,864

 
$
4,766,047

 
0.1

 
Used vehicle retail sales
 
2,160,699

 
2,242,508

 
(3.6
)
 
Used vehicle wholesale sales
 
250,668

 
276,710

 
(9.4
)
 
Total used
 
2,411,367

 
2,519,218

 
(4.3
)
 
Parts and service
 
1,124,380

 
1,071,651

 
4.9

 
Finance, insurance and other, net
 
375,954

 
377,756

 
(0.5
)
 
Total
 
$
8,680,565

 
$
8,734,672

 
(0.6
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
New vehicle retail sales
 
5.1

 
5.1

 
 
 
Used vehicle retail sales
 
6.7

 
6.9

 
 
 
Used vehicle wholesale sales
 
(1.0
)
 
(1.2
)
 
 
 
Total used
 
5.9

 
6.0

 
 
 
Parts and service
 
53.6

 
54.4

 
 
 
Finance, insurance and other, net
 
100.0

 
100.0

 
 
 
Total
 
15.7

 
15.5

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
244,286

 
$
242,773

 
0.6

 
Used vehicle retail sales
 
144,529

 
155,709

 
(7.2
)
 
Used vehicle wholesale sales
 
(2,427
)
 
(3,439
)
 
29.4

 
Total used
 
142,102

 
152,270

 
(6.7
)
 
Parts and service
 
602,972

 
582,550

 
3.5

 
Finance, insurance and other, net
 
375,954

 
377,756

 
(0.5
)
 
Total
 
$
1,365,314

 
$
1,355,349

 
0.7

 
UNITS SOLD:
 
 
 
 
 
 
 
Retail new vehicles sold
 
127,141

 
130,471

 
(2.6
)
 
Retail used vehicles sold
 
101,170

 
105,754

 
(4.3
)
 
Wholesale used vehicles sold
 
37,662

 
41,009

 
(8.2
)
 
Total used
 
138,832

 
146,763

 
(5.4
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
37,508

 
$
36,530

 
2.7

 
Used vehicle retail sales
 
$
21,357

 
$
21,205

 
0.7

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
New vehicle retail sales
 
$
1,921

 
$
1,861

 
3.2

 
Used vehicle retail sales
 
1,429

 
1,472

 
(2.9
)
 
Used vehicle wholesale sales
 
(64
)
 
(84
)
 
23.8

 
Total used
 
1,024

 
1,038

 
(1.3
)
 
Finance, insurance and other, net (per retail unit)
 
$
1,647

 
$
1,599

 
3.0

 
 
 
 
 
 
 
 
 

6


OTHER:
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1) (2)
 
$
382,504

 
$
377,756

 
1.3

 
Adjusted Total revenue (1)
 
$
8,687,115

 
$
8,734,672

 
(0.5
)
 
Adjusted Total gross profit (1)
 
$
1,371,864

 
$
1,355,349

 
1.2

 
Adjusted Total gross margin (1)
 
15.8

 
15.5

 
 
 
Adjusted Finance, insurance and other, net (per retail unit) (1)
 
$
1,675

 
$
1,599

 
4.8

 
SG&A expenses
 
$
983,974

 
$
965,139

 
2.0

 
Adjusted SG&A expenses (1)
 
$
975,497

 
$
971,908

 
0.4

 
SG&A as % revenues
 
11.3

 
11.0

 
 
 
Adjusted SG&A as % revenues (1)
 
11.2

 
11.1

 
 
 
SG&A as % gross profit
 
72.1

 
71.2

 
 
 
Adjusted SG&A as % gross profit (1)
 
71.1

 
71.7

 
 
 
Operating margin %
 
3.7

 
3.7

 
 
 
Adjusted operating margin % (1)
 
4.0

 
3.9

 
 
 
Pretax margin %
 
2.4

 
2.5

 
 
 
Adjusted pretax margin % (1)
 
2.7

 
2.7

 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
Floorplan interest expense
 
$
(47,221
)
 
$
(40,444
)
 
16.8

 
Floorplan assistance
 
47,984

 
48,377

 
(0.8
)
 
Net floorplan income
 
$
763

 
$
7,933

 
(90.4
)
 
Other interest expense, net
 
$
(66,493
)
 
$
(62,320
)
 
6.7

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

7


Group 1 Automotive, Inc.
 
Additional Information - U.K.
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
267,785

 
$
222,831

 
20.2

 
12.5

 
Used vehicle retail sales
144,415

 
94,403

 
53.0

 
43.3

 
Used vehicle wholesale sales
37,243

 
27,762

 
34.2

 
25.7

 
Total used
181,658

 
122,165

 
48.7

 
39.3

 
Parts and service
45,141

 
33,182

 
36.0

 
27.5

 
Finance, insurance and other, net
13,263

 
9,314

 
42.4

 
33.2

 
Total
$
507,847

 
$
387,492

 
31.1

 
22.8

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.7

 
6.0

 
 
 
 
 
Used vehicle retail sales
4.6

 
4.8

 
 
 
 
 
Used vehicle wholesale sales
(0.9
)
 
(4.4
)
 
 
 
 
 
Total used
3.5

 
2.7

 
 
 
 
 
Parts and service
56.6

 
55.8

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
11.9

 
11.5

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
15,231

 
$
13,308

 
14.4

 
7.1

 
Used vehicle retail sales
6,696

 
4,497

 
48.9

 
39.5

 
Used vehicle wholesale sales
(322
)
 
(1,235
)
 
73.9

 
75.4

 
Total used
6,374

 
3,262

 
95.4

 
83.1

 
Parts and service
25,559

 
18,532

 
37.9

 
29.2

 
Finance, insurance and other, net
13,263

 
9,314

 
42.4

 
33.2

 
Total
$
60,427

 
$
44,416

 
36.0

 
27.4

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
8,750

 
7,880

 
11.0

 
 
 
Retail used vehicles sold
6,188

 
4,429

 
39.7

 
 
 
Wholesale used vehicles sold
5,089

 
3,780

 
34.6

 
 
 
Total used
11,277

 
8,209

 
37.4

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
30,604

 
$
28,278

 
8.2

 
1.4

 
Used vehicle retail
$
23,338

 
$
21,315

 
9.5

 
2.5

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,741

 
$
1,689

 
3.1

 
(3.6
)
 
Used vehicle retail sales
1,082

 
1,015

 
6.6

 
(0.1
)
 
Used vehicle wholesale sales
(63
)
 
(327
)
 
80.7

 
81.7

 
Total used
565

 
397

 
42.3

 
33.3

 
Finance, insurance and other, net (per retail unit)
$
888

 
$
757

 
17.3

 
9.7

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
54,095

 
$
39,482

 
37.0

 
28.3

 
Adjusted SG&A expenses (1)
$
54,095

 
$
39,137

 
38.2

 
29.4

 
SG&A as % revenues
10.7

 
10.2

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.7

 
10.1

 
 
 
 
 
SG&A as % gross profit
89.5

 
88.9

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
89.5

 
88.1

 
 
 
 
 
Operating margin %
0.8

 
0.8

 
 
 
 
 
Adjusted operating margin % (1)
0.8

 
0.9

 
 
 
 
 
Pretax margin %
0.3

 
0.2

 
 
 
 
 
Adjusted pretax margin % (1)
0.3

 
0.3

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(1,304
)
 
$
(1,085
)
 
20.2

 
12.5

 
Floorplan assistance
237

 
182

 
30.2

 
22.1

 
Net floorplan expense
$
(1,067
)
 
$
(903
)
 
18.2

 
10.6

 
Other interest expense, net
$
(1,278
)
 
$
(1,231
)
 
3.8

 
(2.8
)
 



8


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,092,612

 
$
987,538

 
10.6

 
16.0

 
Used vehicle retail sales
546,266

 
434,203

 
25.8

 
32.3

 
Used vehicle wholesale sales
136,847

 
121,747

 
12.4

 
18.1

 
Total used
683,113

 
555,950

 
22.9

 
29.2

 
Parts and service
165,755

 
143,362

 
15.6

 
21.3

 
Finance, insurance and other, net
44,523

 
36,305

 
22.6

 
27.9

 
Total
$
1,986,003

 
$
1,723,155

 
15.3

 
20.9

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.5

 
5.7

 
 
 
 
 
Used vehicle retail sales
4.8

 
5.0

 
 
 
 
 
Used vehicle wholesale sales
(0.9
)
 
(1.0
)
 
 
 
 
 
Total used
3.7

 
3.7

 
 
 
 
 
Parts and service
57.3

 
55.4

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
11.3

 
11.2

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
60,581

 
$
56,655

 
6.9

 
11.9

 
Used vehicle retail sales
26,275

 
21,826

 
20.4

 
26.9

 
Used vehicle wholesale sales
(1,173
)
 
(1,181
)
 
0.7

 
7.8

 
Total used
25,102

 
20,645

 
21.6

 
28.9

 
Parts and service
95,047

 
79,377

 
19.7

 
25.6

 
Finance, insurance and other, net
44,523

 
36,305

 
22.6

 
27.9

 
Total
$
225,253

 
$
192,982

 
16.7

 
22.4

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
36,571

 
31,574

 
15.8

 
 
 
Retail used vehicles sold
24,623

 
18,830

 
30.8

 
 
 
Wholesale used vehicles sold
18,334

 
15,108

 
21.4

 
 
 
Total used
42,957

 
33,938

 
26.6

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
29,876

 
$
31,277

 
(4.5
)
 
0.1

 
Used vehicle retail
$
22,185

 
$
23,059

 
(3.8
)
 
1.1

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,657

 
$
1,794

 
(7.6
)
 
(3.4
)
 
Used vehicle retail sales
1,067

 
1,159

 
(7.9
)
 
(2.9
)
 
Used vehicle wholesale sales
(64
)
 
(78
)
 
17.9

 
24.0

 
Total used
584

 
608

 
(3.9
)
 
1.9

 
Finance, insurance and other, net (per retail unit)
$
728

 
$
720

 
1.1

 
5.3

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
191,570

 
$
158,636

 
20.8

 
26.3

 
Adjusted SG&A expenses (1)
$
191,282

 
$
157,730

 
21.3

 
26.8

 
SG&A as % revenues
9.6

 
9.2

 
 
 
 
 
Adjusted SG&A as % revenues (1)
9.6

 
9.2

 
 
 
 
 
SG&A as % gross profit
85.0

 
82.2

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
84.9

 
81.7

 
 
 
 
 
Operating margin %
1.3

 
1.6

 
 
 
 
 
Adjusted operating margin % (1)
1.3

 
1.7

 
 
 
 
 
Pretax margin %
0.9

 
1.1

 
 
 
 
 
Adjusted pretax margin % (1)
0.9

 
1.1

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(4,727
)
 
$
(4,222
)
 
12.0

 
16.8

 
Floorplan assistance
951

 
825

 
15.3

 
22.1

 
Net floorplan expense
$
(3,776
)
 
$
(3,397
)
 
11.2

 
15.6

 
Other interest expense, net
$
(3,664
)
 
$
(5,197
)
 
(29.5
)
 
(26.5
)
 
(1) See the section of this release entitled "Non-GAAP Financial Measures" and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


9


 
Group 1 Automotive, Inc.
 
Additional Information - Brazil
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1)  % Increase/(Decrease)
 
 
REVENUES:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
82,947

 
$
76,760

 
8.1

 
6.2

 
 
Used vehicle retail sales
24,129

 
23,828

 
1.3

 
(0.4
)
 
 
Used vehicle wholesale sales
4,282

 
1,058

 
304.7

 
296.6

 
 
Total used
28,411

 
24,886

 
14.2

 
12.2

 
 
Parts and service
11,761

 
11,751

 
0.1

 
(1.5
)
 
 
Finance, insurance and other, net
2,242

 
1,809

 
23.9

 
22.0

 
 
Total
$
125,361

 
$
115,206

 
8.8

 
7.0

 
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
6.1

 
 
 
 
 
 
Used vehicle retail sales
7.8

 
7.0

 
 
 
 
 
 
Used vehicle wholesale sales
4.4

 
4.8

 
 
 
 
 
 
Total used
7.3

 
6.9

 
 
 
 
 
 
Parts and service
45.9

 
44.7

 
 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
 
Total
11.6

 
11.7

 
 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,849

 
$
4,659

 
4.1

 
2.5

 
 
Used vehicle retail sales
1,887

 
1,672

 
12.9

 
11.1

 
 
Used vehicle wholesale sales
189

 
51

 
270.6

 
264.3

 
 
Total used
2,076

 
1,723

 
20.5

 
18.6

 
 
Parts and service
5,403

 
5,257

 
2.8

 
1.0

 
 
Finance, insurance and other, net
2,242

 
1,809

 
23.9

 
22.0

 
 
Total
$
14,570

 
$
13,448

 
8.3

 
6.6

 
 
UNITS SOLD:
 
 
 
 
 
 
 
 
 
Retail new vehicles sold
2,355

 
2,372

 
(0.7
)
 
 
 
 
Retail used vehicles sold
1,092

 
1,082

 
0.9

 
 
 
 
Wholesale used vehicles sold
290

 
367

 
(21.0
)
 
 
 
 
Total used
1,382

 
1,449

 
(4.6
)
 
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
 
New vehicle retail
$
35,222

 
$
32,361

 
8.8

 
7.0

 
 
Used vehicle retail
$
22,096

 
$
22,022

 
0.3

 
(1.3
)
 
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,059

 
$
1,964

 
4.8

 
3.3

 
 
Used vehicle retail sales
1,728

 
1,545

 
11.8

 
10.1

 
 
Used vehicle wholesale sales
652

 
139

 
369.1

 
361.1

 
 
Total used
1,502

 
1,189

 
26.3

 
24.4

 
 
Finance, insurance and other, net (per retail unit)
$
650

 
$
524

 
24.0

 
22.3

 
 
OTHER:
 
 
 
 
 
 
 
 
 
SG&A expenses
$
13,356

 
$
12,178

 
9.7

 
8.1

 
 
Adjusted SG&A expenses (1)
$
12,881

 
$
12,178

 
5.8

 
4.2

 
 
SG&A as % revenues
10.7

 
10.6

 
 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.3

 
10.6

 
 
 
 
 
 
SG&A as % gross profit
91.7

 
90.6

 
 
 
 
 
 
Adjusted SG&A as % gross profit (1)
88.4

 
90.6

 
 
 
 
 
 
Operating margin %
(4.7
)
 
(8.2
)
 
 
 
 
 
 
Adjusted operating margin % (1)
1.1

 
0.8

 
 
 
 
 
 
Pretax margin %
(4.9
)
 
(8.5
)
 
 
 
 
 
 
Adjusted pretax margin % (1)
0.9

 
0.5

 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(142
)
 
$
(89
)
 
59.6

 
54.4

 
 
Floorplan assistance
—

 
—

 
—

 
—

 
 
Net floorplan expense
$
(142
)
 
$
(89
)
 
59.6

 
54.4

 
 
Other interest expense, net
$
(109
)
 
$
(237
)
 
(54.0
)
 
(54.4
)
 




10


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
296,055

 
$
292,490

 
1.2

 
(6.7
)
 
Used vehicle retail sales
92,021

 
81,002

 
13.6

 
4.4

 
Used vehicle wholesale sales
12,655

 
3,406

 
271.6

 
243.3

 
Total used
104,676

 
84,408

 
24.0

 
14.1

 
Parts and service
47,897

 
46,294

 
3.5

 
(4.8
)
 
Finance, insurance and other, net
8,525

 
6,593

 
29.3

 
19.3

 
Total
$
457,153

 
$
429,785

 
6.4

 
(2.0
)
 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
5.8

 
 
 
 
 
Used vehicle retail sales
7.3

 
6.1

 
 
 
 
 
Used vehicle wholesale sales
6.8

 
5.2

 
 
 
 
 
Total used
7.3

 
6.1

 
 
 
 
 
Parts and service
45.2

 
39.0

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
12.0

 
10.9

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
17,138

 
$
16,950

 
1.1

 
(6.7
)
 
Used vehicle retail sales
6,751

 
4,944

 
36.5

 
28.4

 
Used vehicle wholesale sales
858

 
178

 
382.0

 
346.9

 
Total used
7,609

 
5,122

 
48.6

 
39.4

 
Parts and service
21,670

 
18,073

 
19.9

 
10.4

 
Finance, insurance and other, net
8,525

 
6,593

 
29.3

 
19.3

 
Total
$
54,942

 
$
46,738

 
17.6

 
8.6

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
8,488

 
10,008

 
(15.2
)
 
 
 
Retail used vehicles sold
4,140

 
4,547

 
(9.0
)
 
 
 
Wholesale used vehicles sold
1,148

 
1,222

 
(6.1
)
 
 
 
Total used
5,288

 
5,769

 
(8.3
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
34,879

 
$
29,226

 
19.3

 
10.1

 
Used vehicle retail
$
22,227

 
$
17,814

 
24.8

 
14.7

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,019

 
$
1,694

 
19.2

 
10.0

 
Used vehicle retail sales
1,631

 
1,087

 
50.0

 
41.0

 
Used vehicle wholesale sales
747

 
146

 
411.6

 
375.8

 
Total used
1,439

 
888

 
62.0

 
52.1

 
Finance, insurance and other, net (per retail unit)
$
675

 
$
453

 
49.0

 
37.5

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
50,651

 
$
46,988

 
7.8

 
(0.7
)
 
Adjusted SG&A expenses (1)
$
50,176

 
$
46,342

 
8.3

 
(0.2
)
 
SG&A as % revenues
11.1

 
10.9

 
 
 
 
 
Adjusted SG&A as % revenues (1)
11.0

 
10.8

 
 
 
 
 
SG&A as % gross profit
92.2

 
100.5

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
91.3

 
99.2

 
 
 
 
 
Operating margin %
(0.9
)
 
(2.9
)
 
 
 
 
 
Adjusted operating margin % (1)
0.7

 
(0.2
)
 
 
 
 
 
Pretax margin %
(1.0
)
 
(3.0
)
 
 
 
 
 
Adjusted pretax margin % (1)
0.6

 
(0.3
)
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(424
)
 
$
(261
)
 
62.5

 
51.4

 
Floorplan assistance
—

 
—

 
—

 
—

 
Net floorplan expense
$
(424
)
 
$
(261
)
 
62.5

 
51.4

 
Other interest expense, net
$
(340
)
 
$
(418
)
 
(18.7
)
 
(25.0
)
 
(1) See the section of this release entitled "Non-GAAP Financial Measures " and the tables attached hereto for information regarding certain selected items that the Company believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures and their reconciliation to the most directly comparable measures as reported in accordance with U.S. GAAP.


11


Group 1 Automotive, Inc.
 
Additional Information - Consolidated
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
Three Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1)  % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,661,309

 
$
1,507,513

 
10.2

 
9.0

 
Used vehicle retail sales
709,072

 
651,144

 
8.9

 
7.4

 
Used vehicle wholesale sales
91,809

 
99,774

 
(8.0
)
 
(10.4
)
 
Total used
800,881

 
750,918

 
6.7

 
5.1

 
Parts and service
343,510

 
310,966

 
10.5

 
9.5

 
Finance, insurance and other, net
114,705

 
104,235

 
10.0

 
9.2

 
Total
$
2,920,405

 
$
2,673,632

 
9.2

 
7.9

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.4

 
5.5

 
 
 
 
 
Used vehicle retail sales
5.7

 
6.0

 
 
 
 
 
Used vehicle wholesale sales
(2.6
)
 
(4.0
)
 
 
 
 
 
Total used
4.8

 
4.7

 
 
 
 
 
Parts and service
53.4

 
53.6

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
14.6

 
14.6

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
89,535

 
$
83,068

 
7.8

 
6.5

 
Used vehicle retail sales
40,514

 
39,046

 
3.8

 
2.6

 
Used vehicle wholesale sales
(2,390
)
 
(3,980
)
 
39.9

 
40.4

 
Total used
38,124

 
35,066

 
8.7

 
7.5

 
Parts and service
183,311

 
166,812

 
9.9

 
8.9

 
Finance, insurance and other, net
114,705

 
104,235

 
10.0

 
9.2

 
Total
$
425,675

 
$
389,181

 
9.4

 
8.3

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
44,713

 
42,031

 
6.4

 
 
 
Retail used vehicles sold
32,015

 
30,377

 
5.4

 
 
 
Wholesale used vehicles sold
13,573

 
14,262

 
(4.8
)
 
 
 
Total used
45,588

 
44,639

 
2.1

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
37,155

 
$
35,867

 
3.6

 
2.4

 
Used vehicle retail
$
22,148

 
$
21,435

 
3.3

 
1.9

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,002

 
$
1,976

 
1.3

 
0.1

 
Used vehicle retail sales
1,265

 
1,285

 
(1.6
)
 
(2.6
)
 
Used vehicle wholesale sales
(176
)
 
(279
)
 
36.9

 
37.3

 
Total used
836

 
786

 
6.4

 
5.2

 
Finance, insurance and other, net (per retail unit)
$
1,495

 
$
1,440

 
3.8

 
3.0

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
309,521

 
$
279,071

 
10.9

 
9.6

 
Adjusted SG&A expenses (1)
$
309,046

 
$
289,542

 
6.7

 
5.5

 
SG&A as % revenues
10.6

 
10.4

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.6

 
10.8

 
 
 
 
 
SG&A as % gross profit
72.7

 
71.7

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
72.6

 
74.4

 
 
 
 
 
Operating margin %
3.1

 
2.9

 
 
 
 
 
Adjusted operating margin % (1)
3.5

 
3.2

 
 
 
 
 
Pretax margin %
2.0

 
1.8

 
 
 
 
 
Adjusted pretax margin % (1)
2.4

 
2.2

 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(13,713
)
 
$
(11,189
)
 
22.6

 
21.8

 
Floorplan assistance
13,189

 
12,383

 
6.5

 
6.4

 
Net floorplan (expense) income
$
(524
)
 
$
1,194

 
(143.9
)
 
(137.7
)
 
Other interest expense, net
$
(18,309
)
 
$
(17,208
)
 
6.4

 
5.9

 

12


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (1) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
6,157,531

 
$
6,046,075

 
1.8

 
2.3

 
Used vehicle retail sales
2,798,986

 
2,757,713

 
1.5

 
2.2

 
Used vehicle wholesale sales
400,170

 
401,863

 
(0.4
)
 
1.1

 
Total used
3,199,156

 
3,159,576

 
1.3

 
2.1

 
Parts and service
1,338,032

 
1,261,307

 
6.1

 
6.4

 
Finance, insurance and other, net
429,002

 
420,654

 
2.0

 
2.3

 
Total
$
11,123,721

 
$
10,887,612

 
2.2

 
2.7

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.2

 
5.2

 
 
 
 
 
Used vehicle retail sales
6.3

 
6.6

 
 
 
 
 
Used vehicle wholesale sales
(0.7
)
 
(1.1
)
 
 
 
 
 
Total used
5.5

 
5.6

 
 
 
 
 
Parts and service
53.8

 
53.9

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
14.8

 
14.7

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
322,005

 
$
316,378

 
1.8

 
2.2

 
Used vehicle retail sales
177,555

 
182,479

 
(2.7
)
 
(2.1
)
 
Used vehicle wholesale sales
(2,742
)
 
(4,442
)
 
38.3

 
38.8

 
Total used
174,813

 
178,037

 
(1.8
)
 
(1.2
)
 
Parts and service
719,689

 
680,000

 
5.8

 
6.3

 
Finance, insurance and other, net
429,002

 
420,654

 
2.0

 
2.3

 
Total
$
1,645,509

 
$
1,595,069

 
3.2

 
3.6

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
172,200

 
172,053

 
0.1

 
 
 
Retail used vehicles sold
129,933

 
129,131

 
0.6

 
 
 
Wholesale used vehicles sold
57,144

 
57,339

 
(0.3
)
 
 
 
Total used
187,077

 
186,470

 
0.3

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
35,758

 
$
35,141

 
1.8

 
2.2

 
Used vehicle retail
$
21,542

 
$
21,356

 
0.9

 
1.6

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,870

 
$
1,839

 
1.7

 
2.2

 
Used vehicle retail sales
1,367

 
1,413

 
(3.3
)
 
(2.7
)
 
Used vehicle wholesale sales
(48
)
 
(77
)
 
37.7

 
38.5

 
Total used
934

 
955

 
(2.2
)
 
(1.5
)
 
Finance, insurance and other, net (per retail unit)
$
1,420

 
$
1,397

 
1.6

 
2.0

 
 
 
 
 
 
 
 
 
 

13


OTHER:
 
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (1) (2)
$
435,552

 
$
420,654

 
3.5

 
3.8

 
Adjusted Total revenue (1)
$
11,130,271

 
$
10,887,612

 
2.2

 
2.8

 
Adjusted Total gross profit (1)
$
1,652,059

 
$
1,595,069

 
3.6

 
4.0

 
Adjusted Total gross margin (1)
14.8

 
14.7

 
 
 

 
Adjusted Finance, insurance and other, net (per retail unit) (1)
$
1,442

 
$
1,397

 
3.2

 
3.5

 
SG&A expenses
$
1,226,195

 
$
1,170,763

 
4.7

 
5.1

 
Adjusted SG&A expenses (1)
$
1,216,955

 
$
1,175,980

 
3.5

 
3.9

 
SG&A as % revenues
11.0

 
10.8

 
 
 
 
 
Adjusted SG&A as % revenues (1)
10.9

 
10.8

 
 
 
 
 
SG&A as % gross profit
74.5

 
73.4

 
 
 
 
 
Adjusted SG&A as % gross profit (1)
73.7

 
73.7

 
 
 
 
 
Operating margin %
3.1

 
3.1

 
 
 
 
 
Adjusted operating margin % (1)
3.4

 
3.4

 
 
 
 
 
Pretax margin %
2.0

 
2.1

 
 
 
 
 
Adjusted pretax margin % (1)
2.3

 
2.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Floorplan interest expense
$
(52,372
)
 
$
(44,927
)
 
16.6

 
17.0

 
Floorplan assistance
48,935

 
49,202

 
(0.5
)
 
(0.4
)
 
Net floorplan (expense) income
$
(3,437
)
 
$
4,275

 
(180.4
)
 
(183.3
)
 
Other interest expense, net
$
(70,497
)
 
$
(67,936
)
 
3.8

 
4.0

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



14


Group 1 Automotive, Inc.
Additional Information - Same Store U.S. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
1,290,879

 
$
1,207,538

 
6.9

 
Used vehicle retail sales
532,189

 
532,880

 
(0.1
)
 
Used vehicle wholesale sales
49,602

 
70,621

 
(29.8
)
 
Total used
581,791

 
603,501

 
(3.6
)
 
Parts and service
283,561

 
266,011

 
6.6

 
Finance, insurance and other, net
97,536

 
92,661

 
5.3

 
Total
$
2,253,767

 
$
2,169,711

 
3.9

 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
5.3

 
5.4

 
 
 
Used vehicle retail sales
5.9

 
6.2

 
 
 
Used vehicle wholesale sales
(4.5
)
 
(3.9
)
 
 
 
Total used
5.0

 
5.0

 
 
 
Parts and service
53.1

 
53.8

 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
Total
15.3

 
15.2

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
68,391

 
$
64,974

 
5.3

 
Used vehicle retail sales
31,474

 
32,871

 
(4.2
)
 
Used vehicle wholesale sales
(2,222
)
 
(2,750
)
 
19.2

 
Total used
29,252

 
30,121

 
(2.9
)
 
Parts and service
150,672

 
143,046

 
5.3

 
Finance, insurance and other, net
97,536

 
92,661

 
5.3

 
Total
$
345,851

 
$
330,802

 
4.5

 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
33,157

 
31,765

 
4.4

 
Retail used vehicles sold
24,386

 
24,864

 
(1.9
)
 
Wholesale used vehicles sold
8,100

 
10,090

 
(19.7
)
 
Total used
32,486

 
34,954

 
(7.1
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
38,932

 
$
38,015

 
2.4

 
Used vehicle retail
$
21,824

 
$
21,432

 
1.8

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
$
2,063

 
$
2,045

 
0.9

 
Used vehicle retail sales
1,291

 
1,322

 
(2.3
)
 
Used vehicle wholesale sales
(274
)
 
(273
)
 
(0.4
)
 
Total used
900

 
862

 
4.4

 
Finance, insurance and other, net (per retail unit)
$
1,695

 
$
1,636

 
3.6

 
OTHER:
 
 
 
 
 
 
SG&A expenses
$
238,151

 
$
229,946

 
3.6

 
Adjusted SG&A expenses (2)
$
238,151

 
$
237,973

 
0.1

 
SG&A as % revenues
10.6

 
10.6

 
 
 
Adjusted SG&A as % revenues (2)
10.6

 
11.0

 
 
 
SG&A as % gross profit
68.9

 
69.5

 
 
 
Adjusted SG&A as % gross profit (2)
68.9

 
71.9

 
 
 
Operating margin %
4.1

 
3.7

 
 
 
Adjusted operating margin % (2)
4.2

 
3.8

 
 
 

15


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
New vehicle retail sales
$
4,732,177

 
$
4,713,124

 
0.4

 
Used vehicle retail sales
2,146,803

 
2,217,717

 
(3.2
)
 
Used vehicle wholesale sales
248,922

 
272,623

 
(8.7
)
 
Total used
2,395,725

 
2,490,340

 
(3.8
)
 
Parts and service
1,118,749

 
1,062,465

 
5.3

 
Finance, insurance and other, net
372,001

 
372,581

 
(0.2
)
 
Total
$
8,618,652

 
$
8,638,510

 
(0.2
)
 
GROSS MARGIN %:
 
 
 
 
 
 
New vehicle retail sales
5.1

 
5.1

 
 
 
Used vehicle retail sales
6.7

 
6.9

 
 
 
Used vehicle wholesale sales
(1.0
)
 
(1.1
)
 
 
 
Total used
5.9

 
6.1

 
 
 
Parts and service
53.6

 
54.3

 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
Total
15.7

 
15.5

 
 
 
GROSS PROFIT:
 
 
 
 
 
 
New vehicle retail sales
$
242,301

 
$
240,528

 
0.7

 
Used vehicle retail sales
143,688

 
153,911

 
(6.6
)
 
Used vehicle wholesale sales
(2,452
)
 
(2,964
)
 
17.3

 
Total used
141,236

 
150,947

 
(6.4
)
 
Parts and service
599,933

 
576,925

 
4.0

 
Finance, insurance and other, net
372,001

 
372,581

 
(0.2
)
 
Total
$
1,355,471

 
$
1,340,981

 
1.1

 
UNITS SOLD:
 
 
 
 
 
 
Retail new vehicles sold
126,247

 
128,441

 
(1.7
)
 
Retail used vehicles sold
100,542

 
104,451

 
(3.7
)
 
Wholesale used vehicles sold
37,415

 
40,361

 
(7.3
)
 
Total used
137,957

 
144,812

 
(4.7
)
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
New vehicle retail
$
37,483

 
$
36,695

 
2.1

 
Used vehicle retail
$
21,352

 
$
21,232

 
0.6

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
New vehicle retail sales
$
1,919

 
$
1,873

 
2.5

 
Used vehicle retail sales
1,429

 
1,474

 
(3.1
)
 
Used vehicle wholesale sales
(66
)
 
(73
)
 
9.6

 
Total used
1,024

 
1,042

 
(1.7
)
 
Finance, insurance and other, net (per retail unit)
$
1,640

 
$
1,600

 
2.5

 

16


OTHER: 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (2) (3)
$
378,551

 
$
372,581

 
1.6

 
Adjusted Total revenue (2)
$
8,625,202

 
$
8,638,510

 
(0.2
)
 
Adjusted Total gross profit (2)
$
1,362,021

 
$
1,340,981

 
1.6

 
Adjusted Total gross margin (2)
15.8

 
15.5

 
 
 
Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,669

 
$
1,600

 
4.3

 
SG&A expenses
$
975,701

 
$
955,108

 
2.2

 
Adjusted SG&A expenses (2)
$
967,224

 
$
956,848

 
1.1

 
SG&A as % revenues
11.3

 
11.1

 
 
 
Adjusted SG&A as % revenues (2)
11.2

 
11.1

 
 
 
SG&A as % gross profit
72.0

 
71.2

 
 
 
Adjusted SG&A as % gross profit (2)
71.0

 
71.4

 
 
 
Operating margin %
3.7

 
3.7

 
 
 
Adjusted operating margin % (2)
4.0

 
4.0

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



17


Group 1 Automotive, Inc.
Additional Information - Same Store U.K. (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
224,123

 
$
221,036

 
1.4

 
(5.0
)
 
Used vehicle retail sales
111,186

 
93,314

 
19.2

 
11.6

 
Used vehicle wholesale sales
28,518

 
27,158

 
5.0

 
(1.6
)
 
Total used
139,704

 
120,472

 
16.0

 
8.6

 
Parts and service
36,664

 
32,768

 
11.9

 
4.8

 
Finance, insurance and other, net
11,264

 
9,245

 
21.8

 
13.9

 
Total
$
411,755

 
$
383,521

 
7.4

 
0.5

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.7

 
6.0

 
 
 
 
 
Used vehicle retail sales
4.6

 
4.7

 
 
 
 
 
Used vehicle wholesale sales
(1.2
)
 
(4.5
)
 
 
 
 
 
Total used
3.4

 
2.7

 
 
 
 
 
Parts and service
56.2

 
55.9

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
12.0

 
11.5

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
12,773

 
$
13,217

 
(3.4
)
 
(9.6
)
 
Used vehicle retail sales
5,099

 
4,424

 
15.3

 
8.0

 
Used vehicle wholesale sales
(336
)
 
(1,215
)
 
72.3

 
73.9

 
Total used
4,763

 
3,209

 
48.4

 
39.0

 
Parts and service
20,610

 
18,332

 
12.4

 
5.3

 
Finance, insurance and other, net
11,264

 
9,245

 
21.8

 
13.9

 
Total
$
49,410

 
$
44,003

 
12.3

 
5.1

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
7,201

 
7,763

 
(7.2
)
 
 
 
Retail used vehicles sold
4,617

 
4,344

 
6.3

 
 
 
Wholesale used vehicles sold
3,822

 
3,625

 
5.4

 
 
 
Total used
8,439

 
7,969

 
5.9

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
31,124

 
$
28,473

 
9.3

 
2.4

 
Used vehicle retail
$
24,082

 
$
21,481

 
12.1

 
5.0

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,774

 
$
1,703

 
4.2

 
(2.6
)
 
Used vehicle retail sales
1,104

 
1,018

 
8.4

 
1.6

 
Used vehicle wholesale sales
(88
)
 
(335
)
 
73.7

 
75.2

 
Total used
564

 
403

 
40.0

 
31.2

 
Finance, insurance and other, net (per retail unit)
$
953

 
$
764

 
24.7

 
16.7

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
43,033

 
$
38,468

 
11.9

 
4.7

 
Adjusted SG&A expenses (2)
$
43,033

 
$
38,285

 
12.4

 
5.2

 
SG&A as % revenues
10.5

 
10.0

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.5

 
10.0

 
 
 
 
 
SG&A as % gross profit
87.1

 
87.4

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
87.1

 
87.0

 
 
 
 
 
Operating margin %
1.1

 
1.0

 
 
 
 
 
Adjusted operating margin % (2)
1.1

 
1.1

 
 
 
 
 



18


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
943,182

 
$
967,424

 
(2.5
)
 
2.2

 
Used vehicle retail sales
447,777

 
419,455

 
6.8

 
12.2

 
Used vehicle wholesale sales
113,082

 
116,519

 
(2.9
)
 
1.9

 
Total used
560,859

 
535,974

 
4.6

 
10.0

 
Parts and service
138,143

 
137,800

 
0.2

 
5.0

 
Finance, insurance and other, net
37,762

 
35,582

 
6.1

 
10.7

 
Total
$
1,679,946

 
$
1,676,780

 
0.2

 
5.1

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.6

 
5.8

 
 
 
 
 
Used vehicle retail sales
4.9

 
5.1

 
 
 
 
 
Used vehicle wholesale sales
(0.7
)
 
(1.0
)
 
 
 
 
 
Total used
3.8

 
3.8

 
 
 
 
 
Parts and service
57.2

 
55.3

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
11.4

 
11.2

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
52,962

 
$
55,921

 
(5.3
)
 
(0.8
)
 
Used vehicle retail sales
22,147

 
21,350

 
3.7

 
9.6

 
Used vehicle wholesale sales
(831
)
 
(1,122
)
 
25.9

 
33.2

 
Total used
21,316

 
20,228

 
5.4

 
12.0

 
Parts and service
79,083

 
76,235

 
3.7

 
8.6

 
Finance, insurance and other, net
37,762

 
35,582

 
6.1

 
10.7

 
Total
$
191,123

 
$
187,966

 
1.7

 
6.6

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
31,054

 
30,719

 
1.1

 
 
 
Retail used vehicles sold
19,632

 
18,062

 
8.7

 
 
 
Wholesale used vehicles sold
14,861

 
14,428

 
3.0

 
 
 
Total used
34,493

 
32,490

 
6.2

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
30,372

 
$
31,493

 
(3.6
)
 
1.1

 
Used vehicle retail
$
22,809

 
$
23,223

 
(1.8
)
 
3.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,705

 
$
1,820

 
(6.3
)
 
(1.9
)
 
Used vehicle retail sales
1,128

 
1,182

 
(4.6
)
 
0.8

 
Used vehicle wholesale sales
(56
)
 
(78
)
 
28.2

 
35.2

 
Total used
618

 
623

 
(0.8
)
 
5.5

 
Finance, insurance and other, net (per retail unit)
$
745

 
$
729

 
2.2

 
6.5

 
OTHER: 
 
 
 
 
 
 
 
 
SG&A expenses
$
156,369

 
$
150,626

 
3.8

 
8.4

 
Adjusted SG&A expenses (2)
$
156,081

 
$
149,882

 
4.1

 
8.7

 
SG&A as % revenues
9.3

 
9.0

 
 
 
 
 
Adjusted SG&A as % revenues (2)
9.3

 
8.9

 
 
 
 
 
SG&A as % gross profit
81.8

 
80.1

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
81.7

 
79.7

 
 
 
 
 
Operating margin %
1.7

 
1.8

 
 
 
 
 
Adjusted operating margin % (2)
1.7

 
1.9

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


19


Group 1 Automotive, Inc.
Additional Information - Same Store Brazil (1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
82,548

 
$
70,759

 
16.7

 
14.7

 
Used vehicle retail sales
22,173

 
21,755

 
1.9

 
0.2

 
Used vehicle wholesale sales
3,897

 
1,058

 
268.3

 
260.5

 
Total used
26,070

 
22,813

 
14.3

 
12.2

 
Parts and service
11,650

 
10,617

 
9.7

 
8.0

 
Finance, insurance and other, net
2,230

 
1,674

 
33.2

 
31.1

 
Total
$
122,498

 
$
105,863

 
15.7

 
13.8

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
6.0

 
 
 
 
 
Used vehicle retail sales
8.0

 
7.0

 
 
 
 
 
Used vehicle wholesale sales
4.8

 
4.9

 
 
 
 
 
Total used
7.5

 
6.9

 
 
 
 
 
Parts and service
46.2

 
45.2

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
11.7

 
11.6

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
4,803

 
$
4,258

 
12.8

 
11.1

 
Used vehicle retail sales
1,780

 
1,515

 
17.5

 
15.6

 
Used vehicle wholesale sales
186

 
52

 
257.7

 
257.5

 
Total used
1,966

 
1,567

 
25.5

 
23.5

 
Parts and service
5,377

 
4,795

 
12.1

 
10.1

 
Finance, insurance and other, net
2,230

 
1,674

 
33.2

 
31.1

 
Total
$
14,376

 
$
12,294

 
16.9

 
15.0

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
2,334

 
2,108

 
10.7

 
 
 
Retail used vehicles sold
1,049

 
958

 
9.5

 
 
 
Wholesale used vehicles sold
274

 
300

 
(8.7
)
 
 
 
Total used
1,323

 
1,258

 
5.2

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
35,368

 
$
33,567

 
5.4

 
3.6

 
Used vehicle retail
$
21,137

 
$
22,709

 
(6.9
)
 
(8.5
)
 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,058

 
$
2,020

 
1.9

 
0.3

 
Used vehicle retail sales
1,697

 
1,581

 
7.3

 
5.6

 
Used vehicle wholesale sales
679

 
173

 
292.5

 
291.5

 
Total used
1,486

 
1,246

 
19.3

 
17.4

 
Finance, insurance and other, net (per retail unit)
$
659

 
$
546

 
20.7

 
18.8

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
13,233

 
$
11,124

 
19.0

 
17.2

 
Adjusted SG&A expenses (2)
$
12,758

 
$
11,124

 
14.7

 
12.9

 
SG&A as % revenues
10.8

 
10.5

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.4

 
10.5

 
 
 
 
 
SG&A as % gross profit
92.0

 
90.5

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
88.7

 
90.5

 
 
 
 
 
Operating margin %
(4.9
)
 
(9.1
)
 
 
 
 
 
Adjusted operating margin % (2)
1.0

 
0.8

 
 
 
 
 


20


 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
287,190

 
$
270,923

 
6.0

 
(2.2
)
 
Used vehicle retail sales
86,298

 
72,549

 
19.0

 
9.6

 
Used vehicle wholesale sales
12,144

 
2,929

 
314.6

 
287.3

 
Total used
98,442

 
75,478

 
30.4

 
20.4

 
Parts and service
45,944

 
39,623

 
16.0

 
7.2

 
Finance, insurance and other, net
8,142

 
5,852

 
39.1

 
28.9

 
Total
$
439,718

 
$
391,876

 
12.2

 
3.6

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.8

 
5.8

 
 
 
 
 
Used vehicle retail sales
7.5

 
6.2

 
 
 
 
 
Used vehicle wholesale sales
6.9

 
6.5

 
 
 
 
 
Total used
7.4

 
6.3

 
 
 
 
 
Parts and service
45.9

 
40.7

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
12.1

 
10.8

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
16,662

 
$
15,652

 
6.5

 
(1.7
)
 
Used vehicle retail sales
6,488

 
4,533

 
43.1

 
34.6

 
Used vehicle wholesale sales
838

 
190

 
341.1

 
311.2

 
Total used
7,326

 
4,723

 
55.1

 
45.7

 
Parts and service
21,100

 
16,110

 
31.0

 
21.1

 
Finance, insurance and other, net
8,142

 
5,852

 
39.1

 
28.9

 
Total
$
53,230

 
$
42,337

 
25.7

 
16.4

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
8,198

 
8,798

 
(6.8
)
 
 
 
Retail used vehicles sold
3,974

 
3,859

 
3.0

 
 
 
Wholesale used vehicles sold
997

 
934

 
6.7

 
 
 
Total used
4,971

 
4,793

 
3.7

 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
35,032

 
$
30,794

 
13.8

 
5.0

 
Used vehicle retail
$
21,716

 
$
18,800

 
15.5

 
6.4

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,032

 
$
1,779

 
14.2

 
5.5

 
Used vehicle retail sales
1,633

 
1,175

 
39.0

 
30.7

 
Used vehicle wholesale sales
841

 
203

 
314.3

 
285.3

 
Total used
1,474

 
985

 
49.6

 
40.5

 
Finance, insurance and other, net (per retail unit)
$
669

 
$
462

 
44.8

 
34.0

 
OTHER: 
 
 
 
 
 
 
 
 
SG&A expenses
$
47,926

 
$
40,315

 
18.9

 
10.1

 
Adjusted SG&A expenses (2)
$
47,451

 
$
40,041

 
18.5

 
9.7

 
SG&A as % revenues
10.9

 
10.3

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.8

 
10.2

 
 
 
 
 
SG&A as % gross profit
90.0

 
95.2

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
89.1

 
94.6

 
 
 
 
 
Operating margin %
(0.6
)
 
(2.4
)
 
 
 
 
 
Adjusted operating margin % (2)
1.0

 
0.3

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


21


Group 1 Automotive, Inc.
 
Additional Information - Same Store Consolidated (1)
 
(Unaudited)
 
(Dollars in thousands, except per unit amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,597,550

 
$
1,499,333

 
6.6

 
5.5

 
Used vehicle retail sales
665,548

 
647,949

 
2.7

 
1.6

 
Used vehicle wholesale sales
82,017

 
98,837

 
(17.0
)
 
(18.9
)
 
Total used
747,565

 
746,786

 
0.1

 
(1.1
)
 
Parts and service
331,875

 
309,396

 
7.3

 
6.5

 
Finance, insurance and other, net
111,030

 
103,580

 
7.2

 
6.5

 
Total
$
2,788,020

 
$
2,659,095

 
4.8

 
3.8

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.4

 
5.5

 
 
 
 
 
Used vehicle retail sales
5.8

 
6.0

 
 
 
 
 
Used vehicle wholesale sales
(2.9
)
 
(4.0
)
 
 
 
 
 
Total used
4.8

 
4.7

 
 
 
 
 
Parts and service
53.2

 
53.7

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
14.7

 
14.6

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
85,967

 
$
82,449

 
4.3

 
3.2

 
Used vehicle retail sales
38,353

 
38,810

 
(1.2
)
 
(2.1
)
 
Used vehicle wholesale sales
(2,372
)
 
(3,913
)
 
39.4

 
39.8

 
Total used
35,981

 
34,897

 
3.1

 
2.1

 
Parts and service
176,659

 
166,173

 
6.3

 
5.5

 
Finance, insurance and other, net
111,030

 
103,580

 
7.2

 
6.5

 
Total
$
409,637

 
$
387,099

 
5.8

 
4.9

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
42,692

 
41,636

 
2.5

 
 
 
Retail used vehicles sold
30,052

 
30,166

 
(0.4
)
 
 
 
Wholesale used vehicles sold
12,196

 
14,015

 
(13.0
)
 
 
 
Total used
42,248

 
44,181

 
(4.4
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
37,420

 
$
36,010

 
3.9

 
2.9

 
Used vehicle retail
$
22,147

 
$
21,479

 
3.1

 
2.0

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
2,014

 
$
1,980

 
1.7

 
0.6

 
Used vehicle retail sales
1,276

 
1,287

 
(0.9
)
 
(1.7
)
 
Used vehicle wholesale sales
(194
)
 
(279
)
 
30.5

 
30.8

 
Total used
852

 
790

 
7.8

 
6.8

 
Finance, insurance and other, net (per retail unit)
$
1,526

 
$
1,443

 
5.8

 
5.1

 
OTHER:
 
 
 
 
 
 
 
 
SG&A expenses
$
294,417

 
$
279,538

 
5.3

 
4.3

 
Adjusted SG&A expenses (2)
$
293,942

 
$
287,382

 
2.3

 
1.3

 
SG&A as % revenues
10.6

 
10.5

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.5

 
10.8

 
 
 
 
 
SG&A as % gross profit
71.9

 
72.2

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
71.8

 
74.2

 
 
 
 
 
Operating margin %
3.3

 
2.8

 
 
 
 
 
Adjusted operating margin % (2)
3.6

 
3.3

 
 
 
 
 

22




 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/ (Decrease)
 
Constant Currency (2) % Increase/(Decrease)
 
REVENUES:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
5,962,549

 
$
5,951,471

 
0.2

 
0.6

 
Used vehicle retail sales
2,680,878

 
2,709,721

 
(1.1
)
 
(0.5
)
 
Used vehicle wholesale sales
374,148

 
392,071

 
(4.6
)
 
(3.3
)
 
Total used
3,055,026

 
3,101,792

 
(1.5
)
 
(0.8
)
 
Parts and service
1,302,836

 
1,239,888

 
5.1

 
5.3

 
Finance, insurance and other, net
417,905

 
414,015

 
0.9

 
1.2

 
Total
$
10,738,316

 
$
10,707,166

 
0.3

 
0.7

 
GROSS MARGIN %:
 
 
 
 
 
 
 
 
New vehicle retail sales
5.2

 
5.2

 
 
 
 
 
Used vehicle retail sales
6.4

 
6.6

 
 
 
 
 
Used vehicle wholesale sales
(0.7
)
 
(1.0
)
 
 
 
 
 
Total used
5.6

 
5.7

 
 
 
 
 
Parts and service
53.7

 
54.0

 
 
 
 
 
Finance, insurance and other, net
100.0

 
100.0

 
 
 
 
 
Total
14.9

 
14.7

 
 
 
 
 
GROSS PROFIT:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
311,925

 
$
312,101

 
(0.1
)
 
0.3

 
Used vehicle retail sales
172,323

 
179,794

 
(4.2
)
 
(3.7
)
 
Used vehicle wholesale sales
(2,445
)
 
(3,896
)
 
37.2

 
37.8

 
Total used
169,878

 
175,898

 
(3.4
)
 
(2.9
)
 
Parts and service
700,116

 
669,270

 
4.6

 
4.9

 
Finance, insurance and other, net
417,905

 
414,015

 
0.9

 
1.2

 
Total
$
1,599,824

 
$
1,571,284

 
1.8

 
2.2

 
UNITS SOLD:
 
 
 
 
 
 
 
 
Retail new vehicles sold
165,499

 
167,958

 
(1.5
)
 
 
 
Retail used vehicles sold
124,148

 
126,372

 
(1.8
)
 
 
 
Wholesale used vehicles sold
53,273

 
55,723

 
(4.4
)
 
 
 
Total used
177,421

 
182,095

 
(2.6
)
 
 
 
AVERAGE RETAIL SALES PRICE:
 
 
 
 
 
 
 
 
New vehicle retail
$
36,028

 
$
35,434

 
1.7

 
2.1

 
Used vehicle retail
$
21,594

 
$
21,442

 
0.7

 
1.3

 
GROSS PROFIT PER UNIT SOLD:
 
 
 
 
 
 
 
 
New vehicle retail sales
$
1,885

 
$
1,858

 
1.5

 
1.8

 
Used vehicle retail sales
1,388

 
1,423

 
(2.5
)
 
(1.9
)
 
Used vehicle wholesale sales
(46
)
 
(70
)
 
34.3

 
34.9

 
Total used
957

 
966

 
(0.9
)
 
(0.4
)
 
Finance, insurance and other, net (per retail unit)
$
1,443

 
$
1,407

 
2.6

 
2.8

 

23


 
 
 
 
 
 
 
 
 
OTHER:
 
 
 
 
 
 
 
 
Adjusted Finance, insurance and other revenue, net (2) (3)
$
424,455

 
$
414,015

 
2.5

 
2.8

 
Adjusted Total revenue (2)
$
10,744,866

 
$
10,707,166

 
0.4

 
0.8

 
Adjusted Total gross profit (2)
$
1,606,374

 
$
1,571,284

 
2.2

 
2.6

 
Adjusted Total gross margin (2)
15.0

 
14.7

 
 
 

 
Adjusted Finance, insurance and other, net (per retail unit) (2)
$
1,465

 
$
1,407

 
4.1

 
4.4

 
SG&A expenses
$
1,179,996

 
$
1,146,049

 
3.0

 
3.3

 
Adjusted SG&A expenses (2)
$
1,170,756

 
$
1,146,770

 
2.1

 
2.4

 
SG&A as % revenues
11.0

 
10.7

 
 
 
 
 
Adjusted SG&A as % revenues (2)
10.9

 
10.7

 
 
 
 
 
SG&A as % gross profit
73.8

 
72.9

 
 
 
 
 
Adjusted SG&A as % gross profit (2)
72.9

 
73.0

 
 
 
 
 
Operating margin %
3.2

 
3.2

 
 
 
 
 
Adjusted operating margin % (2)
3.5

 
3.5

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


24


Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - U.S.
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
242,070

 
$
227,411

 
6.4

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Gain on real estate and dealership transactions
—

 
982

 
 
 
 
Severance costs
—

 
(1,837
)
 
 
 
 
Legal settlements (4)
—

 
11,671

 
 
 
 
Adjusted SG&A (1)
$
242,070

 
$
238,227

 
1.6

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.5

 
 
 
 
Adjusted (1)
10.6

 
11.0

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
69.0

 
68.6

 
 
 
 
Adjusted (1)
69.0

 
71.9

 
 
 
OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
4.1

 
3.8

 
 
 
 
Adjusted (1), (2)
4.2

 
3.8

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.8

 
2.7

 
 
 
 
Adjusted (1), (2)
2.9

 
2.6

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
238,151

 
$
229,946

 
3.6

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
—

 
(1,837
)
 
 
 
 
Legal settlements (4)
—

 
9,864

 
 
 
 
Adjusted Same Store SG&A (1)
$
238,151

 
$
237,973

 
0.1

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.6

 
 
 
 
Adjusted (1)
10.6

 
11.0

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
68.9

 
69.5

 
 
 
 
Adjusted (1)
68.9

 
71.9

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
4.1

 
3.7

 
 
 
 
Adjusted (1), (3)
4.2

 
3.8

 
 
 











25


 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
375,954

 
$
377,756

 
(0.5
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
382,504

 
$
377,756

 
1.3

 
TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
8,680,565

 
$
8,734,672

 
(0.6
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Revenues (1)
$
8,687,115

 
$
8,734,672

 
(0.5
)
 
TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,365,314

 
$
1,355,349

 
0.7

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Gross Profit (1)
$
1,371,864

 
$
1,355,349

 
1.2

 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
983,974

 
$
965,139

 
2.0

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(8,792
)
 
(5,873
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
(798
)
 
2,838

 
 
 
 
Severance costs
—

 
(1,837
)
 
 
 
 
Acquisition costs
—

 
(30
)
 
 
 
 
Legal settlements (4)
1,113

 
11,671

 
 
 
 
Adjusted SG&A (1)
$
975,497

 
$
971,908

 
0.4

 
TOTAL GROSS MARGIN %:
 
 
 
 
 
 
 
Unadjusted
15.7

 
15.5

 
 
 
 
Adjusted (1)
15.8

 
15.5

 
 
 
FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
 
Unadjusted
$
1,647

 
$
1,599

 
3.0

 
 
Adjusted (1)
$
1,675

 
$
1,599

 
4.8

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.3

 
11.0

 
 
 
 
Adjusted (1)
11.2

 
11.1

 
 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.1

 
71.2

 
 
 
 
Adjusted (1)
71.1

 
71.7

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.7

 
3.7

 
 
 
 
Adjusted (1), (2)
4.0

 
3.9

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.4

 
2.5

 
 
 
 
Adjusted (1), (2)
2.7

 
2.7

 
 
 
 
 
 
 
 
 
 
 

26


SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
372,001

 
$
372,581

 
(0.2
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
378,551

 
$
372,581

 
1.6

 
SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
8,618,652

 
$
8,638,510

 
(0.2
)
 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Revenues (1)
$
8,625,202

 
$
8,638,510

 
(0.2
)
 
SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,355,471

 
$
1,340,981

 
1.1

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Gross Profit (1)
$
1,362,021

 
$
1,340,981

 
1.6

 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
975,701

 
$
955,108

 
2.2

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(8,792
)
 
(5,873
)
 
 
 
 
Loss on real estate and dealership transactions
(798
)
 
(384
)
 
 
 
 
Severance costs
—

 
(1,837
)
 
 
 
 
Acquisition costs
—

 
(30
)
 
 
 
 
Legal settlements (4)
1,113

 
9,864

 
 
 
 
Adjusted Same Store SG&A (1)
$
967,224

 
$
956,848

 
1.1

 
SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
 
Unadjusted
15.7

 
15.5

 
 
 
 
Adjusted (1)
15.8

 
15.5

 
 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
 
Unadjusted
$
1,640

 
$
1,600

 
2.5

 
 
Adjusted (1)
$
1,669

 
$
1,600

 
4.3

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.3

 
11.1

 
 
 
 
Adjusted (1)
11.2

 
11.1

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.0

 
71.2

 
 
 
 
Adjusted (1)
71.0

 
71.4

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
3.7

 
3.7

 
 
 
 
Adjusted (1), (3)
4.0

 
4.0

 
 
 
 
 
 
 
 
 
 
 
(1)
See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
 
(2)
Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $3,236 and $12,762 for the three and twelve months ended December 31, 2017, respectively, and $9,406 and $21,794 for the three and twelve months ended December 31, 2016, respectively.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $3,236 and $12,762 for the three and twelve months ended December 31, 2017, respectively, and $9,343 and $21,671 for the three and twelve months ended December 31, 2016, respectively.
 
(4)
For the twelve months ended December 31, 2017 the Company recognized a net pre-tax gain related to a settlement with an OEM of $1.8 million ($1.1 million on a Same Store basis). For the three and twelve months ended December 31, 2016, respectively, the Company recognized a net pre-tax gain related to a settlement with an OEM of $11.7 million ($9.9 million on a Same Store basis).
 


27


Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - U.K.
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
54,095

 
$
39,482

 
37.0

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(223
)
 
 
 
 
Severance costs
—

 
(122
)
 
 
 
 
Adjusted SG&A (1)
$
54,095

 
$
39,137

 
38.2

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.7

 
10.2

 
 
 
 
Adjusted (1)
10.7

 
10.1

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
89.5

 
88.9

 
 
 
 
Adjusted (1)
89.5

 
88.1

 
 
 
OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
0.8

 
0.8

 
 
 
 
Adjusted (1), (2)
0.8

 
0.9

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
0.3

 
0.2

 
 
 
 
Adjusted (1), (2)
0.3

 
0.3

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
43,033

 
$
38,468

 
11.9

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(61
)
 
 
 
 
Severance costs
—

 
(122
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
43,033

 
$
38,285

 
12.4

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.5

 
10.0

 
 
 
 
Adjusted (1)
10.5

 
10.0

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
87.1

 
87.4

 
 
 
 
Adjusted (1)
87.1

 
87.0

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
1.1

 
1.0

 
 
 
 
Adjusted (1), (3)
1.1

 
1.1

 
 
 
 
 
 
 
 
 
 
 

 
 

28


 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
191,570

 
$
158,636

 
20.8

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(223
)
 
 
 
 
Severance costs
—

 
(122
)
 
 
 
 
Acquisition costs
(288
)
 
(561
)
 
 
 
 
Adjusted SG&A (1)
$
191,282

 
$
157,730

 
21.3

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
9.6

 
9.2

 
 
 
 
Adjusted (1)
9.6

 
9.2

 
 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
85.0

 
82.2

 
 
 
 
Adjusted (1)
84.9

 
81.7

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
1.3

 
1.6

 
 
 
 
Adjusted (1), (2)
1.3

 
1.7

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
0.9

 
1.1

 
 
 
 
Adjusted (1), (2)
0.9

 
1.1

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
156,369

 
$
150,626

 
3.8

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(61
)
 
 
 
 
Severance costs
—

 
(122
)
 
 
 
 
Acquisition costs
(288
)
 
(561
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
156,081

 
$
149,882

 
4.1

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
9.3

 
9.0

 
 
 
 
Adjusted (1)
9.3

 
8.9

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
81.8

 
80.1

 
 
 
 
Adjusted (1)
81.7

 
79.7

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
1.7

 
1.8

 
 
 
 
Adjusted (1), (3)
1.7

 
1.9

 
 
 
 
 
 
 
 
 
 
 
(1)
See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
 
(2)
Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $201 for the three and twelve months ended December 31, 2016, respectively.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $201 for the three and twelve months ended December 31, 2016, respectively.
 



29


Group 1 Automotive, Inc.
 
Reconciliation of Certain Non-GAAP Financial Measures - Brazil
 
(Unaudited)
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
13,356

 
$
12,178

 
9.7

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
(475
)
 
—

 
 
 
 
Adjusted SG&A (1)
$
12,881

 
$
12,178

 
5.8

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.7

 
10.6

 
 
 
 
Adjusted (1)
10.3

 
10.6

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
91.7

 
90.6

 
 
 
 
Adjusted (1)
88.4

 
90.6

 
 
 
OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
(4.7
)
 
(8.2
)
 
 
 
 
Adjusted (1), (2)
1.1

 
0.8

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(4.9
)
 
(8.5
)
 
 
 
 
Adjusted (1), (2)
0.9

 
0.5

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
13,233

 
$
11,124

 
19.0

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
(475
)
 
—

 
 
 
 
Adjusted Same Store SG&A (1)
$
12,758

 
$
11,124

 
14.7

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.8

 
10.5

 
 
 
 
Adjusted (1)
10.4

 
10.5

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
92.0

 
90.5

 
 
 
 
Adjusted (1)
88.7

 
90.5

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
(4.9
)
 
(9.1
)
 
 
 
 
Adjusted (1), (3)
1.0

 
0.8

 
 
 














30


 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
50,651

 
$
46,988

 
7.8

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(372
)
 
 
 
 
Severance costs
(475
)
 
—

 
 
 
 
Foreign transaction tax
—

 
(274
)
 
 
 
 
Adjusted SG&A (1)
$
50,176

 
$
46,342

 
8.3

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.1

 
10.9

 
 
 
 
Adjusted (1)
11.0

 
10.8

 
 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
92.2

 
100.5

 
 
 
 
Adjusted (1)
91.3

 
99.2

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(0.9
)
 
(2.9
)
 
 
 
 
Adjusted (1), (2)
0.7

 
(0.2
)
 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
(1.0
)
 
(3.0
)
 
 
 
 
Adjusted (1), (2)
0.6

 
(0.3
)
 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
47,926

 
$
40,315

 
18.9

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Severance costs
(475
)
 
—

 
 
 
 
Foreign transaction tax
—

 
(274
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
47,451

 
$
40,041

 
18.5

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.9

 
10.3

 
 
 
 
Adjusted (1)
10.8

 
10.2

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
90.0

 
95.2

 
 
 
 
Adjusted (1)
89.1

 
94.6

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
(0.6
)
 
(2.4
)
 
 
 
 
Adjusted (1), (3)
1.0

 
0.3

 
 
 
 
 
 
 
 
 
 
 
(1)
See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
 
(2)
Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the three and twelve months ended December 31, 2017, respectively, and $10,420 and $10,843 for the three and twelve months ended December 31, 2016, respectively.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $6,744 for the three and twelve months ended December 31, 2017, respectively, and $10,420 for the three and twelve months ended December 31, 2016, respectively.
 

31


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,
 
 
 
2017
 
2016
 
% Increase/(Decrease)
 
NET INCOME RECONCILIATION:
 
 
 
 
 
 
 
As reported
 
 
 
 
 
 
 
  Pretax Net Income
$
58,974

 
$
48,520

 
 
 
 
  Income Tax Benefit (Provision)
51,515

 
(17,692
)
 
 
 
 
    Net Income
$
110,489

 
$
30,828

 
258.4

 
 
      Effective Tax Rate
(87.4
)%
 
36.5
%
 
 
 
 
  Adjustments:
 
 
 
 
 
 
 
(Gain) loss on real estate and dealership transactions
 
 
 
 
 
 
 
Pre-tax
—

 
(529
)
 
 
 
 
Tax impact
—

 
264

 
 
 
 
Severance costs
 
 
 
 
 
 
 
Pre-tax
475

 
1,959

 
 
 
 
Tax impact
(122
)
 
(710
)
 
 
 
 
Legal settlements (4) 
 
 
 
 
 
 
 
Pre-tax
—

 
(11,671
)
 
 
 
 
Tax impact
—

 
4,359

 
 
 
 
Non-cash asset impairment
 
 
 
 
 
 
 
Pre-tax
9,979

 
19,797

 
 
 
 
Tax impact
(3,515
)
 
(7,041
)
 
 
 
 
Tax rate changes
 
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
 
Tax impact
(73,028
)
 
—

 
 
 
 
Adjusted
 
 
 
 
 
 
 
  Pretax Net Income
$
69,428

 
$
58,076

 
 
 
 
  Income Tax Provision
(25,150
)
 
(20,820
)
 
 
 
 
Adjusted net income (1)
$
44,278

 
$
37,256

 
23.4

 
 
      Effective Tax Rate
36.2
 %
 
35.8
%
 
 
 
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
COMMON SHARES RECONCILIATION:
 
 
 
 
 
Adjusted net income (1)
$
44,278

 
$
37,256

 
23.4

 
 
Less: Adjusted earnings allocated to participating securities
1,483

 
1,477

 
0.4

 
 
Adjusted net income available to diluted common shares (1)
$
42,795

 
$
35,779

 
19.6

 
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
5.27

 
$
1.44

 
266.0

 
 
  After-tax adjustments:
 
 
 
 
 
 
 
Gain on real estate and dealership transactions
—

 
(0.01
)
 
 
 
 
Severance costs
0.02

 
0.06

 
 
 
 
Legal settlements
—

 
(0.34
)
 
 
 
 
Non-cash asset impairment
0.30

 
0.59

 
 
 
 
Tax rate changes
(3.48
)
 
—

 
 
 
 
Adjusted diluted income per share (1)
$
2.11

 
$
1.74

 
25.9

 
 
 
 
 
 
 
 
 

32


SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
309,521

 
$
279,071

 
10.9

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Gain on real estate and dealership transactions
—

 
759

 
 
 
 
Severance costs
(475
)
 
(1,959
)
 
 
 
 
Legal settlements (4)
—

 
11,671

 
 
 
 
Adjusted SG&A (1)
$
309,046

 
$
289,542

 
6.7

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.4

 
 
 
 
Adjusted (1)
10.6

 
10.8

 
 
 
SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
72.7

 
71.7

 
 
 
 
Adjusted (1)
72.6

 
74.4

 
 
 
OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
3.1

 
2.9

 
 
 
 
Adjusted (1), (2)
3.5

 
3.2

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.0

 
1.8

 
 
 
 
Adjusted (1), (2)
2.4

 
2.2

 
 
 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
294,417

 
$
279,538

 
5.3

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Loss on real estate and dealership transactions
—

 
(61
)
 
 
 
 
Severance costs
(475
)
 
(1,959
)
 
 
 
 
Legal settlements (4) 
—

 
9,864

 
 
 
 
Adjusted Same Store SG&A (1)
$
293,942

 
$
287,382

 
2.3

 
SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
10.6

 
10.5

 
 
 
 
Adjusted (1)
10.5

 
10.8

 
 
 
SAME STORE SG&A AS % GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
71.9

 
72.2

 
 
 
 
Adjusted (1)
71.8

 
74.2

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
3.3

 
2.8

 
 
 
 
Adjusted (1), (3)
3.6

 
3.3

 
 
 
 
 
 
 
 
 
 
 

















33



 
 
Twelve Months Ended December 31,
 
 
 
2017
 
2016
 
% Increase/ (Decrease)
 
NET INCOME RECONCILIATION:
 
 
 
 
 
 
 
As reported
 
 
 
 
 
 
 
  Pretax Net Income
$
219,003

 
$
227,371

 
 
 
 
  Income Tax Provision
(5,561
)
 
(80,306
)
 
 
 
 
    Net Income
$
213,442

 
$
147,065

 
45.1

 
 
      Effective Tax Rate
2.5
%
 
35.3
%
 
 
 
 
  Adjustments:
 
 
 
 
 
 
 
Catastrophic events
 
 
 
 
 
 
 
Pre-tax
15,342

 
5,873

 
 
 
 
Tax impact
(5,926
)
 
(2,207
)
 
 
 
 
(Gain) loss on real estate and dealership transactions
 
 
 
 
 
 
 
Pre-tax
798

 
(1,530
)
 
 
 
 
Tax impact
(301
)
 
937

 
 
 
 
Severance costs
 
 
 
 
 
 
 
Pre-tax
475

 
1,959

 
 
 
 
Tax impact
(122
)
 
(710
)
 
 
 
 
Acquisition costs
 
 
 
 
 
 
 
Pre-tax
288

 
591

 
 
 
 
Tax impact
—

 
(11
)
 
 
 
 
Legal settlements (4)
 
 
 
 
 
 
 
Pre-tax
(1,113
)
 
(11,671
)
 
 
 
 
Tax impact
426

 
4,359

 
 
 
 
Foreign transaction tax
 
 
 
 
 
 
 
Pre-tax
—

 
274

 
 
 
 
Tax impact
—

 
—

 
 
 
 
Non-cash asset impairment
 
 
 
 
 
 
 
Pre-tax
19,505

 
32,124

 
 
 
 
Tax impact
(7,094
)
 
(11,676
)
 
 
 
 
Allowance for uncertain tax positions
 
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
 
Tax impact
834

 
—

 
 
 
 
Tax rate changes
 
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
 
Tax impact
(73,028
)
 
—

 
 
 
 
Foreign deferred income tax benefit
 
 
 
 
 
 
 
Pre-tax
—

 
—

 
 
 
 
Tax impact
—

 
(1,686
)
 
 
 
 
Adjusted
 
 
 
 
 
 
 
  Pretax Net Income
$
254,298

 
$
254,991

 
 
 
 
  Income Tax Provision
(90,772
)
 
(91,300
)
 
 
 
 
Adjusted net income (1)
$
163,526

 
$
163,691

 
(0.1
)
 
 
      Effective Tax Rate
35.7
%
 
35.8
%
 
 
 
 
 
 
 
 
 
 
 

34


ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED
COMMON SHARES RECONCILIATION:
 
 
 
 
 
Adjusted net income (1)
$
163,526

 
$
163,691

 
(0.1
)
 
 
Less: Adjusted earnings allocated to participating securities
5,738

 
6,537

 
(12.2
)
 
 
Adjusted net income available to diluted common shares (1)
$
157,788

 
$
157,154

 
0.4

 
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
 
 
As reported
$
10.08

 
$
6.67

 
51.1

 
 
  After-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
0.45

 
0.17

 
 
 
 
(Gain) loss on real estate and dealership transactions
0.03

 
(0.03
)
 
 
 
 
Severance costs
0.01

 
0.05

 
 
 
 
Acquisition costs including related tax impact
0.01

 
0.02

 
 
 
 
Legal settlements
(0.03
)
 
(0.33
)
 
 
 
 
Foreign transaction tax
—

 
0.01

 
 
 
 
Non-cash asset impairment
0.59

 
0.93

 
 
 
 
Allowance for uncertain tax positions
0.04

 
—

 
 
 
 
Tax rate changes
(3.45
)
 
—

 
 
 
 
Foreign deferred income tax benefit
—

 
(0.07
)
 
 
 
 
Adjusted diluted income per share (1)
$
7.73

 
$
7.42

 
4.2

 
FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
429,002

 
$
420,654

 
2.0

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
435,552

 
$
420,654

 
3.5

 
TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
11,123,721

 
$
10,887,612

 
2.2

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Revenues (1)
$
11,130,271

 
$
10,887,612

 
2.2

 
TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,645,509

 
$
1,595,069

 
3.2

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Gross Profit (1)
$
1,652,059

 
$
1,595,069

 
3.6

 
SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,226,195

 
$
1,170,763

 
4.7

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(8,792
)
 
(5,873
)
 
 
 
 
Gain (loss) on real estate and dealership transactions
(798
)
 
2,243

 
 
 
 
Severance costs
(475
)
 
(1,959
)
 
 
 
 
Acquisition costs
(288
)
 
(591
)
 
 
 
 
Legal settlements (4) 
1,113

 
11,671

 
 
 
 
Foreign transaction tax
—

 
(274
)
 
 
 
 
Adjusted SG&A (1)
$
1,216,955

 
$
1,175,980

 
3.5

 
TOTAL GROSS MARGIN %:
 
 
 
 
 
 
 
Unadjusted
14.8

 
14.7

 
 
 
 
Adjusted (1)
14.8

 
14.7

 
 
 
 
 
 
 
 
 
 
 

35


FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
 
Unadjusted
$
1,420

 
$
1,397

 
1.6

 
 
Adjusted (1)
$
1,442

 
$
1,397

 
3.2

 
SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.0

 
10.8

 
 
 
 
Adjusted (1)
10.9

 
10.8

 
 
 
SG&A AS % OF GROSS PROFIT:
 
 
 
 
 
 
 
Unadjusted
74.5

 
73.4

 
 
 
 
Adjusted (1)
73.7

 
73.7

 
 
 
OPERATING MARGIN %:
 
 
 
 
 
 
 
Unadjusted
3.1

 
3.1

 
 
 
 
Adjusted (1), (2)
3.4

 
3.4

 
 
 
PRETAX MARGIN %:
 
 
 
 
 
 
 
Unadjusted
2.0

 
2.1

 
 
 
 
Adjusted (1), (2)
2.3

 
2.3

 
 
 
SAME STORE FINANCE, INSURANCE AND OTHER REVENUE, NET RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
417,905

 
$
414,015

 
0.9

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Finance, insurance and other revenue, net (1)
$
424,455

 
$
414,015

 
2.5

 
SAME STORE TOTAL REVENUES RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
10,738,316

 
$
10,707,166

 
0.3

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Revenues (1)
$
10,744,866

 
$
10,707,166

 
0.4

 
SAME STORE TOTAL GROSS PROFIT RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,599,824

 
$
1,571,284

 
1.8

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
6,550

 
—

 
 
 
 
Adjusted Total Gross Profit (1)
$
1,606,374

 
$
1,571,284

 
2.2

 
SAME STORE SG&A RECONCILIATION:
 
 
 
 
 
 
 
As reported
$
1,179,996

 
$
1,146,049

 
3.0

 
 
  Pre-tax adjustments:
 
 
 
 
 
 
 
Catastrophic events
(8,792
)
 
(5,873
)
 
 
 
 
Loss on real estate and dealership transactions
(798
)
 
(446
)
 
 
 
 
Severance costs
(475
)
 
(1,959
)
 
 
 
 
Acquisition costs
(288
)
 
(591
)
 
 
 
 
Legal settlements (4)
1,113

 
9,864

 
 
 
 
Foreign transaction tax
—

 
(274
)
 
 
 
 
Adjusted Same Store SG&A (1)
$
1,170,756

 
$
1,146,770

 
2.1

 
SAME STORE TOTAL GROSS MARGIN %:
 
 
 
 
 
 
 
Unadjusted
14.9

 
14.7

 
 
 
 
Adjusted (1)
15.0

 
14.7

 
 
 
SAME STORE FINANCE, INSURANCE AND OTHER, NET (PER RETAIL UNIT):
 
 
 
 
 
 
 
Unadjusted
$
1,443

 
$
1,407

 
2.6

 
 
Adjusted (1)
$
1,465

 
$
1,407

 
4.1

 
 
 
 
 
 
 
 
 

36


SAME STORE SG&A AS % REVENUES:
 
 
 
 
 
 
 
Unadjusted
11.0

 
10.7

 
 
 
 
Adjusted (1)
10.9

 
10.7

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

 
72.9

 
 
 
 
Adjusted (1)
72.9

 
73.0

 
 
 
SAME STORE OPERATING MARGIN %
 
 
 
 
 
 
 
Unadjusted
3.2

 
3.2

 
 
 
 
Adjusted (1), (3)
3.5

 
3.5

 
 
 
 
 
 
 
 
 
 
 
(1)
See the section of this release entitled "Non-GAAP Financial Measures" for information regarding non-GAAP financial measures and certain selected items that the Company believes impact comparability of financial results between reporting periods.
 
(2)
Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $9,979 and $19,505 for the three and twelve months ended December 31, 2017, respectively, and $20,027 and $32,838 for the three and twelve months ended December 31, 2016, respectively.
 
(3)
Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $9,979 and $19,505 for the three and twelve months ended December 31, 2017, respectively, and $19,965 and $32,292 for the three and twelve months ended December 31, 2016, respectively.
 
(4)
For the twelve months ended December 31, 2017 the Company recognized a net pre-tax gain related to a settlement with an OEM of $1.8 million ($1.1 million on a Same Store basis). For the three and twelve months ended December 31, 2016, respectively, the Company recognized a net pre-tax gain related to a settlement with an OEM of $11.7 million ($9.9 million on a Same Store basis).
 



37

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