GROUP 1 AUTOMOTIVE INC - FORM 8-K - EX-99.1 - 2ND QUARTER EARNINGS RELEASE

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8-K - 8-K - GROUP 1 AUTOMOTIVE INC	a20132ndquarterearningsrel.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

Group 1 Automotive Reports All-Time Record 2013 Second Quarter Financial Results with Total Revenue Increasing 23 Percent

HOUSTON, July 25, 2013 - Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported second quarter 2013 adjusted net income of $39.7 million, a 33.6 percent increase, and adjusted diluted earnings per common share of $1.52, a 21.6 percent increase, on a year-over-year comparable basis for the period ended June 30, 2013.

CONSOLIDATED RESULTS FOR SECOND QUARTER 2013 (year-over-year comparable basis)


▪	Total revenue increased 23.2 percent to an all-time quarterly record of $2.3 billion; total gross profit grew 19.6 percent to $341.3 million.


▪	New vehicle revenue increased 27.3 percent, reflecting 26.1 percent higher unit sales, as Same Store new vehicle unit sales grew 5.1 percent.


▪	Used vehicle retail revenue increased 17.2 percent, reflecting 16.5 percent higher used retail unit sales, as Same Store used vehicle unit sales grew 4.2 percent.


▪	Total parts, service, and collision sales increased 18.4 percent, with record Same Store growth of 8.8 percent.


▪	Same Store finance and insurance (F&I) per retail unit improved $122 to $1,328, a 10.1 percent increase.


▪	Selling, general and administrative (SG&A) expenses as a percent of gross profit improved 180 basis points, to 72.8 percent, with a Same Store improvement of 250 basis points, to 71.2 percent.


▪	Operating margin expanded 20 basis points to 3.6 percent, with a Same Store operating margin expansion of 40 basis points to 4.0 percent. Adjusted pretax income grew 33.1 percent to a record $63.6 million.


▪	Consolidated adjusted effective tax rate was 37.6 percent.


▪	Adjusted diluted earnings per common share increased 21.6 percent, to $1.52, on 33.6 percent higher adjusted net income of $39.7 million, both record results for the Company.

“We are delighted to announce Group 1's second quarter operating results which reflect double-digit revenue increases across all of our business sectors coupled with strong expense leverage, which delivered record earnings for our shareholders,” said Earl J. Hesterberg, Group 1's president and chief executive officer. “As these record results demonstrate, we are beginning to reap the benefits of the significant process improvements and growth investments we have made since the recession.”

For the six-month period ended June 30, 2013, the Company reported adjusted net income of $69 million, or $2.69 per diluted share, compared to adjusted net income of $52.9 million, or $2.23 per diluted share in the prior year period. Total revenue increased 20.7 percent to $4.3 billion for the six-month period ended June 30, 2013.

CORPORATE DEVELOPMENT

As previously announced during the second quarter, Group 1 acquired one dealership with estimated annual revenues of approximately $80.0 million and disposed of four dealerships that generated $176.7 million in trailing-twelve-month revenues. Additionally, on July 22, 2013, Group 1 completed the disposition of Miller Nissan, Inc., and Miller Infiniti Inc. These two dealerships, located in California, generated $107.2 million in trailing-twelve-month revenues. “In addition to our ongoing corporate growth efforts via acquisitions, we have continued to rebalance our U.S. dealership portfolio with the disposition of operations not generating an acceptable level of return for our shareholders,” said Hesterberg. “Five of these dealership dispositions have occurred in California. Following the two dispositions made earlier this week, we expect no additional near-term disposals in the California market as our remaining seven dealerships are expected to generate positive shareholder returns.”

SEGMENT RESULTS FOR SECOND QUARTER 2013 (year-over-year comparable basis)

United States:

Group 1's U.S. revenues were $1.9 billion, an increase of 7.1 percent. The revenue growth was primarily explained by unit sales increases of 5.9 percent in new vehicles and 5.6 percent in retail used vehicles, as well as an increase of 7.1 percent in parts and service revenue. The higher revenue drove gross profit growth of 7.8 percent, reflecting the higher new and used retail volumes, expanded parts and service margins of 50 basis points, and an F&I increase of 16.2 percent, or $121, to $1,351 per retail unit, which is another all-time record for the Company.

On a comparable basis, SG&A expenses as a percent of gross profit improved 250 basis points to 71.6 percent, operating margin expanded to 4.0 percent and pretax margin increased to 3.0 percent. Group 1's U.S. operations accounted for 80.6 percent of total revenues, 85.1 percent of total gross profit and 89.1 percent of the Company's adjusted pretax income.

United Kingdom:

Group 1's U.K. operations accounted for 8.9 percent of total revenues, roughly 7.0 percent of total gross profit and 6.0 percent of the Company's adjusted pretax income. Reflecting significant acquisition activity over the past year, total revenue increased 50.1 percent to $207.4 million, and gross profit increased 50.5 percent. Revenue growth was primarily driven by 68.1 percent and 103.4 percent increases in new and used vehicle retail unit sales, respectively.

On a comparable basis, SG&A expenses as a percent of gross profit improved 430 basis points to 78.2 percent.

Brazil:

Group 1's Brazil operations accounted for 10.5 percent of total revenues, 7.9 percent of total gross profit and 4.9 percent of the Company's adjusted pretax income. Gross profit was $27.1 million on revenues of $246.0 million. New vehicle sales were the primary revenue contributor at 76.1 percent, while new vehicles and parts and service were the primary gross profit contributors at 55.0 percent and 28.0 percent, respectively.

SG&A expenses as a percent of gross profit was at 80.5 percent, operating margin was 2.0 percent and pretax margin was 1.3 percent.

SECOND QUARTER EARNINGS CONFERENCE CALL

Group 1's senior management team will host a conference call to discuss the results later this morning at 10 a.m. ET.

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

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

Domestic: 1-877-300-8521

International: 1-412-317-6026

Conference ID: 10031305

A telephonic replay will be available following the call through July 31, 2013 at 11:59 p.m. ET by dialing:

Domestic: 1-877-870-5176

International: 1-858-384-5517

Replay Pin: 105312

Conference ID: 10031305

About Group 1 Automotive, Inc.

Group 1 owns and operates 139 automotive dealerships, 178 franchises, and 35 collision centers in the United States, the United Kingdom and Brazil that offer 33 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Investor contacts:

Sheila Roth

Manager, Investor Relations

Group 1 Automotive, Inc.

713-647-5741 | sroth@group1auto.com

Media contacts:

Pete DeLongchamps

V.P. Manufacturer Relations and Public Affairs

Group 1 Automotive Inc.

713-647-5770 | pdelongchamps@group1auto.com

Clint Woods

Pierpont Communications, Inc.

713-627-2223 | cwoods@piercom.com



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

	Three Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	1,376,219		$	1,080,710		27.3
Used vehicle retail sales	534,804			456,234			17.2
Used vehicle wholesale sales	83,316			73,134			13.9
Parts and service	260,950			220,313			18.4
Finance and insurance	79,821			65,435			22.0
Total revenues	2,335,110			1,895,826			23.2
COST OF SALES:
New vehicle retail sales	1,295,854			1,016,868			27.4
Used vehicle retail sales	491,299			417,388			17.7
Used vehicle wholesale sales	82,804			72,811			13.7
Parts and service	123,879			103,415			19.8
Total cost of sales	1,993,836			1,610,482			23.8
GROSS PROFIT	341,274			285,344			19.6
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	251,159			214,327			17.2
DEPRECIATION AND AMORTIZATION EXPENSE	8,884			7,742			14.8
ASSET IMPAIRMENTS	609			187			225.7
OPERATING INCOME	80,622			63,088			27.8
OTHER EXPENSE:
Floorplan interest expense	(10,873		)	(7,863		)	38.3
Other interest expense, net	(9,570		)	(9,190		)	4.1
INCOME BEFORE INCOME TAXES	60,179			46,035			30.7
PROVISION FOR INCOME TAXES	(22,791		)	(17,410		)	30.9
NET INCOME	$	37,388		$	28,625		30.6
DILUTED INCOME PER SHARE	$	1.43		$	1.20		19.2
Weighted average dilutive common shares outstanding	24,980			22,513			11.0
Weighted average participating securities	1,112			1,317			(15.6	)
Total weighted average shares outstanding	26,092			23,830			9.5



	Six Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	2,486,454		$	1,993,305		24.7
Used vehicle retail sales	1,006,203			871,208			15.5
Used vehicle wholesale sales	157,867			139,991			12.8
Parts and service	498,460			433,414			15.0
Finance and insurance	149,958			122,653			22.3
Total revenues	4,298,942			3,560,571			20.7
COST OF SALES:
New vehicle retail sales	2,343,453			1,876,643			24.9
Used vehicle retail sales	922,422			795,965			15.9
Used vehicle wholesale sales	154,933			136,964			13.1
Parts and service	236,371			205,231			15.2
Total cost of sales	3,657,179			3,014,803			21.3
GROSS PROFIT	641,763			545,768			17.6
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	484,592			413,439			17.2
DEPRECIATION AND AMORTIZATION EXPENSE	17,297			14,978			15.5
ASSET IMPAIRMENTS	609			288			111.5
OPERATING INCOME	139,265			117,063			19.0
OTHER EXPENSE:
Floorplan interest expense	(20,237		)	(15,482		)	30.7
Other interest expense, net	(18,812		)	(18,230		)	3.2
Other expense, net	(789		)	—			100.0
INCOME BEFORE INCOME TAXES	99,427			83,351			19.3
PROVISION FOR INCOME TAXES	(39,921		)	(31,609		)	26.3
NET INCOME	$	59,506		$	51,742		15.0
DILUTED INCOME PER SHARE	$	2.32		$	2.18		6.4
Weighted average dilutive common shares outstanding	24,544			22,522			9.0
Weighted average participating securities	1,093			1,263			(13.5	)
Total weighted average shares outstanding	25,637			23,785			7.8



Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
	June 30,			December 31,
	2013			2012			% Change
	(Unaudited)
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents	$	10,852		$	4,650		133.4
Contracts in transit and vehicle receivables, net	185,626			204,396			(9.2	)
Accounts and notes receivable, net	132,513			111,228			19.1
Inventories, net	1,358,294			1,194,288			13.7
Deferred income taxes	22,072			19,750			11.8
Prepaid expenses and other current assets	21,443			31,869			(32.7	)
Total current assets	1,730,800			1,566,181			10.5
PROPERTY AND EQUIPMENT, net	706,293			667,768			5.8
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS	955,830			778,442			22.8
OTHER ASSETS	16,395			10,624			54.3
Total assets	$	3,409,318		$	3,023,015		12.8
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable - credit facility and other	$	1,016,896		$	968,959		4.9
Offset account related to floorplan notes payable - credit facility	(81,996		)	(112,261		)	(27.0	)
Floorplan notes payable - manufacturer affiliates	301,670			211,965			42.3
Current maturities of long-term debt and short-term financing	24,338			31,358			(22.4	)
Accounts payable	237,573			167,439			41.9
Accrued expenses	144,361			128,118			12.7
Total current liabilities	1,642,842			1,395,578			17.7
2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at June 30, 2013 and December 31, 2012)	156,272			152,363			2.6
3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at June 30, 2013 and December 31, 2012)	82,468			80,706			2.2
MORTGAGE FACILITY, net of current maturities	46,724			53,643			(12.9	)
OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities	217,971			232,285			(6.2	)
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities	38,274			36,019			6.3
DEFERRED INCOME TAXES	130,517			94,130			38.7
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES	28,116			43,089			(34.7	)
OTHER LIABILITIES	44,810			42,413			5.7
COMMITMENTS AND CONTINGENCIES
TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 3.00% CONVERTIBLE SENIOR NOTES	30,835			32,505			(5.1	)
STOCKHOLDERS' EQUITY:
Common stock	259			258			0.4
Additional paid-in capital	367,569			332,836			10.4
Retained earnings	729,869			677,864			7.7
Accumulated other comprehensive loss	(48,682		)	(33,057		)	47.3
Treasury stock	(58,526		)	(117,617		)	(50.2	)
Total stockholders' equity	990,489			860,284			15.1
Total liabilities and stockholders' equity	$	3,409,318		$	3,023,015		12.8



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

		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2013 (%)	2012 (%)	2013 (%)	2012 (%)
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
Region	Geographic Market
East	Massachusetts	5.8	9.7	6.2	10.2
	New Jersey	3.9	5.1	4.3	5.1
	Georgia	3.4	3.4	3.8	3.4
	New York	2.8	3.2	2.8	3.3
	Louisiana	2.4	2.5	2.4	2.6
	New Hampshire	2.2	3.0	2.3	2.9
	Mississippi	1.6	2.1	1.7	2.1
	South Carolina	1.4	1.9	1.5	1.8
	Florida	1.2	1.2	1.3	1.0
	Alabama	0.8	1.0	0.8	1.0
	Maryland	0.5	0.6	0.5	0.7
		26.0	33.7	27.6	34.1

West	Texas	31.2	36.0	32.6	36.8
	California	10.7	14.4	11.9	14.5
	Oklahoma	7.9	7.8	7.7	7.8
	Kansas	2.6	1.6	2.5	1.4
		52.4	59.8	54.7	60.5

International	Brazil	12.9	—	9.1	—
	United Kingdom	8.7	6.5	8.6	5.4
		100.0	100.0	100.0	100.0

NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Scion/Lexus		26.5	31.2	27.0	30.9
Honda/Acura		12.6	11.4	12.5	11.2
Ford/Lincoln		11.4	8.8	11.5	9.5
BMW/MINI		10.8	11.3	10.5	11.0
Nissan/Infiniti		10.4	10.8	10.5	11.8
Volkswagen/Audi/Porsche		6.3	6.6	6.5	5.4
Hyundai/Kia		4.6	3.1	4.5	2.9
Chevrolet/GMC/Buick/Cadillac		4.4	5.8	4.8	6.0
Mercedes Benz/smart/Sprinter		4.2	4.8	4.4	4.7
Chrysler/Dodge/Jeep/RAM		3.9	4.4	4.1	4.4
Other		4.9	1.8	3.7	2.2
		100.0	100.0	100.0	100.0



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

	Three Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	1,078,607		$	1,003,570		7.5
Used vehicle retail sales	448,574			420,735			6.6
Used vehicle wholesale sales	56,725			60,614			(6.4	)
Total used	505,299			481,349			5.0
Parts and service	224,084			209,295			7.1
Finance and insurance	73,664			63,420			16.2
Total	$	1,881,654		$	1,757,634		7.1
GROSS MARGIN %:
New vehicle retail sales	5.4			5.8
Used vehicle retail sales	8.5			8.6
Used vehicle wholesale sales	0.4			1.0
Total used	7.6			7.7
Parts and service	53.5			53.0
Finance and insurance	100.0			100.0
Total	15.4			15.3
GROSS PROFIT:
New vehicle retail sales	$	58,325		$	58,334		—
Used vehicle retail sales	38,341			36,225			5.8
Used vehicle wholesale sales	248			614			(59.6	)
Total used	38,589			36,839			4.8
Parts and service	119,898			110,974			8.0
Finance and insurance	73,664			63,420			16.2
Total	$	290,476		$	269,567		7.8
UNITS SOLD:
Retail new vehicles sold	32,589			30,780			5.9
Retail used vehicles sold	21,928			20,763			5.6
Wholesale used vehicles sold	9,940			10,005			(0.6	)
Total used	31,868			30,768			3.6
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,097		$	32,605		1.5
Used vehicle retail	$	20,457		$	20,264		1.0
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,790		$	1,895		(5.5	)
Used vehicle retail sales	1,748			1,745			0.2
Used vehicle wholesale sales	25			61			(59.0	)
Total used	1,211			1,197			1.2
Finance and insurance (per retail unit)	$	1,351		$	1,230		9.8
OTHER: ⁽¹⁾
SG&A expenses	$	207,977		$	199,737		4.1
SG&A as % revenues	11.1			11.4
SG&A as % gross profit	71.6			74.1
Operating margin %	4.0			3.6
Pretax margin %	3.0			2.6
INTEREST EXPENSE:
Floorplan interest	$	8,645		$	7,546		14.6
Floorplan assistance	(10,010		)	(8,658		)	15.6
Net floorplan income	$	1,365		$	1,112		22.8
Other interest expense, net	$	9,301		$	9,070		2.5



	Six Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	2,041,239		$	1,876,559		8.8
Used vehicle retail sales	866,913			813,008			6.6
Used vehicle wholesale sales	114,394			120,032			(4.7	)
Total used	981,307			933,040			5.2
Parts and service	440,438			414,680			6.2
Finance and insurance	140,456			119,574			17.5
Total	$	3,603,440		$	3,343,853		7.8
GROSS MARGIN %:
New vehicle retail sales	5.4			5.8
Used vehicle retail sales	8.8			8.8
Used vehicle wholesale sales	2.1			2.7
Total used	8.0			8.0
Parts and service	53.3			52.6
Finance and insurance	100.0			100.0
Total	15.6			15.6
GROSS PROFIT:
New vehicle retail sales	$	109,907		$	108,100		1.7
Used vehicle retail sales	75,960			71,562			6.1
Used vehicle wholesale sales	2,373			3,214			(26.2	)
Total used	78,333			74,776			4.8
Parts and service	234,721			218,035			7.7
Finance and insurance	140,457			119,573			17.5
Total	$	563,418		$	520,484		8.2
UNITS SOLD:
Retail new vehicles sold	61,367			57,563			6.6
Retail used vehicles sold	43,044			40,658			5.9
Wholesale used vehicles sold	19,597			19,309			1.5
Total used	62,641			59,967			4.5
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,263		$	32,600		2.0
Used vehicle retail	$	20,140		$	19,996		0.7
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,791		$	1,878		(4.6	)
Used vehicle retail sales	1,765			1,760			0.3
Used vehicle wholesale sales	121			166			(27.1	)
Total used	1,251			1,247			0.3
Finance and insurance (per retail unit)	$	1,345		$	1,217		10.5
OTHER: ⁽¹⁾
SG&A expenses	$	412,068		$	391,314		5.3
SG&A as % revenues	11.4			11.7
SG&A as % gross profit	73.1			75.2
Operating margin %	3.8			3.4
Pretax margin %	2.8			2.5
INTEREST EXPENSE:
Floorplan interest	$	16,941		$	15,028		12.7
Floorplan assistance	(18,183		)	(16,072		)	13.1
Net floorplan income	$	1,242		$	1,044		19.0
Other interest expense, net	$	18,341		$	17,989		2.0

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



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

	Three Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	110,473		$	77,139		43.2
Used vehicle retail sales	58,429			35,499			64.6
Used vehicle wholesale sales	17,958			12,520			43.4
Total used	76,387			48,019			59.1
Parts and service	17,024			11,018			54.5
Finance and insurance	3,552			2,016			76.2
Total	$	207,436		$	138,192		50.1
GROSS MARGIN %:
New vehicle retail sales	6.5			7.1
Used vehicle retail sales	6.9			7.4
Used vehicle wholesale sales	(3.4		)	(2.3		)
Total used	4.5			4.9
Parts and service	56.4			53.8
Finance and insurance	100.0			100.0
Total	11.4			11.4
GROSS PROFIT:
New vehicle retail sales	$	7,161		$	5,506		30.1
Used vehicle retail sales	4,052			2,621			54.6
Used vehicle wholesale sales	(614		)	(292		)	110.3
Total used	3,438			2,329			47.6
Parts and service	9,594			5,924			62.0
Finance and insurance	3,551			2,017			76.1
Total	$	23,744		$	15,776		50.5
UNITS SOLD:
Retail new vehicles sold	3,605			2,144			68.1
Retail used vehicles sold	2,524			1,241			103.4
Wholesale used vehicles sold	2,251			1,239			81.7
Total used	4,775			2,480			92.5
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	30,644		$	35,979		(14.8	)
Used vehicle retail	$	23,149		$	28,605		(19.1	)
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,986		$	2,568		(22.7	)
Used vehicle retail sales	1,605			2,112			(24.0	)
Used vehicle wholesale sales	(273		)	(236		)	15.7
Total used	720			939			(23.3	)
Finance and insurance (per retail unit)	$	579		$	596		(2.9	)
OTHER:
SG&A expenses	$	18,570		$	13,011		42.7
SG&A as % revenues	9.0			9.4
SG&A as % gross profit	78.2			82.5
Operating margin %	2.2			1.6
Pretax margin %	1.8			1.3
INTEREST EXPENSE:
Floorplan interest	$	421		$	317		32.8
Floorplan assistance	—			—			—
Net floorplan expense	$	421		$	317		32.8
Other interest expense, net	$	293		$	120		144.2



	Six Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	205,298		$	116,746		75.9
Used vehicle retail sales	103,394			58,200			77.7
Used vehicle wholesale sales	31,722			19,958			58.9
Total used	135,116			78,158			72.9
Parts and service	31,795			18,734			69.7
Finance and insurance	6,305			3,079			104.8
Total	$	378,514		$	216,717		74.7
GROSS MARGIN %:
New vehicle retail sales	6.7			7.3
Used vehicle retail sales	6.1			6.3
Used vehicle wholesale sales	(1.7		)	(0.9		)
Total used	4.2			4.5
Parts and service	53.7			54.2
Finance and insurance	100.0			100.0
Total	11.3			11.7
GROSS PROFIT:
New vehicle retail sales	$	13,793		$	8,562		61.1
Used vehicle retail sales	6,270			3,682			70.3
Used vehicle wholesale sales	(530		)	(188		)	181.9
Total used	5,740			3,494			64.3
Parts and service	17,078			10,149			68.3
Finance and insurance	6,304			3,078			104.8
Total	$	42,915		$	25,283		69.7
UNITS SOLD:
Retail new vehicles sold	6,432			3,291			95.4
Retail used vehicles sold	4,252			2,095			103.0
Wholesale used vehicles sold	3,694			1,929			91.5
Total used	7,946			4,024			97.5
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	31,918		$	35,474		(10.0	)
Used vehicle retail	$	24,317		$	27,780		(12.5	)
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	2,144		$	2,602		(17.6	)
Used vehicle retail sales	1,475			1,758			(16.1	)
Used vehicle wholesale sales	(143		)	(97		)	47.4
Total used	722			868			(16.8	)
Finance and insurance (per retail unit)	$	590		$	571		3.3
OTHER: ⁽¹⁾
SG&A expenses	$	34,464		$	20,546		67.7
SG&A as % revenues	9.1			9.5
SG&A as % gross profit	80.3			81.3
Operating margin %	1.9			1.7
Pretax margin %	1.6			1.4
INTEREST EXPENSE:
Floorplan interest	$	727		$	454		60.1
Floorplan assistance	—			—			—
Net floorplan expense	$	727		$	454		60.1
Other interest expense, net	$	507		$	241		110.4



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

	Three Months Ended June 30, 2013
REVENUES:
New vehicle retail sales		$	187,139
Used vehicle retail sales		27,802
Used vehicle wholesale sales		8,633
Total used		36,435
Parts and service		19,841
Finance and insurance		2,605
Total		$	246,020
GROSS MARGIN %:
New vehicle retail sales		8.0
Used vehicle retail sales		4.0
Used vehicle wholesale sales		10.2
Total used		5.5
Parts and service		38.2
Finance and insurance		100.0
Total		11.0
GROSS PROFIT:
New vehicle retail sales		$	14,879
Used vehicle retail sales		1,113
Used vehicle wholesale sales		878
Total used		1,991
Parts and service		7,579
Finance and insurance		2,605
Total		$	27,054
UNITS SOLD:
Retail new vehicles sold		5,337
Retail used vehicles sold		1,182
Wholesale used vehicles sold		881
Total used		2,063
AVERAGE RETAIL SALES PRICE:
New vehicle retail		$	35,064
Used vehicle retail		$	23,521
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales		$	2,788
Used vehicle retail sales		942
Used vehicle wholesale sales		997
Total used		965
Finance and insurance (per retail unit)		$	400
OTHER:
SG&A expenses		$	21,769
SG&A as % revenues		8.8
SG&A as % gross profit		80.5
Operating margin %		2.0
Pretax margin %		1.3
INTEREST EXPENSE:
Floorplan interest		$	1,807
Floorplan assistance		—
Net floorplan expense		$	1,807



	Six Months Ended
	June 30, 2013 ⁽²⁾
REVENUES:
New vehicle retail sales	$	239,917
Used vehicle retail sales	35,897
Used vehicle wholesale sales	11,750
Total used	47,647
Parts and service	26,227
Finance and insurance	3,197
Total	$	316,988
GROSS MARGIN %:
New vehicle retail sales	8.0
Used vehicle retail sales	4.3
Used vehicle wholesale sales	9.3
Total used	5.5
Parts and service	39.2
Finance and insurance	100.0
Total	11.2
GROSS PROFIT:
New vehicle retail sales	$	19,301
Used vehicle retail sales	1,552
Used vehicle wholesale sales	1,090
Total used	2,642
Parts and service	10,290
Finance and insurance	3,197
Total	$	35,430
UNITS SOLD:
Retail new vehicles sold	6,828
Retail used vehicles sold	1,576
Wholesale used vehicles sold	1,116
Total used	2,692
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	35,137
Used vehicle retail	$	22,777
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	2,827
Used vehicle retail sales	985
Used vehicle wholesale sales	977
Total used	981
Finance and insurance (per retail unit)	$	380
OTHER: ⁽¹⁾
SG&A expenses	$	28,471
SG&A as % revenues	9.0
SG&A as % gross profit	80.4
Operating margin %	2.0
Pretax margin %	1.2
INTEREST EXPENSE:
Floorplan interest	$	2,569
Floorplan assistance	—
Net floorplan expense	$	2,569

⁽²⁾ Results are for the period from the date of acquisition (February 28, 2013) through June 30, 2013.



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

	Three Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	1,376,219		$	1,080,710		27.3
Used vehicle retail sales	534,804			456,234			17.2
Used vehicle wholesale sales	83,316			73,134			13.9
Total used	618,120			529,368			16.8
Parts and service	260,950			220,313			18.4
Finance and insurance	79,821			65,435			22.0
Total	$	2,335,110		$	1,895,826		23.2
GROSS MARGIN %:
New vehicle retail sales	5.8			5.9
Used vehicle retail sales	8.1			8.5
Used vehicle wholesale sales	0.6			0.4
Total used	7.1			7.4
Parts and service	52.5			53.1
Finance and insurance	100.0			100.0
Total	14.6			15.1
GROSS PROFIT:
New vehicle retail sales	$	80,365		$	63,842		25.9
Used vehicle retail sales	43,505			38,846			12.0
Used vehicle wholesale sales	512			323			58.5
Total used	44,017			39,169			12.4
Parts and service	137,071			116,898			17.3
Finance and insurance	79,821			65,435			22.0
Total	$	341,274		$	285,344		19.6
UNITS SOLD:
Retail new vehicles sold	41,531			32,924			26.1
Retail used vehicles sold	25,634			22,004			16.5
Wholesale used vehicles sold	13,072			11,244			16.3
Total used	38,706			33,248			16.4
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,137		$	32,824		1.0
Used vehicle retail	$	20,863		$	20,734		0.6
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,935		$	1,939		(0.2	)
Used vehicle retail sales	1,697			1,765			(3.9	)
Used vehicle wholesale sales	39			29			34.5
Total used	1,137			1,178			(3.5	)
Finance and insurance (per retail unit)	$	1,188		$	1,191		(0.3	)
OTHER: ⁽¹⁾
SG&A expenses	$	248,316		$	212,748		16.7
SG&A as % revenues	10.6			11.2
SG&A as % gross profit	72.8			74.6
Operating margin %	3.6			3.4
Pretax margin %	2.7			2.5
INTEREST EXPENSE:
Floorplan interest	$	10,873		$	7,863		38.3
Floorplan assistance	(10,010		)	(8,658		)	15.6
Net floorplan income (expense)	$	(863	)	$	795		(208.6	)
Other interest expense, net	$	9,570		$	9,190		4.1



	Six Months Ended June 30,
	2013			2012			% Change
REVENUES:
New vehicle retail sales	$	2,486,454		$	1,993,305		24.7
Used vehicle retail sales	1,006,203			871,208			15.5
Used vehicle wholesale sales	157,867			139,991			12.8
Total used	1,164,070			1,011,199			15.1
Parts and service	498,460			433,414			15.0
Finance and insurance	149,958			122,653			22.3
Total	$	4,298,942		$	3,560,571		20.7
GROSS MARGIN %:
New vehicle retail sales	5.8			5.9
Used vehicle retail sales	8.3			8.6
Used vehicle wholesale sales	1.9			2.2
Total used	7.4			7.7
Parts and service	52.6			52.6
Finance and insurance	100.0			100.0
Total	14.9			15.3
GROSS PROFIT:
New vehicle retail sales	$	143,000		$	116,662		22.6
Used vehicle retail sales	83,781			75,243			11.3
Used vehicle wholesale sales	2,934			3,027			(3.1	)
Total used	86,715			78,270			10.8
Parts and service	262,089			228,183			14.9
Finance and insurance	149,959			122,653			22.3
Total	$	641,763		$	545,768		17.6
UNITS SOLD:
Retail new vehicles sold	74,627			60,854			22.6
Retail used vehicles sold	48,872			42,753			14.3
Wholesale used vehicles sold	24,407			21,238			14.9
Total used	73,279			63,991			14.5
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,318		$	32,756		1.7
Used vehicle retail	$	20,589		$	20,378		1.0
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,916		$	1,917		(0.1	)
Used vehicle retail sales	1,714			1,760			(2.6	)
Used vehicle wholesale sales	120			143			(16.1	)
Total used	1,183			1,223			(3.3	)
Finance and insurance (per retail unit)	$	1,214		$	1,184		2.5
OTHER: ⁽¹⁾
SG&A expenses	$	475,003		$	411,860		15.3
SG&A as % revenues	11.0			11.6
SG&A as % gross profit	74.0			75.5
Operating margin %	3.5			3.3
Pretax margin %	2.6			2.4
INTEREST EXPENSE:
Floorplan interest	$	20,237		$	15,482		30.7
Floorplan assistance	(18,183		)	(16,072		)	13.1
Net floorplan income (expense)	$	(2,054	)	$	590		(448.1	)
Other interest expense, net	$	18,812		$	18,230		3.2



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

	Three Months Ended June 30,
	2013		2012		% Change
REVENUES:
New vehicle retail sales	$	1,117,203	$	1,047,135	6.7
Used vehicle retail sales	466,996		441,638		5.7
Used vehicle wholesale sales	67,987		70,140		(3.1	)
Total used	534,983		511,778		4.5
Parts and service	231,110		212,324		8.8
Finance and insurance	73,646		63,851		15.3
Total	$	1,956,942	$	1,835,088	6.6
GROSS MARGIN %:
New vehicle retail sales	5.5		5.9
Used vehicle retail sales	8.4		8.6
Used vehicle wholesale sales	0.4		0.6
Total used	7.4		7.5
Parts and service	53.5		53.0
Finance and insurance	100.0		100.0
Total	15.3		15.1
GROSS PROFIT:
New vehicle retail sales	$	61,974	$	62,216	(0.4	)
Used vehicle retail sales	39,150		37,783		3.6
Used vehicle wholesale sales	241		403		(40.2	)
Total used	39,391		38,186		3.2
Parts and service	123,578		112,529		9.8
Finance and insurance	73,646		63,851		15.3
Total	$	298,589	$	276,782	7.9
UNITS SOLD:
Retail new vehicles sold	33,345		31,715		5.1
Retail used vehicles sold	22,106		21,209		4.2
Wholesale used vehicles sold	10,786		10,662		1.2
Total used	32,892		31,871		3.2
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,504	$	33,017	1.5
Used vehicle retail	$	21,125	$	20,823	1.5
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,859	$	1,962	(5.2	)
Used vehicle retail sales	1,771		1,781		(0.6	)
Used vehicle wholesale sales	22		38		(42.1	)
Total used	1,198		1,198		—
Finance and insurance (per retail unit)	$	1,328	$	1,206	10.1
OTHER:⁽²⁾
SG&A expenses	$	212,448	$	204,004	4.1
SG&A as % revenues	10.9		11.1
SG&A as % gross profit	71.2		73.7
Operating margin %	4.0		3.6



	Six Months Ended June 30,
	2013		2012		% Change
REVENUES:
New vehicle retail sales	$	2,084,535	$	1,936,297	7.7
Used vehicle retail sales	887,462		846,603		4.8
Used vehicle wholesale sales	130,143		134,530		(3.3	)
Total used	1,017,605		981,133		3.7
Parts and service	450,751		420,751		7.1
Finance and insurance	139,109		119,940		16.0
Total	$	3,692,000	$	3,458,121	6.8
GROSS MARGIN %:
New vehicle retail sales	5.5		5.9
Used vehicle retail sales	8.5		8.7
Used vehicle wholesale sales	1.9		2.3
Total used	7.7		7.8
Parts and service	53.1		52.6
Finance and insurance	100.0		100.0
Total	15.5		15.4
GROSS PROFIT:
New vehicle retail sales	$	114,256	$	113,779	0.4
Used vehicle retail sales	75,442		73,396		2.8
Used vehicle wholesale sales	2,415		3,069		(21.3	)
Total used	77,857		76,465		1.8
Parts and service	239,569		221,325		8.2
Finance and insurance	139,109		119,940		16.0
Total	$	570,791	$	531,509	7.4
UNITS SOLD:
Retail new vehicles sold	61,980		58,791		5.4
Retail used vehicles sold	42,776		41,402		3.3
Wholesale used vehicles sold	20,539		20,180		1.8
Total used	63,315		61,582		2.8
AVERAGE RETAIL SALES PRICE:
New vehicle retail	$	33,632	$	32,935	2.1
Used vehicle retail	$	20,747	$	20,448	1.5
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales	$	1,843	$	1,935	(4.8	)
Used vehicle retail sales	1,764		1,773		(0.5	)
Used vehicle wholesale sales	118		152		(22.4	)
Total used	1,230		1,242		(1.0	)
Finance and insurance (per retail unit)	$	1,328	$	1,197	10.9
OTHER: ⁽²⁾
SG&A expenses	$	415,849	$	397,500	4.6
SG&A as % revenues	11.3		11.5
SG&A as % gross profit	72.9		74.8
Operating margin %	3.8		3.4

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

⁽²⁾ These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.



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

		Three Months Ended June 30,
		2013			2012			% Change
SG&A RECONCILIATION:
	As reported	$	210,820		$	201,316		4.7
	Pre-tax adjustments:
	Catastrophic events	(11,092		)	(2,650		)
	Net gain on dealership dispositions	8,449			—
	Net gain on real estate transactions	—			1,071
	Lease termination	(200		)	—
	Adjusted SG&A ⁽¹⁾	$	207,977		$	199,737		4.1
SG&A AS % REVENUES:
	Unadjusted	11.2			11.5
	Adjusted ⁽¹⁾	11.1			11.4
SG&A AS % GROSS PROFIT:
	Unadjusted	72.6			74.7
	Adjusted ⁽¹⁾	71.6			74.1
OPERATING MARGIN %:
	Unadjusted	3.8			3.5
	Adjusted ^(1),(2)	4.0			3.6
PRETAX MARGIN %:
	Unadjusted	2.8			2.5
	Adjusted ^(1),(2)	3.0			2.6



		Six Months Ended June 30,
		2013			2012			% Change
SG&A RECONCILIATION:
	As reported	$	420,304		$	392,893		7.0
	Pre-tax adjustments:
	Acquisition costs	(5,159		)	—
	Catastrophic events	(11,900		)	(2,650		)
	Net gain on dealership dispositions	9,023			—
	Net gain on real estate transactions	—			1,071
	Lease termination	(200		)	—
	Adjusted SG&A ⁽¹⁾	$	412,068		$	391,314		5.3
SG&A AS % REVENUES:
	Unadjusted	11.7			11.7
	Adjusted ⁽¹⁾	11.4			11.7
SG&A AS % GROSS PROFIT:
	Unadjusted	74.6			75.5
	Adjusted ⁽¹⁾	73.1			75.2
OPERATING MARGIN %:
	Unadjusted	3.5			3.4
	Adjusted ^(1),(2)	3.8			3.4
PRETAX MARGIN %:
	Unadjusted	2.5			2.4
	Adjusted ^(1),(2)	2.8			2.5

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

⁽²⁾Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $609 for the three and six months ended June 30, 2013, and $187 for the three and six months ended June 30, 2012.



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

		Six Months Ended June 30,
		2013			2012		% Change
SG&A RECONCILIATION:
	As reported	$	34,606		$	20,546	68.4
	Pre-tax adjustments:
	Acquisition costs	(142		)	—
	Adjusted SG&A ⁽¹⁾	$	34,464		$	20,546	67.7
SG&A AS % REVENUES:
	Unadjusted	9.1			9.5
	Adjusted ⁽¹⁾	9.1			9.5
SG&A AS % GROSS PROFIT:
	Unadjusted	80.6			81.3
	Adjusted ⁽¹⁾	80.3			81.3
OPERATING MARGIN %:
	Unadjusted	1.9			1.7
	Adjusted ^(1),(2)	1.9			1.7
PRETAX MARGIN %:
	Unadjusted	1.5			1.4
	Adjusted ^(1),(2)	1.6			1.4

⁽²⁾ Excludes the impact of SG&A reconciling items above.



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

		Six Months Ended June 30, 2013 ⁽³⁾
SG&A RECONCILIATION:
	As reported	$	29,682
	Pre-tax adjustments:
	Acquisition costs	(1,211		)
	Adjusted SG&A ⁽¹⁾	$	28,471
SG&A AS % REVENUES:
	Unadjusted	9.4
	Adjusted ⁽¹⁾	9.0
SG&A AS % GROSS PROFIT:
	Unadjusted	83.8
	Adjusted ⁽¹⁾	80.4
OPERATING MARGIN %:
	Unadjusted	1.6
	Adjusted ^(1),(2)	2.0
PRETAX MARGIN %:
	Unadjusted	0.6
	Adjusted ^(1),(4)	1.2

⁽²⁾ Excludes the impact of SG&A reconciling items above.

⁽³⁾ Results are for the period from the date of acquisition (February 28, 2013) through June 30, 2013.

⁽⁴⁾ Excludes the impact of SG&A reconciling items above, as well as the other expense of $789, for the period from acquisition through June 30, 2013.



Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures - Consolidated
(Unaudited)
(Dollars in thousands, except per share amounts)
		Three Months Ended June 30,
		2013			2012			% Change
NET INCOME RECONCILIATION:
	As reported	$	37,388		$	28,625		30.6
	After-tax adjustments:
	Catastrophic events⁽³⁾	6,757			1,658
	Net gain on dealership dispositions ⁽⁴⁾	(4,909		)	—
	Net gain on real estate transactions⁽¹⁰⁾	—			(659		)
	Lease termination⁽⁵⁾	124			—
	Non-cash impairment ⁽⁶⁾	369			115
	Adjusted net income ⁽¹⁾	$	39,729		$	29,739		33.6
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES RECONCILIATION
	Adjusted net income	$	39,729		$	29,739		33.6
	Less: Adjusted earnings allocated to participating securities	1,692			1,637			3.4
	Adjusted net income available to diluted common shares	$	38,037		$	28,102		35.4
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
	As reported	$	1.43		$	1.20		19.2
	After-tax adjustments:
	Catastrophic events	0.26			0.07
	Net gain on dealership dispositions	(0.19		)	—
	Net gain on real estate transactions	—			(0.03		)
	Lease termination	0.01			—
	Non-cash impairment	0.01			0.01
	Adjusted diluted income per share ⁽¹⁾	$	1.52		$	1.25		21.6
SG&A RECONCILIATION:
	As reported	$	251,159		$	214,327		17.2
	Pre-tax adjustments:
	Catastrophic events	(11,092		)	(2,650		)
	Net gain on dealership dispositions	8,449			—
	Net gain on real estate transactions	—			1,071
	Lease termination	(200		)	—
	Adjusted SG&A ⁽¹⁾	$	248,316		$	212,748		16.7
SG&A AS % REVENUES:
	Unadjusted	10.8			11.3
	Adjusted ⁽¹⁾	10.6			11.2
SG&A AS % GROSS PROFIT:
	Unadjusted	73.6			75.1
	Adjusted ⁽¹⁾	72.8			74.6
OPERATING MARGIN %:
	Unadjusted	3.5			3.3
	Adjusted ^(1),(7)	3.6			3.4
PRETAX MARGIN %:
	Unadjusted	2.6			2.4
	Adjusted ^(1),(8)	2.7			2.5



SAME STORE SG&A RECONCILIATION:
	As reported	$	223,740		$	207,158		8.0
	Pre-tax adjustments:
	Catastrophic events	(11,092		)	(2,650		)
	Net gain on real estate transactions	—			(504		)
	Lease termination	(200		)	—
	Adjusted Same Store SG&A ⁽¹⁾	$	212,448		$	204,004		4.1
SAME STORE SG&A AS % REVENUES:
	Unadjusted	11.4			11.3
	Adjusted⁽¹⁾	10.9			11.1
SAME STORE SG&A AS % GROSS PROFIT:
	Unadjusted	74.9			74.8
	Adjusted⁽¹⁾	71.2			73.7
SAME STORE OPERATING MARGIN %:
	Unadjusted	3.4			3.4
	Adjusted^(1),(9)	4.0			3.6



		Six Months Ended June 30,
		2013			2012			% Change
NET INCOME RECONCILIATION:
	As reported	$	59,506		$	51,742		15.0
	After-tax adjustments:
	Acquisition costs ⁽²⁾	4,639			—
	Catastrophic events⁽³⁾	7,261			1,658
	Net gain on dealership dispositions ⁽⁴⁾	(5,265		)	—
	Net gain on real estate transactions ⁽¹⁰⁾	—			(659		)
	Lease termination ⁽⁵⁾	124			—
	Non-cash impairment ⁽⁶⁾	369			115
	Income tax effect of non-deductible acquisition costs	2,329			—
	Adjusted net income ⁽¹⁾	$	68,963		$	52,856		30.5
ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES RECONCILIATION
	Adjusted net income	$	68,963		$	52,856		30.5
	Less: Adjusted earnings allocated to participating securities	2,925			2,789			4.9
	Adjusted net income available to diluted common shares	$	66,038		$	50,067		31.9
DILUTED INCOME PER COMMON SHARE RECONCILIATION:
	As reported	$	2.32		$	2.18		6.4
	After-tax adjustments:
	Acquisition costs	0.18			—
	Catastrophic events	0.28			0.07
	Net gain on dealership dispositions	(0.20		)	—
	Net gain on real estate transactions	—			(0.03		)
	Lease termination	0.01			—
	Non-cash impairment	0.01			0.01
	Income tax effect of non-deductible acquisition costs	0.09			—
	Adjusted diluted income per share ⁽¹⁾	$	2.69		$	2.23		20.6
SG&A RECONCILIATION:
	As reported	$	484,592		$	413,439		17.2
	Pre-tax adjustments:
	Acquisition costs	(6,512		)	—
	Catastrophic events	(11,900		)	(2,650		)
	Net gain on dealership dispositions	9,023			—
	Net gain on real estate transactions	—			1,071
	Lease termination	(200		)	—
	Adjusted SG&A ⁽¹⁾	$	475,003		$	411,860		15.3
SG&A AS % REVENUES:
	Unadjusted	11.3			11.6
	Adjusted ⁽¹⁾	11.0			11.6
SG&A AS % GROSS PROFIT:
	Unadjusted	75.5			75.8
	Adjusted ⁽¹⁾	74.0			75.5
OPERATING MARGIN %:
	Unadjusted	3.2			3.3
	Adjusted ^(1),(7)	3.5			3.3



PRETAX MARGIN %:
	Unadjusted	2.3	2.3
	Adjusted ^(1),(8)	2.6	2.4



SAME STORE SG&A RECONCILIATION:
	As reported	$	433,250		$	400,654		8.1
	Pre-tax adjustments:
	Acquisition costs	(5,301		)	—
	Catastrophic events	(11,900		)	(2,650		)
	Net gain on real estate transactions	—			(504		)
	Lease termination	(200		)	—
	Adjusted Same Store SG&A ⁽¹⁾	$	415,849		$	397,500		4.6
SAME STORE SG&A AS % REVENUES:
	Unadjusted	11.7			11.6
	Adjusted⁽¹⁾	11.3			11.5
SAME STORE SG&A AS % GROSS PROFIT:
	Unadjusted	75.9			75.4
	Adjusted⁽¹⁾	72.9			74.8
SAME STORE OPERATING MARGIN %:
	Unadjusted	3.3			3.4
	Adjusted^(1),(9)	3.8			3.4



(1)	We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations.
(2)	Adjustment is net of tax benefit of $2,394 for the six months ended June 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.
(3)	Adjustment is net of tax benefit of $4,335 and $4,639 for the three and six months ended June 30, 2013, respectively, and $992 for the three and six months ended June 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.
(4)	Adjustment is net of tax provision of $3,540 and $3,758 for the three and six months ended June 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.
(5)	Adjustment is net of tax benefit of $76 for the three and six months ended June 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.
(6)	Adjustment is net of tax benefit of $240 for the three and six months ended June 30, 2013, and $72 for the three and six months ended June 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.
(7)	Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges for all periods.
(8)	Excludes the impact of SG&A reconciling items above, non-cash asset impairment charges for all periods, as well as the other expense of $789, for the six months ended June 30, 2013.
(9)	Excludes the impact of Same Store SG&A reconciling items above, as well as Same Store non-cash asset impairment charges of $609 for the three and six months ended June 30, 2013, and $187 for the three and six months ended June 30, 2012.
(10)	Adjustment is net of tax provision of $412 for the three and six months ended June 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.

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