What changed in this filing

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Item 9A. Controls and Procedures

2025-02-14 compared with 2024-02-14 · 364 added, 313 removed, 1268 unchanged (35% of the section changed)

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In making this assessment, management used the 2013 framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework .

As permitted by guidelines established by the SEC for newly acquired businesses, we excluded one of our recently acquired businesses in 2023, (the “Excluded Acquisition”), from the scope of our annual report on internal controls over financial reporting for the year ended December 31, 2023.

The Excluded Acquisition comprised approximately $51.3 million of our consolidated total assets as of December 31, 2023, and $15.8 million of our consolidated revenues for the year then ended.

We are in the process of integrating this business into our overall internal controls over financial reporting and plan to include it in our scope for the year ended December 31, 2024.

As permitted by guidelines established by the SEC for newly acquired businesses, we excluded three of our recently acquired businesses in 2024, (the “Excluded Acquisitions”), from the scope of our annual report on internal controls over financial reporting for the year ended December 31, 2024.

The Excluded Acquisitions comprise approximately $768.6 million of our consolidated total assets as of December 31, 2024, and $1.0 billion of our consolidated revenues for the year then ended.

We are in the process of integrating these businesses into our overall internal controls over financial reporting and plan to include it in our scope for the year ended December 31, 2025.

Based on our evaluation under the framework in Internal Control — Integrated Framework , our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 14, 2025, expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at one dealership (the “Excluded Acquisition”).

The Excluded Acquisition constitutes $51.3 million of consolidated total assets as of December 31, 2023, and $15.8 million of consolidated revenues for the year then ended.

Accordingly, our audit did not include the internal control over financial reporting at the Excluded Acquisition.

The Excluded Acquisitions constitute $768.6 million of consolidated total assets as of December 31, 2024, and $1.0 billion of consolidated revenues for the year then ended.

Accor dingly, our audit did not include the internal control over financial reporting at the Excluded Acquisitions.

Basis for Opinion

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Trading Plans

During the year ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

During the three months ended December 31, 2024, the following officer, as defined in Rule 16a-1(f), adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K.

On November 26, 2024 , Daryl A.

Kenningham , our Chief Executive Officer , adopted a 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 24,401 shares of the Company’s common stock until August 1, 2025 .

No other officers or directors, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, during the three months ended December 31, 2024.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Number Description

— Purchase Agreement, dated as of September 12, 2021, by and among Group 1 Automotive, Inc., GPB Portfolio Automotive, LLC, Capstone Automotive Group, LLC, Capstone Automotive Group II, LLC, Automile Parent Holdings, LLC, Automile TY Holdings, LLC and Prime Real Estate Holdings, LLC (incorporated by reference to Exhibit 2.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended September 30, 2021)

— Share Purchase Agreement, dated November 12, 2021, by and between Group 1 Automotive, Inc., Buyer and UAB as intervening party (English translation) (incorporated by reference to Exhibit 2.1 of Group 1 Automotive Inc.’s Current Report on Form 8-K (File No.

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001-13461) filed August 17, 2020)

— First Supplemental Indenture and Subsidiary Guarantee, by and among Group 1 Automotive, Inc., the guarantors party thereto and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended June 30, 2024)

— Second Supplemental Indenture and Subsidiary Guarantee, by and among Group 1 Automotive, Inc., the guarantors party thereto and Computershare Trust Company, N.A., as trustee(incorporated by reference to Exhibit 4.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended June 30, 2024)

— Form of 4.000% Senior Notes due 2028 (incorporated by reference to Exhibit 4.1, Exhibit A, of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No.

001-13461) filed August 17, 2020)

— Master Assignment and Acceptance Agreement, dated effective December 11, 2012, between JPMorgan Chase Bank, N.A., Comerica Bank, and Bank of America, N.A., each, an Assignor, and VW Credit, Inc., as Assignee, pursuant to the terms of the Eighth Amended and Restated Revolving Credit Agreement, dated effective as of July 1, 2011, as amended (incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No.

001-13461) for the year ended December 31, 2012)

— Loan Facility dated as of October 3, 2008 by and between Chandlers Garage Holdings Limited and BMW Financial Services (GB) Limited.

(incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended September 30, 2008)

— Indenture, dated as of July 30, 2024, by and among Group 1 Automotive, Inc., the guarantors party thereto and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of Group 1 Automotive Inc.’s Current Report on Form 8-K (File No.

001-13461) filed July 30, 2024)

— Form of 6.375% Senior Notes due 2030 (included as Exhibit A to Exhibit 4.1) (incorporated by reference to Exhibit 4.2 of Group 1 Automotive Inc.’s Current Report on Form 8-K (File No.

001-13461) filed July 30, 2024)

— Form of Ford Motor Credit Company Automotive Wholesale Plan Application for Wholesale Financing and Security Agreement (incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

5 unchanged sentences

001-13461) filed November 13, 2007)

— Purchase Agreement, dated October 6, 2021, by and among Group 1 Automotive, Inc., BofA Securities, Inc., as representative of the Initial Purchasers listed in Schedule 1 thereto, and the guarantors listed in Schedule 2 thereto (incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No.

001-13461) filed October 7, 2021)

— Group 1 Automotive, Inc.

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001-13461) for the quarter ended September 30, 2022).

— Employment Agreement dated effective as of December 1, 2009 between Group 1 Automotive, Inc.

and Darryl M.

Burman (incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No.

001-13461) filed November 16, 2009)

— Incentive Compensation and Non-Compete Agreement dated December 1, 2006 between Group 1 Automotive, Inc.

and Darryl M.

Burman (incorporated by reference to Exhibit 10.2 of Group 1 Automotive, Inc.’s Current Report on Form 8-K/A (File No.

001-13461) filed December 1, 2006)

— Offer Letter, dated June 1, 2020, between Group 1 Automotive, Inc.

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001-13461) filed August 23, 2022).

— Transition and Separation Agreement, effective as of March 31, 2023, between Group 1 Automotive, Inc.

and Darryl Burman (incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

— Second Amendment to the Twelfth Amended and Restated Revolving Credit Agreement dated effective December 8, 2023 (incorporated by reference to Exhibit 10.3 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended March 31, 2024)

— Third Amendment to the Twelfth Amended and Restated Revolving Credit Agreement dated effective April 30, 2024 (incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Current Report on Form 8-K (File No.

001-13461) filed May 2, 2024)

— Fourth Amendment to the Twelfth Amended and Restated Revolving Credit Agreement effective July 25, 2024 (incorporated by reference to Exhibit 10.1 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended September 30, 2024)

— Additional Borrower Addendum to Master Loan Agreement dated effective March 25, 2024 (incorporated by reference to Exhibit 10.1 of Group 1 Automotive Inc.’s Current Report on Form 8-K (File No.

001-13461) filed March 28, 2024).

— Master Loan Agreement dated effective December 8, 2023 (incorporated by reference to Exhibit 10.1 of Group 1 Automotive Inc.’s Current Report on Form 8-K (File No.

001-13461) filed December 11, 2023)

— Group 1 Automotive, Inc.

2024 Long Term Incentive Plan (incorporated by reference to Appendix B of Group 1 Automotive, Inc.’s definitive proxy statement on Schedule 14A filed on April 5, 2024)

— Form of Restricted Stock Agreement (2024 Form)(incorporated by reference to Exhibit 10.27 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No.

001-13461) for the year ended December 31, 2023)

— Form of Performance Share Unit Agreement (2024 Form) (incorporated by reference to Exhibit 10.28 of Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No.

001-13461) for the year ended December 31, 2023)

— Form of Restricted Stock Agreement (2025 Form)

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001-13461) filed on February 14, 2024).

— First Amendment to Master Credit Agreement dated effective as of March 1, 2024 (incorporated by reference to Exhibit 10.6 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended March 31, 2024)

— Second Amendment to Master Credit Agreement dated effective as of March 11, 2024 (incorporated by reference to Exhibit 10.7 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended March 31, 2024)

— Third Amendment to Master Credit Agreement dated effective as of April 2, 2024 (incorporated by reference to Exhibit 10.8 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended March 31, 2024)

— Fourth Amendment to Master Credit Agreement dated effective as of April 25, 2024 (incorporated by reference to Exhibit 10.9 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended March 31, 2024)

— Fifth Amendment to Master Credit Agreement dated effective as of May 23, 2024 (incorporated by reference to Exhibit 10.4 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended June 30, 2024)

— Sixth Amendment to Master Credit Agreement dated effective as of June 26, 2024 (incorporated by reference to Exhibit 10.5 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended June 30, 2024)

— First Amendment to Term Note with Draw Period dated effective June 26, 2024 (incorporated by reference to Exhibit 10.6 of Group 1 Automotive, Inc.’s Quarterly Report on Form 10-Q (File No.

001-13461) for the quarter ended June 30, 2024)

— Group 1 Automotive, Inc.

Insider Trading Policy

— Group 1 Automotive, Inc.

Subsidiary List

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— Group 1 Automotive Inc.

Incentive-Based Compensation Recoupment Policy

Incentive-Based Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to Group 1 Automotive, Inc.’s Annual Report on Form 10-K (File No.

001-13461) for the year ended December 31, 2023)

101.INS — XBRL Instance Document

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** Furnished herewith

# The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.

+ Exhibits marked with a (+) exclude certain immaterial schedules and exhibits pursuant to the provisions of Regulation S-K, Item 601(a)(5).

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Critical Audit Matter Description

During the year ended December 31, 2023, the Company acquired six dealerships for a total of $365.8 million, net of cash acquired (“the acquisitions”).

During the year ended December 31, 2024, the Company acquired 67 dealerships.

The acquisitions were accounted for as business combinations.

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In evaluating intangible franchise rights for impairment, a qualitative assessment is initially performed to determine whether it is more-likely-than-not that an impairment exists.

If it is concluded that it is more-likely-than-not that an impairment exists, a quantitative test is performed.

If it is concluded that it is more-likely-than-not that an impairment exists, a quantitative assessment is performed.

The fair value is estimated using a discounted cash flow model, or income approach.

The Company’s impairment analyses performed in fiscal year 2023 resulted in an impairment of $25.1 million of intangible franchise rights.

We identified the fair value of acquired intangible franchise rights for the acquisitions, as well as the fair value estimates used in the quantitative impairment test of intangible franchise rights as a critical audit matter because of the significant estimates and assumptions management makes related to forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, and terminal growth rates.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions.

The Company’s impairment assessments performed in fiscal year 2024 resulted in an impairment of $28.2 million of intangible franchise rights.

We identified the fair value of acquired intangible franchise rights for the acquisitions, the qualitative impairment assessments for certain franchise rights, as well as the fair value estimates used in the quantitative impairment assessments of intangible franchise rights as a critical audit matter because of the significant estimates and assumptions management makes related to forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, and terminal growth rates.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists for the quantitative impairment assessments and acquired intangible franchise rights, when performing audit procedures to evaluate the reasonableness of management’s assumptions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures for the acquisitions and the impairment analyses related to the forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital and terminal growth rates included the following, among others:

• We tested the effectiveness of internal controls over the intangible franchise rights fair value estimates, including those over the inputs, assumptions, and calculations.

Our audit procedures for the acquisitions and the impairment assessments related to the forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital and terminal growth rates included the following, among others:

• We tested the effectiveness of internal controls over the acquired intangible franchise rights and the intangible franchise rights impairment assessments, including those over the inputs, assumptions, and calculations used in determining fair value of the intangible franchise rights.

• We evaluated the reasonableness of management’s forecasts of revenue growth rates and future EBITDA margins by comparing the forecasts to:

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• We performed a sensitivity analysis of certain assumptions such as revenue growth rates, future EBITDA margins, weighted average cost of capital, and terminal growth rates to evaluate the potential change in the fair value resulting from changes in underlying assumptions.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the weighted average cost of capital and terminal growth rates by:

• With the assistance of our fair value specialists, for acquired intangible franchise rights and those intangible franchise rights where a quantitative impairment assessment was performed, we evaluated the reasonableness of the weighted average cost of capital and terminal growth rates by:

◦ Developing a range of independent estimates and comparing those to the weighted average cost of capital selected by management.

◦ Testing the source information underlying the determination of the terminal growth rates and testing the mathematical accuracy of the calculations.

Goodwill Impairment Assessments — Refer to Notes 1 and 12 to the consolidated financial statements

Goodwill Impairment Assessment — Refer to Notes 1 and 13 to the consolidated financial statements

Critical Audit Matter Description

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The fair value is estimated using the income approach and market approach, weighted equally.

The goodwill balance was $1,651.9 million as of December 31, 2023, of which $1,532.1 million and $119.8 million was allocated to the US and UK reporting units, respectively.

The fair values of the US and UK reporting units exceeded their carrying values as of the measurement date and, therefore, no impairment was recognized.

We identified the fair value estimates used in the goodwill impairment analyses as a critical audit matter because of the significant estimates and assumptions management makes related to forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, and terminal growth rates.

The goodwill balance for the U.K.

reporting unit was $275.7 million as of December 31, 2024.

The fair value of the U.K.

reporting unit exceeded the carrying value as of the assessment date and, therefore, no impairment was recognized.

We identified the fair value estimates used in the U.K.

reporting unit goodwill impairment assessment as a critical audit matter because of the significant estimates and assumptions management makes related to forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, valuation multiples, and terminal growth rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures for the impairment analyses related to the forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital and terminal growth rates included the following, among others:

• We tested the effectiveness of internal controls over the goodwill fair value estimates, including those over the inputs, assumptions, and calculations.

Our audit procedures for the impairment assessment related to the forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, valuation multiples, and terminal growth rate included the following, among others:

• We tested the effectiveness of internal controls over the goodwill impairment assessment, including those over the inputs, assumptions, and calculations used in determining fair value of the reporting unit.

• We evaluated the reasonableness of management’s forecasts of revenue growth rates and future EBITDA margins by comparing the forecasts to:

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◦ Current industry, market and economic trends.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the weighted average cost of capital and terminal growth rates by:

◦ Developing a range of independent estimates and comparing those to the weighted average cost of capital selected by management.

◦ Testing the source information underlying the determination of the terminal growth rates and testing the mathematical accuracy of the calculations.

• We performed a sensitivity analysis of certain assumptions such as revenue growth rates, future EBITDA margins, weighted average cost of capital, valuation multiples, and terminal growth rate to evaluate the potential change in the fair value resulting from changes in underlying assumptions.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the weighted average cost of capital, valuation multiples, and terminal growth rate by:

◦ Developing a range of independent estimates and comparing those to the weighted average cost of capital and valuation multiples selected by management.

◦ Testing the source information underlying the determination of the terminal growth rate and testing the mathematical accuracy of the calculations.

/s/ Deloitte & Touche LLP

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Asset impairments 33.0 32.9 2.1

Restructuring charges

Other operating (income) expense

INCOME FROM OPERATIONS 909.1 968.6 1,091.4

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Net income from continuing operations 497.0 602.0 754.2

Net loss from discontinued operations ( 0.4 ) ( 2.7 ) ( 73.3 )

Net income (loss) from discontinued operations 1.2 ( 0.4 ) ( 2.7 )

NET INCOME $ 498.1 $ 601.6 $ 751.5

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21.5 10.4 84.1

Reclassification adjustment for (gain) loss included in interest expense, net of tax (provision) benefit of $( 7.9 ), $( 0.8 ) and $ 1.8 , respectively

Reclassification adjustment for gain included in interest expense, net of tax provision of $( 9.0 ), $( 7.9 ) and $( 0.8 ), respectively

( 28.7 ) ( 25.4 ) ( 2.5 )

Reclassification related to de-designated interest rate swaps, net of tax (provision) benefit of $( 1.0 ), $ — and $ 1.9 , respectively

Reclassification related to de-designated interest rate swaps, net of tax provision of $( 0.1 ), $( 1.0 ) and $ — , respectively

( 0.2 ) ( 3.1 ) —

Unrealized (loss) gain on interest rate risk management activities, net of tax ( 7.4 ) ( 18.0 ) 81.6

( 18.0 ) 81.6 34.5

OTHER COMPREHENSIVE INCOME, NET OF TAX

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX

( 26.5 ) 5.7 178.7

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Other comprehensive income, net of taxes — — — — 5.7 — 5.7

Purchases of treasury stock — — — — — ( 521.2 ) ( 521.2 )

Purchases of treasury stock, including excise tax

— — — — — ( 174.2 ) ( 174.2 )

Net issuance of treasury shares to stock compensation plans ( 101,160 ) — ( 9.7 ) — — 18.9 9.2

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Net income — — — 498.1 — — 498.1

Other comprehensive income, net of taxes — — — — 5.7 — 5.7

Other comprehensive loss, net of taxes — — — — ( 26.5 ) — ( 26.5 )

Purchases of treasury stock, including excise tax — — — — — ( 163.0 ) ( 163.0 )

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Gain on disposition of assets ( 59.5 ) ( 23.3 ) ( 41.1 )

Loss on extinguishment of debt — — 3.8

Unrealized gain on derivative instruments

Unrealized loss (gain) on derivative instruments

0.3 ( 3.7 ) —

Other ( 0.1 ) ( 2.7 ) 0.5

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Effect of exchange rate changes on cash ( 7.6 ) 0.1 ( 4.8 )

Net increase (decrease) in cash and cash equivalents 9.4 29.2 ( 68.6 )

Net (decrease) increase in cash and cash equivalents ( 22.8 ) 9.4 29.2

CASH AND CASH EQUIVALENTS, beginning of period 57.2 47.9 18.7

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and its subsidiaries are collectively referred to as the “Company” in these Notes to Consolidated Financial Statements.

On November 12, 2021, the Company entered into a Share Purchase Agreement (the “Brazil Agreement”) with Original Holdings S.A.

Pursuant to the terms and conditions set forth in the Brazil Agreement, Buyer agreed to acquire 100 % of the issued and outstanding equity interests of the Company’s Brazilian operations (the “Brazil Disposal Group”) for approximately BRL 510 million in cash (the “Brazil Disposal”).

On July 1, 2022, the Company completed the Brazil Disposal.

The Brazil Disposal Group met the criteria to be reported as held for sale and discontinued operations.

On July 1, 2022, the Company completed the disposal of 100 % of the issued and outstanding equity interests of the Company’s Brazilian operations (the “Brazil Disposal Group”).

The Brazil Disposal Group met the criteria to be reported as discontinued operations.

Therefore, the related assets, liabilities and operating results of the Brazil Disposal Group are reported as discontinued operations (the “Brazil Discontinued Operations”) for all periods presented.

Unless otherwise specified, disclosures in these Consolidated Financial Statements reflect continuing operations only.

Certain prior-period amounts related to the Brazil Discontinued Operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to current-period presentation.

Refer to Note 4.

Discontinued Operations and Other Divestitures for additional information on the Brazil Discontinued Operations.

During the year ended December 31, 2024, the Company recognized $ 10.0 million of business interruption insurance recoveries as a result of the June 2024 cybersecurity incident experienced by CDK, which resulted in service outages on CDK’s dealers’ systems.

The insurance recoveries were recognized within Other operating (income) expense in the Consolidated Statements of Operations.

Certain amounts in the Consolidated Financial Statements and the accompanying notes may not compute due to rounding.

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Management analyzes the Company’s estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances, however, actual results could differ materially from such estimates.

The significant estimates made by management in the accompanying Consolidated Financial Statements include, but are not limited to, inventory valuation adjustments, reserves for future chargebacks on finance, insurance and VSC fees, self-insured property and casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation.

The significant estimates made by management in the accompanying Consolidated Financial Statements include, but are not limited to, inventory valuation adjustments, reserves for future chargebacks on finance, insurance and vehicle service contract fees, self-insured property and casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights, and reserves for potential litigation.

Revenue Recognition

Refer to the discussion of the Company’s revenue streams and accounting policies related to revenue recognition in Note 2.

Refer to Note 2.

Revenues for further discussion of the Company’s revenue streams and accounting policies related to revenue recognition.

Cash and Cash Equivalents

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Intangible Franchise Rights and Goodwill for further discussion of the Company’s goodwill and intangibles, including results of its impairment testing.

The Company is subject to income taxes at the federal level and in 17 states in the U.S., as well as in the U.K., each of which has unique tax calculations.

The Company is subject to income taxes at the U.S.

federal level and in 17 states in the U.S., as well as in the U.K., each of which has unique tax calculations.

As the amount of income generated in each jurisdiction varies from period to period, the Company’s effective tax rate can vary based on the proportion of taxable income generated in each jurisdiction.

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The Company holds derivative financial instruments consisting of interest rate swaps that are designated as cash flow hedges.

Refer to the discussion of the Company’s accounting policies relating to its derivative financial instruments, including fair value measurements, in Note 7.

Financial Instruments and Fair Value Measurements.

Refer to Note 8.

Financial Instruments and Fair Value Measurements for further discussion of the Company’s accounting policies relating to its derivative financial instruments, including fair value measurements.

The Company expenses the costs of advertising as incurred.

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All assets and liabilities of foreign subsidiaries are translated into USD using period-end foreign currency exchange rates and all revenues and expenses are translated at average foreign currency exchange rates during the respective period.

The gains and losses resulting from translation adjustments are recorded in Accumulated Other Comprehensive Income (loss) in the Consolidated Statements of Stockholders’ Equity.

The gains and losses resulting from translation adjustments are recorded in AOCI in the Consolidated Statements of Stockholders’ Equity.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 820):

Improvements to Reportable Segment Disclosures .

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 in terim 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.

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

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The amendments require the disclosure of a reconciliation between income tax expense from continuing operations and the amount computed by multiplying income from continuing operations before income taxes by the applicable statutory rate as well as an annual disaggregation of the income tax rate reconciliation between certain specified categories by both percentage and reported amounts, along with other changes to income tax disclosure requirements.

The standard will be effective for fiscal years beginning after December 15, 2024, and interim periods for fiscal years beginning after December 15, 2025.

The standard will be effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted and can be applied retrospectively.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures.

The ASU requires that an entity disclose additional information about specific expense categories in the notes to financial statements.

The standard will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

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

The Company derives its revenues primarily from the sale of new and used vehicles;

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Total revenues $ 15,772.9 $ 4,161.5 $ 19,934.3

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2023

8 unchanged sentences

Total revenues $ 14,814.2 $ 3,059.5 $ 17,873.7

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2022

23 unchanged sentences

The transaction price for vehicle parts sales is the stand-alone sales price of each individual part and is generally settled within 30 days of the satisfaction of the performance obligation.

Service Sales

The Company performs maintenance and repair services, including collision restoration.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Service Sales

The Company performs maintenance and repair services, including collision restoration.

In certain jurisdictions, the Company has an enforceable right to payment for performance completed to date on open work orders and as such, the transfer of control of vehicle maintenance and repair services and satisfaction of the performance obligation to its customer occurs over time.

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With regards to the upfront commission for these contracts, the transaction price is the amount earned for each individual contract executed and is generally collected within 30 days of the satisfaction of the performance.

The Company may be charged back in the future for commissions received on F&I contract or VSC fees in the event of early termination of the contracts by customers.

The Company may be charged back in the future for commissions received on F&I contract or vehicle service contract fees in the event of early termination of the contracts by customers.

A reserve for future amounts estimated to be charged back, representing variable consideration, is recorded as a reduction to Finance, insurance and other, net in the Consolidated Statements of Operations.

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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.

Prime Acquisition

In November 2021, the Company completed the acquisition of the Prime Automotive Group (“Prime”), including 28 dealerships, certain real estate and three collision centers in the Northeastern U.S.

(collectively referred to as the “Prime Acquisition”), for aggregate consideration of $ 934.2 million.

The Company analyzed and assessed all available information related to property and equipment and property lease contracts, determining the preliminary fair values established in 2021 were appropriate and no material adjustments were recorded to these fair values in the year ended December 31, 2022 upon finalization of the purchase price allocation.

The Company previously recorded a $ 33.4 million deposit for the purchase of an additional dealership as part of the Prime Acquisition, which had not closed as of December 31, 2021.

P ursuant to the purchase agreement with the seller, the seller initiated legal action against the distributor to compel the approval of the sale of the dealership.

In March 2022, upon the contractual release of funds from escrow to the seller related to the dealership, the deposit was recognized as additional consideration paid and reflected as additional goodwill, resulting in total consideration associated with the Prime Acquisition of $ 967.6 million.

In October 2023, the Company closed on the acquisition of the remaining Prime dealership after settlement of legal action with the distributor which had opposed the acquisition.

The previously recorded goodwill of $ 33.4 million was allocated to the identifiable assets and liabilities of the acquired dealership.

The accounting for the acquisition is considered to be preliminary and subject to change as the Company’s fair value assessments are finalized.

The Company is continuing to analyze and assess relevant information related to the valuation of equipment and intangible assets.

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

The results of the Prime Acquisition are included in the U.S.

The goodwill is deductible for income tax purposes.

The following table summarizes the consideration paid and aggregate amounts of the assets acquired and liabilities assumed as of December 31, 2022 (in millions):

Inchcape Acquisition

On August 1, 2024 (the “Acquisition Date”), the Company completed the acquisition of Inchcape Retail automotive operations (“Inchcape Retail”), consisting of 54 dealership locations, certain real estate and three collision centers acro ss the U.K.

(collectively referred to as the “Inchcape Acquisition”), for aggregate consideration of approximately $ 517.0 million .

The accounting for the Inchcape Acquisition is considered to be preliminary.

The Company is continuing to analyze and assess relevant information related to the valuation of certain property, equipment, intangible assets, property lease contracts and deferred tax assets.

Due to the recent timing and complexity of the Inchcape Acquisition, these amounts are provisional and subject to change as the Company’s fair value assessments are finalized.

The Company will reflect any such adjustments in subsequent filings.

The results of the Inchcape Acquisition are included in the U.K.

The acquired goodwill is not deductible for income tax purposes.

The following table summarizes the consideration paid and aggregate amounts of assets acquired and liabilities assumed as of December 31, 2024 (in millions):

Total consideration $ 517.0

Identifiable assets acquired and liabilities assumed

Contracts-in-transit and vehicle receivables, net 27.6

Accounts receivable, net

Inventories 384.3

Prepaid expenses and other current assets

Property and equipment 287.0

Intangible franchise rights 135.3

Operating lease assets 102.5

Other assets (1)

Intangible franchise rights 121.8

Total assets acquired 997.3

Floorplan notes payable

Accounts payable

Accrued expenses

Operating lease liabilities 75.4

Deferred income taxes

Other liabilities

1 unchanged sentence

Total identifiable net assets 402.2

(1) Other assets acquired in connection with the Prime Acquisition include $ 55.3 million of assets classified as held for sale as of the acquisition date.

See the table below for additional details.

(2) Other liabilities assumed in connection with the Prime Acquisition include $ 1.7 million of liabilities classified as held for sale as of the acquisition date.

See the table below for additional details.

(3) Goodwill as of December 31, 2022 has not been adjusted for the impact of the remaining Prime dealership acquired in October 2023 as described above.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prime assets classified as held for sale as of the acquisition date (in millions)

Inventories $ 10.4

Property and equipment 28.1

Operating lease assets 1.7

Goodwill $ 114.8

Total other assets classified as held for sale $ 55.3

Prime liabilities classified as held for sale as of the acquisition date (in millions)

Operating lease liabilities $ 1.7

The Company recorded $ 12.9 million of acquisition related costs attributable to the Prime Acquisition during the year ended December 31, 2021.

The Company recorded $ 15.4 million of acquisition related costs attributable to the Inchcape Acquisition during the year ended December 31, 2024.

These costs are included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

The Company’s Consolidated Statements of Operations included revenues and net income attributable to Prime for the year ended December 31, 2022, of $ 1.7 billion and $ 110.2 million, res pectively.

These revenue and net income amounts attributable to Prime include amounts up to the date of disposal, from certain stores which have been disposed of since the date of the Prime Acquisition.

The Company’s Consolidated Statements of Operations included revenues and net income attributable to Prime from the acquisition date through December 31, 2021, of $ 199.9 million and $ 14.3 million, respectively.

The following represents the unaudited pro forma financial information as if Prime had been included in the Company’s consolidated results since January 1, 2021 (in millions):

The Company’s Consolidated Statements of Operations included revenues and net loss attributable to Inchcape Retail from the Acquisition Date through the year ended December 31, 2024, of $ 990.4 million and $ 3.1 million , res pectively.

The following unaudited pro forma financial information presents consolidated information of the Company as if the Inchcape Acquisition had occurred on January 1, 2023 (in millions):

Year Ended December 31,

1 unchanged sentence

Net income $ 522.7 $ 584.6

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

This pro forma information incorporates the Company’s accounting policies and adjusts the results of Inchcape Retail assuming that the fair value adjustments in connection with the Inchcape Acquisition occurred on January 1, 2023.

They have also been adjusted to reflect the $ 15.4 million of acquisition-related costs incurred during the year ended December 31, 2024 as having occurred on January 1, 2023.

Pro forma data may not be indicative of the results that would have been obtained had these events actually occurred at the beginning of the period presented and is not intended to be a projection of future results.

Other Acquisitions

During the year ended December 31, 2023 , the Company acquired six dealerships in the U.S., including the remaining Prime dealership described above.

During the year ended December 31, 2024, the Co mpany acquired nine dealerships in the U.S., including three Honda, two Lexus, one Toyota, one Kia, one Hyundai and one Mercedes-Benz dealerships.

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.

Goodwill associated with the acquisitions totaled $ 288.3 million.

During the year ended December 31, 2024, the Company acquired five additional dealerships in the U.K., including four Mercedes-Benz and one BMW/MINI dealerships.

Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $ 110.1 million, net of cash acquired, consisting of cash paid of $ 111.1 million and a receivable of $ 1.1 million.

Goodwill associated with the acquisitions totaled $ 46.3 million.

The accounting for these acquisitions is considered to be preliminary and subject to change as the Company’s fair value assessments are finalized.

The Company is continuing to analyze and assess relevant information related to the valuation of property, equipment and intangible assets.

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

During the year ended December 31, 2023, the Company acquired six dealerships in the U.S.

Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $ 365.8 million, net of cash acquired .

4 unchanged sentences

During the year ended December 31, 2022, the Company acquired a dealership and related collision center in the U.K.

C onsideration paid, which was accounted for as a business combination, was $ 34.1 million, consisting of cash paid of $ 32.9 million and a payable of $ 1.2 million, net of cash acquired.

C onsideration paid, which was accounted for as a business combination, was $ 34.1 million , net of cash acquired.

Goodwill associated with the acquisition totaled $ 10.2 million .

During the year ended December 31, 2021, the Company acquired five dealerships in the U.S., excluding the dealerships acquired in the Prime Acquisition, and seven dealerships in the U.K.

Aggregate consideration paid for these dealerships, which were accounted for as business combinations, totaled $ 166.8 million, net of cash acquired.

Goodwill associated with these acquisitions totaled $ 70.1 million.

In February 2024, the Company announced the acquisition of five dealerships and three collision centers in the U.S.

Aggregate consideration paid for these dealerships, which will be accounted for as business combinations, was approximately $ 273.3 million.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

1 unchanged sentence

On November 12, 2021, the Company entered into an agreement to effect the Brazil Disposal.

The sale price of approximately BRL 510.0 million included a holdback amount as of July 1, 2022 (the “Brazil Disposition Date”), for general representations and warranties, of BRL 115.0 million, to be held in escrow for a period of five years from the close of the transaction (the “Brazil Disposal Escrow”).

The sale price of approximately Brazilian Real (“BRL”) 510.0 million included a holdback amount as of July 1, 2022 (the “Brazil Disposition Date”), for general representations and warranties, of BRL 115.0 million, to be held in escrow for a period of five years from the close of the transaction (the “Brazil Disposal Escrow”).

At the conclusion of the five-year period, the remaining funds held in the Brazil Disposal Escrow will be released to the Company.

This amount has been included in the proceeds received.

On the Brazil Disposition Date, the Company closed on the Brazil Disposal.

The Company recorded a total net loss of $ 87.5 million on the Brazil Disposal, of which $ 10.0 million was recognized during the year ended December 31, 2022 and $ 77.5 million was recognized during the year ended December 31, 2021 .

The loss on sale is presented as part of the results within Discontinued Operations .

Upon sale of a foreign entity, amounts recorded within Accumulated other comprehensive income (loss) (“AOCI”) on the Consolidated Balance Sheets are required to be reclassified into earnings on the date of disposition.

For purposes of determining the net gain or loss on the Brazil Disposal, the Company included the currency translation adjustments recorded in AOCI as a loss of $ 122.8 million attributable to the Brazil Disposal Group.

The loss on sale indicated an impairment of assets, however, the loss was entirely the result of the reclassification of the translation adjustment from AOCI .

Prior to the Brazil Disposition Date, the Company recorded a valuation allowance against the assets held for sale for the Brazil Disposal to reflect the expected loss not attributable to a particular asset within the Brazil Disposal Group.

On and following the Brazil Disposition Date, the Company reclassified into earnings the currency translation loss attributable to the Brazil Disposal Group.

The currency translation loss was offset by the reversal of the previously recorded valuation allowance.

In addition, the purchase price of the Brazil Disposal is denominated in BRL, which is subject to foreign currency exchange risk.

In order to partially mitigate this risk, the Company entered into a foreign currency derivative for the conversion of BRL to USD in the form of a costless collar which protects the Company from significant downside exposure on $ 70.0 million of the expected purchase consideration.

Losses associated with the foreign currency derivative are presented as incremental costs to sell in the table below and are fully offset by corresponding foreign currency impacts to the fair value of proceeds from the disposition.

On June 30, 2022, the Company settled the foreign currency derivative for a loss of $ 8.4 million.

Subsequent to the Brazil Disposition Date, the Company received additional proceeds for working capital adjustments related to the Brazil Disposal of $ 4.1 million.

The resulting gain was recognized within Discontinued Operations and included within the net loss recorded for the year ended December 31, 2022 as described above.

Additionally, the Buyer, with the Company’s approval, entered into a tax settlement associated with the Brazil Disposal with the Brazilian tax authority for BRL 23.0 million or approximately $ 4.5 million.

The settlement was accrued within Accrued expenses and other current liabilities on the Consolidated Balance Sheet and recorded as Provision for income taxes within Discontinued Operations and included within the net loss recorded for the year ended December 31, 2022 .

The settlement will be paid out of the existing Brazil Disposal Escrow balance within one year .

As of December 31, 2023 , the Company had a remaining receivable balance of $ 21.1 million associated with the Brazil Disposal Escrow recorded in Other long-term assets on the Consolidated Balance Sheet, of which $ 4.3 million is expected to be paid to settle the Company’s portion of accrued liabilities retained subsequent to the Brazil Disposition Date, including the tax settlement described above.

The following table summarizes the fair value of the proceeds received from the disposition and net carrying value of the assets disposed as of December 31, 2022 (in millions):

Fair value of proceeds from disposition $ 92.5

Net assets disposed 48.8

Gain before currency translation adjustments 43.7

Amount of currency translation loss recorded in AOCI ( 122.8 )

Incremental costs to sell 8.4

Net loss on the Brazil Disposal $ ( 87.5 )

As of December 31, 2024 , the Company had a remaining receivable balance of $ 16.8 million associated with the Brazil Disposal Escrow recorded in Other long-term assets on the Consolidated Balance Sheets, of which $ 2.4 million is expected to be paid to settle the Company’s portion of accrued liabilities retained subsequent to the Brazil Disposition Date.

Results of the Brazil Discontinued Operations were immaterial for the years ended December 31, 2024 and 2023.

The assets and liabilities of the Brazil Discontinued Operations were immaterial as of December 31, 2024 and 2023 and primarily consist of the Brazil Disposal Escrow described above.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Results of the Brazil Discontinued Operations were as follows (in millions):

Years Ended December 31,

2023 2022 2021

Results of the Brazil Discontinued Operations for the year ended December 31, 2022 were as follows (in millions):

Year Ended December 31,

New vehicle retail sales $ 109.0

14 unchanged sentences

Asset impairments 6.3

(LOSS) INCOME FROM DISCONTINUED OPERATIONS ( 2.0 ) 3.7 ( 64.1 )

INCOME FROM DISCONTINUED OPERATIONS

Floorplan interest expense 1.4

Other interest (income) expense, net ( 2.6 ) ( 1.8 ) 0.9

Loss on extinguishment of debt — — 3.8

Other interest income, net

Other expenses 1.5

INCOME (LOSS) BEFORE INCOME TAXES — DISCONTINUED OPERATIONS 0.6 2.6 ( 69.9 )

INCOME BEFORE INCOME TAXES — DISCONTINUED OPERATIONS

Provision for income taxes 5.3

NET LOSS — DISCONTINUED OPERATIONS $ ( 2.7 )

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash flows from operating and investing activities for the Brazil Discontinued Operations were immaterial for the year ended December 31, 2023.

Cash flows from operating and investing activities for the Brazil Discontinued Operations for the prior periods were as follows (in millions):

Years Ended December 31,

Cash flows from operating and investing activities for the Brazil Discontinued Operations were immaterial for the years ended December 31, 2024 and 2023.

Cash flows from operating and investing activities for the Brazil Discontinued Operations for the year ended December 31, 2022 were as follows (in millions):

Year Ended December 31,

Net cash provided by operating activities — discontinued operations $ 26.6

Net cash provided by (used in) investing activities — discontinued operations

$ 59.1 $ ( 1.5 )

Assets and liabilities of the Brazil Discontinued Operations were as follows (in millions):

As of December 31,

Prepaid expenses $ 0.7 $ —

Other current assets — 1.3

Other long-term assets 21.1 22.8

Total assets of discontinued operations $ 21.8 $ 24.1

Accrued expenses and other current liabilities $ 4.3 $ 7.8

Total liabilities of discontinued operations $ 4.3 $ 7.8

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Assets and Liabilities Held for Sale

Assets and liabilities classified as held for sale consisted of the following (in millions):

As of December 31,

Current assets classified as held for sale

Prime Acquisition (1)

Total current assets classified as held for sale $ 99.1 $ 53.6

Current liabilities classified as held for sale

Prime Acquisition (1)

Other 7.2 3.7

Total current liabilities classified as held for sale $ 7.2 $ 4.8

(1) For additional details on current assets and current liabilities classified as held for sale in connection with the Prime Acquisition, refer to Note 3.

Acquisitions.

(2) Includes $ 39.8 million and $ 13.4 million of goodwill reclassified to assets held for sale as of December 31, 2023 and December 31, 2022, respectively.

Net cash provided by investing activities — discontinued operations

Other Divestitures

1 unchanged sentence

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

During the year ended December 31, 2023, the Company recorded a net pre-tax gain totaling $ 16.3 million related to the disposition of eleven dealerships representing fifteen franchises in the U.S.

During the year ended December 31, 2024, the Company recorded a net pre-tax gain totaling $ 52.9 million related to the disposition of eight dealerships and one collision center in the U.S.

The dispositions reduced goodwill by $ 66.4 million.

The Company also terminated two franchises in the U.S.

During the year ended December 31, 2022, the Company recorded a net pre-tax gain totaling $ 30.8 million related to the disposition of five dealerships, representing five franchises, as well as a collision center in the U.S.

The Company also terminated three franchises in the U.S.

During the year ended December 31, 2023, the Company recorded a net pre-tax gain totaling $ 16.3 million related to the disposition of eleven dealerships in the U.S.

The dispositions reduced goodwill by $ 52.9 million.

The Company also terminated one franchise representing one dealership in the U.K.

During the year ended December 31, 2021 , the Company recorded a net pre-tax gain totaling $ 4.4 million related to the disposition of three dealerships, representing three franchises and one franchise within an existing dealership in the U.S.

The Company also terminated two franchises in the U.S.

During the year ended December 31, 2022, the Company recorded a net pre-tax gain totaling $ 30.8 million related to the disposition of five dealerships and one collision center in the U.S.

The dispositions reduced goodwill by $ 37.3 million.

The Company terminated one franchise within an existing dealership in the U.S.

The Company also terminated one dealership representing one franchise in the U.K.

In February 2024, the Company disposed of six dealerships, representing ten franchises, as well as a collision center in the U.S.

Assets and liabilities associated with this disposition were recorded within Current a ssets and current liabilities classified as held for sale in the Consolidated Balance Sheets as of December 31, 2023 and are included in the table above.

The disposition will reduce goodwill by approximately $ 39.8 million .

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

Assets held for sale in the Consolidated Balance Sheets includes $ 11.5 million and $ 39.8 million of goodwill that has been reclassified to assets held for sale as of December 31, 2024 and 2023, respectively.

During the year ended December 31, 2024, the Company recognized $ 4.8 million in intangible asset impairment associated with assets held for sale.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

RESTRUCTURING

During the three months ended December 31, 2024, the Company i nitiated a U.K.

wide restructuring plan (the “Restructuring Plan”) relating to the integration activities of Inchcape Retail with existing U.K.

The Restructuring Plan consisted of workforce realignment, strategic closing of certain facilities and systems integrations.

The Restructuring Plan is expected to continue through 2025 and the Company expects to incur $ 7.7 million in additional restructuring costs.

Any changes to the Company’s estimates or timing will be reflected in the Company’s results of operations in future periods.

The following table summarizes restructuring charges (in millions):

Year Ended December 31,

Contract termination costs

Employee related costs

Asset impairments

System integration costs

Total restructuring charges

Charges associated with the Restructuring Plan are included within Restructuring Charges on the Consolidated Statements of Operations.

Liabilities associated with restructuring charges are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

As of December 31, 2024, the Company had $ 11.9 million of accrued restructuring charges related to the Restructuring Plan.

STOCK-BASED COMPENSATION PLANS

Under the Company’s 2014 Long Term Incentive Plan (the “Incentive Plan”), the Company currently grants RSAs, RSUs and PSUs to Company employees and non-employee directors.

On May 15, 2024, the Company’s shareholders approved the amendment and restatement of the Company’s Long Term Incentive Plan (the “2024 Incentive Plan”).

The aggregate maximum number of shares that may be issued or transferred under the 2024 Incentive Plan is 0.7 million.

The Incentive Plan expires on May 21, 2024.

The Company currently grants RSAs, RSUs and PSUs provided to Company employees and non-employee directors pursuant to the 2024 Incentive Plan.

The 2024 Incentive Plan expires on March 24, 2034.

The terms of the awards (including vesting schedules) are established by the Compensation Committee of the Company’s Board of Directors.

As of December 31, 2024, there were 0.7 million shares available for issuance under the 2024 Incentive Plan.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock Awards

21 unchanged sentences

As of December 31, 2024, there was $ 18.9 million of total unrecognized compensation cost related to RSAs which is expected to be recognized over a weighted-average period of 1.9 years .

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock Units

12 unchanged sentences

Compensation cost for PSUs is based on the Company’s closing stock price on the date of grant, forecasted achievement of performance targets and the estimated grant date per share value of market-based performance utilizing a Monte Carlo simulation model.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes PSU activity and related information for 2024:

10 unchanged sentences

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (the “Purchase Plan”) authorizes the issuance of up to 4.5 million shares of common stock and provides that no options to purchase shares may be granted under the Purchase Plan after May 19, 2025.

The Purchase Plan is available to all employees of the Company and its participating subsidiaries and is a qualified plan as defined by Section 423 of the Internal Revenue Code.

At the end of each fiscal quarter (the “Option Period”) during the term of the Purchase Plan, employees can acquire shares of common stock from the Company at 85 % of the fair market value of the common stock on the first or the last day of the Option Period, whichever is lower.

As of December 31, 2023, there were 270,833 sha res available for issuance under the Purchase Plan.

During the years ended December 31, 2023, 2022 and 2021, the Company iss ued 112,189 , 146,416 and 116,680 shares, respectively, of common stock to employees participating in the Purchase Plan.

With respect to shares issued under the Purchase Plan, the Company’s Board of Directors has authorized specific share repurchases to fund the shares issuable under the Purchase Plan.

The weighted average per share fair value of employee stock purchase rights issued pursuant to the Purchase Plan was $ 50.04 , $ 39.45 an d $ 43.57 during the years ended December 31, 2023, 2022 and 2021, respectively.

The fair value of stock purchase rights is calculated using the grant date stock price, the value of the embed ded call option and the value of the embedded put option.

Employees can contribute a maximum of 10 % of their compensation, up to a maximum of $ 25,000 annually under the Purchase Plan.

Cash received from Purchase Plan purchase s was $ 21.3 million, $ 19.5 million and $ 15.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

On May 15, 2024, the Company’s shareholders approved the amendment and restatement of the Employee Stock Purchase Plan (the “ESPP Plan”).

As a result, the ESPP Plan authorizes the issuance of up to 4.75 million shares of common stock and provides that no options to purchase shares may be granted under the Purchase Plan after May 24, 2034.

The ESPP Plan is available to all employees of the Company and its participating subsidiaries and is a qualified plan as defined by Section 423 of the Internal Revenue Code.

At the end of each fiscal quarter (the “Option Period”) during the term of the ESPP Plan, employees can acquire shares of common stock from the Company at 85 % of the fair market val ue of the common stock on the first or the last day of the Option Period, whichever is lower.

As of December 31, 2024, there were 428,047 sha res available for issuance under the ESPP Plan.

During the years ended December 31, 2024, 2023 and 2022, the Company iss ued 92,787 , 112,189 and 146,416 shares, respectively, of common stock to employees participating in the ESPP Plan.

With respect to shares issued under the ESPP Plan, the Company’s Board of Directors has authorized specific share repurchases to fund the shares issuable under the ESPP Plan.

The weighted average per share fair value of employee stock purchase rights issued pursuant to the ESPP Plan was $ 68.92 , $ 50.04 an d $ 39.45 during the years ended December 31, 2024, 2023 and 2022, respectively.

The fair value of employee stock purchase rights is calculated using the grant date stock price, the value of the embed ded call option and the value of the embedded put option.

Employees can contribute a maximum of 10 % of their compensation, up to a maximum of $ 25,000 annually under the ESPP Plan.

Cash received from the ESPP Plan purchase s was $ 24.4 million, $ 21.3 million and $ 19.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock-Based Compensation

10 unchanged sentences

Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the calculation of EPS on total net income for the years ended December 31, 2024, 2023 and 2022 (in millions, except share and per share data):

6 unchanged sentences

Earnings allocated to participating securities from continuing operations 10.5 14.8 21.3

Loss allocated to participating securities from discontinued operations — ( 0.1 ) ( 2.5 )

Earnings (loss) allocated to participating securities from discontinued operations — — ( 0.1 )

Net income available to basic common shares $ 487.6 $ 586.8 $ 730.3

2 unchanged sentences

Earnings allocated to participating securities from continuing operations 10.4 14.8 21.3

Loss allocated to participating securities from discontinued operations — ( 0.1 ) ( 2.5 )

Earnings (loss) allocated to participating securities from discontinued operations — — ( 0.1 )

Net income available to diluted common shares $ 487.7 $ 586.9 $ 730.3

Diluted earnings per common share $ 36.81 $ 42.73 $ 47.14

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the most advantageous market in an orderly transaction between market participants at the measurement date.

Accounting standards establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value:

Accounting standards establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and establishes the following three levels of inputs that may be used to measure fair value:

• Level 1 — Quoted prices for identical assets or liabilities in active markets.

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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).

On July 30, 2024, the Company issued $ 500.0 million in aggregate principal of 6.375 % Senior Notes due January 2030 (“ 6.375 % Senior Notes”).

The Company estimates the fair value of its $ 750.0 million 4.00 % Senior Notes due August 2028 (“ 4.00 % Senior Notes”) and the 6.375 % 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).

Refer to Note 15.

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

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Debt for further discussion of the Company’s long-term debt arrangements and the issuance of the 6.375 % Senior Notes.

The carrying value and fair value of the Company’s fixed rate long-term debt were as follows (in millions):

December 31, 2024 December 31, 2023

3 unchanged sentences

$ 750.0 $ 701.5 $ 750.0 $ 697.5

6.375 % Senior Notes

500.0 502.4 — —

Real estate related 140.6 136.4 90.9 83.1

4 unchanged sentences

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 Consolidated Balance Sheets, were as follows (in millions):

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Other current assets

1 unchanged sentence

Total assets $ 79.3 $ 89.3

Accrued expenses and other current liabilities $ — $ —

Long-term interest rate swap liabilities — —

Total liabilities $ — $ —

(1) As of December 31, 2023, the balance included gross fair value of $ 3.7 million related to the de-designated swap as described below.

(1) As of December 31, 2024 and December 31, 2023 , the balance included gross fair value of $ 3.4 million and $ 3.7 million, respectively, related to the de-designated swaps as described below.

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

Interest Rate Swaps De-designated as Cash Flow Hedges

During the year ended December 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 December 31, 2023, the de-designated swap had an aggregate notional value of $ 29.7 million that fixed its underlying one-month SOFR at an annual interest rate of 0.60 % and will mature on March 1, 203 0.

The Company reclassified the entire previously deferred gain associated with the de-designated interest rate swap of $ 3.1 million , net of tax of $ 1.0 million , from AOCI into income as an adjustment to Other interest expense, net, as the remaining forecasted hedged transactions associated with the interest rate swap were probable of not occurring due to the settlement of the mortgages described above.

As of December 31, 2023, the Company recorded unrealized mark-to-mark et losses of $ 0.3 million and realized gains of $ 1.0 million a ssociated with the de-designated interest rate swap within Other interest expense, net.

The Company de-designated one mortgage interest rate swap during each of the years ended December 31, 2024 and 2023 , due to the Company settling the underlying mortgages associated with the swaps.

As of December 31, 2024, the de-designated swaps had a total aggregate notional value of $ 34.0 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, during th e years ended December 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 losses of $ 0.5 million and $ 0.3 million and realized gains of $ 1.6 million and $ 1.0 million a ssociated with the de-designated interest rate swaps within Other interest expense, net, for the years ended December 31, 2024 and 2023 , respectively.

Interest Rate Swaps Designated as Cash Flow Hedges

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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.

As of December 31, 2024, the Company held 28 interest rate swaps designated as cash flow hedges with a total notional value of $ 889.3 million that fixed its underlying SOFR at a weighted average rate of 1.23 %.

As of December 31, 2023, the Company held 36 interest rate swaps designated as cash flow hedges with a total notional value of $ 909.6 million that fixed its underlying SOFR at a weighted average rate of 1.25 %.

The maturity dates of the Company’s designated interest rate swaps range between February 14, 2025 and December 31, 2031.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company also held one additional interest rate swap designated as cash flow hedges with forward start dates beginning in January 2024, that had a notional value of $ 50.0 million and a weighted average interest rate of 0.72 % as of December 31, 2023.

The Company’s designated interest rate swap with a forward start date has a maturity date of December 2028.

As of December 31, 2022, the Company held 39 interest rate swaps designated as cash flow hedges with a total notional value of $ 931.1 million that fixed its underlying one-month SOFR at a weighted average rate of 1.22 %.

The Company completed the transition of interest rate swaps from London Interbank Offered Rate to SOFR during 2022.

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

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

Statement of Operations Classification Years Ended December 31,

Statements of Operations Classification

Years Ended December 31,

2024 2023 2022

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Other interest expense, net $ 17.0 $ 17.9 $ 2.4

The amount of gain expected to be reclassified out of Accumulated other comprehensive income (loss) into earnings as an offset to Floorplan interest expense or Other interest expense, net in the next twelve months is $ 18.8 million .

The amount of gain expected to be reclassified out of AOCI into earnings as an offset to Floorplan interest expense or Other interest expense, net in the next twelve months is $ 24.6 million .

RECEIVABLES, NET AND CONTRACT ASSETS

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Basis of Presentation, Consolidation and Summary of Accounting Policies, inventories are valued at lower of cost or net realizable value.

The lower of specific cost or net realizable value adjustments reduced total inventory cost by $ 9.2 million a nd $ 5.4 m illion at December 31, 2023 and 2022, respectively.

The lower of specific cost or net realizable value adjustments reduced total inventory cost by $ 14.1 million a nd $ 9.2 million at December 31, 2024 and 2023, respectively.

Interest assistance reduced inventory costs by $ 8.0 million a nd $ 7.0 million at December 31, 2024 and 2023, respectively, and reduced cost of sal es by $ 88.4 million, $ 71.2 million and $ 56.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

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Property and equipment, net $ 2,856.5 $ 2,248.7

For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 6.8 million, $ 0.8 million and $ 1.7 millio n, respectively, in asset impairment charges related to property and equipment in the Company’s U.S.

No asset impairments were recorded for the year ended December 31, 2024.

For the years ended December 31, 2023 and 2022, the Company recognized $ 6.8 million and $ 0.8 million , respectively, in asset impairment charges related to property and equipment in the Company’s U.S.

Property and equipment impairment charges are reflected in Asset impairments in the Consolidated Statements of Operations.

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The Company has elected not to record leases with an initial term of 12 months or less on the balance sheet for all asset classes.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company reviews ROU assets for impairment at the lowest level of identifiable cash flows whenever evidence exists that the carrying value of an asset may not be recoverable (i.e., triggering events).

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Financial Instruments and Fair Value Measurements.

D uring the year ended December 31, 2023, the Company recorded $ 1.8 million of impairments of ROU assets related to the U.S.

No impairments of ROU assets were recorded during the years ended December 31, 2022 and 2021.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

No impairm ents of ROU assets were recorded during the year ended December 31, 2024 .

During the year ended December 31, 2023, the Company recorded $ 1.8 million of impairments of ROU assets related to the U.S.

No impairments of ROU assets were recorded during the year ended December 31, 2022.

The impairment charges were recognized within Asset impairments in the Company’s Consolidated Statements of Operations.

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Net lease expense $ 74.6 $ 67.6 $ 61.9

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2024

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Present value of lease liabilities $ 302.0 $ 311.4

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Years Ended December 31,

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Basis of Presentation, Consolidation and Summary of Accounting Policies for further discussion of the Company’s accounting policies relating to impairment testing.

For the October 31, 2023 annual goodwill impairment testing, the Company elected to perfor m a quantitative assessment to determine whether the fair values of the Company’s reporting units were less than their carrying values.

Based on the results of the quantitative assessment, the Company did not record a goodwill impairment charge.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

When a quantitative impairment assessment is performed, the Company estimates fair value of goodwill using a combination of the discoun ted cash flow, or income approach, and the market approach.

The Company weights the income approach and market approach 50 % and 50 %, respe ctively, in the fair value model.

For intangible franchise rights, the fair value of the respective franchise right is estimated using a discounted cash flow, or income approach.

The income approach measures fair value by discounting expected future cash flows at a WACC that proportionately weights the cost of debt and equity.

For the October 31, 2024 annual goodwill impairment testing, the Company elected to perfor m a quantitative assessment on the U.K.

reporting unit and a qualitative assessment on the U.S.

reporting unit to determine whether the fair values of the Company’s reporting units were less than their carrying values.

Based on the results of the assessments, the Company did not record a goodwill impairment charge.

When a quantitative impairment assessme nt is performed, the Company estimates the fair value of goodwill using a combination of the market approach, and the discoun ted cash flow, or income approach.

The Company weights the market approach and the income approach 50 % and 50 %, respe ctively, in the fair value model.

For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pre-tax net income weighted as appropriate by reporting unit.

For intangible franchise rights, the fair value of the respective franchise right is also estimated using a discounted cash flow, or income approach.

The income approach measures fair value by discounting expected future cash flows at a weighted average cost of capital (“WACC”) that proportionately weights the cost of debt and equity.

Significant assumptions in the model include revenue growth rates, future EBITDA margins, the WACC and terminal growth rates.

The Company applies a five-year projection period which aligns with the Company’s strategic plan.

Key considerations in the assumed growth rates include industry seasonally adjusted annual rate of vehicle sales (“SAAR”) projections, macroeconomic conditions including consumer confidence levels, unemployment rates and gross domestic product “GDP”) growth, and internal measures such as historical financial performance, cost control and planned capital expenditures.

Key considerations in the assumed growth rates include industry seasonally adjusted annual rate of vehicle sales projections, macroeconomic conditions including consumer confidence levels, unemployment rates and gross domestic product growth, and internal measures such as historical financial performance, cost control and planned capital expenditures.

Beyond the five forecasted years, the terminal value is determined using a perpetuity growth rate based on long-term inflation projections for each reporting unit.

Significant inputs to the WACC include the risk-free rate, an adjustment for stock market risk, an adjustment for company size risk and country risk adjustments for the U.K.

For the market approach, the Company utilizes recent market multiples of guideline companies for both revenue and pre-tax net income weighted as appropriate by reporting unit.

Each of the significant assumptions to the fair value model are considered level 3 inputs within the fair value hierarchy described further in Note 8.

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Developing these assumptions requires applying management’s knowledge of the industry, recent transactions and reasonable performance expectations for its operations.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the October 31, 2024 annual intangible franchise rights assessment, the Company elected to perform a qualitative assessment.

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To perform the intangible franchise rights quantitative assessment, the Company estimated the fair values of the respective franchise rights using a discounted cash flow, or income approach, following the income approach as described for Goodwill.

This resulted in franchise rights impairment charges of $ 25.1 million in the U.S.

This resulted in franchise rights impairment ch arges of $ 28.2 million in the U.S.

segment and none in the U .K.

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segment on inta ngible franchise rights.

No impairment was recorded for intangible franchise rights during the year ended December 31, 2021.

During the year ended December 31, 2022, the Company recorded impairment charges of $ 1.3 million in the U.S.

segment and none in the U.K.

segment on intangible franchise rights.

The impairment charges were recognized within Asset impairments in the Company’s Consolidated Statements of Operations.

During the year ended December 31, 2024, the Company recorded additional indefinite-lived intangible franchise rights acquired through business combinations of $ 178.1 million in the U.S.

segment and none in the U.K.

segment and $ 121.8 million in the U.K.

During the year ended December 31, 2023, the Company recorded additional intangible franchise rights acquire d through business combinations of $ 215.1 million in the U.S.

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Balance, December 31, 2024 $ 809.8 $ 138.3 $ 948.1

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a roll-forward of the Company’s goodwill accounts by reporting unit (in millions):

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reporting unit.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

FLOORPLAN NOTES PAYABLE

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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.

T he Revolving Credit Facility currently consists of two tranches:

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:

(i) a $ 1.5 billion maximum capacity tranche for U.S.

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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 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 Consolidated Balance Sheets — refer to Note 14.

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 Consolidated Balance Sheets — refer to Note 15.

Debt for additional discussion.

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

The Acquisition Line includes a $ 100 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 December 31, 2023 and 2022.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Acquisition Line includes a $ 100 million sub-limit for letters of credit and a $ 50.0 million minimum capacity tranche.

The Company had $ 11.8 million and $ 12.2 million in letters of credit outstanding as of December 31, 2024 and 2023, respectively.

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.

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Under the Revolving Credit Facility, dividends are permitted to the extent that no event of default exists, and the Company is in compliance with the financial covenants contained therein.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Floorplan Notes Payable — Manufacturer Affiliates

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GM Financial Facility

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

As of December 31, 2023, the GM Financial Facility had a total capacity of $ 84.5 million.

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

During the year ended December 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 December 31, 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.

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The Company has other credit facilities in the U.S.

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

As of December 31, 2023, borrowings outstanding under these facilities totaled $ 256.4 million , comprised of $ 142.6 million in the U.S., with annual interest rates ranging from 1 % to approximately 9 % , and $ 113.8 million in the U.K., with annual interest rates ranging from approximat ely 5 % to 9 % .

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

As of December 31, 2024, borrowings outstanding under these facilities totaled $ 377.2 million, comprised of $ 190.0 million in the U.S.

and $ 187.2 million in the U.K., with annual interest rates ranging from 1 % to approximately 8 %.

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

Offset Accounts

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$ 750.0 $ 750.0

6.375 % Senior Notes due January 15, 2030

Acquisition Line 95.0 325.0

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Total $ 2,929.3

6.375 % Senior Notes Issuance

On July 30, 2024, the Company issued the following notes, at par:

Description Principal Amount

(in millions) Maturity Date Effective Interest Rate (1)

Interest Payment Dates

6.375 % Senior Notes

$ 500.0 January 15, 2030 6.661 % January 15 th , July 15 th

(1) The effective interest rate is after the impact of associated debt issuance costs.

The Company may redeem up to 40 % of the original principal amount of the 6.375 % Senior Notes, plus accrued and unpaid interest, at any time prior to July 15, 2026, subject to certain conditions.

The Company, at its option, may redeem some or all of the 6.375 % Senior Notes at the redemption prices (expressed as percentages of principal amount of the notes) set forth below, plus accrued and unpaid interest.

Redemption Period Redemption Price

July 15, 2026 103.188 %

July 15, 2027 101.594 %

July 15, 2028 and thereafter 100.000 %

The 6.375 % Senior Notes are unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of the Company’s future subordinated debt.

The 6.375 % Senior Notes are subordinated to all existing and future senior secured debt of the Company and subordinated to all existing and future liabilities (including trade payables) of any non-guarantor subsidiaries.

The 6.375 % Senior Notes are guaranteed by substantially all of the Company’s U.S.

subsidiaries.

subsidiary guarantees rank equally in the right of payment to all of the Company’s guarantor’s existing and future senior debt and rank senior in right of payment to all of the Company’s guarantor’s existing and future subordinated debt.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company may be required to purchase the 6.375 % Senior Notes if it sells certain assets or triggers the change in control provisions defined in the indenture governing the 6.375 % Senior Notes.

The indenture governing the 6.375 % Senior Notes contains customary restrictions on the Company, including the ability to pay dividends, incur additional indebtedness, create liens, sell or otherwise dispose of assets and repurchase shares of outstanding common stock, which are consistent with those contained in the indenture governing the Company’s 4.00 % Senior Notes.

Acquisition Line

The proceeds of the Acquisition Line are used for working capital, general corporate and acquisition purposes.

As of December 31, 2023, borrowings under the Acquisition Line, a component of the Revolving Credit Facility, totaled $ 325.0 million .

The proceeds of the Acquisition Line (as defined in Note 14.

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

As of December 31, 2024, borrowings under the Acquisition Line, a component of the Revolving Credit Facility (as defined in Note 14.

Floorplan Notes Payable), totaled $ 95.0 million.

The average interest rate on this facility was 5.92 % as of December 31, 2024.

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As of December 31, 2024, borrowings outstanding under these facilities totaled $ 1,253.9 million, gross of debt issuance costs, comprised of $ 843.4 million in the U.S.

and $ 130.7 million in the U.K.

and $ 410.5 million in the U.K., respectively.

The Company’s mortgage loans are secured by real property owned by the Company.

The carrying values of the related collateralized real estate as of December 31, 2024 and 2023 were $ 1,612.9 million and $ 1,153.2 million, respectively.

In February 2024, the Company entered into a master credit agreement with Wells Fargo Bank, National Association (the “Wells Fargo Credit Agreement”) with a maximum capacity of $ 250.0 million.

In February 2024, the Company entered into a master credit agreement with Wells Fargo Bank, National Association (the “Wells Fargo Credit Agreement”), which provides for delayed draw term loans with a maximum borrowing capacity of $ 258.3 million.

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

As of December 31, 2024 , borrowings outstanding under the Wells Fargo Credit Agreement totaled $ 253.9 million and are included in the total U.S.

mortgage loans described above.

Finance Leases

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Leases for further information regarding the Company’s finance leases.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income from continuing operations before income taxes by geographic area was as follows (in millions):

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Provision for income taxes $ 161.5 $ 198.2 $ 231.1

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation of the statutory federal rate to the effective tax rate on income before income taxes from continuing operations was as follows (in millions):

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Foreign income tax rate differential ( 2.1 ) 0.6 ( 2.3 )

Change in enacted tax rate — U.K.

Tax credits ( 3.9 ) ( 0.5 ) ( 0.4 )

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Provision for income taxes $ 161.5 $ 198.2 $ 231.1

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of deferred tax assets and liabilities were as follows (in millions):

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Accrued liabilities $ 66.7 $ 62.6

Fixed asset basis differences

Net operating losses 9.0 13.0

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Deferred tax liabilities:

Goodwill and intangible franchise rights $ 195.9 $ 171.2

Goodwill and other intangibles

$ 239.9 $ 195.9

Fixed asset basis differences 119.5 114.7

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The classification of the continued operations of the Company’s net deferred tax liability within the Consolidated Balance Sheets is as follows (in millions):

Deferred tax asset, included in Other long-term assets

Deferred tax assets, included in Other long-term assets

Deferred tax liability, included in Deferred income taxes

Net deferred tax liability $ 295.8 $ 252.5

As of December 31, 2023, the Company had state pre-tax NOL carryforwards in the U.S.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2024, the Company had state pre-tax net operating loss carryforwards in the U.S.

of $ 182.8 million that will expire between 2025 and 2044 in certain states while some may be carried forward indefinitely.

To the extent that the Company expects that net income will not be sufficient to realize these NOLs in certain jurisdictions, a valuation allowance has been established.

To the extent that the Company expects that net income will not be sufficient to realize these net operating losses in certain jurisdictions, a valuation allowance has been established.

The Company believes it is more-likely-than-not that its deferred tax assets, net of valuation allowances provided, will be realized, based primarily on its expectation of future taxable income and considering future reversals of existing taxable temporary differences.

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Based on the statutes of limitations in the applicable jurisdictions in which the Company operates, the Company is generally no longer subject to examinations by tax authorities in years prior to 2019.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation of the Company’s unrecognized tax benefits is as follows (in millions):

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For the years ended December 31, 2024, 2023 and 2022 the Company recorded approximately $ 0.4 million , $ 0.3 million and $ 0.3 million, respectively, of interest and penalty related to its uncertain tax positions.

Consistent with prior practice, the Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the Consolidated Statements of Operations.

Consistent with prior practice, the Company recognizes interest and penalties related to uncertain tax positions within Provision for income taxes in the Consolidated Statements of Operations.

EMPLOYEE SAVINGS PLANS

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For the years ended December 31, 2024, 2023 and 2022, the matching contributions paid by the Company totaled $ 8.5 million , $ 5.2 million and $ 4.5 million, respectively.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

COMMITMENTS AND CONTINGENCIES

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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 $ 40.9 million as of December 31, 2024.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in the balances of each component of Accumulated other comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021 were as follows (in millions):

Changes in the balances of each component of AOCI for the years ended December 31, 2024, 2023 and 2022 were as follows (in millions):

Year Ended December 31, 2024

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Amounts reclassified from accumulated other comprehensive income (loss):

Floorplan interest income (pre-tax)

Floorplan interest expense (pre-tax)

— ( 20.6 ) ( 20.6 )

Other interest income, net (pre-tax)

Other interest expense, net (pre-tax)

— ( 17.0 ) ( 17.0 )

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Provision for income taxes — 9.0 9.0

Net current period other comprehensive income (loss) 23.7 ( 18.0 ) 5.7

Net current period other comprehensive loss ( 19.1 ) ( 7.4 ) ( 26.5 )

Balance, December 31, 2024

$ ( 56.5 ) $ 58.2 $ 1.6

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2023

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Floorplan interest expense (pre-tax) — ( 15.4 ) ( 15.4 )

Other interest expense (pre-tax) — ( 2.4 ) ( 2.4 )

Cumulative foreign currency translation adjustments associated with the Brazil Disposal 122.8 — 122.8

Other cumulative foreign currency translation adjustments

Other interest expense, net (pre-tax)

— ( 17.9 ) ( 17.9 )

Reclassification related to de-designated interest rate swaps (pre-tax) — ( 4.0 ) ( 4.0 )

Provision for income taxes — 8.9 8.9

Net current period other comprehensive income 97.1 81.6 178.7

Net current period other comprehensive income (loss) 23.7 ( 18.0 ) 5.7

Balance, December 31, 2023

$ ( 37.4 ) $ 65.6 $ 28.1

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2022

8 unchanged sentences

Floorplan interest expense (pre-tax) — ( 0.8 ) ( 0.8 )

Other interest expense (pre-tax) — 4.1 4.1

Reclassification related to de-designated interest rate swaps (pre-tax) — 7.9 7.9

Benefit for income taxes — ( 3.7 ) ( 3.7 )

Net current period other comprehensive (loss) income ( 6.7 ) 34.5 27.8

Other interest expense, net (pre-tax)

— ( 2.4 ) ( 2.4 )

Cumulative foreign currency translation adjustments associated with the Brazil Disposal 122.8 — 122.8

Other cumulative foreign currency translation adjustments 1.5 — 1.5

Provision for income taxes — 0.8 0.8

Net current period other comprehensive income 97.1 81.6 178.7

Balance, December 31, 2022

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Non-cash Activities

The accrual for capital expenditures increased $ 2.0 million, decreased $ 1.6 million , and increased $ 2.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The accrual for capital expend itures, was $ 9.0 million, $ 6.7 million and $ 4.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Interest and Income Taxes Paid

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Cash paid for income taxes, net of refunds, was $ 146.0 million , $ 183.8 million and $ 202.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

GROUP 1 AUTOMOTIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

SEGMENT INFORMATION

As of December 31, 2023, the Company had two reportable segments:

The Company defines its 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.

The Company has adopted ASU 2023-07, Segment Reporting (Topic 820):

Improvements to Reportable Segment Disclosures, effective retrospectively for the year ended December 31, 2024.

As a result of this adoption, the Company’s segment disclosure below now includes significant expense categories.

The Company’s segment performance measure remains unchanged.

As of December 31, 2024, the Company had two operating and reportable segments:

The Company defines its segments as those operations whose results the Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), regularly reviews to analyze performance and allocate resources at the U.S.

geographic areas.

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

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and sell vehicle parts.

The CODM uses income before income taxes predominantly in making decisions about the allocation of operating and capital resources to each segment, evaluating annual budget and forecast, as well as determining compensation for certain employees.

The accounting policies of the segments are the same as those described in the Company’s summary of accounting policies.

All intercompany balances and transactions have been eliminated in consolidation.

Refer to Note 1.

Basis of Presentation, Consolidation and Summary of Accounting Policies for further discussion of the Company’s accounting policies.

Selected reportable segment data for continuing operations as follows (in millions):

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$ 4,161.5 $ 19,934.3

Gross profit $ 2,610.1 $ 410.1 $ 3,020.3

Cost of sales $ 13,092.0 $ 3,601.3 $ 16,693.3

SG&A expenses $ 1,704.0

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Depreciation and amortization expense $ 88.2 $ 24.9 $ 113.1

Asset impairments $ 33.0 $ — $ 33.0

Restructuring charges

$ — $ 16.7 $ 16.7

Other operating (income) expense

$ ( 10.0 ) $ — $ ( 10.0 )

Floorplan interest expense $ 88.8 $ 19.8 $ 108.5

Other interest expense, net $ 124.8 $ 16.6 $ 141.3

Other segment items (1)

$ — $ 0.7 $ 0.7

Income before income taxes $ 652.2 $ 6.3 $ 658.5

7 unchanged sentences

Total revenues $ 14,814.2 $ 3,059.5 $ 17,873.7

Gross profit $ 2,582.3 $ 382.9 $ 2,965.2

Cost of sales $ 12,204.1 $ 2,649.4 $ 14,853.4

SG&A expenses $ 1,622.9

1 unchanged sentence

Depreciation and amortization expense $ 76.9 $ 15.1 $ 92.0

Asset impairments $ 32.9 $ — $ 32.9

Floorplan interest expense $ 53.5 $ 10.6 $ 64.1

Other interest expense, net $ 91.4 $ 8.4 $ 99.8

Other segment items (1)

$ 0.4 $ 4.1 $ 4.5

Income before income taxes $ 732.1 $ 68.1 $ 800.2

5 unchanged sentences

Total revenues $ 13,427.1 $ 2,795.1 $ 16,222.1

Gross profit $ 2,089.5 $ 351.2 $ 2,440.7

Cost of sales $ 10,844.7 $ 2,412.2 $ 13,256.9

SG&A expenses $ 1,516.9

1 unchanged sentence

Depreciation and amortization expense $ 73.1 $ 15.2 $ 88.4

Asset impairments $ 2.1 $ — $ 2.1

Floorplan interest expense $ 21.4 $ 5.9 $ 27.3

Other interest expense, net $ 71.0 $ 6.6 $ 77.5

Other segment items (1)

$ 0.4 $ 0.8 $ 1.2

Income before income taxes $ 897.4 $ 87.9 $ 985.3

3 unchanged sentences

Total capital expenditures $ 117.8 $ 37.3 $ 155.1

(1) Other segment items include other expenses, which primarily relate to currency translation losses.

December 31, 2024

7 unchanged sentences

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-K

Item 9A. Controls and Procedures