15. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following tables include condensed consolidating financial information as of June 30, 2015 and December 31, 2014, and for the three and six months ended June 30, 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

June 30, 2015



	Group 1 Automotive, Inc.		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	4,620		$	19,605		$	—		$	24,225
Contracts-in-transit and vehicle receivables, net	—		202,435			31,453			—			233,888
Accounts and notes receivable, net	—		115,817			28,448			—			144,265
Intercompany accounts receivable	—		249,576			—			(249,576		)	—
Inventories, net	—		1,438,449			218,656			—			1,657,105
Deferred income taxes	331		11,700			—			—			12,031
Prepaid expenses and other current assets	311		15,356			12,184			—			27,851
Total current assets	642		2,037,953			310,346			(249,576		)	2,099,365
PROPERTY AND EQUIPMENT, net	—		849,407			115,956			—			965,363
GOODWILL	—		769,163			118,037			—			887,200
INTANGIBLE FRANCHISE RIGHTS	—		290,876			40,935			—			331,811
INVESTMENT IN SUBSIDIARIES	2,102,908		—			—			(2,102,908		)	—
OTHER ASSETS	—		9,120			10,115			—			19,235
Total assets	$	2,103,550	$	3,956,519		$	595,389		$	(2,352,484	)	$	4,302,974

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Floorplan notes payable — credit facility and other	$	—	$	1,204,346		$	1,383		$	—		$	1,205,729
Offset account related to floorplan notes payable - credit facility	—		(22,466		)	—			—			(22,466		)
Floorplan notes payable — manufacturer affiliates	—		219,148			89,562			—			308,710
Offset account related to floorplan notes payable - manufacturer affiliates	—		(23,300		)	—			—			(23,300		)
Current maturities of long-term debt	—		59,379			17,063			—			76,442
Accounts payable	—		173,603			130,758			—			304,361
Intercompany accounts payable	364,672		—			249,576			(614,248		)	—
Accrued expenses	—		136,583			24,540			—			161,123
Total current liabilities	364,672		1,747,293			512,882			(614,248		)	2,010,599
LONG-TERM DEBT, net of current maturities	631,387		340,496			69,969			—			1,041,852
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES	—		29,020			—			—			29,020
DEFERRED INCOME TAXES AND OTHER LIABILITIES	—		204,703			12,649			—			217,352
STOCKHOLDERS’ EQUITY:
Group 1 stockholders’ equity	1,107,491		1,999,679			(111		)	(2,102,908		)	1,004,151
Intercompany note receivable	—		(364,672		)	—			364,672			—
Total stockholders’ equity	1,107,491		1,635,007			(111		)	(1,738,236		)	1,004,151
Total liabilities and stockholders’ equity	$	2,103,550	$	3,956,519		$	595,389		$	(2,352,484	)	$	4,302,974

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	—		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 June 30, 2015



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	2,287,447		$	439,033		$	—		$	2,726,480
COST OF SALES:	—			1,945,263			389,644			—			2,334,907
GROSS PROFIT	—			342,184			49,389			—			391,573
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	848			237,716			42,004			—			280,568
DEPRECIATION AND AMORTIZATION EXPENSE	—			10,357			1,589			—			11,946
ASSET IMPAIRMENTS	—			498			541			—			1,039
INCOME FROM OPERATIONS	(848		)	93,613			5,255			—			98,020
OTHER EXPENSE:
Floorplan interest expense	—			(8,959		)	(1,056		)	—			(10,015		)
Other interest expense, net	605			(13,073		)	(1,760		)	—			(14,228		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(243		)	71,581			2,439			—			73,777
(PROVISION) BENEFIT FOR INCOME TAXES	92			(26,382		)	(1,177		)	—			(27,467		)
EQUITY IN EARNINGS OF SUBSIDIARIES	46,461			—			—			(46,461		)	—
NET INCOME (LOSS)	$	46,310		$	45,199		$	1,262		$	(46,461	)	$	46,310
COMPREHENSIVE INCOME (LOSS)	—			3,784			9,999			—			13,783
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	46,310		$	48,983		$	11,261		$	(46,461	)	$	60,093

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Six Months Ended June 30, 2015



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	4,285,947		$	873,387		$	—		$	5,159,334
COST OF SALES:	—			3,629,275			774,602			—			4,403,877
GROSS PROFIT	—			656,672			98,785			—			755,457
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	2,079			465,188			84,770			—			552,037
DEPRECIATION AND AMORTIZATION EXPENSE	—			20,475			3,155			—			23,630
ASSET IMPAIRMENTS	—			498			541			—			1,039
INCOME FROM OPERATIONS	(2,079		)	170,511			10,319			—			178,751
OTHER EXPENSE:
Floorplan interest expense	—			(17,477		)	(1,885		)	—			(19,362		)
Other interest expense, net	1,197			(25,796		)	(3,540		)	—			(28,139		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(882		)	127,238			4,894			—			131,250
(PROVISION) BENEFIT FOR INCOME TAXES	331			(46,985		)	(2,472		)	—			(49,126		)
EQUITY IN EARNINGS OF SUBSIDIARIES	82,675			—			—			(82,675		)	—
NET INCOME (LOSS)	$	82,124		$	80,253		$	2,422		$	(82,675	)	$	82,124
COMPREHENSIVE INCOME (LOSS)	—			(762		)	(20,595		)	—			(21,357		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	82,124		$	79,491		$	(18,173	)	$	(82,675	)	$	60,767

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30, 2014



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	2,060,596		$	451,042		$	—		$	2,511,638
COST OF SALES:	—			1,743,819			398,671			—			2,142,490
GROSS PROFIT	—			316,777			52,371			—			369,148
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	914			225,521			45,535			—			271,970
DEPRECIATION AND AMORTIZATION EXPENSE	—			9,310			1,443			—			10,753
ASSET IMPAIRMENTS	—			1,721			—			—			1,721
INCOME FROM OPERATIONS	(914		)	80,225			5,393			—			84,704
OTHER EXPENSE:
Floorplan interest expense	—			(8,360		)	(1,969		)	—			(10,329		)
Other interest expense, net	564			(11,798		)	(1,333		)	—			(12,567		)
Loss on extinguishment of long-term debt	—			(23,614		)	—			—			(23,614		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(350		)	36,453			2,091			—			38,194
(PROVISION) BENEFIT FOR INCOME TAXES	132			(20,369		)	(1,095		)	—			(21,332		)
EQUITY IN EARNINGS OF SUBSIDIARIES	17,080			—			—			(17,080		)	—
NET INCOME (LOSS)	$	16,862		$	16,084		$	996		$	(17,080	)	$	16,862
COMPREHENSIVE INCOME (LOSS)	—			(2,080		)	6,395			—			4,315
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	16,862		$	14,004		$	7,391		$	(17,080	)	$	21,177

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Six Months Ended June 30, 2014



	Group 1 Automotive, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Total Company
	(In thousands)
REVENUES:	$	—		$	3,895,223		$	877,278		$	—		$	4,772,501
COST OF SALES:	—			3,288,714			776,517			—			4,065,231
GROSS PROFIT	—			606,509			100,761			—			707,270
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,756			440,179			87,593			—			529,528
DEPRECIATION AND AMORTIZATION EXPENSE	—			17,936			2,742			—			20,678
ASSET IMPAIRMENTS	—			1,721			—			—			1,721
INCOME FROM OPERATIONS	(1,756		)	146,673			10,426			—			155,343
OTHER EXPENSE:
Floorplan interest expense	—			(16,944		)	(4,298		)	—			(21,242		)
Other interest expense, net	1,129			(22,062		)	(2,147		)	—			(23,080		)
Loss on extinguishment of long-term debt	—			(23,614		)	—			—			(23,614		)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES	(627		)	84,053			3,981			—			87,407
(PROVISION) BENEFIT FOR INCOME TAXES	235			(37,300		)	(2,177		)	—			(39,242		)
EQUITY IN EARNINGS OF SUBSIDIARIE	48,557			—			—			(48,557		)	—
NET INCOME (LOSS)	$	48,165		$	46,753		$	1,804		$	(48,557	)	$	48,165
COMPREHENSIVE INCOME (LOSS)	—			(2,860		)	14,609			—			11,749
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO PARENT	$	48,165		$	43,893		$	16,413		$	(48,557	)	$	59,914

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30, 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	$	82,124		$	(6,018	)	$	4,469		$	80,575
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid in acquisitions, net of cash received	—			(130,783		)	—			(130,783		)
Proceeds from disposition of franchises, property and equipment	—			6,845			494			7,339
Purchases of property and equipment, including real estate	—			(39,305		)	(9,181		)	(48,486		)
Other	—			6,294			—			6,294
Net cash used in investing activities	—			(156,949		)	(8,687		)	(165,636		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facility - floorplan line and other	—			3,550,526			—			3,550,526
Repayments on credit facility - floorplan line and other	—			(3,466,772		)	—			(3,466,772		)
Borrowings on credit facility - acquisition line	346,050			—			—			346,050
Repayment on credit facility - acquisition line	(324,222		)	—			—			(324,222		)
Principal payments on real estate credit facility	—			(1,670		)	—			(1,670		)
Borrowings on other debt	—			138			25,606			25,744
Principal payments on other debt	—			(989		)	(25,953		)	(26,942		)
Borrowings on debt related to real estate	—			—			22,430			22,430
Principal payments on debt related to real estate	—			(11,176		)	(1,513		)	(12,689		)
Employee stock purchase plan purchases, net of employee tax withholdings	(1,113		)	—			—			(1,113		)
Repurchases of common stock, amounts based on settlement date	(33,121		)	—			—			(33,121		)
Tax effect from stock-based compensation	—			1,439			—			1,439
Dividends paid	(9,737		)	—			—			(9,737		)
Borrowings (repayments) with subsidiaries	80,027			(54,206		)	(25,821		)	—
Investment in subsidiaries	(140,008		)	124,918			15,090			—
Net cash provided by (used in) financing activities	(82,124		)	142,208			9,839			69,923
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(1,612		)	(1,612		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	—			(20,759		)	4,009			(16,750		)
CASH AND CASH EQUIVALENTS, beginning of period	—			25,379			15,596			40,975
CASH AND CASH EQUIVALENTS, end of period	$	—		$	4,620		$	19,605		$	24,225

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30, 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	$	48,165		$	99,077		$	(16,309	)	$	130,933
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid in acquisitions, net of cash received	—			(129,276		)	—			(129,276		)
Proceeds from disposition of franchises, property and equipment	—			9,489			275			9,764
Purchases of property and equipment, including real estate	—			(64,039		)	(4,687		)	(68,726		)
Other	—			(6,125		)	—			(6,125		)
Net cash used in investing activities	—			(189,951		)	(4,412		)	(194,363		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facility - floorplan line and other	—			3,735,607			—			3,735,607
Repayments on credit facility - floorplan line and other	—			(3,762,092		)	—			(3,762,092		)
Borrowings on credit facility - acquisition line	89,963			—			—			89,963
Repayment on credit facility - acquisition line	(130,000		)	—			—			(130,000		)
Borrowings on real estate credit facility	—			200			—			200
Principal payments on real estate credit facility	—			(1,603		)	—			(1,603		)
Net borrowings on 5.00% Senior Unsecured Notes	344,750			—			—			344,750
Debt issue costs	(1,221		)	—			—			(1,221		)
Purchase of 3.00% Convertible Notes	(210,356		)	—			—			(210,356		)
Borrowings on other debt	—			—			53,038			53,038
Principal payments on other debt	—			—			(47,167		)	(47,167		)
Borrowings on debt related to real estate	—			32,559			—			32,559
Principal payments on debt related to real estate	—			(7,691		)	(8,545		)	(16,236		)
Employee stock purchase plan purchases, net of employee tax withholdings	55			—			—			55
Repurchases of common stock, amounts based on settlement date	(16,942		)	—			—			(16,942		)
Tax effect from stock-based compensation	—			1,103			—			1,103
Dividends paid	(8,235		)	—			—			(8,235		)
Borrowings (repayments) with subsidiaries	90,086			(116,191		)	26,105			—
Investment in subsidiaries	(206,265		)	206,389			(124		)	—
Distributions to parent	—			2,118			(2,118		)	—
Net cash provided by (used in) financing activities	(48,165		)	90,399			21,189			63,423
EFFECT OF EXCHANGE RATE CHANGES ON CASH	494			—			593			1,087
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	494			(475		)	1,061			1,080
CASH AND CASH EQUIVALENTS, beginning of period	—			4,306			15,909			20,215
CASH AND CASH EQUIVALENTS, end of period	$	494		$	3,831		$	16,970		$	21,295