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Press release from PR Newswire

Group 1 Automotive Reports All-Time Record Profits On 26 Percent Revenue Increase

Thursday, October 25, 2012

Group 1 Automotive Reports All-Time Record Profits On 26 Percent Revenue Increase07:07 EDT Thursday, October 25, 2012HOUSTON, Oct. 25, 2012 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported record 2012 third-quarter net income of $31.3 million and record diluted earnings per common share of $1.32 for the period ended Sept. 30, 2012. Net income increased 31.6 percent from the comparable, adjusted prior-year period which, as shown in the attached reconciliation table, excluded a non-cash asset impairment charge.Year-to-date 2012 adjusted net income increased 31.4 percent, to a record $84.2 million. Adjusted diluted earnings per common share were $3.54, making this the best first nine-month results in the company's history."Group 1 reported all-time, record-setting revenues, gross profit, net income and diluted earnings per common share in the third quarter, driven by strong growth in all segments of the business, including record results in finance and insurance," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Group 1's new vehicle unit sales continue to outpace industry retail sales, reflecting the strength of our brand mix and strong execution by our operating team. In addition, I am especially proud of the growth our team has delivered in used retail unit sales, where we have significantly outperformed the market this year as well."Third-Quarter 2012 Results (on a year-over-year basis unless otherwise noted)Setting new all-time records, total gross profit grew 17.1 percent on 25.9 percent higher revenues of $2.0 billion. New vehicle gross profit increased 18.5 percent on 32.3 percent higher revenues, as the company retailed 34.0 percent more units. Average vehicle selling price declined 1.2 percent, to $33,050, as the mix shifted from luxury and trucks to mid-line imports. Retail used vehicle average selling price increased 2.6 percent, to $20,612, and the company retailed 19.5 percent more units, driving the 17.7 percent gross profit and 22.6 percent revenue growth. Parts and service gross profit increased 8.1 percent on revenue growth of 7.1 percent. Finance and insurance gross profit per retail unit increased $64, to an all-time record $1,220, as penetration rates improved in both finance and vehicle service contracts. Selling, general and administrative expenses as a percent of revenues improved 110 basis points, to 10.9 percent. Selling, general and administrative expenses as a percent of gross profit improved to 74.2 percent, from both the prior-year period and the second quarter on a comparable basis, as the company continued to leverage gross profit growth. Operating margin remained flat, at 3.4 percent, from the prior-year and second-quarter periods on a comparable basis.Corporate DevelopmentDuring the third quarter, Group 1 purchased a Hyundai franchise in Houston that is estimated to generate $30.0 million in annual revenues. The company also disposed of a Lincoln franchise in Houston that generated trailing-12-month revenues of $17.6 million.In October, Group 1 acquired a Hyundai dealership in Oklahoma City, Okla., that is estimated to generate $45.0 million in annual revenues. The company also disposed of a Nissan dealership and a Mazda dealership in the Boston area that generated $67.2 million in combined annual revenues during the last 12 months.Year to date, Group 1 has acquired 14 franchises that are expected to generate $580.0 million in annual revenues and disposed of three franchises that generated $84.8 million of annual revenues.Third-Quarter Earnings Conference CallGroup 1's senior management will host a conference call today at 10 a.m. ET to discuss the third-quarter financial results and the company's outlook and strategy.The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. A replay will be available for 30 days.The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:Domestic: 1.877.317.6789International: 1.412.317.6789Conference ID: 10019588A telephonic replay will be available following the call through Nov. 2 at 9 a.m. ET by dialing:Domestic: 1.877.344.7529International: 1.412.317.0088Conference ID: 10019588About Group 1 Automotive, Inc.Group 1 owns and operates 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 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.Group 1 Automotive can be reached on the Internet at www.group1auto.com.This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.Investor Contacts:Kim Paper CanningManager, Investor RelationsGroup 1 Automotive, Inc.713-647-5741 | kpaper@group1auto.comMedia Contacts:Pete DeLongchampsV.P. Financial Services and Manufacturer RelationsGroup 1 Automotive, Inc.713-647-5770 | pdelongchamps@group1auto.comorClint WoodsPierpont 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 September 30,Nine Months Ended September 30,20122011% Change20122011% ChangeREVENUES:New vehicle retail sales$ 1,141,286$ 862,66032.3$ 3,134,591$ 2,457,25527.6Used vehicle retail sales462,395377,11522.61,333,6031,053,60926.6Used vehicle wholesale sales78,42469,05113.6218,415191,60914.0Parts and service224,990210,0677.1658,404609,1088.1Finance and insurance69,47751,49634.9192,130142,25535.1Total revenues1,976,5721,570,38925.95,537,1434,453,83624.3COST OF SALES:New vehicle retail sales1,074,736806,49833.32,951,3792,304,05728.1Used vehicle retail sales424,663345,04823.11,220,628958,09427.4Used vehicle wholesale sales79,06769,25414.2216,031187,65115.1Parts and service106,875100,8366.0312,106289,2957.9Total cost of sales1,685,3411,321,63627.54,700,1443,739,09725.7GROSS PROFIT291,231248,75317.1836,999714,73917.1SELLING, GENERAL ANDADMINISTRATIVE EXPENSES216,082188,18514.8629,521547,12015.1DEPRECIATION ANDAMORTIZATION EXPENSE8,0966,84518.323,07419,88116.1ASSET IMPAIRMENTS-3,644(100.0)2884,008(92.8)OPERATING INCOME67,05350,07933.9184,116143,73028.1OTHER EXPENSE:Floorplan interest expense(7,942)(6,964)14.0(23,424)(20,245)15.7Other interest expense, net(9,619)(8,644)11.3(27,849)(24,811)12.2INCOME BEFORE INCOME TAXES49,49234,47143.6132,84398,67434.6PROVISION FOR INCOME TAXES(18,157)(12,977)39.9(49,766)(37,135)34.0NET INCOME$ 31,335$ 21,49445.8$ 83,077$ 61,53935.0DILUTED INCOME PER SHARE$ 1.32$ 0.9145.1$ 3.50$ 2.5736.2Weighted average dilutive common shares outstanding22,45822,2191.122,50122,533(0.1)Weighted average participating securities1,2451,392(10.6)1,2571,392(9.7)Total weighted average shares outstanding23,70323,6110.423,75823,925(0.7)Group 1 Automotive, Inc.Consolidated Balance Sheets(Dollars in thousands)September 30,December 31,20122011% ChangeASSETS:(Unaudited)CURRENT ASSETS:Cash and cash equivalents$ 38,822$ 14,895160.6Contracts in transit and vehicle receivables, net150,170167,507(10.4)Accounts and notes receivable, net98,10692,7755.7Inventories, net1,107,193867,47027.6Deferred income taxes19,22316,01220.1Prepaid expenses and other current assets33,21716,92596.3Total current assets1,446,7311,175,58423.1PROPERTY AND EQUIPMENT, net649,811585,63311.0GOODWILL AND INTANGIBLE FRANCHISE RIGHTS759,068702,1458.1OTHER ASSETS11,17512,981(13.9)Total assets$ 2,866,785$ 2,476,34315.8LIABILITIES AND STOCKHOLDERS' EQUITY:CURRENT LIABILITIES:Floorplan notes payable - credit facility$ 910,849$ 718,94526.7Offset account related to floorplan notes payable - credit facility(128,264)(109,207)17.5Floorplan notes payable - manufacturer affiliates172,738155,98010.7Current maturities of long-term debt and short-term financing30,29314,663106.6Current liabilities from interest rate risk management activities3617,273(95.0)Accounts payable164,922148,04811.4Accrued expenses117,892109,2457.9Total current liabilities1,268,7911,044,94721.42.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at September 30, 2012 and December 31, 2011)150,465144,9853.83.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at September 30, 2012 and December 31, 2011)79,85477,4013.2MORTGAGE FACILITY, net of current maturities54,40138,87339.9OTHER REAL ESTATE RELATED AND LONG-TERM DEBT,net of current maturities224,787184,23722.0CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE,net of current maturities36,58737,105(1.4)DEFERRED INCOME TAXES90,54878,45915.4LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES44,70826,76667.0OTHER LIABILITIES41,04736,47012.6COMMITMENTS AND CONTINGENCIESTEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE3.00% CONVERTIBLE SENIOR NOTES33,313-100.0STOCKHOLDERS' EQUITY:Common stock260260-Additional paid-in capital334,942363,375(7.8)Retained earnings664,124591,03712.4Accumulated other comprehensive loss(34,288)(29,236)17.3Treasury stock(122,754)(118,336)3.7Total stockholders' equity842,284807,1004.4Total liabilities and stockholders' equity$ 2,866,785$ 2,476,34315.8KEY DEBT COVENANT METRICS:Senior secured adjusted leverage ratio (must be less than 3.75)2.382.46Total adjusted leverage ratio (must be less than 5.50)3.433.65Fixed charge coverage ratio (must be greater than 1.35)2.041.94Group 1 Automotive, Inc.Consolidated Statements of Adjusted Cash Flows from Operating Activities(Unaudited)(In thousands)Three Months Ended September 30,Nine Months Ended September 30,20122011% Change20122011% ChangeNet income$ 31,335$ 21,49445.8$ 83,077$ 61,53935.0Adjustments to reconcile net income to net cashprovided by operating activities:Asset impairments-3,644(100.0)2884,008(92.8)Depreciation and amortization8,0966,84518.323,07419,88116.1Deferred income taxes4,6802,170115.710,75516,280(33.9)Gain on disposition of assets and franchise(543)(181)200.0(2,131)(967)120.4Stock-based compensation3,0282,7759.18,9438,3337.3Amortization of debt discount and issue costs3,2713,0238.29,6598,8718.9Other53787517.2594(15)4,060.0Changes in operating assets and liabilities, net ofeffects of acquisitions and dispositions:Accounts payable and accrued expenses1,67114,833(88.7)19,29439,722(51.4)Accounts and notes receivable21,400(55)39,009.16,6803,90870.9Inventories(33,063)58,901(156.1)(193,145)111,704(272.9)Contracts-in-transit and vehicle receivables1,2645,398(76.6)25,13513,52585.8Prepaid expenses and other assets360(4,477)108.06,575(3,454)290.4Floorplan notes payable - credit facility (1)24,214(83,371)129.0175,795(156,657)212.2Floorplan notes payable - manufacturer affiliates (2)(2,902)(13,416)(78.4)(5,979)(7,550)(20.8)Deferred revenues(704)(297)137.0(110)(1,245)(91.2)Adjusted net cash provided by operating activities$ 62,644$ 17,373260.6$ 168,504$ 117,88342.9 (1)Excludes net acquisition/(disposition) related activity of $397 and $16,109 and for the three and nine months ended September 30, 2012, respectively, and $20,476 for the nine months ended September 30, 2011.(2)Excludes net acquisition/(disposition) related activity of $26,578 and for the nine months ended September 30, 2011.Group 1 Automotive, Inc.Additional Information - Consolidated(Unaudited)Three Months EndedNine Months EndedSeptember 30,September 30,2012 (%)2011 (%)2012 (%)2011 (%)NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: RegionGeographic MarketEastMassachusetts9.611.210.011.6New Jersey5.04.85.05.5Georgia3.83.13.53.5New Hampshire2.82.82.93.1New York2.53.53.03.7Louisiana2.12.72.53.0Mississippi1.82.02.02.0South Carolina1.71.41.81.4Florida1.70.71.20.7Alabama0.91.41.01.2Maryland0.60.70.60.832.534.333.536.5WestTexas36.238.236.734.9California14.512.914.514.0Oklahoma8.08.57.88.3Kansas1.40.91.41.060.160.560.458.2InternationalUnited Kingdom7.45.26.15.3100.0100.0100.0100.0NEW VEHICLE UNIT SALES BRAND MIX:Toyota/Scion/Lexus30.828.730.930.6Nissan/Infiniti12.015.211.914.0Honda/Acura11.19.311.211.1BMW/MINI10.113.110.713.2Ford8.810.19.28.5Volkswagen/Audi/Porsche8.32.86.52.5GM5.56.25.85.3Daimler4.35.04.65.5Chrysler4.35.04.44.5Other4.84.64.84.8100.0100.0100.0100.0NEW VEHICLE UNIT SALES OTHER MIX:Import54.752.155.054.3Luxury27.626.726.427.6Domestic17.721.218.618.1100.0100.0100.0100.0Car57.453.557.055.1Truck42.646.543.044.9100.0100.0100.0100.0Group 1 Automotive, Inc.Additional Information - Consolidated(Unaudited)(Dollars in thousands, except per unit amounts)Three Months Ended September 30,Nine Months Ended September 30,20122011% Change20122011% ChangeREVENUES:New vehicle retail sales$ 1,141,286$ 862,66032.3$ 3,134,591$ 2,457,25527.6Used vehicle retail sales462,395377,11522.61,333,6031,053,60926.6Used vehicle wholesale sales78,42469,05113.6218,415191,60914.0Total used540,819446,16621.21,552,0181,245,21824.6Parts and service224,990210,0677.1658,404609,1088.1Finance and insurance69,47751,49634.9192,130142,25535.1Total $ 1,976,572$ 1,570,38925.9$ 5,537,143$ 4,453,83624.3GROSS MARGIN %:New vehicle retail sales5.86.55.86.2Used vehicle retail sales8.28.58.59.1Used vehicle wholesale sales(0.8)(0.3)1.12.1Total used6.97.17.48.0Parts and service52.552.052.652.5Finance and insurance100.0100.0100.0100.0Total14.715.815.116.0GROSS PROFIT:New vehicle retail sales$ 66,550$ 56,16218.5$ 183,212$ 153,19819.6Used vehicle retail sales37,73232,06717.7112,97595,51518.3Used vehicle wholesale sales(643)(203)216.72,3843,958(39.8)Total used37,08931,86416.4115,35999,47316.0Parts and service118,115109,2318.1346,298319,8138.3Finance and insurance69,47751,49634.9192,130142,25535.1Total $ 291,231$ 248,75317.1$ 836,999$ 714,73917.1UNITS SOLD:Retail new vehicles sold34,53225,77734.095,38674,57827.9Retail used vehicles sold22,43318,77019.565,18652,70023.7Wholesale used vehicles sold12,0499,69724.333,28727,24622.2Total used34,48228,46721.198,47379,94623.2AVERAGE RETAIL SALES PRICE:New vehicle retail$ 33,050$ 33,466(1.2)$ 32,862$ 32,949(0.3)Used vehicle retail$ 20,612$ 20,0912.6$ 20,458$ 19,9932.3GROSS PROFIT PER UNIT SOLD:New vehicle retail sales$ 1,927$ 2,179(11.6)$ 1,921$ 2,054(6.5)Used vehicle retail sales1,6821,708(1.5)1,7331,812(4.4)Used vehicle wholesale sales(53)(21)152.472145(50.3)Total used1,0761,119(3.8)1,1711,244(5.9)Finance and insurance (per retail unit)$ 1,220$ 1,1565.5$ 1,197$ 1,1187.1OTHER: (1)SG&A expenses$ 216,082$ 188,18514.8$ 627,942$ 547,12014.8SG&A as % revenues10.912.011.312.3SG&A as % gross profit74.275.775.076.5Operating margin %3.43.43.43.3Pretax margin %2.52.42.42.3FLOORPLAN EXPENSE:Floorplan interest$ (7,942)$ (6,964)14.0$ (23,424)$ (20,245)15.7Floorplan assistance9,2046,74036.625,27618,83634.2Net floorplan income (expense)$ 1,262$ (224)663.4$ 1,852$ (1,409)231.4 (1)These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.Group 1 Automotive, Inc.Additional Information - Same Store(1)(Unaudited)(Dollars in thousands, except per unit amounts)Three Months Ended September 30,Nine Months Ended September 30,20122011% Change20122011% ChangeREVENUES:New vehicle retail sales$ 1,036,633$ 862,66120.2$ 2,856,681$ 2,452,45516.5Used vehicle retail sales425,287377,11512.81,228,5971,051,81216.8Used vehicle wholesale sales68,16069,051(1.3)192,587191,5280.6Total used493,447446,16610.61,421,1841,243,34014.3Parts and service210,839210,0660.4615,547607,7331.3Finance and insurance64,99651,50826.2178,771141,99425.9Total $ 1,805,915$ 1,570,40115.0$ 5,072,183$ 4,445,52214.1GROSS MARGIN %:New vehicle retail sales5.76.55.86.2Used vehicle retail sales8.38.58.59.1Used vehicle wholesale sales(0.7)(0.3)1.32.1Total used7.07.17.58.0Parts and service52.352.052.552.5Finance and insurance100.0100.0100.0100.0Total14.915.815.316.0GROSS PROFIT:New vehicle retail sales$ 59,171$ 56,1645.4$ 165,138$ 152,8628.0Used vehicle retail sales35,14132,0669.6104,09095,2469.3Used vehicle wholesale sales(453)(203)123.22,4453,940(37.9)Total used34,68831,8638.9106,53599,1867.4Parts and service110,183109,2300.9323,420319,3271.3Finance and insurance64,99651,50826.2178,771141,99425.9Total $ 269,038$ 248,7658.1$ 773,864$ 713,3698.5UNITS SOLD:Retail new vehicles sold31,46325,77722.187,15474,41417.1Retail used vehicles sold20,80818,77010.960,39852,60614.8Wholesale used vehicles sold10,7639,69711.029,92527,2329.9Total used31,57128,46710.990,32379,83813.1AVERAGE RETAIL SALES PRICE:New vehicle retail$ 32,948$ 33,467(1.6)$ 32,777$ 32,957(0.5)Used vehicle retail$ 20,439$ 20,0921.7$ 20,342$ 19,9941.7GROSS PROFIT PER UNIT SOLD:New vehicle retail sales$ 1,881$ 2,179(13.7)$ 1,895$ 2,054(7.7)Used vehicle retail sales1,6891,708(1.1)1,7231,811(4.9)Used vehicle wholesale sales(42)(21)100.082145(43.4)Total used1,0991,119(1.8)1,1791,242(5.1)Finance and insurance (per retail unit)$ 1,243$ 1,1567.5$ 1,212$ 1,1188.4OTHER: (2)SG&A expenses$ 198,852$ 188,2305.6$ 578,619$ 546,4155.9SG&A as % revenues11.012.011.412.3SG&A as % gross profit73.975.774.876.6Operating margin % 3.53.43.43.3FLOORPLAN EXPENSE:Floorplan interest$ (7,364)$ (6,964)5.7$ (21,543)$ (20,166)6.8Floorplan assistance8,5446,74026.823,01718,80622.4Net floorplan income (expense)$ 1,180$ (224)626.8$ 1,474$ (1,360)208.4 (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(Unaudited)(Dollars in thousands, except per share amounts)Three Months Ended September 30,Nine Months Ended September 30,NET INCOME RECONCILIATION:20122011% Change20122011% ChangeAs reported$ 31,335$ 21,49445.8$ 83,077$ 61,53935.0After-tax adjustments:Non-cash asset impairment charges(2)-2,3091152,534Net gain on real estate transactions(3)--(659)-Insurance deductibles for hail storm damage (4)--1,658-Adjusted net income (1)$ 31,335$ 23,80331.6$ 84,191$ 64,07331.4ADJUSTED NET INCOMEATTRIBUTABLE TO DILUTEDCOMMON SHARES RECONCILIATION:Adjusted net income$ 31,335$ 23,80331.6$ 84,191$ 64,07331.4Less: Adjusted earnings allocated to participating securities1,6411,39217.94,4323,69719.9Adjusted net income available to diluted common shares$ 29,694$ 22,41132.5$ 79,759$ 60,37632.1DILUTED INCOME PER COMMON SHARE RECONCILIATION:As reported$ 1.32$ 0.9145.1$ 3.50$ 2.5736.2After-tax adjustments:Non-cash asset impairment charges-0.10-0.11Net gain on real estate transactions--(0.03)-Insurance deductibles for hail storm damage--0.07-Adjusted diluted income per share (1)$ 1.32$ 1.0130.7$ 3.54$ 2.6832.1SG&A RECONCILIATION:As reported$ 216,082$ 188,18514.8$ 629,521$ 547,12015.1Pre-tax adjustments:Net gain on real estate transactions--1,071-Insurance deductibles for hail storm damage--(2,650)-Adjusted SG&A (1)$ 216,082$ 188,18514.8$ 627,942$ 547,12014.8SG&A AS % REVENUES:Unadjusted10.912.011.412.3Adjusted (1)10.912.011.312.3SG&A AS % OF GROSS PROFIT:Unadjusted74.275.775.276.5Adjusted (1)74.275.775.076.5OPERATING MARGIN %:Unadjusted3.43.23.33.2Adjusted (1), (5)3.43.43.43.3PRETAX MARGIN %:Unadjusted2.52.22.42.2Adjusted (1), (5)2.52.42.42.3SAME STORE SG&A RECONCILIATION:As reportedPre-tax adjustments:$ 198,852$ 188,2305.6$ 581,773$ 546,4156.5Loss on real estate transaction--(504)-Insurance deductibles for hail storm damage--(2,650)-Adjusted Same Store SG&A (1)$ 198,852$ 188,2305.6$ 578,619$ 546,4155.9SAME STORE SG&A AS % REVENUES:Unadjusted11.012.011.512.3Adjusted (1)11.012.011.412.3SAME STORE SG&A AS % OF GROSS PROFIT:Unadjusted73.975.775.276.6Adjusted (1)73.975.774.876.6SAME STORE OPERATING MARGIN %:Unadjusted3.53.23.43.2Adjusted (1), (6)3.53.43.43.3Three Months Ended September 30,Nine Months Ended September 30,CASH FLOWS FROM OPERATING ACTIVITIES20122011% Change20122011% ChangeRECONCILIATION:Net cash provided by (used in) operating activities$ 38,430$ 100,744(61.9)$ (7,291)$ 301,118(102.4)Change in floorplan notes payable-credit facility, excluding floorplan offset account and net acquisition and disposition related activity24,214(83,371)175,795(156,657)Change in floorplan notes payable-manufacturer affiliatesassociated with net acquisition and disposition related activity---(26,578)Adjusted net cash provided by operating activities(1)$ 62,644$ 17,373260.6$ 168,504$ 117,88342.9 (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 $72 for the nine months ended September 30, 2012, and $1,335 and $1,474 for the three and nine months ended September 30, 2011, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.(3)Adjustment is net of tax provision of $412 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.(4)Adjustment is net of tax benefit of $992 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.(5)Excludes the impact of non-cash asset impairment charges for all periods, as well as a net gain on real estate transactions and insurance deductibles for hail storm damage in 2012.(6)Excludes the impact of Same Store non-cash asset impairment charges of $187 for the nine months ended September 30, 2012, and $3,644 and $3,964 for the three and nine months ended September 30, 2011, respectively. In addition, this excludes the impact of Same Store loss on real estate transaction of $504 and insurance deductibles of $2,650 for the nine months ended September 30, 2012. Adjusted Same Store operating income was $62,569, $53,689, $173,287, and $147,100 for the periods presented respectively.   SOURCE Group 1 Automotive, Inc.