What changed in this filing

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Item 1. Financial Statements

2024-07-24 compared with 2024-04-26 · 135 added, 100 removed, 457 unchanged (34% of the section changed)

3 unchanged sentences

(In millions, except share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

CURRENT ASSETS:

45 unchanged sentences

(In millions, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

New vehicle retail sales $ 2,364.2 $ 2,243.2 $ 4,546.8 $ 4,198.9

17 unchanged sentences

Other interest expense, net 33.4 25.9 62.7 45.6

Other (income) expense, net ( 0.5 ) 2.8

Other expense (income) 0.1 1.3 ( 0.4 ) 4.2

INCOME BEFORE INCOME TAXES 183.0 227.9 376.3 434.3

18 unchanged sentences

(In millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

NET INCOME $ 138.2 $ 170.5 $ 286.1 $ 329.0

2 unchanged sentences

Net unrealized gain (loss) on interest rate risk management activities, net of tax:

Unrealized gain (loss) arising during the period, net of tax (provision) benefit of $( 4.5 ) and $ 2.1 , respectively

Unrealized gain arising during the period, net of tax provision of $( 1.6 ), $( 5.0 ), $( 6.1 ) and $( 2.8 ), respectively

5.3 15.8 19.6 9.0

Reclassification adjustment for gain included in interest expense, net of tax provision of $( 2.3 ), $( 1.0 ), $( 4.7 ) and $( 2.8 ), respectively

2 unchanged sentences

— — ( 0.2 ) ( 3.1 )

Unrealized gain (loss) on interest rate risk management activities, net of tax

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

Unrealized (loss) gain on interest rate risk management activities, net of tax

( 2.2 ) 12.6 4.4 ( 2.8 )

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX

( 3.3 ) 23.8 ( 1.2 ) 18.1

COMPREHENSIVE INCOME $ 134.9 $ 194.4 $ 284.9 $ 347.1

5 unchanged sentences

Paid-in Capital Retained Earnings Accumulated

Comprehensive Income

Treasury Stock Total

Comprehensive Income (Loss) Treasury Stock Total

Shares Amount

BALANCE, DECEMBER 31, 2023

25,131,460 $ 0.3 $ 349.1 $ 3,649.8 $ 28.1 $ ( 1,352.8 ) $ 2,674.4

BALANCE, MARCH 31, 2024 25,109,781 $ 0.3 $ 351.7 $ 3,791.3 $ 30.3 $ ( 1,401.1 ) 2,772.4

Net income — — — 138.2 — — 138.2

Other comprehensive income, net of taxes — — — — 2.1 — 2.1

Other comprehensive loss, net of taxes — — — — ( 3.3 ) — ( 3.3 )

Purchases of treasury stock, including excise tax — — — — — ( 46.5 ) ( 46.5 )

3 unchanged sentences

— — — ( 6.4 ) — — ( 6.4 )

BALANCE, MARCH 31, 2024

25,109,781 $ 0.3 $ 351.7 $ 3,791.3 $ 30.3 $ ( 1,401.1 ) $ 2,772.4

BALANCE, JUNE 30, 2024 25,092,785 $ 0.3 $ 359.7 $ 3,923.0 $ 27.0 $ ( 1,443.7 ) $ 2,866.3

Common Stock Additional

5 unchanged sentences

Other comprehensive loss, net of taxes — — — — ( 1.2 ) — ( 1.2 )

Purchases of treasury stock — — — — — ( 34.9 ) ( 34.9 )

Purchases of treasury stock, including excise tax — — — — — ( 100.6 ) ( 100.6 )

Net issuance of treasury shares to stock compensation plans ( 38,675 ) — ( 3.7 ) — — 9.8 6.1

2 unchanged sentences

— — — ( 12.8 ) — — ( 12.8 )

BALANCE, JUNE 30, 2024 25,092,785 $ 0.3 $ 359.7 $ 3,923.0 $ 27.0 $ ( 1,443.7 ) $ 2,866.3

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

GROUP 1 AUTOMOTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except share data)

Common Stock Additional

Paid-in Capital Retained Earnings Accumulated

Comprehensive Income (Loss) Treasury Stock Total

Shares Amount

BALANCE, MARCH 31, 2023 25,150,165 $ 0.3 $ 333.6 $ 3,225.5 $ 16.7 $ ( 1,223.7 ) $ 2,352.5

Net income — — — 170.5 — — 170.5

Other comprehensive income, net of taxes — — — — 23.8 — 23.8

Purchases of treasury stock, including excise tax — — — — — ( 31.6 ) ( 31.6 )

Net issuance of treasury shares to stock compensation plans 14,001 — 1.5 — — 3.7 5.2

Stock-based compensation — — 4.8 — — — 4.8

Dividends declared ($ 0.45 per share)

— — — ( 6.4 ) — — ( 6.4 )

BALANCE, JUNE 30, 2023 25,164,166 $ 0.3 $ 339.8 $ 3,389.7 $ 40.6 $ ( 1,251.5 ) $ 2,518.9

Common Stock Additional

Paid-in Capital Retained Earnings Accumulated

Comprehensive Income (Loss) Treasury Stock Total

Shares Amount

BALANCE, DECEMBER 31, 2022 25,232,620 $ 0.3 $ 338.7 $ 3,073.6 $ 22.5 $ ( 1,197.5 ) $ 2,237.5

Net income — — — 329.0 — — 329.0

Other comprehensive income, net of taxes — — — — 18.1 — 18.1

Purchases of treasury stock, including excise tax — — — — — ( 66.5 ) ( 66.5 )

Net issuance of treasury shares to stock compensation plans ( 68,454 ) — ( 9.4 ) — — 12.5 3.1

Stock-based compensation — — 10.5 — — — 10.5

Dividends declared ($ 0.90 per share)

— — — ( 12.8 ) — — ( 12.8 )

BALANCE, JUNE 30, 2023 25,164,166 $ 0.3 $ 339.8 $ 3,389.7 $ 40.6 $ ( 1,251.5 ) $ 2,518.9

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

2 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

25 unchanged sentences

Purchases of property and equipment ( 102.9 ) ( 86.7 )

Escrow payments for acquisitions

Other 9.4 0.2

15 unchanged sentences

Dividends paid ( 12.7 ) ( 12.7 )

Net cash provided by (used in) financing activities 349.4 ( 67.0 )

Net cash provided by financing activities 546.4 103.0

Effect of exchange rate changes on cash — 2.1

Net decrease in cash and cash equivalents ( 15.3 ) ( 26.6 )

Net increase (decrease) in cash and cash equivalents 7.2 ( 25.1 )

CASH AND CASH EQUIVALENTS, beginning of period 57.2 47.9

32 unchanged sentences

The amendments require the disclosure of significant segment expenses as well as expanded interim disclosures, along with other changes to segment disclosure requirements.

The standard will be effective for fiscal years beginning after December 15, 2023, and interim periods beginning on or after January 1, 2025.

The Company is currently evaluating the impact that the adoption of the provisions of the ASU will have on its consolidated financial statements.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024, and is required to be applied retrospectively.

Beginning with the annual Financial Statements and notes thereto included within the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, the Company will incorporate the required disclosures, which include information concerning the Company’s reported measure of segment profit or loss, as well as significant segment expenses and other segment items that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included in the measure, among other required disclosure changes.

Additionally, the Company expects that interim periods beginning after December 15, 2024 will include segment disclosures largely consistent with the annual disclosure requirements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

6 unchanged sentences

The following tables present the Company’s revenues disaggregated by its geographical segments (in millions):

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

New vehicle retail sales $ 2,009.5 $ 354.6 $ 2,364.2 $ 3,809.4 $ 737.4 $ 4,546.8

7 unchanged sentences

Total revenues $ 3,921.2 $ 775.2 $ 4,696.4 $ 7,566.9 $ 1,600.0 $ 9,166.9

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

New vehicle retail sales $ 1,915.5 $ 327.6 $ 2,243.2 $ 3,524.1 $ 674.8 $ 4,198.9

8 unchanged sentences

(1) The Company has elected not to disclose revenues related to remaining performance obligations on its maintenance and repair services as the duration of these contracts is less than one year.

(2) Includes variable consideration recognized of $ 12.4 million and $ 4.9 million during the three months ended March 31, 2024 and 2023, respectively, relating to performance obligations satisfied in previous periods on the Compa ny’s retrospective commission income contracts.

(2) Includes variable consideration recognized of $ 5.6 million and $ 7.6 million during the three months ended June 30, 2024 and 2023, respectively, and $ 18.0 million and $ 12.5 million during the six months ended June 30, 2024 and 2023, respectively, relating to performance obligations satisfied in previous periods on the Compa ny’s retrospective commission income contracts.

Refer to Note 7.

2 unchanged sentences

The Company accounts for business combinations under the acquisition method of accounting, under which the Company allocates the purchase price to the assets acquired and liabilities assumed based on an estimate of fair value.

During the three months ended March 31, 2024, the Company acquired nine dealerships in the U.S., including three Honda dealerships, two Lexus dealerships, one Toyota dealership, one Kia dealership, one Hyundai dealership and one Mercedes-Benz dealership.

During the six months ended June 30, 2024, the Company acquired nine dealerships in the U.S., including three Honda , two Lexus, one Toyota, one Kia, one Hyundai and one Mercedes-Benz.

The Company also acquired one Toyota Certified pre-owned center and three collision centers in the U.S.

Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $ 690.4 million, consisting of cash paid of $ 689.7 million and a payable of $ 0.7 million.

Aggregate cash consideration paid for these dealerships, which were accounted for as business combinations, was $ 690.4 million.

Goodwill associated with the acquisitions totaled $ 287.5 million.

2 unchanged sentences

The Company will reflect any required fair value adjustments in subsequent periods.

During the three months ended March 31, 2023 , the Company acquired one Chevrolet dealership in the U.S.

Consideration paid for the dealership, which was accounted for as a business combination, was $ 76.9 million.

Goodwill associated with the acquisition totaled $ 36.5 million.

In April 2024, the Company announced it entered into a definitive agreement to acquire 54 dealerships in the U.K.

from a subsidiary of Inchcape plc for approximately $ 439 million in an all-cash transaction, inclusive of $ 279 million of real estate.

During the six months ended June 30, 2023 , the Company acquired one Chevrolet dealership, one Kia dealership and three Buick-GMC dealerships in the U.S.

Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $ 363.5 million.

Goodwill associated with the acquisitions totaled $ 43.9 million.

In April 2024, the Company announced it entered into a definitive agreement to acquire the U.K.

automotive retailing business and related owned real estate, comprising 54 dealerships, from a subsidiary of Inchcape plc for approximately $ 439 million in an all-cash transaction, inclusive of $ 279 million of real estate.

The transaction is expected to close in the third quarter of 2024.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

In July 2024, the Company acquired four Mercedes-Benz dealerships located north of London in the county of Hertfordshire.

During the three months ended June 30, 2024, the Company made an escrow payment of $ 86.4 million related to the acquisition to an escrow agent, which was then paid to the sellers in July 2024.

As the escrow payment was made prior to the closing of the transaction, the amount is recorded within Other current asset s in the Condensed Consolidated Balance Sheets as of June 30, 2024 and as Escrow payments for acquisitions within Net cash used in investing activities in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2024.

The Company will account for the business combination in future periods.

The Company’s divestitures generally consist of dealership assets and related real estate.

Gains and losses on divestitures are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the three months ended March 31, 2024, the Company recorded a net pre-tax gain totaling $ 30.9 million related to the disposition of six dealerships in the U.S.

Gains and losses on divestitures are recorded within Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the six months ended June 30, 2024, the Company recorded a net pre-tax gain totaling $ 51.6 million related to the disposition of seven dealerships and one collision center in the U.S.

The dispositions reduced goodwill by $ 62.5 million.

During the three months ended March 31, 2023, the Company recorded a net pre-tax gain totaling $ 1.9 million related to the disposition of one dealership in the U.S.

The disposition reduced goodwill by $ 2.1 million.

During the six months ended June 30, 2023, the Company recorded a net pre-tax gain totaling $ 10.1 million related to the disposition of four dealerships in the U.S.

The dispositions reduced goodwill by $ 20.8 million.

The Company also terminated one franchise in the U.S.

Assets held for sale in the Condensed Consolidated Balance Sheets includes $ 22.7 million and $ 39.8 million of goodwill that has been reclassified to assets held for sale as of March 31, 2024 and December 31, 2023, respectively.

There was no goodwill that has been reclassified to assets held for sale as of June 30, 2024.

Assets held for sale in the Condensed Consolidated Balance Sheets includes $ 39.8 million of goodwill that has been reclassified to assets held for sale as of December 31, 2023.

SEGMENT INFORMATION

As of March 31, 2024, the Company had two reportable segments:

The Company defines its reportable segments as those operations whose results the Company’s Chief Executive Officer, who is the chief operating decision maker, regularly reviews to analyze performance and allocate resources.

Each reportable segment is comprised of retail automotive franchises that sell new and used cars and light trucks;

arrange related vehicle financing;

sell service and insurance contracts;

provide automotive maintenance and repair services;

and sell vehicle parts.

As of June 30, 2024, the Company had two reportable segments:

The Company defines its reportable segments as those operations whose results the Company’s Chief Executive Officer, who is the CODM, regularly reviews to analyze performance and allocate resources.

Each reportable segment is comprised of retail automotive franchises that sell new and used cars and light trucks, arrange related vehicle financing, sell service and insurance contracts, provide automotive maintenance and repair services, and sell vehicle parts.

Selected reportable segment data is as follows (in millions):

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Total revenues $ 3,921.2 $ 775.2 $ 4,696.4 $ 7,566.9 $ 1,600.0 $ 9,166.9

Income before income taxes $ 173.3 $ 9.7 $ 183.0 $ 353.3 $ 23.0 $ 376.3

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Total revenues $ 3,799.6 $ 758.9 $ 4,558.5 $ 7,142.0 $ 1,546.5 $ 8,688.5

10 unchanged sentences

The following table sets forth the calculation of EPS (in millions, except share and per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Weighted average basic common shares outstanding 13,226,129 13,777,225 13,277,425 13,819,024

3 unchanged sentences

Earnings allocated to participating securities from continuing operations 2.9 4.2 6.3 8.2

Earnings (loss) allocated to participating securities from discontinued operations — —

Loss allocated to participating securities to discontinued operations — — — —

Net income available to basic common shares $ 135.2 $ 166.4 $ 279.8 $ 320.7

2 unchanged sentences

Earnings allocated to participating securities from continuing operations 2.9 4.1 6.3 8.2

Earnings (loss) allocated to participating securities from discontinued operations — —

Loss allocated to participating securities to discontinued operations — — — —

Net income available to diluted common shares $ 135.2 $ 166.4 $ 279.8 $ 320.8

11 unchanged sentences

Fixed Rate Long-Term Debt

The Company estimates the fair value of its $ 750.0 million 4.00 % Senior Notes due August 2028 (“ 4.00 % Senior Notes”) using quoted prices for the identical liability (Level 1) and estimates the fair value of its fixed-rate mortgage facilities using a present value technique based on current market interest rates for similar types of financial instruments (Level 2).

The Company estimates the fair value of its $ 750.0 million 4.00 % Senior Notes due August 2028 (“ 4.00 % Senior Notes”) using quoted prices for the identical liability (Level 1) and estimates the fair value of its fixed-rate mortgage facilities using a present value method based on current market interest rates for similar types of financial instruments (Level 2).

Refer to Note 8.

Debt for further discussion of the Company’s long-term debt arrangements.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

The carrying value and fair value of the Company’s 4.00 % Senior Notes and fixed rate mortgages were as follows (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Carrying Value (1)

5 unchanged sentences

(1) Carrying value excludes unamortized debt issuance costs.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Derivative Financial Instruments

1 unchanged sentence

The Company’s interest rate swaps are measured at fair value utilizing a SOFR forward yield curve matched to the identical maturity term of the instrument being measured.

Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity.

Observable inputs utilized in the income approach valuation method incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity.

The fair value of the interest rate swaps also considers the credit risk of the Company for instruments in a liability position or the counterparty for instruments in an asset position.

1 unchanged sentence

The inputs to the fair value measurements reflect Level 2 of the hierarchy framework.

Assets and liabilities associated with the Company’s interest rate swaps, as reflected gross in the Condensed Consolidated Balance Sheets, were as follows (in millions):

March 31, 2024 December 31, 2023

Assets associated with the Company’s interest rate swaps, as reflected gross in the Condensed Consolidated Balance Sheets, were as follows (in millions):

June 30, 2024 December 31, 2023

Other current assets (1)

1 unchanged sentence

Total assets $ 95.5 $ 89.3

Accrued expenses and other current liabilities $ — $ —

Other long-term liabilities — —

Total liabilities $ — $ —

(1) As of March 31, 2024, the balance included gross fair value of $ 0.2 million related to the de-designated swap as described below.

(2) As of March 31, 2024 and December 31, 2023 , the balance included gross fair value of $ 4.0 million and $ 3.7 million, respectively, related to the de-designated swap as described below.

(1) As of June 30, 2024, the balance included gross fair value of $ 0.2 million related to the de-designated swap as described below.

(2) As of June 30, 2024 and December 31, 2023 , the balance included gross fair value of $ 3.9 million and $ 3.7 million, respectively, related to the de-designated swap as described below.

There were no liabilities associated with the Company’s interest rate swaps as of June 30, 2024 and December 31, 2023 .

Interest Rate Swaps De-designated as Cash Flow Hedges

During the three months ended March 31, 2024 , the Company de-designated one mortgage interest rate swap due to the Company settling the underlying mortgages associated with the swap during the same period.

As of March 31, 2024 , the de-designated swap had an aggregate notional value of $ 7.1 million that fixed its underlying one-month SOFR at an annual interest rate of 0.62 % and will mature o n January 4, 2025.

No interest rate swaps were de-designated by the Company during the three months ended June 30, 2024.

During the three months ended March 31, 2023 , the Company de-designated one mortgage interest rate swap due to the Company settling the underlying mortgages associated with the swap during the same period.

As of March 31, 2024 , the de-designated swap had an aggregate notional value of $ 29.1 million that fixed its underlying one-month SOFR at an annual interest rate of 0.60 % and will mature on March 1, 2030.

The Company reclassified the entire previously deferred gains associated with the de-designated interest rate swaps of $ 0.2 million and $ 3.1 million , net of tax of $ 0.1 million and $ 1.0 million , for the three months ended March 31, 2024 and 2023, respectively, from AOCI into income as an adjustment to Other interest expense, net, as the remaining forecasted hedged transactions associated with the interest rate swaps were probable of not occurring due to the settlement of the mortgages described above.

The Company recorded unrealized mark-to-mark et gains of $ 0.3 million and realized gains of $ 0.4 million a ssociated with the de-designated interest rate swaps within Other interest expense, net, for the three months ended March 31, 2024.

The Company had no unrealized mark-to-market gains or realized gains associated with the de-designated interest rate swaps for the three months ended March 31, 2023.

No interest rate swaps were de-designated by the Company during the three months ended June 30, 2023.

As of June 30, 2024 , the de-designated swaps had a total aggregate notional value of $ 35.5 million and a weighted average interest rate of 0.60 %.

The de-designated swaps will mature between January 4, 2025 and March 1, 2030.

The Company reclassified the entire previously deferred gains associated with the de-designated interest rate swaps of $ 0.2 million and $ 3.1 million , net of tax of $ 0.1 million and $ 1.0 million , for th e three months ended March 31, 2024 and 2023, respectively, from AOCI into income as an adjustment to Other interest expense, net, as the remaining forecasted hedged transactions associated with the interest rate swaps were probable of not occurring due to the settlement of the mortgages described above.

The Company recorded unrealized mark-to-mark et gains of $ 0.2 million and $ 0.5 million and realized gains of $ 0.4 million and $ 0.8 million a ssociated with the de-designated interest rate swaps within Other interest expense, net, for the three and six months ended June 30, 2024, respectively.

The Company recorded unrealized mark-to-mark et gains of $ 0.4 million and reali zed gains of $ 0.3 million a ssociated with the de-designated interest rate swap within Other interest expense, net, for the three and six months ended June 30, 2023, respectively .

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Interest Rate Swaps Designated as Cash Flow Hedges

3 unchanged sentences

Gains or losses for periods where future forecasted hedged transactions are deemed probable of not occurring are reclassified from AOCI into income as Floorplan interest expense or Other interest expense, net.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

As of March 31, 2024, the Company held 35 interest rate swaps designated as cash flow hedges with a total notional value of $ 941.9 million that fixed its underlying SOFR at a weighted average rate of 1.22 %.

As of March 31, 2023, the Company held 35 interest rate swaps designated as cash flow hedges with a total notional value of $ 879.2 million that fixed its underlying SOFR at a weighted average rate of 1.25 % .

As of June 30, 2024, the Company held 35 interest rate swaps designated as cash flow hedges with a total notional value of $ 935.6 million that fixed its underlying SOFR at a weighted average rate of 1.22 %.

As of June 30, 2023, the Company held 35 interest rate swaps designated as cash flow hedges with a total notional value of $ 872.7 million that fixed its underlying SOFR at a weighted average rate of 1.25 % .

The following tables present the impact of the Company’s interest rate swaps designated as cash flow hedges (in millions):

Amount of Unrealized Income (Loss), Net of Tax, Recognized in Other Comprehensive Income (Loss)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Derivatives in Cash Flow Hedging Relationship 2024 2023 2024 2023

1 unchanged sentence

Amount Reclassified from Other Comprehensive Income (Loss) into Statements of Operations

Statement of Operations Classification Three Months Ended March 31,

Statement of Operations Classification Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Floorplan interest expense $ 5.3 $ 3.8 $ 10.6 $ 7.1

3 unchanged sentences

The Company’s receivables, net and contract assets consisted of the following (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Contracts-in-transit and vehicle receivables, net:

15 unchanged sentences

$ 57.9 $ 55.0

(1) No allowance for doubtful accounts was recorded for contract assets as of March 31, 2024 or December 31, 2023.

(1) No allowance for doubtful accounts was recorded for contract assets as of June 30, 2024 or December 31, 2023.

GROUP 1 AUTOMOTIVE, INC.

1 unchanged sentence

Long-term debt consisted of the following (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

4.00 % Senior Notes due August 15, 2028

12 unchanged sentences

Floorplan Notes Payable) are used for working capital, general corporate and acquisition purposes.

As of March 31, 2024, borrowings under the Acquisition Line, a component of the Revolvin g Credit Facility (as defined in Note 9.

As of June 30, 2024, borrowings under the Acquisition Line, a component of the Revolvin g Credit Facility (as defined in Note 9.

Floorplan Notes Payable), totaled $ 294.3 million.

The average interest rate on this facility was 6.43 % during the three months ended March 31, 2024.

The average interest rate on this facility was 6.42 % during the three months ended June 30, 2024.

Real Estate Related

1 unchanged sentence

that are paid in installments.

As of March 31, 2024, borrowings outstanding under these facilities totaled $ 919.0 million, gross of debt issuance costs, comprised of $ 793.6 million in the U.S.

As of June 30, 2024, borrowings outstanding under these facilities totaled $ 1,064.4 million, gross of debt issuance costs, comprised of $ 904.3 million in the U.S.

and $ 160.1 million in the U.K., respectively.

1 unchanged sentence

The Wells Fargo Credit Agreement accrues interest at SOFR plus 175 basis points and matures on March 1, 2031.

As of March 31, 2024, borrowings outstanding under the Wells Fargo Credit Agreement totaled $ 154.2 million and are included in the total U.S.

As of June 30, 2024, borrowings outstanding under the Wells Fargo Credit Agreement totaled $ 258.3 million and are included in the total U.S.

mortgage loans described above.

3 unchanged sentences

The Company’s floorplan notes payable consisted of the following (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Revolving Credit Facility — floorplan notes payable $ 1,396.9 $ 1,358.2

11 unchanged sentences

Revolving Credit Facility

In the U.S., the Company has a $ 2.0 billion revolving syndicated credit arrangement with 20 participating financial institutions that matures on March 9, 2027 (“Revolving Credit Facility”).

The Company has the option to increase the availability to $ 2.4 billion, under certain conditions.

In the U.S., the Company has a revolving syndicated credit arrangement with 20 participating financial institutions that matures on March 9, 2027 (the “Revolving Credit Facility”) .

On April 30, 2024, the Company entered into an amendment to the Revolving Credit Facility that increased the availability from $ 2.0 billion to $ 2.5 billion, with the ability to increase to $ 3.0 billion, as further described below.

The Revolving Credit Facility consists of two tranches:

2 unchanged sentences

Floorplan Line”) which the outstanding balance, net of offset account discussed below, is reported in Floorplan notes payable — credit facility and other, net ;

and (ii) an $ 800.0 million maximum capacit y tranche (“Acquisition Line”), which is not due until maturity of the Revolving Credit Facility and is therefore classified in Long-term debt on the Condensed Consolidated Balance Sheets — refer to Note 8.

and (ii) a $ 1.0 billion maximum capacity tranche (“Acquisition Line”), which is not due until maturity of the Revolving Credit Facility and is therefore classified in Long-term debt on the Condensed Consolidated Balance Sheets — refer to Note 8.

Debt for additional discussion.

The capacity under these two tranches can be re-designated within the overall $ 2.5 billion commitment.

Th e Acquisition Line includes a $ 100.0 million sub-limit for letters of credit and $ 50.0 million minimum capacity tranche.

The Company had $ 12.2 million in letters of credit outstanding as of March 31, 2024 and December 31, 2023.

Th e Acquisition Line includes a $ 100.0 million sub-limit for letters of credit and a $ 50.0 million minimum capacity tranche.

The Company had $ 12.2 million in letters of credit outstanding as of June 30, 2024 and December 31, 2023.

Floorplan Line bears interest at rates equal to SOFR plus 120 basis points for new vehicle inventory and SOFR plus 150 basis points for used vehicle inventory.

The weighted average interest rate on the U.S.

Floorplan Line was 6.55 % as of March 31, 2024, excluding the impact of the Company’s interest rate swap derivative instruments.

Floorplan Line was 6.57 % as of June 30, 2024, excluding the impact of the Company’s interest rate swap derivative instruments.

The Acquisition Line bears interest at SOFR or a SOFR equivalent plus 110 to 210 basis points , depending on the Company’s total adjusted leverage ratio, on borrowings in USD, Euros or GBP.

3 unchanged sentences

The Acquisition Line requires a commitment fee ranging fr om 0.15 % to 0.40 % per annum, depending on the Company’s total adjusted leverage ratio, based on a minimum commitment of $ 50.0 million less outstanding borrowings.

In conjunction with the Revolving Credit Facility, the Company had $ 3.5 million and $ 3.8 million of unamortized debt issuance costs as of March 31, 2024 and December 31, 2023, respectively, which are included in Prepaid expenses and Other long-term assets in the Company’s Condensed Consolidated Balance Sheets and amortized over the term of the facility.

In conjunction with the Revolving Credit Facility, the Company had $ 3.9 million and $ 3.8 million of unamortized debt issuance costs as of June 30, 2024 and December 31, 2023, respectively, which are included in Prepaid expenses and Other long-term assets in the Company’s Condensed Consolidated Balance Sheets and amortized over the term of the facility.

Floorplan Notes Payable — Manufacturer Affiliates

3 unchanged sentences

The FMCC Facility bears interest at the U.S.

prime rate which was 8.50 % as of March 31, 2024.

prime rate which was 8.50 % as of June 30, 2024.

GROUP 1 AUTOMOTIVE, INC.

2 unchanged sentences

During 2023, the Company entered into a master loan agreement with General Motors Financial (the “GM Financial Facility”).

During the three months ended March 31, 2024, additional subsidiaries of the Company entered into the GM Financial Facility as additional borrowers and the borrowing base thereunder was increased.

As of March 31, 2024 and December 31, 2023 , the GM Financial Facility had a total capacity of $ 348.1 million and $ 84.5 million, respectively.

During the six months ended June 30, 2024, additional subsidiaries of the Company entered into the GM Financial Facility as additional borrowers and the borrowing base thereunder was increased.

As of June 30, 2024 and December 31, 2023 , the GM Financial Facility had a total capacity of $ 348.1 million and $ 84.5 million, respectively.

The GM Financial Facility bears interest at the U.S.

3 unchanged sentences

and the U.K., respectively, with financial institutions affiliated with manufacturers for financing of new, used and rental vehicle inventories.

As of March 31, 2024, borrowings outstanding under these facilities totaled $ 310.3 million, comprised of $ 168.6 million in the U.S.

and $ 141.7 million in the U.K., with annual interest rates ranging from less than 1 % to approximately 9 %.

As of June 30, 2024, borrowings outstanding under these facilities totaled $ 340.3 million, comprised of $ 184.4 million in the U.S.

and $ 156.0 million in the U.K., with annual interest rates ranging from 1 % to approximately 9 %.

Interest rates on the Company’s manufacturer facilities vary across manufacturers.

5 unchanged sentences

Non-Cash Activities

The accrual for capital expenditures increased $ 1.1 million an d $ 4.6 million during the three months ended March 31, 2024 and 2023, respectively.

The accrual for capital expenditures decreased $ 2.2 million an d increased $ 1.3 million during the six months ended June 30, 2024 and 2023, respectively.

Interest and Income Taxes Paid

Cash paid for interest, including the monthly settlement of the Company’s interest rate swaps, was $ 52.5 million and $ 40.9 million for the three months ended March 31, 2024 and 2023, respectively.

Cash paid for interest, including the monthly settlement of the Company’s interest rate swaps, was $ 99.9 million and $ 70.8 million for the six months ended June 30, 2024 and 2023, respectively.

Refer to Note 6.

Financial Instruments and Fair Value Measurements for further discussion of the Company’s interest rate swaps.

Cash paid for income taxes, net of refunds, was $ 6.2 million and $ 5.7 million for the three months ended March 31, 2024 and 2023, respectively.

Cash paid for income taxes, net of refunds, was $ 75.1 million and $ 78.7 million for the six months ended June 30, 2024 and 2023, respectively.

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

Legal Proceedings

As of March 31, 2024, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

As of June 30, 2024, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

However, the results of current or future matters cannot be predicted with certainty;

2 unchanged sentences

In connection with dealership dispositions where the Company did not own the real estate and was a tenant, it assigned the lease to the purchaser but remained liable as a guarantor for the remaining lease payments in the event of non-payment by the purchaser.

Although the Company has no reason to believe that it will be called upon to perform under any such assigned leases, the Company estimates that lessee remaining rental obligations were $ 42.5 million as of March 31, 2024.

GROUP 1 AUTOMOTIVE, INC.

2 unchanged sentences

Changes in the balances of each component of AOCI were as follows (in millions):

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Accumulated Income (Loss) On Foreign Currency Translation Accumulated Income (Loss) On Interest Rate Swaps Total

9 unchanged sentences

Net current period other comprehensive (loss) income ( 5.6 ) 4.4 ( 1.2 )

( 4.5 ) 6.6 2.1

Balance, March 31, 2024 $ ( 41.9 ) $ 72.2 $ 30.3

Three Months Ended March 31, 2023

Balance, June 30, 2024 $ ( 43.0 ) $ 70.0 $ 27.0

Six Months Ended June 30, 2023

Accumulated Income (Loss) On Foreign Currency Translation Accumulated Income (Loss) On Interest Rate Swaps Total

9 unchanged sentences

Net current period other comprehensive income (loss) 21.0 ( 2.8 ) 18.1

Balance, March 31, 2023 $ ( 51.3 ) $ 68.1 $ 16.7

Balance, June 30, 2023 $ ( 40.1 ) $ 80.8 $ 40.6

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements