15. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following tables include condensed consolidating financial information as of March 31, 2015 and December 31, 2014, and for the three months ended March 31, 2015 and 2014, for Group 1 Automotive, Inc.’s (as issuer of the 5.00% Notes), guarantor subsidiaries and non-guarantor subsidiaries (representing foreign entities). The condensed consolidating financial information includes certain allocations of balance sheet, statement of operations and cash flows items that are not necessarily indicative of the financial position, results of operations or cash flows of these entities had they operated on a stand-alone basis.

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2015



	Group 1 Automotive, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	4,449		$	21,830		$	—		$	26,279
Contracts-in-transit and vehicle receivables, net	—		196,674			28,374			—			225,048
Accounts and notes receivable, net	—		105,570			31,803			—			137,373
Intercompany accounts receivable	—		257,147			—			(257,147		)
Inventories, net	—		1,346,561			200,875			—			1,547,436
Deferred income taxes	240		13,076			—			—			13,316
Prepaid expenses and other current assets	743		17,297			14,997			—			33,037
Total current assets	983		1,940,774			297,879			(257,147		)	1,982,489
PROPERTY AND EQUIPMENT, net	—		835,370			109,115			—			944,485
GOODWILL	—		734,367			113,305			—			847,672
INTANGIBLE FRANCHISE RIGHTS	—		266,345			39,405			—			305,750
INVESTMENT IN SUBSIDIARIES	2,039,365		—			—			(2,039,365		)	—
OTHER ASSETS	—		9,277			8,794			—			18,071
Total assets	$	2,040,348	$	3,786,133		$	568,498		$	(2,296,512	)	$	4,098,467

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Floorplan notes payable — credit facility and other	$	—	$	1,133,884		$	4,611		$	—		$	1,138,495
Offset account related to floorplan notes payable - credit facility	—		(79,795		)	—			—			(79,795		)
Floorplan notes payable — manufacturer affiliates	—		195,038			95,000			—			290,038
Offset account related to floorplan notes payable - manufacturer affiliates	—		(21,000		)	—			—			(21,000		)
Current maturities of long-term debt and short-term financing	—		56,439			12,836			—			69,275
Accounts payable	—		139,261			111,265			—			250,526
Intercompany accounts payable	299,275		—			257,147			(556,422		)	—
Accrued expenses	—		146,999			22,568			—			169,567
Total current liabilities	299,275		1,570,826			503,427			(556,422		)	1,817,106
LONG-TERM DEBT, net of current maturities	664,120		347,809			66,035			—			1,077,964
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES	—		33,793			—			—			33,793
DEFERRED INCOME TAXES AND OTHER LIABILITIES	—		197,710			12,067			—			209,777
STOCKHOLDERS’ EQUITY:
Group 1 stockholders’ equity	1,076,953		1,935,270			(13,031		)	(2,039,365		)	959,827
Intercompany note receivable	—		(299,275		)	—			299,275			—
Total stockholders’ equity	1,076,953		1,635,995			(13,031		)	(1,740,090		)	959,827
Total liabilities and stockholders’ equity	$	2,040,348	$	3,786,133		$	568,498		$	(2,296,512	)	$	4,098,467

CONDENSED CONSOLIDATED BALANCE SHEET

December 31, 2014



	Group 1 Automotive, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Elimination			Total Company
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	25,379		$	15,596	$	—		$	40,975
Contracts-in-transit and vehicle receivables, net	—		218,361			19,087		—			237,448
Accounts and notes receivable, net	—		117,427			33,903		—			151,330
Intercompany accounts receivable	—		276,217			—		(276,217		)	—
Inventories, net	—		1,342,022			214,683		—			1,556,705
Deferred income taxes	196		10,866			—		—			11,062
Prepaid expenses and other current assets	590		22,039			15,070		—			37,699
Total current assets	786		2,012,311			298,339		(276,217		)	2,035,219
PROPERTY AND EQUIPMENT, net	—		839,063			111,325		—			950,388
GOODWILL	—		700,642			129,735		—			830,377
INTANGIBLE FRANCHISE RIGHTS	—		257,502			46,445		—			303,947
INVESTMENT IN SUBSIDIARIES	1,964,442		—			—		(1,964,442		)	—
OTHER ASSETS	—		10,120			11,441		—			21,561
Total assets	$	1,965,228	$	3,819,638		$	597,285	$	(2,240,659	)	$	4,141,492

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Floorplan notes payable — credit facility and other	$	—	$	1,137,743		$	5,503	$	—		$	1,143,246
Offset account related to floorplan notes payable - credit facility	—		(39,616		)	—		—			(39,616		)
Floorplan notes payable — manufacturer affiliates	—		207,329			100,327		—			307,656
Offset account related to floorplan notes payable - manufacturer affiliates	—		(22,500		)	—		—			(22,500		)
Current maturities of long-term debt and short-term financing	—		61,185			11,445		—			72,630
Accounts payable	—		176,143			112,177		—			288,320
Intercompany accounts payable	295,421		—			276,217		(571,638		)	—
Accrued expenses	—		149,700			22,763		—			172,463
Total current liabilities	295,421		1,669,984			528,432		(571,638		)	1,922,199
LONG-TERM DEBT, net of current maturities	609,812		347,202			51,823		—			1,008,837
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES	—		25,311			—		—			25,311
DEFERRED INCOME TAXES AND OTHER LIABILITIES	—		193,077			14,058		—			207,135
STOCKHOLDERS’ EQUITY:
Group 1 stockholders’ equity	1,059,995		1,879,485			2,972		(1,964,442		)	978,010
Intercompany note receivable	—		(295,421		)	—		295,421			—
Total stockholders’ equity	1,059,995		1,584,064			2,972		(1,669,021		)	978,010
Total liabilities and stockholders’ equity	$	1,965,228	$	3,819,638		$	597,285	$	(2,240,659	)	$	4,141,492

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2015



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	1,998,500		$	434,354		$	—		$	2,432,854
COST OF SALES:	—			1,684,012			384,958			—			2,068,970
GROSS PROFIT	—			314,488			49,396			—			363,884
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,231			227,472			42,766			—			271,469
DEPRECIATION AND AMORTIZATION EXPENSE	—			10,118			1,566			—			11,684
INCOME FROM OPERATIONS	(1,231		)	76,898			5,064			—			80,731
OTHER EXPENSE:
Floorplan interest expense	—			(8,519		)	(829		)	—			(9,348		)
Other interest expense, net	592			(12,723		)	(1,780		)	—			(13,911		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(639		)	55,656			2,455			—			57,472
(PROVISION) BENEFIT FOR INCOME TAXES	240			(20,602		)	(1,295		)	—			(21,657		)
EQUITY IN EARNINGS OF SUBSIDIARIES	36,214			—			—			(36,214		)	—
NET INCOME (LOSS)	$	35,815		$	35,054		$	1,160		$	(36,214	)	$	35,815
COMPREHENSIVE INCOME (LOSS)	—			(4,546		)	(30,594		)	—			(35,140		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	35,815		$	30,508		$	(29,434	)	$	(36,214	)	$	675

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2014



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	1,834,627		$	426,236		$	—		$	2,260,863
COST OF SALES:	—			1,544,895			377,846			—			1,922,741
GROSS PROFIT	—			289,732			48,390			—			338,122
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	842			214,658			42,058			—			257,558
DEPRECIATION AND AMORTIZATION EXPENSE	—			8,626			1,299			—			9,925
INCOME FROM OPERATIONS	(842		)	66,448			5,033			—			70,639
OTHER EXPENSE:
Floorplan interest expense	—			(8,584		)	(2,329		)	—			(10,913		)
Other interest expense, net	565			(10,264		)	(814		)	—			(10,513		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(277		)	47,600			1,890			—			49,213
(PROVISION) BENEFIT FOR INCOME TAXES	103			(16,931		)	(1,082		)	—			(17,910		)
EQUITY IN EARNINGS OF SUBSIDIARIES	31,477			—			—			(31,477		)	—
NET INCOME (LOSS)	$	31,303		$	30,669		$	808		$	(31,477	)	$	31,303
COMPREHENSIVE INCOME (LOSS)	—			(780		)	8,215			—			7,435
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	31,303		$	29,889		$	9,023		$	(31,477	)	$	38,738

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2015



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Company
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	(399	)	$	57,971		$	595		$	58,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid in acquisitions, net of cash received	—			(50,142		)	—			(50,142		)
Proceeds from disposition of franchises, property and equipment	—			816			355			1,171
Purchases of property and equipment, including real estate	—			(16,949		)	(6,208		)	(23,157		)
Other	—			287			—			287
Net cash used in investing activities	—			(65,988		)	(5,853		)	(71,841		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facility - floorplan line and other	—			1,597,034			—			1,597,034
Repayments on credit facility - floorplan line and other	—			(1,641,072		)	—			(1,641,072		)
Borrowings on credit facility - acquisition line	189,933			—			—			189,933
Repayment on credit facility - acquisition line	(135,907		)	—			—			(135,907		)
Principal payments on real estate credit facility	—			(836		)	—			(836		)
Borrowings on other debt	—			—			13,678			13,678
Principal payments on other debt	—			—			(10,644		)	(10,644		)
Borrowings on debt related to real estate	—			—			17,600			17,600
Principal payments on debt related to real estate	—			(5,102		)	(520		)	(5,622		)
Employee stock purchase plan purchases, net of employee tax withholdings	(2,140		)	—			—			(2,140		)
Repurchases of common stock, amounts based on settlement date	(16,175		)	—			—			(16,175		)
Tax effect from stock-based compensation	—			1,004			—			1,004
Dividends paid	(4,892		)	—			—			(4,892		)
Borrowings (repayments) with subsidiaries	9,831			9,239			(19,070		)	—
Investment in subsidiaries	(40,251		)	26,820			13,431			—
Distributions to parent	—			—			—			—
Net cash provided by (used in) financing activities	399			(12,913		)	14,475			1,961
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(2,983		)	(2,983		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	—			(20,930		)	6,234			(14,696		)
CASH AND CASH EQUIVALENTS, beginning of period	—			25,379			15,596			40,975
CASH AND CASH EQUIVALENTS, end of period	$	—		$	4,449		$	21,830		$	26,279

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2014



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Company
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	(173	)	$	129,876		$	3,489		$	133,192
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid in acquisitions, net of cash received	—			(52,648		)	—			(52,648		)
Proceeds from disposition of franchises, property and equipment	—			—			197			197
Purchases of property and equipment, including real estate	—			(24,552		)	(2,543		)	(27,095		)
Other	—			(1,539		)	—			(1,539		)
Net cash used in investing activities	—			(78,739		)	(2,346		)	(81,085		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facility - floorplan line and other	—			1,503,650			—			1,503,650
Repayments on credit facility - floorplan line and other	—			(1,511,811		)	—			(1,511,811		)
Borrowings on credit facility - acquisition line	19,963			—			—			19,963
Repayment on credit facility - acquisition line	(30,000		)	—			—			(30,000		)
Borrowings on real estate credit facility	—			200			—			200
Principal payments on real estate credit facility	—			(677		)	—			(677		)
Borrowings on other debt	—			—			19,683			19,683
Principal payments on other debt	—			—			(24,321		)	(24,321		)
Borrowings on debt related to real estate	—			13,855			—			13,855
Principal payments on debt related to real estate	—			(3,939		)	(7,571		)	(11,510		)
Employee stock purchase plan purchases, net of employee tax withholdings	(1,089		)	—			—			(1,089		)
Repurchases of common stock, amounts based on settlement date	(16,942		)	—			—			(16,942		)
Tax effect from stock-based compensation	—			733			—			733
Dividends paid	(4,115		)	—			—			(4,115		)
Borrowings (repayments) with subsidiaries	77,862			(99,669		)	21,807			—
Investment in subsidiaries	(45,506		)	45,656			(150		)	—
Distributions to parent	—			—			—			—
Net cash provided by (used in) financing activities	173			(52,002		)	9,448			(42,381		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(12,254		)	(12,254		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	—			(865		)	(1,663		)	(2,528		)
CASH AND CASH EQUIVALENTS, beginning of period	—			4,306			15,909			20,215
CASH AND CASH EQUIVALENTS, end of period	$	—		$	3,441		$	14,246		$	17,687