Company Overview
           and
2009 First-Quarter Results

       April 28, 2009
Safe Harbor
This presentation contains quot;forward-looking statements,“ which are
statements related to future, not past,...
Introduction




July 31, 2007
Group 1 Automotive, Inc.
     p
        Top five U.S. dealer group led by management team with more
        than 100 years...
New Vehicle Unit Sales
                             Brand Mix                                            Brand Diversity

...
Business Mix – 1st Quarter 2009
  3%
                                                 21% of
                             ...
Acquisitions / Dispositions
  q               p
       2009 Activity
               Acquired a Hyundai franchise that is e...
Financial Highlights
                            gg




July 31, 2007
Consolidated Financial Results
                                                                                           ...
Financial Highlights
             gg
                                                                                   Gr...
Profit Contributions
                               New Vehicles                                       Total Used Vehicles...
Same Store Financial Results
                                                                      Three Months Ended
    ...
Floorplan / Interest
                     p




July 31, 2007
Floorplan Interest
        p
                                                       Floorplan Interest Exp.               ...
Impact of Interest Rates
   p
        Increase of 100 basis points would have a direct
        impact of approximately $0....
Balance Sheet




July 31, 2007
Summary Balance Sheet
       y
                                                           As of                 As of
    ...
Capitalization
   p
                                                                                                      ...
De-Leveraging in Progress
         gg         g
    Debt              (1)
                                                ...
Debt Covenant Ratios
Ratios                                                         2Q08   3Q08   4Q08        1Q09

Sr.
Sr...
2009 Outlook and Strategy
                                       gy




July 31, 2007
2009 Outlook & Strategy
                     gy
       Protect the Balance Sheet

       Continue t manage costs t i d t s...
Capital Expenditures
  p       p
                                                              Maintenance CapEx
       Ca...
2009 Key Assumptions
       y      p
       Full-year Assumptions:
               SAAR of 10.0 to 10.3 million units
     ...
Conclusion




July 31, 2007
Conclusion
       Exceeded cost and new vehicle inventory reduction
       targets
       Executing well in a very difficu...
Visit: www.Group1Auto.com




July 31, 2007
Appendix
                 pp




July 31, 2007
Reconciliation of Certain Non-GAAP Financial Measures
                                              (Unaudited)
          ...
Debt Covenants as of 3/31/2009
 Revolving Credit Facility / Mortgage Facility
        Senior Secured Leverage Ratio must b...
Debt Covenant Calculations
       See following:




Group 1 Automotive, Inc.   31   RS_09Q1_v1.ppt
Group 1 Automotive, Inc.
Debt Covenant Summary

JPM Credit Facility and BofA MORTGAGE FACILITY
 1 Senior Secured Leverage ...
Group 1 Automotive, Inc.
Debt Covenant Summary

 4 Current Ratio must be > 1.15
   TOTAL CURRENT ASSETS (numerator)
    + ...
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Q1 2009 Earning Report of Group 1 Automotive Inc.

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Q1 2009 Earning Report of Group 1 Automotive Inc.

  1. 1. Company Overview and 2009 First-Quarter Results April 28, 2009
  2. 2. Safe Harbor This presentation contains quot;forward-looking statements,“ which are statements related to future, not past, events. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, l l j ti d id di fi il iti results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Any such forward-looking statements are not assurances of future y g performance and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an environment inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings “Business—Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations ” We urge you to carefully consider this information We undertake no Operations. information. duty to update our forward-looking statements, including our earnings outlook. Group 1 Automotive, Inc. 2 RS_09Q1_v1.ppt
  3. 3. Introduction July 31, 2007
  4. 4. Group 1 Automotive, Inc. p Top five U.S. dealer group led by management team with more than 100 years of automotive experience Most Group 1 dealerships are larger and more profitable than industry average More than 170,000 retail vehicles sold in 2008 Revenue run rate of $4.3 billion Assets of $2.0 billion Brand and geographic diversity 3 U.S. Regions + U.K. – 15 States – 99 Dealerships – 133 Franchises – 31 Brands – Financial data is from continuing operations Note: New Vehicle Unit Sales for quarter ending 03/31/09 Group 1 Automotive, Inc. 4 RS_09Q1_v1.ppt
  5. 5. New Vehicle Unit Sales Brand Mix Brand Diversity 17% 18% 24% 25% 25% Daimler 6% Toyota/ Scion/ Chrysler Lexus 7% 47% 35% 53% BMW/ 55% 56% 56% Mini 9% Ford 9% 36% Honda/ 29% Acura Nissan/ 21% 19% 19% 14% Infiniti 12% 2005 2006 2007 2008 2009 Q1 Q 1st Quarter 2009 Domestic Import Luxury Financial data is from continuing operations Group 1 Automotive, Inc. 5 RS_09Q1_v1.ppt
  6. 6. Business Mix – 1st Quarter 2009 3% 21% of 18% Revenues R 18% Generate 70% of Gross Parts & Service Gross Profit Profit 25% Covers Between 75% and 85% of Total Company Fixed Costs 52% and Parts & Service Selling Expenses 54% Finance & Insurance 14% Parts & Service Used Vehicles 16% New Vehicles Revenues Gross Profit $1,020 $183 ($ in millions) Financial data is from continuing operations Group 1 Automotive, Inc. 6 RS_09Q1_v1.ppt
  7. 7. Acquisitions / Dispositions q p 2009 Activity Acquired a Hyundai franchise that is expected to g q y p generate – $36.7 million in annual revenues Disposed of a Ford franchise – Revenues Acquired with twelve-month (in millions) revenues of $38.9 million $732 $702 2009 Projections Group 1 does not anticipate – purchasing any further franchises in 2009 $118 $90 $37 $ We will continue to evaluate – our portfolio and dispose of 2005 2006 2007 2008 2009 dealerships that do not provide acceptable returns • Some dispositions may result in exit charges Group 1 Automotive, Inc. 7 RS_09Q1_v1.ppt
  8. 8. Financial Highlights gg July 31, 2007
  9. 9. Consolidated Financial Results Three Months Ended 3/31/2009 3/31/2008 Change Revenues R $1,019.8 $1 019 8 $1,503.3 $1 503 3 (32.2)% (32 2)% Gross Profit $182.7 $247.6 (26.2)% Gross Margin 17.9% 17 9% 16.5% 16 5% 140 bp SG&A as % Gross Profit 83.9% 78.8% 510 bp Income from continuing operations (1) (1) before adoption of APB 14-1 $5.7 16.9 (66.4)% Diluted EPS from continuing operations (1) (1) $0.24 $0.75 before adoption of APB 14-1 (68.0)% (1) Excludes $9.0 million after-tax, or $0.40 per diluted share, in bond redemption gains and dealership disposition losses incurred in 1Q09; and, excludes $0.3 million after-tax, or $0.01 per diluted share, in bond redemption gains incurred in 1Q08 (See appendix for GAAP reconciliation) Financial data is from continuing operations ($ in millions, except per share amounts) Group 1 Automotive, Inc. 9 RS_09Q1_v1.ppt
  10. 10. Financial Highlights gg Gross Profit / Margin Revenues $6,260 $5 941 $5,941 $5 654 $5,654 $5 795 $5,795 $974 $939 $ $903 $ $916 17.9% 16.2% 15.8% 15.6% 15.6% $183 $1,020 2005 2006 2007 2008 1Q09 2005 2006 2007 2008 1Q09 Gross Profit Gross Margin SG&A E Expenses Operating Income / M O ti I Margin i $759 $739 $202 $718 $716 $199 $160 83.9% $152 80.8% 3.4% 79.4% 3.2% 2.2% 77 9% 77.9% 2.8% 76.4% 2.7% $153 $23 2005 2006 2007 2008 1Q09 2005 2006 2007 2008 1Q09 Operating Income Operating Margin SG&A Expenses SG&A as a % of Gross Profit ($ in millions) Financial data is from continuing operations Group 1 Automotive, Inc. 10 RS_09Q1_v1.ppt
  11. 11. Profit Contributions New Vehicles Total Used Vehicles $266 $262 $255 $135 $128 $126 $215 $111 7.2% 7.1% 6.7% 9.8% 9.7% 6.3% 9.0% 8.8% 5.4% 8.3% $26 $29 2005 2006 2007 2008 1Q09 2005 2006 2007 2008 1Q09 Gross Profit Gross Margin Gross Profit Gross Margin Finance & Insurance Parts & Service $404 $381 $351 $203 $343 $187 $187 $179 $1,034 52.8% 54.5% 54.1% 54.0% 53.8% $1,045 $1,080 $32 $975 $951 $96 2005 2006 2007 2008 1Q09 2005 2006 2007 2008 1Q09 Gross Profit Gross Margin Gross Profit Gross Profit PRU Financial data is from continuing operations ($ in millions, except per retail unit amounts) Group 1 Automotive, Inc. 11 RS_09Q1_v1.ppt
  12. 12. Same Store Financial Results Three Months Ended 3/31/2009 3/31/2008 Change ($ in millions) Revenues: New vehicle retail sales $ 540.7 $ 879.9 (38.6)% Used vehicle retail sales 220.9 300.8 (26.5)% Used vehicle wholesale sales 34.2 66.5 (48.6)% Total used $ 255.2 $ 367.3 (30.5)% Parts and service 177.8 188.3 (5.6)% Finance and insurance 31.7 31 7 52.1 52 1 (39.0)% (39 0)% Total $ 1,005.4 $ 1,487.5 (32.4)% Gross Margin g 17.9% 16.5% 140 bp p Financial data is from continuing operations Group 1 Automotive, Inc. 12 RS_09Q1_v1.ppt
  13. 13. Floorplan / Interest p July 31, 2007
  14. 14. Floorplan Interest p Floorplan Interest Exp. Manufacturer Assistance Interest Rate* $60,000 8.0% 6.7% 6 7% 7.0% 7 0% 6.5% $50,000 6.0% 5.3% 5.0% $40,000 5.0% 5 0% 5.0% $30,000 4.0% $46 $46 $4 45,308 6,822 6,377 3.0% $37,171 $36,922 $36,840 $34,120 $20,000 $28,311 2.0% $8,962 $10 000 $10,000 1.0% $4,534 $0 0.0% 2005 2006 2007 2008 1Q09 Manufacturer A i t M ft Assistance as % of Floorplan Int. Expense: 92.6% 81.5% 79.4% 61.0% 50.6% * Rate adjusted for impact of interest rate swaps Financial data is from continuing operations ($ in thousands) Group 1 Automotive, Inc. 14 RS_09Q1_v1.ppt
  15. 15. Impact of Interest Rates p Increase of 100 basis points would have a direct impact of approximately $0.08 per share based on p pp y p variable debt, net of interest rate swaps and manufacturer assistance At end of 1Q09 1Q09, 1-Month 1 Month LIBOR – $550 million at 4.7% 5.3% 5.3% 5.3% 6.0% average weighted 4.6% 4.4% 5.0% 3.9% interest rate under 4.0% 3.0% a combination of 2.0% 3-to-5-year swaps 0.4% 0.5% 1.0% 0.0% Source: British Bankers' Association Financial data is from continuing operations Group 1 Automotive, Inc. 15 RS_09Q1_v1.ppt
  16. 16. Balance Sheet July 31, 2007
  17. 17. Summary Balance Sheet y As of As of 3/31/2009 12/31/2008 Cash and cash equivalents $ 21,610 $ 23,144 CIT and vehicle receivables, net $ 85,909 $ 102,834 Inventories $ 638,358 $ 845,944 Total current assets $ 851,764 $ 1,096,624 Total assets $ 2,028,131 2 028 131 $ 2,288,114 2 288 114 Total current liabilities $ 752,612 $ 1,004,496 Long-Term Debt, net of current maturities $ 514,050 $ 536,723 Total stockholder's equity $ 671,325 $ 662,117 % Fixed Debt 72.5% 72 5% 60.1% 60 1% Financial data is from continuing operations ($ in thousands) Group 1 Automotive, Inc. 17 RS_09Q1_v1.ppt
  18. 18. Capitalization p As of March 31, 2009 Maturity Available Funding ($ in millions) Date Liquidity Capacity Actual Cash and cash equivalents $ 21.6 $ 21.6 Short-Term Debt Inventory Financing (1) 2012 $ 548.5 $ 62.3 $ 1,300.0 Rental Vehicles Financing (2) 2012 33.3 - - Current Maturities - LTD 13.0 - - $ 594.8 $ 83.9 $ 1,300.0 Long-Term Debt Senior Subordinated 8.25% Notes 2013 73.0 (Moody’s / S&P ratings: B2 / B) Acquisition Line of Credit (1,3) 2012 60.0 97.8 350.0 2.25% Convertible Notes 2016 136.1 Mortgage Facility 2012 156.4 156 4 235.0 235 0 Other Debt 88.5 Total Long-Term Debt $ 514.0 Total Debt $ 1,108.8 $ 181.7 $ 1,885.0 Stockholders Stockholders' Equity 671.3 671 3 Total Capitalization $ 1,780.1 () (1) The capacity under the floorplan and acquisition tranches of our credit facility can be redesignated within the overall $1.35 billion commitment. Further, the p y p q y g $ , borrowings under the acquisition tranche may be limited from time to time based upon certain debt covenants. (2) Borrowings with manufacturer affiliates for rental vehicles financing not associated with any of the Company’s credit facilities (3) The available liquidity balance at March 31, 2009, considers the $60 million outstanding and $17.3 million of letters of credit outstanding. Financial data is from continuing operations Group 1 Automotive, Inc. 18 RS_09Q1_v1.ppt
  19. 19. De-Leveraging in Progress gg g Debt (1) 2007 2008 1Q09 Real E t t R l Estate $169.9 $169 9 $272.0 $272 0 $257.8 $257 8 Floorplan 819.4 822.3 581.8 Acquisition Line q 135.0 50.0 60.0 8.25 Sr. Notes 100.3 73.0 73.0 2.25 Convertible Bonds (face) 287.5 224.5 194.5 TOTAL $1,512.1 $1,441.8 $1,167.1 TOTAL (excluding real estate & floorplan) $522.8 $347.5 $327.5 MEMO: Operating lease payments decreased by 6% year over y year- from $13.3M to $12.5M in 2009 p g py y y $20 million of non-real estate debt paid down in 1Q09 (1) Debt balances presented include U.K debt, which is excluded from debt covenant calculations. ($ in millions) Group 1 Automotive, Inc. 19 RS_09Q1_v1.ppt
  20. 20. Debt Covenant Ratios Ratios 2Q08 3Q08 4Q08 1Q09 Sr. Sr Secured Leverage < 2 75 1.49 1 49 1.41 1 41 1.49 1 49 1.54 1 54 2.75 Total Leverage* < 4.50 3.80 3.92 3.46 3.35 Fixed Charge Coverage > 1.25 g g 1.45 1.40 1.59 1.68 Current Ratio > 1.15 1.27 1.17 1.18 1.24 8.25% Sr. Subordinated N t 8 25% S S b di t d Notes: Consolidated Cash Flow Coverage > 2.00 5.58 4.96 5.53 5.97 In Compliance with ALL Debt Covenants at March 31, 2009 *Total Leverage Ratio not included in Mortgage Facility See Appendix for calculation definitions Group 1 Automotive, Inc. 20 RS_09Q1_v1.ppt
  21. 21. 2009 Outlook and Strategy gy July 31, 2007
  22. 22. 2009 Outlook & Strategy gy Protect the Balance Sheet Continue t manage costs t i d t sales levels C ti to t to industry l l l Scale back capital expenditures Focus on cash generation Continue to focus on Used Vehicle, Parts and Service Vehicle and F&I businesses Complete transition to operating model Dispose of underperforming dealerships p p g p Group 1 Automotive, Inc. 22 RS_09Q1_v1.ppt
  23. 23. Capital Expenditures p p Maintenance CapEx CapEx projected to be Capital Expenditures $90 less than $30 million in Depreciation & Amortization Expense 2009 $80 $70 No real estate purchases $70 – anticipated $60 $53 Maintenance CapEx $50 Approximates Depreciation $44 – $40 and A d Amortization E ti ti Expense $37 <$30 Working with our $30 manufacturer partners to p $20 $20 $20 limit spending next year $16 $10 $13 $13 $0 2005 2006 2007 2008 2009 Projection Group 1 Automotive, Inc. 23 RS_09Q1_v1.ppt
  24. 24. 2009 Key Assumptions y p Full-year Assumptions: SAAR of 10.0 to 10.3 million units – SG&A as a percent of gross profit at 80% to 83.5%, excluding any – one-time items, as lower sales revenues are expected to offset cost improvements p Total year-over-year reduction in SG&A expenses of $120 million at – 10 million SAAR level Tax rate of 40% – Estimated average diluted shares outstanding of 23.2 million – Capital expenditures of $30 million or less – On a same-store level: – Vehicle margins consistent with fourth-quarter 2008 levels – Parts and service revenues 3% to 5% lower – Finance and insurance gross profit at $1,000 to $1,025 per retail unit Group 1 Automotive, Inc. 24 RS_09Q1_v1.ppt
  25. 25. Conclusion July 31, 2007
  26. 26. Conclusion Exceeded cost and new vehicle inventory reduction targets Executing well in a very difficult environment – Have improved profitably as we rightsized the business this quarter Remained focused on cash generation and de-leveraging Capital Expenditures cut in half – almost equal to D&A – Balance sheet strengthened – Paid down $20 million of non- real estate debt in 2009 Acquisitions halted until economic conditions and balance sheet improve With these actions, we remain comfortable that we can manage through the current economic downturn and protect existing covenants. Group 1 Automotive, Inc. 26 RS_09Q1_v1.ppt
  27. 27. Visit: www.Group1Auto.com July 31, 2007
  28. 28. Appendix pp July 31, 2007
  29. 29. Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share amounts) Group 1 Automotive, Inc. 29 RS_09Q1_v1.ppt
  30. 30. Debt Covenants as of 3/31/2009 Revolving Credit Facility / Mortgage Facility Senior Secured Leverage Ratio must be < 2.75 g – $263.2 mil / $170.6 mil = 1.54 Total Leverage Ratio* must be < 4.50 – $571 3 mil / $170 6 mil = 3 35 $571.3 $170.6 3.35 Fixed Charge Coverage Ratio must be > 1.25 – $263.9 mil / $156.8 mil = 1.68 Current Ratio must be > 1.15 – $935.6 mil /$753.2 mil = 1.24 8.25% Senior Subordinated Notes Consolidated Cash Flow Coverage Ratio must be > 2.0 – $168 2 mil / $28 2 mil = 5 97 $168.2 $28.2 5.97 *Total Leverage Ratio not included in Mortgage Facility See Appendix for calculation definitions Group 1 Automotive, Inc. 30 RS_09Q1_v1.ppt
  31. 31. Debt Covenant Calculations See following: Group 1 Automotive, Inc. 31 RS_09Q1_v1.ppt
  32. 32. Group 1 Automotive, Inc. Debt Covenant Summary JPM Credit Facility and BofA MORTGAGE FACILITY 1 Senior Secured Leverage Ratio must be < 2.75 SECURED DEBT (numerator) + Mortgage Facility and other real estate debt PLUS current + Acquisition Line = TOTAL SECURED DEBT (ex Floorplan) EBITDA (denominator) + Pre-Tax Income - trailing 12 months (T12) + Add back Total Interest Expense (including FP) - T12 + Add back Depreciation & Amortization - T12 + Add back Asset Impairments - T12 Add back Other non-cash charges (including asset impairments + and stock-based compensation) - T12 = CONSOLIDATED EBITDA - take out Floorplan Interest Expense - T12 = CONSOLIDATED adjusted EBITDA (excludes FP Interest Exp) + Add Proforma EBITDA (excluding FP Interest) = CONSOLIDATED adjusted PROFORMA EBITDA 2 Total Leverage Ratio* must be < 4.50 TOTAL DEBT (numerator) + Mortgage Facility and other real estate debt PLUS current + Acquisition Line + Notes Payable (Capital lease obligations) + 8.25 Sr. Sub Notes + 2.25 Convert (Face value) = TOTAL DEBT (ex Floorplan) EBITDA (denominator) + Pre-Tax Income - trailing 12 months (T12) + Add back Total Interest Expense (including FP) - T12 + Add back Depreciation & Amortization - T12 + Add back Asset Impairments - T12 Add back Other non-cash charges (including asset impairments + and stock-based compensation) - T12 = CONSOLIDATED EBITDA - take out Floorplan Interest Expense - T12 = CONSOLIDATED adjusted EBITDA (excludes FP Interest Exp) + Add Proforma EBITDA (excluding FP Interest) = CONSOLIDATED adjusted PROFORMA EBITDA *Total Leverage Ratio not included in Mortgage Facility 3 Fixed Charge Coverage Ratio must be > 1.25 EARNINGS available for FIXED CHARGES (numerator) = CONSOLIDATED EBITDA (see #2 or #3 ratios) + PLUS Lease Expense - T12 - LESS Cash Paid for Taxes - T12 = TOTAL EARNINGS available for FIXED CHARGES FIXED CHARGES (denominator) + Total Interest Expense (including FP) - T12 - LESS Non-cash interest + PLUS Lease Expense - T12 + PLUS Required Principle Payments - T12 + PLUS Cash paid for Dividends - T12 + PLUS Maintenance CapEx - T12 (calc $50k per dealership per qtr) = TOTAL FIXED CHARGES 2009-04-28 v8
  33. 33. Group 1 Automotive, Inc. Debt Covenant Summary 4 Current Ratio must be > 1.15 TOTAL CURRENT ASSETS (numerator) + Total Current Assets + PLUS Total Revolver Capacity (Total Undrawn Acquisition Line) = TOTAL CURRENT ASSETS TOTAL CURRENT LIABILITIES (demoninator) 5 Funds Available for Restricted Payments - Minimum Net Worth Calc STOCKHOLDERS' EQUITY on B/S LESS REQUIRED STOCKHOLDERS' EQUITY (since 1Q07) + Minimum Flat $520,000,000 + PLUS 50% of Consolidated Net Income since 1Q07 PLUS 100% of Net Proceeds from Issuance of Equity since + 1Q07 + PLUS Asset Impairment, net of tax, since 1Q07 = TOTAL REQUIRED STOCKHOLDERS' EQUITY LESS = CONVERT CALL SPREAD = $35,700,000 EQUALS EXCESS REMAINING FOR RESTRICTED PAYMENTS 8.25% Senior Sub Notes 1 Consolidated Cash Flow Coverage Ratio must be > 2.0 CASH FLOW available for FIXED CHARGES (numerator) + Consolidated Net Income - T12 +/- Adjustment for one time change in accounting principle PLUS (add back) Consolidated Interest Expense (excludes + Floorplan Interest Expense) + PLUS (add back) Consolidated Income Tax Expense + PLUS (add back) Depreciation & Amortization PLUS (add back) Other non-cash charges (including asset + impairments and stock-based compensation) - T12 = TOTAL CASH FLOW available for FIXED CHARGES - T12 CONSOLIDATED FIXED CHARGES (denominator) Consolidated Interest Expense (excludes Floorplan Interest = Expense) - T12 NOTE: All ratios exclude the UK and discontinued operations and APB 14-1 All EBITDA and Fixed Charge items are trailing twelve months 2009-04-28 v8

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