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What changed in GROUP 1 AUTOMOTIVE INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GROUP 1 AUTOMOTIVE INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+324 added−296 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-16)

Top changes in GROUP 1 AUTOMOTIVE INC's 2023 10-K

324 paragraphs added · 296 removed · 231 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

67 edited+31 added−28 removed34 unchanged
Biggest changeWe make the following information available free of charge on our website: • Annual Report on Form 10-K; • Quarterly Reports on Form 10-Q; • Current Reports on Form 8-K; • Amendments to the reports filed or furnished electronically with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; • Our Corporate Governance Guidelines; • The charters for our Audit, Compensation and Human Resources, Finance/Risk Management and Governance & Corporate Responsibility Committees; • Our Code of Conduct for Directors, Officers and Employees (“Code of Conduct”); • Our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller (“Code of Ethics”); and • Our Sustainability Report.
Biggest changeWe make the following information available free of charge on our website: • Annual Report on Form 10-K; • Quarterly Reports on Form 10-Q; • Current Reports on Form 8-K; • Amendments to the reports filed or furnished electronically with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; • Our Corporate Governance Guidelines; • The charters for our Audit, Compensation & Human Resources, Finance/Risk Management and Governance & Corporate Responsibility Committees; • Our Code of Conduct for Directors, Officers and Employees (“Code of Conduct”); • Our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller (“Code of Ethics”); and • Our Sustainability Report. 12 Within the time period required by the SEC and the NYSE, as applicable, we will post on our website any modifications to the Code of Conduct and Code of Ethics and any waivers applicable to senior officers as defined in the Code of Conduct or Code of Ethics, as applicable, as required by the Sarbanes-Oxley Act of 2002.
We continuously evaluate our processes to identify opportunities for process automation, enabling us to facilitate our customers’ vehicle inventory selection on a more expedited basis, process parts inventory and F&I products transactions quicker and price cars more competitively for our customers using the latest and most accurate information available.
We continuously evaluate our processes to identify opportunities for automation, enabling us to facilitate our customers’ vehicle inventory selection on a more expedited basis, process parts inventory and F&I products transactions quicker and price cars more competitively for our customers using the latest and most accurate information available.
We are also subject to potential premium cost fluctuations and changes in loss retention limits with the annual renewal of these programs. For further discussion, refer to Item 1A. Risk Factors, within this Form 10-K. 9 Human Capital People make up the foundation of everything we do at the Company.
We are also subject to potential premium cost fluctuations and changes in loss retention limits with the annual renewal of these programs. For further discussion, refer to Item 1A. Risk Factors, within this Form 10-K. Human Capital People make up the foundation of everything we do at the Company.
Parts and Service We believe the principal competitive factors in the parts and service business are the quality of customer service, the use of factory-approved replacement parts, familiarity with a manufacturer’s brands and models, location, price, the availability and competence of technicians, and the availability of training programs to enhance such expertise.
Parts and Service We believe the principal competitive factors in the parts and service business are the quality of customer service, timeliness of service, the use of factory-approved replacement parts, familiarity with a manufacturer’s brands and models, location, price, the availability and competence of technicians, and the availability of training programs to enhance such expertise.
Employee Engagement We engage in activities aimed at listening to our employees and addressing their concerns. In turn, our employees deliver exceptional service to our customers, and ultimately achieve exceptional results for our investors. We solicit employee feedback through multiple channels such as employee surveys and town halls.
Employee Engagement We engage in activities aimed at listening to our employees and addressing their concerns. In turn, our employees deliver superior service to our customers, and ultimately achieve exceptional results for our investors. We solicit employee feedback through multiple channels such as employee surveys and town halls.
Acquisitions completed within our existing markets allow us to capitalize on economies of scale and provide for cost saving opportunities in key expense areas such as used vehicle sourcing, advertising, purchasing, data processing and personnel utilization.
Acquisitions completed within our existing markets allow us to better capitalize on economies of scale and provide for cost saving opportunities in key expense areas such as used vehicle sourcing, advertising, purchasing, data processing and personnel utilization.
Consumers have a number of choices when deciding where and how to (i) purchase a new or used vehicle as well as select related vehicle financing and insurance products; (ii) purchase related parts and accessories; and (iii) procure vehicle maintenance and repair services.
Consumers have a number of choices when deciding where and how to (i) purchase and/or lease a new or used vehicle as well as select related vehicle financing and insurance products; (ii) purchase related parts and accessories; and (iii) procure vehicle maintenance and repair services.
In the used vehicle market, our dealerships compete both in their local market and nationally with other franchised dealers, large multi-location used vehicle retailers, local independent used vehicle dealers, automobile rental agencies and private parties for the supply and resale of used vehicles.
Used Vehicle Sales In the used vehicle market, our dealerships compete both in their local market and nationally with other franchised dealers, large multi-location used vehicle retailers, local independent used vehicle dealers, automobile rental agencies and private parties for the supply and resale of used vehicles.
Our new vehicle dealer competitors also have franchise agreements with the various vehicle manufacturers and, as such, generally have access to new vehicles on the same terms as we do.
Our principal new vehicle dealer competitors also have franchise agreements with the various vehicle manufacturers and, as such, generally have access to new vehicles on the same terms as we do.
The following chart presents total revenues and gross profit contribution from our operations by new vehicles, used vehicles, parts and service and F&I for the year ended December 31, 2022 (“Current Year”): 3 The following chart presents our diversity of new vehicle unit sales by manufacturer for the Current Year: The following table shows our new vehicle unit sales geographic mix for the Current Year and our franchise count as of December 31, 2022: New vehicle unit sales geographic mix (%) Franchises Region Geographic Market U.S.
The following chart presents total revenues and gross profit contribution from our operations by new vehicles, used vehicles, parts and service and F&I for the year ended December 31, 2023 (“Current Year”): 3 The following chart presents our diversity of new vehicle unit sales by manufacturer for the Current Year: The following table shows our new vehicle unit sales geographic mix for the Current Year and our franchise count as of December 31, 2023: New vehicle unit sales geographic mix (%) Franchises Region Geographic Market U.S.
These laws, regulations and controls may impose numerous obligations on our operations including the acquisition of permits to conduct regulated activities, the imposition of restrictions on where or how to manage or dispose of used products and wastes, the incurrence of capital expenditures to limit or prevent releases of such material, and the imposition of substantial liabilities for pollution resulting from our operations or attributable to former operations.
These laws, regulations and controls may impose numerous obligations on our operations including the acquisition of permits to conduct regulated activities, the imposition of restrictions on where or how to manage or dispose of used products and wastes, the incurring of capital expenditures to limit or prevent releases of such material, and the imposition of substantial liabilities for pollution resulting from our operations or attributable to former operations.
In certain cases, we insure costs in excess of our retained risk under various contracts with third-party insurance carriers. Although we believe our insurance coverage is adequate, we cannot assure that we will not be exposed to uninsured losses that could have a material adverse effect on our business, results of operations and financial condition.
In certain cases, we insure costs in excess of our retained risk under various contracts with third-party insurance carriers. Although we believe our insurance coverage is adequate, we cannot be assured that we will not be exposed to uninsured losses that could have a material adverse effect on our business, results of operations and financial condition.
It generally is difficult, outside of bankruptcy, for a manufacturer to terminate, or not renew, a franchise under these laws, which were designed to protect dealers. 7 The U.K. generally does not have automotive dealership franchise laws and, as a result, our U.K. dealerships operate without these types of specific protections.
As a result, it generally is difficult, outside of bankruptcy, for a manufacturer or distributor to terminate, or not renew, a franchise under these laws, which were designed to protect dealers. The U.K. generally does not have automotive dealership franchise laws and, as a result, our U.K. dealerships operate without these types of specific protections.
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. Effective as of the fourth quarter of 2021, we are aligned into two reportable segments: the U.S. and the U.K.
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. Effective as of the fourth quarter of 2021, we have two reportable segments: the U.S. and the U.K.
In 2022, we launched an all-in-one communication platform that keeps our employees across the U.S. and U.K. up-to-date on the latest company news and brings our teams together digitally. The platform offers our executive team the ability to engage in direct and more frequent, real-time communication with our employees.
In 2022, we launched the Meta-based Workplace app, an all-in-one communication platform that keeps our employees across the U.S. and U.K. up to date on the latest company news and brings our teams together digitally. The platform offers our executive team the ability to engage in direct and more frequent, real-time communication with our employees.
In addition to cost savings opportunities, scale enables us to make the EV, facility, compliance, real estate, and technology investments necessary to thrive in today’s retail automotive industry. In addition to expanding our portfolio of dealerships through acquisitions, from time to time, we make decisions to optimize our portfolio by disposing of certain dealerships.
In addition to cost savings opportunities, scale enables us to make the EV, facility, compliance, real estate, and technology investments necessary to thrive in today’s retail automotive industry. In addition to expanding our portfolio through acquisitions, from time to time, we make decisions to optimize our portfolio by disposing of certain assets or operations.
Our collision centers compete with other large, multi-location companies, as well as local, independent, collision service operations. F&I We believe the principal competitive factors in the F&I business are convenience, interest rates, product availability and affordability, product knowledge and flexibility in contract length.
Our collision centers compete with other large, multi-location companies, as well as local, independent, collision service operations. F&I We believe the principal competitive factors in the F&I business are convenience, interest rates, product availability and affordability, product knowledge, flexibility in contract length and ease of consumer understanding.
We also sell parts to wholesale customers. Revenues from our F&I operations consist primarily of fees for arranging financing and selling vehicle service and insurance contracts in connection with the retail sale of a new or used vehicle. We offer a wide variety of third-party finance, vehicle service and insurance products in a convenient manner at competitive prices.
Revenues from our F&I operations consist primarily of fees for arranging financing and selling vehicle service and insurance contracts in connection with the retail sale of a new or used vehicle. We offer a wide variety of third-party finance, vehicle service and insurance products in a convenient manner at competitive prices.
Item 1. Business General Group 1 Automotive, Inc. is a leading operator in the automotive retail industry. Through our omni-channel platform, we sell new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts.
Item 1. Business General Group 1 Automotive, Inc. is a leading operator in the automotive retail industry. Through our omnichannel platform, we sell and/or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale.
These regulations provide for various data protection requirements related to protection of customer’s personally identifiable information, notice requirements related to data breaches and obligations to inform a consumer, at or before collection, of the purpose and intended use of the collection, and to delete a consumer’s personal information upon request.
These regulations provide for various data protection requirements related to protection of customer’s personally identifiable information, notice requirements related to data breaches and obligations to inform a consumer, at or before collection, of the purpose and intended use of the collection, and to delete a consumer’s personal information upon request. If an organization violates the U.K.
We may dispose of a less significant dealership to allow us to acquire a more substantial dealership within the same or another geographic area based on the ownership limitations in the respective franchise agreement. Refer to Note 3. Acquisitions and Note 4.
Specifically, we may dispose of a less significant dealership to allow us to acquire a more substantial dealership within the same or another geographic area based on the ownership limitations imposed in the various franchise agreements. Refer to Note 3. Acquisitions and Note 4.
With oversight from our Board of Directors, in 2021 we performed a thorough review of our business operations pertaining to: hiring practices, equal pay, promotional practices, health and safety, health insurance, community impact and environmental impact. Building off this analysis, we performed a second assessment in 2022.
Beginning in 2021 we performed a thorough review of our business operations pertaining to: hiring practices, equal pay, promotional practices, health and safety, health insurance, community impact and environmental impact. Building off this analysis, we performed a second assessment in 2022.
As a matter of 2020 EU law, authorized dealers are generally able to, subject to manufacturer facility requirements, relocate or add additional facilities throughout the EU, offer multiple brands in the same facility, allow the operation of service facilities independent of new car sales facilities and ease restrictions on cross supplies (including on transfers of dealerships) between existing authorized dealers within the EU.
For instance, authorized dealers are generally able to, subject to manufacturer facility requirements, relocate or add additional facilities, offer multiple brands in the same facility, allow the operation of service facilities independent of new car sales facilities and ease restrictions on cross supplies (including on transfers of dealerships) between existing authorized dealers within the EU.
Our core values — Integrity, Transparency, Professionalism, Teamwork and Respect — define our culture and help us attract and retain talented employees. As of December 31, 2022, we ha d 15,491 e mployees (full-time, part-time and temporary), of which 12,004 w ere employed in the U.S. a nd 3,487 in the U.K.
Our core values — Integrity, Transparency, Professionalism, Teamwork and Respect — define our culture and help us attract and retain talented employees. As of December 31, 2023, we ha d 16,011 e mployees (full-time, part-time and temporary), of which 12,493 w ere employed in the U.S. a nd 3,518 in the U.K.
Discontinued Operations On November 12, 2021, we entered into a Share Purchase Agreement (the “Brazil Agreement”) with Original Holdings S.A. (“Buyer”).
Discontinued Operations On November 12, 2021, we entered into a Share Purchase Agreement (the “Brazil Agreement”) with Original Holdings S.A. (“Buyer”) to dispose of our Brazilian operations.
In general, the U.S. jurisdictions in which we operate have automotive dealership franchise laws, providing that, notwithstanding the terms of any franchise agreement, it is unlawful for a manufacturer to terminate or not renew a franchise unless “good cause” exists.
In general, the U.S. jurisdictions in which we operate have automotive dealership franchise laws, which generally provide that it is unlawful for a manufacturer or distributor to terminate or not renew a franchise unless “good cause” exists.
Texas 37.2 % 76 Massachusetts 9.9 % 22 Oklahoma 5.8 % 20 California 5.4 % 7 Georgia 3.8 % 9 New Mexico 2.4 % 9 Maine 2.3 % 11 New Jersey 2.2 % 9 New Hampshire 1.9 % 5 Florida 1.9 % 4 South Carolina 1.8 % 3 Louisiana 1.7 % 10 Kansas 1.5 % 3 New York 1.4 % 4 Alabama 0.7 % 2 Maryland 0.6 % 2 Mississippi 0.3 % 1 80.8 % 197 U.K.
Texas 38.4 % 81 Massachusetts 9.0 % 22 Oklahoma 5.6 % 19 California 5.9 % 7 Georgia 3.6 % 9 New Mexico 2.9 % 8 Maine 1.8 % 6 New Jersey 2.2 % 8 New Hampshire 2.1 % 6 Florida 3.0 % 5 South Carolina 1.6 % 3 Louisiana 1.7 % 6 Kansas 1.2 % 3 New York 1.0 % 2 Alabama 0.4 % 1 Maryland 0.5 % 2 Mississippi 0.4 % 1 81.3 % 189 U.K.
Governance Our Board of Directors has four standing committees to assist in fulfilling its responsibilities: the Audit Committee, the Compensation & Human Resources Committee, the Governance and Corporate Responsibility Committee and the Finance/Risk Management Committee.
Governance Our Board of Directors has four standing committees to assist in fulfilling its responsibilities: the Audit Committee, the Compensation and Human Resources Committee, the Governance and Corporate Responsibility Committee and the Finance/Risk Management Committee. 11 Our Governance & Corporate Responsibility Committee advises the Board on appropriate corporate governance guidelines and has direct oversight of our ESG policies and practices.
The U.K. is similarly committed to the Paris Agreement, and the U.K. announced in late 2020 that it plans to ban sales of new gasoline and diesel-powered vehicles after 2030. Additional regulation of GHG emissions from the vehicles could increase the cost of vehicles sold to us.
The U.K. is similarly committed to the Paris Agreement, and the U.K. announced that it plans to ban sales of new gasoline and diesel-powered vehicles after 2035. Similar planned bans have been announced in California, New Mexico, Massachusetts and New York. Additional regulation of GHG emissions from the vehicles could increase the cost of the vehicles sold to us.
United Kingdom 19.2 % 78 100.0 % 275 4 Business Strategy Our business strategy is built upon our commitment to maximize the return on investment for our stockholders.
United Kingdom 18.7 % 78 100.0 % 267 4 Business Strategy Our business strategy is built on our commitment to maximize the return on investment for our stockholders sustainably.
Environmental, Social and Governance (“ESG”) We are committed towards a more sustainable future by working to improve various aspects of our business in the ESG areas most relevant to us, our stakeholders and our industry.
In addition, employees participate in various diversity and inclusion training programs which were specifically developed for the Company. Environmental, Social and Governance (“ESG”) We are committed towards a more sustainable future by working to improve various aspects of our business in the ESG areas most relevant to us, our stakeholders and our industry.
We sell retail used vehicles directly to our customers at our dealerships and via AcceleRide® and wholesale our used vehicles at third party auctions. We sell replacement parts and provide both warranty and non-warranty maintenance and repair services at each of our franchised dealerships, as well as provide collision repair services at the 46 collision centers that we operate.
We sell replacement parts and provide both warranty and non-warranty maintenance and repair services at each of our franchised dealerships, as well as provide collision repair services at the 41 collision centers that we operate. We also sell parts to wholesale customers.
Unless otherwise specified, disclosures in this Form 10-K reflect continuing operations only. Dealership Operations Our new vehicle revenues include new vehicle sales and new vehicle lease transactions, sold at our dealerships or via our digital platform, AcceleRide®.
Unless otherwise specified, disclosures in this Form 10-K reflect continuing operations only. Dealership Operations Our new vehicle revenues include new vehicle sales and lease transactions, completed at our dealerships or via our digital platform, AcceleRide®. We sell retail used vehicles directly to our customers at our dealerships and via AcceleRide® and wholesale our used vehicles at third party auctions.
We are a multinational organization, with operations in geographically diverse markets that extend across 17 states in the U.S. and 34 towns and cities in the U.K. As of December 31, 2022, our retail network consisted of 149 dealerships in the U.S. and 55 dealerships in the U.K.
We have operations in geographically diverse markets that extend across 17 states in the U.S. and 34 towns and cities in the U.K. As of December 31, 2023, our retail network consisted of 144 dealerships and 28 collision centers in the U.S. and 55 dealerships and 13 collision centers in the U.K.
Organizational Growth In 2021 and 2022, the retail automotive industry experienced multiple merger and acquisition transactions aimed at further consolidation of the industry. Despite this increase in merger and acquisition activity, the industry remains fragmented to a significant degree. We believe there will continue to be opportunity for consolidation within the industry.
Despite this increase in merger and acquisition activity, the industry remains fragmented to a significant degree. We believe there will continue to be opportunity for consolidation within the industry.
Consistent with our acquisition activity completed in 2021 and 2022, we intend to pursue growth opportunities in 2023, specifically focusing on brands and dealerships that will provide attractive returns to our dealership portfolio.
Consistent with our acquisition activity completed in 2021, 2022 and 2023, we intend to pursue opportunities in growth-positioned or economically stable markets, or that are economically accretive to our existing markets in 2024 and beyond, specifically focusing on brands, large dealership operations and/or dealership clusters that will provide attractive returns to our portfolio.
Environmental and Occupational Health and Safety Laws and Regulations Our business activities in the U.S. and the U.K. are subject to stringent federal, regional, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
The FTC Safeguards Rule contains procedural, technical and personnel requirements that financial institutions, including dealers, must satisfy to meet their information security obligations. 8 Environmental and Occupational Health and Safety Laws and Regulations Our business activities in the U.S. and the U.K. are subject to stringent federal, regional, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
For instance, an accidental release from one of our storage tanks could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations. 8 Properties that we now or have in the past owned or leased in the U.S. are subject to the federal Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes.
For instance, an accidental release from one of our storage tanks could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations.
The franchise agreements grant the franchised automobile dealership a non-exclusive right to sell the manufacturer’s or distributor’s brand of vehicles and offer related parts and service within a specified market area.
Manufacturers’ Relationships and Agreements Each of our U.S. dealerships operates under one or more franchise agreements with vehicle manufacturers or authorized distributors. The franchise agreements grant the franchised automobile dealership a non-exclusive right to sell the manufacturer’s or distributor’s brand of vehicles and offer related parts and service within a specified market area.
Diversity, Equity and Inclusion (“DEI”) We maintain a DEI council that is chaired by our Chief Diversity Officer. The council’s mission is to foster a diverse and inclusive culture where employees of all backgrounds are respected, valued and developed.
DEI We maintain a DEI council that is chaired by our Chief Diversity Officer. The council’s mission is to foster a diverse and inclusive culture where employees of all backgrounds are respected, valued and developed. We enhance employee engagement in DEI by offering training, recruitment and career path development where a sense of belonging is apparent throughout the organization.
Several companies are currently manufacturing EVs for sale primarily through the internet, under a direct to consumer model, without using the traditional dealer-network or are considering such a strategy, including some of our manufacturer partners.
Several companies are currently manufacturing EVs for sale primarily through the internet, under a direct-to-consumer model, without using the traditional dealer-network or are considering such a strategy, including some of our OEM partners. Certain of our vehicle manufacturers in the U.K. recently transitioned or have announced plans to explore an agency model for selling new vehicles.
Data Privacy We are subject to numerous laws and regulations designed to protect information of clients, customers, employees and other third parties that we collect and maintain.
Data Privacy We are subject to numerous laws and regulations designed to protect the information of clients, customers, employees and other third parties that we collect and maintain. Some of the more significant regulations that we are required to comply with include the U.K.’s General Data Protection Regulation (“U.K.
In the new vehicle market, our dealerships compete with other franchised dealerships in their market areas, as well as auto brokers, leasing companies and internet companies that provide referrals to, or broker vehicle sales with, other dealerships or customers.
We believe the principal competitive factors in the automotive retailing industry are location, service, price, selection, online capabilities, established customer relationships, and reputation. 6 New Vehicles Sales In the new vehicle market, our dealerships compete with other franchised dealerships in their market areas, as well as auto brokers, leasing companies and internet companies that provide referrals to, or broker vehicle sales with, other dealerships or customers.
The features of the platform include targeted announcement capabilities, company documents like policies, guidelines and benefits plans, and quick access to employee and department directories. We believe that working together is critical to prepare for coming opportunities and changes affecting us internally and externally.
The features of the platform include targeted announcement capabilities, company documents like policies, guidelines and benefits plans, and quick access to employee and department directories.
California and other states have indicated they would pursue more stringent CAFE and GHG standards than required by current EPA and NHTSA standards. Comparable laws and regulations have been enacted in the U.K, including updated standards for cars, vans and heavy-duty trucks for upcoming model years.
Comparable laws and regulations have been enacted in the U.K, including updated standards for cars, vans and heavy-duty trucks for upcoming model years.
We are committed to supporting our customers who currently own EVs and those that purchase EVs in the future. Social We maintain a human capital strategy that supports a diverse and inclusive workforce with equal opportunity. The Company offers programs for training and career advancement, strong benefits, incentives, and health, safety and wellness initiatives.
Social We maintain a human capital strategy that supports a talented, diverse and inclusive workforce with equal opportunity. The Company offers programs for training and career advancement, strong benefits, incentives, and health, safety and wellness initiatives as described above within Human Capital . In addition, the Company has a history of philanthropy and volunteerism.
In addition, some manufacturers provide us with incentives to order and/or sell certain models and/or volumes of inventory over designated periods of time. Under the terms of our dealership franchise agreements, the respective manufacturers are able to perform warranty, incentive and rebate audits and charge us back for unsupported or non-qualifying warranty repairs, rebates or incentives.
Under the terms of our dealership franchise agreements, the respective manufacturers are able to perform warranty, incentive and rebate audits and charge us back for unsupported or non-qualifying warranty repairs, rebates or incentives. In addition to the individual dealership franchise agreements discussed above, we have entered into framework agreements in the U.S. with most major vehicle manufacturers and distributors.
A number of laws and regulations applicable to automotive companies affect our business and conduct, including, but not limited to our sales, operations, financing, insurance, advertising and employment practices. These laws and regulations include state franchise laws and regulations, consumer protection laws and other extensive laws and regulations applicable to new and used motor vehicle dealers.
Risk Factors. Governmental Regulations Automotive and Other Laws and Regulations We operate in a highly regulated industry. A number of laws and regulations applicable to automotive companies affect our business and conduct, including, but not limited to our sales, operations, financing, insurance, advertising and employment practices.
These agreements also impose change of control provisions related to the ownership of our common stock. For a discussion of these restrictions and the risks related to our relationships with vehicle manufacturers, please refer to Item 1A. Risk Factors. Governmental Regulations Automotive and Other Laws and Regulations We operate in a highly regulated industry.
These agreements impose a number of restrictions on our operations, including our ability to make acquisitions and obtain financing, and on our management. These agreements also contain change of control provisions related to the ownership of our common stock. For a discussion of these restrictions and the risks related to our relationships with vehicle manufacturers, please refer to Item 1A.
In most cases, manufacturers have renewed the franchises upon expiration so long as the dealership is in compliance with the terms of the agreement. From time to time, certain manufacturers may assert sales and customer satisfaction performance requirements under the terms of our framework or franchise agreements. We work with these manufacturers to address any performance issues.
In most cases, manufacturers have renewed the franchises upon expiration so long as the dealership is in compliance with the terms of the agreement. We diligently work with our manufacturers to address any performance issues. 7 Our dealership service departments perform vehicle repairs and service for customers under manufacturer warranties.
In some instances, we dispose of underperforming dealerships where we no longer believe opportunity exists for improvement. We may also dispose of certain dealerships in order to complete strategic acquisition opportunities.
In some instances, we dispose of underperforming dealerships which do not meet our return objectives. We may also dispose of certain dealerships in order to complete strategic acquisition opportunities.
We enhance employee engagement in DEI by offering training, recruitment and career path development where a sense of belonging is apparent throughout the organization. The council has four primary areas of focus: Talent Acquisition, Talent Development, Community Building and Women in the Workplace. The council consists of a diverse group of employees, providing representation across the organization.
The council has four primary areas of focus: Talent Acquisition, Talent Development, Community Building and Women in the Workplace. The council consists of a diverse group of employees, providing representation across the organization. Each area has an employee chairperson, as well as an executive sponsor.
Vehicle manufacturers in the U.S. are also subject to regulations by the EPA and the NHTSA that establish corporate average fuel economy (“CAFE”) standards applicable to light-duty vehicles. These agencies have finalized more stringent standards for both heavy-duty and light-duty vehicles and for increased fuel economy for vehicles in upcoming model years.
These developments could increase our costs of operation as well as reduce our volume of business. 9 Vehicle manufacturers in the U.S. are also subject to regulations by the EPA and the NHTSA that establish corporate average fuel economy (“CAFE”) standards applicable to light-duty vehicles.
We continue to invest in numerous initiatives to improve our carbon and broader environmental footprint as we strive to be good stewards of the environment, such as climate control thermostats and LED lighting to improve our energy efficiency, solar panels to increase our usage of renewable energy, and up-to-date waste management systems to improve our handling of chemicals and other byproducts from our dealerships’ operations.
These opportunities include technological solutions such as: climate control thermostats and LED lighting to improve energy efficiency, solar panels to increase our use of renewable energy and updated waste management systems to improve handling of chemicals and other byproducts from our dealerships’ operations.
In addition, our management team and cross-functional subject matter experts are responsible for the implementation of our ESG strategy, initiatives and communications. We believe the composition of our Board of Directors is critical to our success. As the Company continues to evolve, so do the perspectives, skills and experiences that the Board of Directors seeks in its director nominees.
As Group 1 continues to evolve, so do the perspectives, skills and experiences the Board seeks in its director nominees. We believe the composition of our Board is critical to our success. As such, one-third of our directors are women, all of whom serve as committee chairs.
Additionally, in every jurisdiction in which we operate, we must obtain various permits and licenses in order to conduct our businesses.
These laws and regulations include state franchise laws and regulations, consumer protection laws and other extensive laws and regulations applicable to new and used motor vehicle dealers. Additionally, in every jurisdiction in which we operate, we must obtain various permits and licenses in order to conduct our business.
The shortage of new vehicle supply, led by a global semiconductor and other parts shortage, as well as the current rising inflation and increasing interest rate environment, has and could continue to lead to a deviation from historical seasonal variations.
A shortage of new vehicle supply in 2022 and much of 2023, led by a global semiconductor and other parts shortage, as well as high inflation and high interest rates led to a deviation from historical seasonal variations. As a result, historical seasonal variation patterns may not be an appropriate indicator of current and future trends in seasonal variations.
Many financial institutions now offer their own menu of F&I products, providing an alternative to our product offering, which may reduce our profits from the sale of these products through reduced penetration. 6 Manufacturers’ Relationships and Agreements Each of our U.S. dealerships operates under one or more franchise agreements with vehicle manufacturers (or authorized distributors).
We face competition in arranging financing for our customers’ vehicle purchases from a broad range of unaffiliated third-party financial institutions. Many financial institutions now offer their own menu of F&I products, providing an alternative to our product offering, which may reduce our profits from the sale of these products through reduced penetration.
Our dealership service departments perform vehicle repairs and service for customers under manufacturer warranties. We are reimbursed for the repairs and service directly from the manufacturer. Some manufacturers offer rebates to new vehicle customers that we are required, under specific program rules, to adequately document, support and collect.
We are reimbursed for those repairs and service by the manufacturer. Some manufacturers offer rebates to new vehicle customers, which we are required, under specific program rules, to adequately document, support and collect. In addition, some manufacturers provide us with incentives to order and/or sell certain models and/or volumes of inventory over designated periods of time.
Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements within this Form 10-K, for additional information regarding our acquisitions and dispositions. Teamwork and Collaboration As a multinational automotive retailer, we seek to identify and implement operational improvements within our dealerships by leveraging the unique and varying experiences of our U.S. and U.K. automotive retailers.
Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements within this Form 10-K, for additional information regarding our acquisitions and dispositions. Operations optimization includes leveraging our dealership’s full potential and local scale advantage to improve operational efficiency.
We look for opportunities to reduce our energy consumption, eliminate waste, and accommodate the growing EV market. One of our principal business activities is the construction and operation of new and remodeled dealership facilities.
We look for opportunities to reduce our energy consumption, eliminate waste and accommodate the growing EV market and continue to invest in numerous initiatives to improve our carbon and broader environmental footprint.
Consumer concerns regarding climate change could also alter consumer preferences and adversely affect our ability to market and sell vehicles. These developments could increase our costs of operation as well as reduce our volume of business.
Government bans or restrictions on certain vehicle types could impact the mix of vehicles that we offer for sale. Consumer concerns regarding climate change could also alter consumer preferences and adversely affect our ability to market and sell vehicles.
Training and Development We offer a variety of training courses and professional development opportunities to employees based on job categories, including a management training program and a technician training program. In addition to job specific courses, we also offer leadership training. Employees have opportunities for various certification levels based on training completed and tenure.
Employees have opportunities for various certification levels based on training completed and tenure. We have also developed a management training program and a technician training program to attract talent to the automotive industry. In addition to providing career growth pathways for employees, annually our Board of Directors reviews management’s succession planning for key positions throughout the organization.
As a result, historical seasonal variation patterns may not be an appropriate indicator of current and future trends in seasonal variations. 11 Internet Website and Availability of Public Filings Our internet address is www.group1auto.com .
Internet Website and Availability of Public Filings Our internet address is www.group1auto.com .
However, certain restrictions on dealerships may be permissible, provided the conditions set out in the relevant EU Block Exemption Regulations are met. The U.K. formally exited the EU on January 31, 2020, and the EU and the U.K. reached an agreement in principle as set out in the EU-U.K. Agreement, which became provisionally applicable on January 1, 2021. The EU-U.K.
However, under the EU Motor Vehicle Block Exemption Regulation, which was retained in U.K. law following U.K.’s exit from the EU on January 31, 2020, certain restrictions on dealerships are permissible in franchise agreements provided certain conditions are met.
In July 2022, the Competition and Markets Authority of the U.K. published proposed recommendations broadly similar to the Block Exemption Regulations currently in effect, but these may be further amended, revoked or extended by subsequent U.K. law.
In October 2022, the Competition and Markets Authority of the U.K. published recommendations to introduce an updated U.K. equivalent broadly similar to the EU Motor Vehicle Block Exemption Regulations. The U.K. Motor Vehicle Block Exemption Regulation is applicable until May 31, 2029.
If an EU or non-EU organization violates the GDPR, the organization can be fined up to 4% of annual global turnover or 20 million euros, whichever is greater. Our dealerships in California are required to comply with the CCPA, which became effective in January 2020.
GDPR, the organization can be fined up to 4% of annual global turnover or 20 million euros, whichever is greater. The CCPA allows the California Attorney General to bring actions against non-compliant businesses with fines of $2,500 per violation or, if intentional, up to $7,500 per violation and permits a private right of action for certain violations of laws.
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We showcase our products on menus that display pricing and other information, allowing customers to choose the products that suit their needs.
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We intend to execute our business strategy, underpinned by the following four key components: • Business growth through portfolio and operations optimization; • Leading customer experience; • Employer of choice; and • OEM Partner of choice.
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We intend to execute our business strategy by staying close to our core competencies and focusing on three key initiatives, each as further described below: • organizational growth; • teamwork and collaboration; and • aftersales excellence.
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Business Growth Through Portfolio and Operations Optimization At Group 1, growing and improving our operations is fundamental to future success, driven by the following key activities: • Mergers and Acquisitions • Dispositions • Operations optimization In 2021 to 2023, the retail automotive industry experienced multiple merger and acquisition transactions.
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Key to the success of these initiatives, is our determination to be great partners to those around us, including but not limited to our customers, employees, vendors, OEM partners, philanthropic partners and the communities in which we do business.
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This includes focusing on operational excellence at each dealership and other facilities, including, but not limited to, standardization of key common processes and taking advantage of shareable business resources. We believe our operations optimization efforts will provide a strategic advantage by structurally lowering our operating costs.
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We evaluate all brands and geographies to expand our portfolio, seeking to acquire dealerships in growth-positioned or economically stable markets, or that are economically accretive to our existing markets.
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Leading Customer Experience Our customers drive what we do each day, and we seek to provide them with an industry-leading customer experience, both physically in our stores and digitally. With our expansive portfolio of brands and service capabilities across significant geographical areas, we believe we can service the needs of each and every member of our customers’ families.
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The U.K. has adopted EV technology at a much faster pace than the U.S., providing us the opportunity to develop best-in-class practices for servicing EV customers through our U.K. dealerships. Alternatively, our dealerships in the U.S. were the first to adopt the use of AcceleRide® and likewise developed standard practices to enhance the customer experience with this technology.
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To drive the leading customer experience we endeavor to: • Adopt new technology • Drive process improvement • Improve the customer aftersales journey 5 As new and innovative tools become available, we seek to quickly adopt those that provide a mutual benefit to our customers and Group 1.
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With teamwork and collaboration, we are sharing these best-in-class standard practices across our U.S. and U.K. operations. In addition to benefiting from our shared dealership experiences, we are capitalizing on technology advances in robotic process automation and artificial intelligence to improve our marketing, call center and back-office efficiency.
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Our digital platform, AcceleRide®, allows customers to shop for and purchase and/or lease new and used vehicles, including a full selection of finance and insurance options; receive instant cash offers or trade-in of vehicles; and schedule service appointments at the customers’ convenience.
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This effort, in recent years, has primarily focused on our U.S. dealerships, from which we have gained valuable insight and knowledge. In late 2022, we launched our first use of robotics within the back-office functions of the U.K. This effort is expected to continue throughout 2023 as we leverage the already established processes developed in the U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny significant increase in existing tariffs on such goods and raw materials, or implementation of new tariffs, could adversely affect our profits on the vehicles we sell. 14 If we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired.
Biggest changeIf we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired. We are dependent on our relationships with manufacturers, which exercise a great degree of influence over our operations through the franchise agreements.
Acquisitions involve a number of special risks, including, among other things: • incurring significantly higher capital expenditures and operating expenses; • failing to integrate the operations and personnel of the acquired dealerships; • entering new markets with which we are not familiar; • incurring undiscovered liabilities at acquired dealerships, generally, in the case of stock acquisitions; • disrupting our ongoing business; • failing to retain key personnel of the acquired dealerships; • impairing relationships with employees, manufacturers and customers; and • incorrectly valuing acquired entities.
In addition, acquisitions involve a number of special risks, including, among other things: • incurring significantly higher capital expenditures and operating expenses; • failing to integrate the operations and personnel of the acquired dealerships; • entering new markets with which we are not familiar; • incurring undiscovered liabilities at acquired dealerships, generally, in the case of stock acquisitions; • disrupting our ongoing business; • failing to retain key personnel of the acquired dealerships; • impairing relationships with employees, manufacturers and customers; and • incorrectly valuing acquired entities.
Our ability to sell new vehicles is dependent on a vehicle manufacturer’s ability to produce and allocate to our dealerships an attractive, high quality and desirable product mix at the right time in order to satisfy customer demand. Manufacturers generally support their franchisees by providing direct financial assistance in various areas, including, among others, incentives, floorplan assistance and advertising assistance.
Our ability to sell new vehicles is dependent on a vehicle manufacturer’s ability to produce and allocate to our dealerships an attractive, high quality and desirable product mix at the right time in order to satisfy customer demand. 14 Manufacturers generally support their franchisees by providing direct financial assistance in various areas, including, among others, incentives, floorplan assistance and advertising assistance.
The growing use of social media by consumers increases the speed and extent that information and opinions can be shared, and negative posts or comments on social media about the Company or any of our dealerships could damage our reputation and brand names, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The use of social media by consumers increases the speed and extent that information and opinions can be shared, and negative posts or comments on social media about the Company or any of our dealerships could damage our reputation and brand names, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
During the Current Year, our manufacturers’ production continued at reduced levels as a result of global semiconductor and other parts shortages. Despite recent improvements in production by certain manufacturers driving an improvement in vehicles days’ supply, our new vehicle inventory continues to be impacted compared to historical levels.
During the Current Year, the majority of our manufacturers’ production continued at reduced levels as a result of global semiconductor and other parts shortages. Despite recent improvements in production by certain manufacturers driving an improvement in vehicles days’ supply, our new vehicle inventory continues to be impacted compared to historical levels.
Under an agency model, our franchised dealerships would receive a fee for facilitating the sale of a new vehicle to a customer but would no longer record the vehicle sales price as revenue, record vehicles in inventory or incur floorplan interest expense, as has been historical practice.
Under an agency model, our franchised dealerships receive a fee for facilitating the sale of a new vehicle to a customer but no longer record the vehicle sales price as revenue, record vehicles in inventory or incur floorplan interest expense, as has been historical practice.
Volatile fuel prices have affected and may continue to affect consumer preferences in connection with the purchase of our vehicles. Rising fuel prices result in consumers less likely to purchase larger, more expensive vehicles, such as sports utility vehicles or luxury automobiles, and more likely to purchase smaller, less expensive and more fuel efficient vehicles.
Volatile fuel prices have affected and may continue to affect consumer preferences in connection with the purchase of our vehicles. Rising fuel prices result in consumers being less likely to purchase larger, more expensive vehicles, such as sports utility vehicles or luxury automobiles, and more likely to purchase smaller, less expensive and more fuel-efficient vehicles.
Any failure or circumvention of our controls and procedures, or failure to comply with regulations related to controls and procedures, could have a material adverse effect on our business, results of operations and financial condition. Item 1B. Unresolved Staff Comments None.
Any failure or circumvention of our controls and procedures, or failure to comply with regulations related to controls and procedures, could have a material adverse effect on our business, results of operations and financial condition. Item 1B. Unresolved Staff Comments None. 21
Bribery Act and other anti-corruption compliance laws and issues; • inability to obtain or preserve franchise rights in the foreign countries in which we operate; and • fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility. 18 Legal, Regulatory and Compliance Risks Changes to laws and regulations could adversely impact our operations and financial condition.
Bribery Act and other anti-corruption compliance laws and issues; • inability to obtain or preserve franchise rights in the foreign countries in which we operate; and • fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility. 19 Legal, Regulatory and Compliance Risks Changes to laws and regulations could adversely impact our operations and financial condition.
Any such production constraints could further exacerbate an already ailing supply chain. The impact of these macroeconomic developments on our operations cannot be predicted with certainty. Rising inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles and services.
Any such production constraints could further exacerbate an already ailing supply chain. The impact of these macroeconomic developments on our operations cannot be predicted with certainty. Sustained inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles and services.
In addition, we may be required to spend additional time or money on integration that otherwise would be spent on the development and expansion of our business, including efforts to further expand our product portfolio. 16 Vehicle manufacturers may alter their distribution models.
In addition, we may be required to spend additional time or money on integration that otherwise would be spent on the development and expansion of our business, including efforts to further expand our product portfolio. 17 Vehicle manufacturers may alter their distribution models.
A disruption in our operations may adversely impact our business, results of operations, financial condition and cash flows. In addition to business interruption, the automotive retailing business is subject to substantial risk of property loss due to the significant concentration of property value at dealership locations.
A disruption in our operations can adversely impact our business, results of operations, financial condition and cash flows. In addition to business interruption, the automotive retailing business is subject to substantial risk of property loss due to the significant concentration of property value at dealership locations.
Other rules such as franchise laws and regulations, consumer protection laws and other extensive laws and regulations apply to new and used motor vehicle dealers. Additionally, in every jurisdiction in which we operate, we must obtain various permits and licenses in order to conduct our businesses.
Other rules such as franchise laws and regulations, consumer protection laws and other extensive laws and regulations apply to new and used motor vehicle dealers. Additionally, in every jurisdiction in which we operate, we must obtain various permits and licenses in order to conduct our business.
Business — Governmental Regulations for further discussion of environmental and regulations impacting our business. 19 Risks Related to Accounting Matters The impairment of our goodwill and/or indefinite-lived intangibles could have a material adverse effect on our results of operations.
Business — Governmental Regulations for further discussion of environmental and regulations impacting our business. 20 Risks Related to Accounting Matters The impairment of our goodwill and/or indefinite-lived intangibles could have a material adverse effect on our results of operations.
In Europe, rising energy costs as a result of supply disruptions and increased winter demand for heating could place additional strain on our suppliers’ ability to maintain current production levels of vehicles and vehicle parts. Across the EU, these energy constraints could result in nations or regions enacting emergency energy related policies, limiting energy availability for manufacturers.
In Europe, rising energy costs as a result of supply disruptions and increased winter demand for heating could place additional strain on our suppliers’ ability to maintain current production levels of vehicles and vehicle parts. Across the EU, these energy constraints could result in nations or region s enacting emergency energy related policies, limiting energy availability for manufacturers.
Furthermore, if current manufacturers or future manufacturers are not required to conduct their business in accordance with state franchise laws and thereby circumvent the current dealer-network to sell directly to the customer, our results of operations may be materially and adversely affected. Substantial competition in automotive sales and services could adversely impact our sales and our margins.
Furthermore, if current manufacturers or future manufacturers are not required to conduct their business in accordance with state franchise laws and thereby circumvent the current dealer-network to sell directly to the customer, our results of operations may be materially and adversely affected. 15 Substantial competition in automotive sales, F&I and services could adversely impact our sales and our margins.
The implementation of new SEC rules and regulations and accounting standards could require certain systems, internal process and controls and other changes that could increase our operating costs, and result in changes to our financial statements. U.S.
The implementation of new SEC rules and regulations and accounting standards could require certain systems, internal processes and controls and other changes that could increase our operating costs, and result in changes to our financial statements. U.S.
Some of our dealerships are concentrated in states and regions in the U.S. and U.K., in which actual or threatened natural disasters and severe weather events (such as hurricanes, earthquakes, snowstorms, flooding, tornados, and hail storms) have in the past, and may in the future, disrupt our dealership operations.
Some of our dealerships are concentrated in states and regions in the U.S. and U.K., in which actual or threatened natural disasters and severe weather events (such as hurricanes, earthquakes, snowstorms, flooding, tornados, and hailstorms) have in the past, and may in the future, disrupt our dealership operations.
The automotive retail industry is highly competitive. Within our markets we are subject to competition from franchised automotive dealerships and other businesses as it relates to new and used vehicles, parts and service, as well as acquisitions. The internet has become a significant part of the advertising and sales process in our industry.
The automotive retail industry is highly competitive. Within our markets we are subject to competition from franchised automotive dealerships and other businesses as it relates to new and used vehicles, F&I, and parts and service. The internet has become a significant part of the advertising and sales process in our industry.
This adversely impacted production of new vehicles, parts and other supplies, thereby reducing new vehicle inventories, increasing new vehicle prices and limiting the availability of replacement parts. Under these conditions, automotive dealer profits have increased sharply as new vehicle prices and margins have more than offset the effects of lower new vehicle volume.
This adversely impacted production of new vehicles, parts and other supplies in 2022 and much of 2023, thereby reducing new vehicle inventories, increasing new vehicle prices and limiting the availability of replacement parts. Under these conditions, automotive dealer profits have increased sharply as new vehicle prices and margins have more than offset the effects of lower new vehicle volume.
The agency model, as adopted by Mercedes Benz, will result in reduced revenues, as we will act as an agent of Mercedes Benz, receiving a commission for each sale and other expense fee support.
The agency model, as adopted by Mercedes Benz, resulted in reduced revenues, as we act as an agent of Mercedes Benz, receiving a commission for each sale and other expense fee support.
For example, in 2022, the FTC proposed new regulations for automotive dealers that would prohibit a wide range of current industry-accepted sales practices with regard to sales and advertising of our vehicles and products, require an extensive series of both oral and written disclosures to be made at the initial contact in regard to the sale price of vehicles, financial terms and voluntary protection products, mandate the posting of certain pricing and other information on dealer websites, and impose burdensome recordkeeping requirements.
For example, in December 2023, the FTC adopted new regulations for automotive dealers that would prohibit a wide range of current industry-accepted sales practices with regard to sales and advertising of our vehicles and products, require an extensive series of both oral and written disclosures to be made at the initial contact in regard to the sale price of vehicles, financial terms and voluntary protection products, mandate the posting of certain pricing and other information on dealer websites, and impose burdensome recordkeeping requirements (the “CARS Rule”).
Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, increase the risk of an impairment charge, which could have a material adverse impact on our results of operations. No goodwill impairments were recorded during the years ended December 31, 2022, 2021 and 2020.
Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, increase the risk of an impairment charge, which could have a material adverse impact on ou r results of operations. No goodwill impairments were recorded during the years ended December 31, 2023, 2022 and 2021.
The integration process required us to expand the scope of our operations and financial and other systems. Our management devotes a substantial amount of time and attention to the process of integrating the operations of acquired dealerships into our business.
The integration process for acquisitions requires us to expand the scope of our operations and financial and other systems. Our management devotes a substantial amount of time and attention to the process of integrating the operations of acquired dealerships into our business.
Our new vehicle days’ supply of inventory was approximately 24 days as of the Current Year, as compared to 12 days and 53 days for the years ended December 31, 2021 and 2020, respectively. It is impossible to predict with certainty the duration of the production issues or when normalized production will resume at these manufacturers.
Our new vehicle days’ supply of inventory was approximately 37 days as of December 31, 2023, as compared to 24 days and 12 days for the years ended December 31, 2022 and 2021, respectively. It is impossible to predict with certainty the duration of the production issues or when normalized production will resume at these manufacturers.
Failure to adhere to these new policies could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.
While litigation has stayed the implementation of the CARS Rule, if implemented our failure to adhere to these new policies could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.
We do not expect a material negative or positive impact to the U.K. region gross margin and consolidated results of operations from a change to the Mercedes Benz agency model.
We did not experience a material negative or positive impact to the U.K. region gross margin and consolidated results of operations as a result of the change to the Mercedes Benz agency model.
In particular, if sub-prime finance companies apply higher credit standards or if there is a decline in the overall availability of credit in the sub-prime lending market, the ability of selected consumers to purchase vehicles could be limited, which could have a material adverse effect on our business and results of operations. 12 In addition, local economic, competitive and other conditions affect the performance of our dealerships.
In particular, if sub-prime finance companies apply further higher credit standards or if there is a further decline in the overall availability of credit in the sub-prime lending market, the ability of selected consumers to purchase vehicles could be even more limited, which could have a material adverse effect on our business and results of operations.
Our inability to acquire and successfully integrate new dealerships into our business could adversely affect the growth of our revenues and earnings. Growth in our revenues and earnings partially depends on our ability to acquire new dealerships and successfully integrate those dealerships into our existing operations.
If we are unable to acquire and successfully integrate new dealerships into our business, the growth of our revenues and earnings could be adversely affected. Growth in our revenues and earnings partially depends on our ability to acquire new dealerships and successfully integrate those dealerships into our existing operations.
In addition, security breaches and other security incidents could expose us to a risk of loss or exposure of this information, which could result in potential liability, investigations, regulatory fines, penalties for violation of applicable laws or regulations, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, administrative, and civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition. 17 Further, advances in computer capabilities, new discoveries in the field of cryptography, inadequate facility security or other developments may result in a compromise or breach of the technology we use to safeguard confidential, personal, or otherwise protected information.
In addition, security breaches and other security incidents could expose us to a risk of loss or exposure of this information, which could result in potential liability, investigations, regulatory fines, penalties for violation of applicable laws or regulations, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, administrative, and civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition.
Natural disasters and severe weather events have in the past and may in the future impair the value of our dealership property. Although we have, subject to certain limitations and exclusions, substantial insurance, including business interruption insurance, we may be exposed to uninsured losses that could have a material adverse effect on our business, results of operations and financial condition.
Although we have, subject to certain limitations and exclusions, substantial insurance, including business interruption insurance, we may be exposed to uninsured losses that could have a material adverse effect on our business, results of operations and financial condition.
Tightening of the credit markets, increases in interest rates and credit conditions may decrease the availability or increase the costs of automotive loans and leases and adversely impact our new and used vehicle sales and margins.
A significant portion of our vehicles purchased by customers are financed. Tightening of the credit markets, increases in interest rates and credit conditions have and may continue to decrease the availability or increase the costs of automotive loans and leases and adversely impact our new and used vehicle sales and margins.
Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition. We rely on the positive cash flow we generate from our operations and our access to the credit and capital markets to fund our operations, growth strategy, and return of cash to our shareholders through share repurchases and dividends.
We rely on the positive cash flow we generate from our operations and our access to the credit and capital markets to fund our operations, growth strategy, and return of cash to our shareholders through share repurchases and dividends.
Conversely, lower fuel prices could have the opposite effect. Sudden changes in customer preferences make maintenance of an optimal mix of large and small vehicle inventory a challenge.
Conversely, lower fuel prices could have the opposite effect. Sudden changes in customer preferences make maintenance of an optimal mix of large and small vehicle inventory a challenge. Further increases or sharp declines in fuel prices could have a material adverse effect on our business and results of operations.
If consumer demand increases for fuel efficient vehicles or EVs and our manufacturers are not able to adapt and produce vehicles that meet the customer demands or we are unable to align with the manufacturers of these vehicles, such events could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations.
If consumer demand increases for fuel efficient vehicles or EVs and our manufacturers are not able to adapt and produce vehicles that meet the customer demands or we are unable to align with the manufacturers of these vehicles, such events could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations. 16 Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.
Global responses to climate change and resulting changes in consumer demand towards fuel efficient vehicles and EVs, and shifts by manufacturers to meet demand, could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations.
Regulatory requirements to reduce emissions in response to climate change, as well as changes in consumer demand towards fuel-efficient vehicles, and shifts in product offerings by manufacturers to meet such demand, could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations.
Despite ongoing efforts to improve our ability to protect data from compromise, we may not be able to protect all of our data across our diverse systems. Our efforts to improve security and protect data may result in increased capital and operating costs.
Despite ongoing efforts to improve our ability to protect data from compromise, we may not be able to protect all of our data across our diverse systems and third-party vendors.
Continued interest rate increases could have a material adverse impact on our interest expense and ability to obtain financing through the debt markets, as well as consumers’ ability to obtain financing for the purchase of new and used vehicles. Refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk for additional analysis regarding our interest rate sensitivity.
Continued interest rate increases or the maintenance of interest rates at current levels could have a material adverse impact on our interest expense and ability to obtain financing through the debt markets, as well as consumers’ ability to obtain financing for the purchase of new and used vehicles. Refer to Item 7A.
In addition to the announcement by Mercedes Benz in the U.K., certain of our other vehicle manufacturers serving the U.K. and U.S. markets recently announced plans to explore an agency model for selling new vehicles.
In addition to the transition by Mercedes Benz in the U.K., certain of our other vehicle manufacturers serving the U.K. and U.S. markets recently announced plans to explore an agency model for selling new vehicles. These announcements include, among others, a transition to agency model in the U.K. for Mini and Jaguar Land Rover in 2025 and BMW in 2026.
Increased competition can adversely impact our sales volumes and margins as well as our ability to acquire dealerships. Please see Item 1. Business — Competition for further discussion of competition in our industry.
The location of new dealerships near our existing dealerships could have a material and adverse effect on our operations and reduce the profitability of our existing dealerships. Increased competition can adversely impact our sales volumes and margins as well as our ability to acquire dealerships. Please see Item 1. Business — Competition for further discussion of competition in our industry.
Representatives of the U.K. government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2030 and a ban on the sale of gasoline hybrid engines in new cars and new vans as early as 2035.
Representatives of the U.K. government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2035. These and similar proposals may have a significant impact on the future mix of vehicles provided by our manufacturers.
We can make no assurances that our ability to obtain additional financing through the debt markets will not be adversely affected by economic conditions or that we will be able to maintain or improve our current credit ratings. 13 Our floorplan notes payable, mortgages and other debt are benchmarked to SOFR, which can be highly volatile as a result of changing economic conditions.
We can make no assurances that our ability to obtain additional financing through the debt markets will not be adversely affected by economic conditions or that we will be able to maintain or improve our current credit ratings.
We cannot guarantee that we will be able to identify and acquire dealerships in the future. In addition, we cannot guarantee that any acquisitions will be successful or on terms and conditions consistent with past acquisitions. Restrictions by our manufacturers, as well as covenants contained in our debt instruments, may directly or indirectly limit our ability to acquire additional dealerships.
We cannot guarantee that we will be able to identify and acquire dealerships in the future. In addition, we cannot guarantee that any acquisitions will be successful or on terms and conditions consistent with past acquisitions.
In the event one or more of our manufacturers sought to prohibit future acquisitions or imposed requirements to dispose of one or more of our dealerships, our acquisition and growth strategy could be adversely affected. Moreover, our franchise agreements do not give us the exclusive right to sell a manufacturer’s product within a given geographic area.
In the event one or more of our manufacturers sought to prohibit future acquisitions or imposed requirements to dispose of one or more of our dealerships, our acquisition and growth strategy could be adversely affected.
Item 1A. Risk Factors The following risks have had or in the future could have a material adverse effect on our business and results of operations. Market and Industry Risks Availability and demand for and pricing of our products and services may be adversely impacted by economic conditions and other factors.
Item 1A. Risk Factors The following risks have had or in the future could have a material adverse effect on our business and results of operations.
Federal Reserve, along with other central banks, including in the U.K., continued to increase interest rates throughout 2022 and have indicated that such increases may continue into 2023, which could lower demand for new and used vehicles in future periods. Additionally, U.S.
Federal Reserve, along with other central banks, including in the U.K., maintained interest rates at heightened levels throughout 2023, which could lower demand for new and used vehicles in future periods.
Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage. The operation of automobile dealerships is subject to a broad variety of risks.
Business — Governmental Regulations for information on our risks related to compliance with such laws and regulations. Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage.
The OEMs have been and could continue to be impacted by the COVID-19 pandemic’s impact on the economy, factory production, parts shortages, including semiconductor chips, and other disruptions.
The OEMs have been and could continue to be impacted by disruptions to the economy, lower than anticipated EV adoption, delays in increasing factory production, labor negotiations, parts shortages, including semiconductor chips, and other disruptions.
In addition, we are subject to numerous laws and regulations designed to protect information of clients, customers, employees and other third parties that we collect and maintain. See Item 1. Business — Governmental Regulations for information on our risks related to compliance with such laws and regulations.
Our efforts to improve security and protect data result in increased capital and operating costs. 18 In addition, we are subject to numerous laws and regulations designed to protect the information of clients, customers, employees and other third parties that we collect and maintain. See Item 1.
From time to time, we have not met all of the manufacturers’ requirements to make acquisitions and have received requests to dispose of certain of our dealerships.
A manufacturer may also limit the number of its dealerships that we may own overall or in a particular geographic area. From time to time, we have not met all of the manufacturers’ requirements to make acquisitions and have received requests from manufacturers to dispose of certain of our dealerships.
Further increases or sharp declines in fuel prices could have a material adverse effect on our business and results of operations. 15 Changes in fuel prices, changes in customer preferences, government support, improvements in EVs and more EV options have increased the customer demand for more fuel efficient vehicles and EVs.
Changes in fuel prices, changes in customer preferences, government support, improvements in EVs and more EV options have increased the customer demand for more fuel-efficient vehicles and EVs.
If our operating results are below the estimates or expectations of public market analysts and expectations of our investors, our stock price could decline. We are subject to risks associated with our dependence on manufacturer business relationships and agreements. The success of our dealerships is dependent on vehicle manufacturers whom we rely exclusively on for our new vehicle inventory.
If our operating results are below the estimates or expectations of public market analysts and the expectations of our investors, our stock price could decline, adversely affecting, among other things, our access to capital and investor confidence in management and those charged with governance. We are subject to risks associated with our dependence on manufacturer business relationships and agreements.
Vehicle technology advancements are occurring at an accelerating pace. These include driver assist functionality, autonomous vehicle development and rideshare and vehicle co-ownership business models.
Vehicle technology advancements and changes in consumer vehicle ownership preferences could adversely affect our new and used vehicle sales volumes, parts and service revenues and results of operations. Vehicle technology advancements are occurring at an accelerating pace. These include driver assist functionality, autonomous vehicle development and rideshare and vehicle co-ownership business models.
During the Current Year, the global economy experienced rising inflation and increased volatility in gasoline and energy prices. In response to inflationary pressures and macroeconomic conditions, the U.S.
Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern about manufacturer viability. During the Current Year, the global economy experienced elevated inflation and increased volatility in gasoline and energy prices. In response to inflationary pressures and macroeconomic conditions, the U.S.
In December 2021, Mercedes Benz announced the transition to an agency model for distribution of vehicles in the U.K. The transition began on January 1, 2023.
On January 1, 2023, Mercedes Benz transitioned to an agency model for distribution of vehicles in the U.K. after collaborating with various automotive retailers and conducting pilot programs.
These, and similar proposals could impact demand for certain vehicles, even if not finalized by creating consumer uncertainty. With a potential increase in demand by consumers for EVs, and government support for such actions, manufacturers have also announced increased production focus on the manufacture of fuel efficient vehicles and EVs.
Any future impact of these regulations on our operations cannot be predicted with certainty. With a potential increase in demand by consumers for EVs, and government support for such actions, certain manufacturers have also announced plans to increase production of fuel-efficient vehicles and EVs.
Additionally, many U.S. manufacturers of vehicles, parts and supplies are dependent on imported products and raw materials in their production.
Additionally, many U.S. manufacturers of vehicles, parts and supplies are dependent on imported products and raw materials in their production. Any significant increase in existing tariffs on such goods and raw materials, or implementation of new tariffs, could adversely affect our profits on the vehicles we sell.
Increased competition for acquisitions may develop, which could result in fewer acquisition opportunities available to us and/or higher acquisition prices, and some of our competitors may have greater financial resources than us.
Restrictions imposed by our manufacturers, as well as covenants contained in our debt instruments, may directly or indirectly limit our ability to acquire additional dealerships. As competition for acquisitions increases that may result in fewer acquisition opportunities available to us and/or higher acquisition prices, and some of our competitors may have greater financial resources than us.
During the year ended December 31, 2022, we recorded $1.3 million of impairment of intangible franchise rights. During the year ended 2021, no impairments of intangible franchise rights were recorded. During the year ended December 31, 2020, we recorded $20.7 million of impairment of intangible franchise rights.
During the years ended December 31, 2023 and 2022, we recognized $25.1 million and $1.3 million, respectively, of intangible franchise rights impairment. We did not recognize any intangible franchise rights impairment during the year ended December 31, 2021.
Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern about manufacturer viability. Increased demand for personal electronics, coupled with the impact of the COVID-19 pandemic on manufacturers, created a shortfall of semiconductor chips.
Quantitative and Qualitative Disclosures About Market Risk for additional analysis regarding our interest rate sensitivity. Increased demand for personal electronics, coupled with the impact of the COVID-19 pandemic on manufacturers, created a shortfall of semiconductor chips.
At such time that semi-conductor chip and other parts shortages are resolved, vehicle production may increase, and new vehicle prices could decrease thereby resulting in reduced profitability at our dealerships. A significant portion of our vehicles purchased by customers are financed.
While semi-conductor chip and other parts shortages were substantially resolved by the end of 2023 and vehicle production has increased, inventory levels remain below pre-COVID-19 pandemic levels for certain OEMs. If vehicle inventory is restored to pre-COVID-19 pandemic levels, new vehicle prices could decrease thereby resulting in reduced profitability at our dealerships.
Our results of operations depend substantially on general economic conditions and spending habits in those regions of the U.S. and U.K. where we maintain our operations. Recent economic and financial developments, including rising inflation, high energy prices, increasing interest rates and the potential recessionary environment could adversely affect our operations and financial condition.
Our results of operations depend substantially on general economic conditions and spending habits in those regions of the U.S. and U.K. where we maintain our operations. 13 EV inventory has been building in 2023 for certain brands, outpacing the buildup of non-EV inventory, as EV sales volume has lagged OEM deliveries in recent quarters.
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GDP shrank for two consecutive quarters in the first half of 2022 and increased for the third and fourth quarters of 2022, indicating there is uncertainty as to whether the U.S. economy will experience a recession in the near-term.
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Market and Industry Risks Availability and demand for and pricing of our products and services may be adversely impacted by economic conditions, financial developments including rising inflation, high energy prices, increasing interest rates, a potential recessionary environment, and other factors.
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The Russian invasion of Ukraine and the retaliatory measures imposed by the U.S., U.K., EU and other countries and the responses of Russia to such measures have caused significant disruptions to domestic and foreign economies.
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In addition, local economic, competitive and other conditions affect the performance of our dealerships.
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The February 2022 military invasion of Ukraine by Russia (the “Russia and Ukraine Conflict”) had an immediate impact on the global economy resulting in higher prices for oil and other commodities. The U.S., U.K., EU and other countries responded to Russia’s invasion of Ukraine by imposing various economic sanctions and bans. Russia has responded with its own retaliatory measures.
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While EV sales continued to increase in 2023, the growth trend has not continued at the pace experienced in the two years prior. Challenges with EV technologies continue to make headlines within the U.S. media market, raising concerns around consumer demand and interest in the products.
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These measures have impacted the availability and price of certain raw materials throughout the global economy. The invasion and retaliatory measures have also disrupted economic markets.
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Should EV demand decline at the same time as more OEMs transition to EV models, this could have a material adverse effect on our business and results of operations. Recent negative developments affecting the financial services industry, such as insolvency, defaults, or non-performance by financial institutions, could adversely affect our access to capital, liquidity, financial condition and results of operations.
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The global impact of these measures is continually evolving and cannot be predicted with certainty and there is no assurance that Russia’s invasion of Ukraine and responses thereto will not further disrupt the global economy and supply chain.
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During the Current Year, closures of Silicon Valley Bank, Signature Bank and First Republic Bank and their placement into receivership with the FDIC created bank-specific and broader financial institution liquidity risk concerns. The FDIC, the U.S. Federal Reserve and the U.S.
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In particular, the Russia and Ukraine Conflict has further impacted the ability of certain OEMs to produce new vehicles and new vehicle parts, which may result in continued disruptions to the supply of new and used vehicles. Further, there is no assurance that when the Russia and Ukraine Conflict ends, countries will not continue to impose sanctions and bans.
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Department of the Treasury jointly announced that depositors at Silicon Valley Bank, Signature Bank and First Republic Bank would have access to their funds, even those in excess of the standard FDIC insurance limits.
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While these events have not materially interrupted our operations, these or future developments resulting from the Russia and Ukraine Conflict, such as a cyberattack on the U.S. or our suppliers, could disrupt our operations, increase the cost or decrease the availability of certain materials necessary to produce vehicles we sell or obtain parts to complete maintenance and collision repair services, or make it difficult to access debt and equity capital on attractive terms, if at all, and impact our ability to fund business activities and/or limit future acquisition activity.
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Although we are not a party to any transactions with Silicon Valley Bank, Signature Bank, First Republic Bank or any other financial institution currently in receivership, we maintain cash and floorplan offset balances at banks and third-party financial institutions in excess of FDIC insurance limits.
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We are dependent on our relationships with manufacturers, which exercise a great degree of influence over our operations through the franchise agreements.
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If any of our lenders or counterparties to any of our financial instruments were to be placed into receivership or become insolvent, our ability to access our capital and liquidity and process transactions could be impaired and could have a material adverse effect on our business, operations and financial condition.
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A manufacturer may also limit the number of its dealerships that we may own or the number that we may own in a particular geographic area. Delays in obtaining, or failing to obtain, manufacturer approvals and franchise agreements for dealership acquisitions could adversely affect our acquisition program.
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In addition, if any of our suppliers, customers or other parties with whom we conduct business are unable to access funds or lending arrangements with relevant financial institutions, such parties’ ability to pay their obligations to us or to enter into new arrangements with us could be adversely affected.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, we had 204 dealerships as shown below by region and by whether the associated real estate is leased or owned: Dealerships Region Owned Leased United States 109 40 United Kingdom 25 30 Total 134 70 Item 3. Legal Proceedings For discussion of our legal proceedings, refer to Note 17.
Biggest changeAs of December 31, 2023, we had 199 dealerships as shown below by region and by whether the associated real estate is leased or owned: Dealerships Region Owned Leased United States 108 36 United Kingdom 26 29 Total 134 65 Item 3. Legal Proceedings For discussion of our legal proceedings, refer to Note 17.
Commitments and Contingencies within our Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not Applicable. 20 PART II
Commitments and Contingencies within our Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not Applicable. 24 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 20 PART II 21 Item 5. Market for Registrant Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation s 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39
Biggest changeItem 4. Mine Safety Disclosures 24 PART II 25 Item 5. Market for Registrant Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation s 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn November 16, 2022, our Board of Directors increased the Company’s share repurchase authorization by $161.0 million to $200.0 million. Our share repurchase authorization does not have an expiration date. (2) Shares repurchased under the Rule 10b5-1 trading plan that was effective from October 3, 2022 to October 19, 2022.
Biggest changeOn August 2, 2023, our Board of Directors increased the Company’s share repurchase authorization to $250.0 million. Our share repurchase authorization does not have an expiration date.
Item 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the NYSE under the symbol “GPI.” There were 36 holders of record of our common stock as of February 10, 2023.
Item 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the NYSE under the symbol “GPI.” There were 34 holders of record of our common stock as of February 5, 2024.
As of December 31, 2022, we had $163.4 million available under our current stock repurchase authorization. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Form 10-K for additional information on share repurchases and authorization.
As of December 31, 2023, we had $143.3 million available under our current stock repurchase authorization. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Form 10-K for additional information on share repurchases and authorization.
Issuer Purchases of Equity Securities The following table sets forth information with respect to shares of common stock repurchased by us during the three months ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1, 2022 — October 31, 2022 (2) 638,072 $ 156.70 638,072 $ 64.1 November 1, 2022 — November 30, 2022 188,327 $ 180.75 188,327 $ 191.1 December 1, 2022 — December 31, 2022 146,966 $ 188.42 146,966 $ 163.4 Total 973,365 973,365 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Issuer Purchases of Equity Securities The following table sets forth information with respect to shares of common stock repurchased by us during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1, 2023 — October 31, 2023 87,043 $ 249.12 87,043 $ 163.9 November 1, 2023 — November 30, 2023 57,262 $ 276.35 57,262 $ 148.0 December 1, 2023 — December 31, 2023 16,663 $ 282.42 16,663 $ 143.3 Total 160,968 160,968 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
The graph assumes that the value of the investment in our common stock, the S&P 500 Index and the peer group was $100 on the last trading day of December 2017, and that all dividends were reinvested. 21 Base Period Indexed Returns for the Years Ended Company /Index 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Group 1 Automotive, Inc. $ 100.00 $ 75.43 $ 145.13 $ 191.45 $ 287.23 $ 267.53 S&P 500 Index — Total Return $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.88 Peer Group $ 100.00 $ 78.06 $ 119.48 $ 175.23 $ 245.15 $ 226.38 22
The graph assumes that the value of the investment in our common stock, the S&P 500 Index and the peer group was $100 on the last trading day of December 2018, and that all dividends were reinvested. 25 Base Period Indexed Returns for the Years Ended Company /Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Group 1 Automotive, Inc. $ 100.00 $ 192.39 $ 253.80 $ 380.78 $ 354.66 $ 603.54 S&P 500 Index — Total Return $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Peer Group $ 100.00 $ 153.07 $ 224.48 $ 314.05 $ 290.01 $ 411.17 26
Removed
During December 2022, we adopted a Rule 10b5-1 trading plan that was effective from January 3, 2023 to January 23, 2023. Under the plan, we repurchased an additional 76,294 shares subsequent to December 31 2022, at an average price of $179.42 per share, for a total cost of $13.7 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReported Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 7,452.5 $ 6,504.8 $ 947.8 14.6 % $ (146.4) 16.8 % Used vehicle retail sales 5,673.3 4,438.8 1,234.5 27.8 % (126.8) 30.7 % Used vehicle wholesale sales 364.6 365.7 (1.2) (0.3) % (13.3) 3.3 % Total used 6,037.9 4,804.6 1,233.3 25.7 % (140.2) 28.6 % Parts and service sales 2,009.5 1,591.2 418.4 26.3 % (28.9) 28.1 % F&I, net 722.2 581.4 140.8 24.2 % (7.4) 25.5 % Total revenues $ 16,222.1 $ 13,481.9 $ 2,740.2 20.3 % $ (322.8) 22.7 % Gross profit: New vehicle retail sales $ 825.6 $ 610.8 $ 214.8 35.2 % $ (13.3) 37.3 % Used vehicle retail sales 313.8 354.2 (40.5) (11.4) % (6.9) (9.5) % Used vehicle wholesale sales — 24.9 (24.9) (100.0) % 0.3 (101.2) % Total used 313.8 379.1 (65.3) (17.2) % (6.6) (15.5) % Parts and service sales 1,103.7 869.4 234.3 27.0 % (16.6) 28.9 % F&I, net 722.2 581.4 140.8 24.2 % (7.4) 25.5 % Total gross profit $ 2,965.2 $ 2,440.7 $ 524.5 21.5 % $ (44.2) 23.3 % Gross margin: New vehicle retail sales 11.1 % 9.4 % 1.7 % Used vehicle retail sales 5.5 % 8.0 % (2.4) % Used vehicle wholesale sales — % 6.8 % (6.8) % Total used 5.2 % 7.9 % (2.7) % Parts and service sales 54.9 % 54.6 % 0.3 % Total gross margin 18.3 % 18.1 % 0.2 % Units sold: Retail new vehicles sold 154,714 146,072 8,642 5.9 % Retail used vehicles sold 184,700 161,857 22,843 14.1 % Wholesale used vehicles sold 37,072 39,486 (2,414) (6.1) % Total used 221,772 201,343 20,429 10.1 % Average sales price per unit sold: New vehicle retail $ 48,170 $ 44,531 $ 3,639 8.2 % $ (946) 10.3 % Used vehicle retail $ 30,716 $ 27,424 $ 3,292 12.0 % $ (687) 14.5 % Gross profit per unit sold: New vehicle retail sales $ 5,336 $ 4,181 $ 1,155 27.6 % $ (86) 29.7 % Used vehicle retail sales $ 1,699 $ 2,189 $ (490) (22.4) % $ (38) (20.7) % Used vehicle wholesale sales $ — $ 630 $ (630) (100.0) % $ 8 (101.3) % Total used $ 1,415 $ 1,883 $ (468) (24.9) % $ (30) (23.3) % F&I PRU $ 2,128 $ 1,888 $ 240 12.7 % $ (22) 13.8 % Other: SG&A expenses $ 1,783.3 $ 1,477.2 $ 306.2 20.7 % $ (30.7) 22.8 % SG&A as % gross profit 60.1 % 60.5 % (0.4) % Floorplan expense: Floorplan interest expense $ 27.3 $ 27.6 $ (0.4) (1.3) % $ (0.7) 1.2 % Less: floorplan assistance (1) 56.0 54.2 1.8 3.3 % — 3.3 % Net floorplan expense $ (28.7) $ (26.5) $ (2.1) $ (0.7) (1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Consolidated Statements of Operations. 25 Same Store Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 6,183.2 $ 6,368.8 $ (185.6) (2.9) % $ (140.7) (0.7) % Used vehicle retail sales 4,866.1 4,368.0 498.1 11.4 % (120.8) 14.2 % Used vehicle wholesale sales 309.4 361.2 (51.8) (14.3) % (12.8) (10.8) % Total used 5,175.5 4,729.1 446.4 9.4 % (133.6) 12.3 % Parts and service sales 1,732.7 1,554.3 178.4 11.5 % (26.5) 13.2 % F&I, net 613.5 569.1 44.4 7.8 % (7.1) 9.1 % Total revenues $ 13,705.0 $ 13,221.4 $ 483.6 3.7 % $ (308.0) 6.0 % Gross profit: New vehicle retail sales $ 669.6 $ 596.0 $ 73.6 12.3 % $ (12.7) 14.5 % Used vehicle retail sales 265.9 349.3 (83.4) (23.9) % (6.5) (22.0) % Used vehicle wholesale sales (0.6) 24.6 (25.2) (102.4) % 0.3 (103.6) % Total used 265.3 373.9 (108.6) (29.1) % (6.3) (27.4) % Parts and service sales 934.7 848.4 86.3 10.2 % (15.5) 12.0 % F&I, net 613.5 569.1 44.4 7.8 % (7.1) 9.1 % Total gross profit $ 2,483.0 $ 2,387.4 $ 95.7 4.0 % $ (41.8) 5.8 % Gross margin: New vehicle retail sales 10.8 % 9.4 % 1.5 % Used vehicle retail sales 5.5 % 8.0 % (2.5) % Used vehicle wholesale sales (0.2) % 6.8 % (7.0) % Total used 5.1 % 7.9 % (2.8) % Parts and service sales 53.9 % 54.6 % (0.6) % Total gross margin 18.1 % 18.1 % 0.1 % Units sold: Retail new vehicles sold 128,684 143,009 (14,325) (10.0) % Retail used vehicles sold 158,848 159,172 (324) (0.2) % Wholesale used vehicles sold 30,655 38,818 (8,163) (21.0) % Total used 189,503 197,990 (8,487) (4.3) % Average sales price per unit sold: New vehicle retail $ 48,050 $ 44,534 $ 3,516 7.9 % $ (1,094) 10.3 % Used vehicle retail $ 30,634 $ 27,442 $ 3,192 11.6 % $ (761) 14.4 % Gross profit per unit sold: New vehicle retail sales $ 5,203 $ 4,167 $ 1,036 24.9 % $ (99) 27.2 % Used vehicle retail sales $ 1,674 $ 2,195 $ (521) (23.7) % $ (41) (21.9) % Used vehicle wholesale sales $ (20) $ 634 $ (653) (103.1) % $ 9 (104.5) % Total used $ 1,400 $ 1,889 $ (489) (25.9) % $ (33) (24.1) % F&I PRU $ 2,134 $ 1,883 $ 250 13.3 % $ (25) 14.6 % Other: SG&A expenses $ 1,531.4 $ 1,442.8 $ 88.6 6.1 % $ (29.2) 8.2 % SG&A as % gross profit 61.7 % 60.4 % 1.2 % 26 Reported Operating Data — U.S.
Biggest changeReported Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2023 2022 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 8,774.6 $ 7,452.5 $ 1,322.0 17.7 % $ 13.9 17.6 % Used vehicle retail sales 5,693.5 5,673.3 20.2 0.4 % 3.7 0.3 % Used vehicle wholesale sales 441.4 364.6 76.9 21.1 % 0.1 21.1 % Total used 6,135.0 6,037.9 97.1 1.6 % 3.8 1.5 % Parts and service sales 2,222.3 2,009.5 212.7 10.6 % 2.5 10.5 % F&I, net 741.9 722.2 19.7 2.7 % 0.4 2.7 % Total revenues $ 17,873.7 $ 16,222.1 $ 1,651.6 10.2 % $ 20.4 10.1 % Gross profit: New vehicle retail sales $ 767.0 $ 825.6 $ (58.6) (7.1) % $ 1.5 (7.3) % Used vehicle retail sales 300.9 313.8 (12.8) (4.1) % 0.1 (4.1) % Used vehicle wholesale sales (3.8) — (3.8) NM — NM Total used 297.2 313.8 (16.6) (5.3) % — (5.3) % Parts and service sales 1,214.2 1,103.7 110.5 10.0 % 1.3 9.9 % F&I, net 741.9 722.2 19.7 2.7 % 0.4 2.7 % Total gross profit $ 3,020.3 $ 2,965.2 $ 55.1 1.9 % $ 3.1 1.8 % Gross margin: New vehicle retail sales 8.7 % 11.1 % (2.3) % Used vehicle retail sales 5.3 % 5.5 % (0.2) % Used vehicle wholesale sales (0.9) % — % (0.9) % Total used 4.8 % 5.2 % (0.4) % Parts and service sales 54.6 % 54.9 % (0.3) % Total gross margin 16.9 % 18.3 % (1.4) % Units sold: Retail new vehicles sold 175,566 154,714 20,852 13.5 % Retail used vehicles sold 187,656 184,700 2,956 1.6 % Wholesale used vehicles sold 43,763 37,072 6,691 18.0 % Total used 231,419 221,772 9,647 4.3 % Average sales price per unit sold: New vehicle retail $ 50,325 $ 48,170 $ 2,156 4.5 % $ 426 3.6 % Used vehicle retail $ 30,340 $ 30,716 $ (376) (1.2) % $ 20 (1.3) % Gross profit per unit sold: New vehicle retail sales $ 4,369 $ 5,336 $ (967) (18.1) % $ 9 (18.3) % Used vehicle retail sales $ 1,604 $ 1,699 $ (95) (5.6) % $ — (5.6) % Used vehicle wholesale sales $ (86) $ — $ (86) NM $ (1) NM Total used $ 1,284 $ 1,415 $ (131) (9.2) % $ — (9.2) % F&I PRU $ 2,043 $ 2,128 $ (85) (4.0) % $ 1 (4.1) % Other: SG&A expenses $ 1,926.8 $ 1,783.3 $ 143.4 8.0 % $ 2.7 7.9 % SG&A as % gross profit 63.8 % 60.1 % 3.7 % Floorplan expense: Floorplan interest expense $ 64.1 $ 27.3 $ 36.8 134.9 % $ 0.1 134.5 % Less: floorplan assistance (1) 71.2 56.0 15.2 27.2 % — 27.2 % Net floorplan expense $ (7.1) $ (28.7) $ 21.6 $ 0.1 (1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Consolidated Statements of Operations.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions. Results of Operations The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions. 28 Results of Operations The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership.
Our management also uses constant currency and adjusted net cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance.
Our management also uses constant currency and adjusted cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance.
Parts and service same store revenues outperformed the Prior Year, primarily driven by increases across all business lines, reflecting increased business activity and increased same store technician headcount through our technician recruiting and retention efforts providing greater capacity to meet increased demand.
Parts and service same store revenues outperformed the Prior Year, driven by increases across all parts and service business lines, reflecting increased business activity and increased same store technician headcount through our technician recruiting and retention efforts, providing greater capacity to meet increased demand.
Floorplan Notes Payable in our Notes to Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings.
Floorplan Notes Payable in our Notes to the Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings.
Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements. 23 Critical Accounting Policies and Accounting Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions.
Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements. Critical Accounting Policies and Accounting Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions.
Covenants Our Revolving Credit Facility, indentures governing our senior notes and certain mortgage term loans, contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and to merge or consolidate with other entities.
Covenants Our Revolving Credit Facility, indentures governing our 4.00% Senior Notes and certain mortgage term loans contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and to merge or consolidate with other entities.
Management's Discussion and Analysis of Financial Condition and Results of Operations to this Form 10-K, we believe we have sufficient liquidity and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants. 37 Refer to Note 13. Floorplan Notes Payable and Note 14.
Management’s Discussion and Analysis of Financial Condition and Results of Operations to this Form 10-K, we believe we have sufficient liquidity and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants. 42 Refer to Note 13. Floorplan Notes Payable and Note 14.
Floorplan Notes Payable within our Notes to Consolidated Financial Statements for additional discussion of our Revolving Credit Facility. 35 However, we believe that all floorplan financing of inventory purchases in the normal course of business should correspond with the related inventory activity and be classified as an operating activity.
Floorplan Notes Payable within our Notes to the Consolidated Financial Statements for additional discussion of our Revolving Credit Facility. 40 However, we believe that all floorplan financing of inventory purchases in the normal course of business should correspond with the related inventory activity and be classified as an operating activity.
Debt in our Notes to Consolidated Financial Statements for further discussion of our credit facilities, debt instruments and other financing arrangements existing as of December 31, 2022. Stock Repurchases and Dividends From time to time, our Board of Directors authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Debt in our Notes to Consolidated Financial Statements for further discussion of our credit facilities, debt instruments and other financing arrangements existing as of December 31, 2023. Stock Repurchases and Dividends From time to time, our Board of Directors authorizes the repurchase of shares of our common stock up to a certain monetary limit.
The quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units. Refer to Note 12. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of goodwill, including management’s use of estimates and assumptions.
T he quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units. Refer to Note 12. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of goodwill, including management’s use of estimates and assumptions.
Region — Year Ended December 31, 2022 compared to 2021 The following discussion of our U.S. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.
Region — Year Ended December 31, 2023 compared to 2022 The following discussion of our U.S. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.
Region — Year Ended December 31, 2022 compared to 2021 The following discussion of our U.K. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.
Region — Year Ended December 31, 2023 compared to 2022 The following discussion of our U.K. operating results is on an as reported and same store basis. The difference between the as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings.
During the Current Year, impairment charges of $1.3 million were recorded for intangible franchise rights. In the Prior Year, no impairment was recorded for intangible franchise rights. As our intangible franchise rights are tested for impairment at the dealership level, any impairments are specific to the performance and outlook of the respective dealership. Refer to Note 12.
During the Current Year, $25.1 million of impairment was recorded for intangible franchise rights. In the Prior Year, impairment charges of $1.3 million were recorded for intangible franchise rights. As our intangible franchise rights are tested for impairment at the dealership level, any impairments are specific to the performance and outlook of the respective dealership. Refer to Note 12.
In addition, floorplan financing associated with dealership acquisitions and dispositions are classified as investing activity on an adjusted basis to eliminate excess volatility in our operating cash flows prepared in accordance with U.S. GAAP. The following table reconciles cash flows on a U.S.
In addition, floorplan financing associated with dealership acquisitions and dispositions are classified as investing activities on an adjusted basis to eliminate excess volatility in our operating cash flows prepared in accordance with U.S. GAAP. The following table reconciles cash flows on a U.S.
Certain of our mortgage agreements contain cross-default provisions that, in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default. As of December 31, 2022, we were in compliance with the requirements of the financial covenants under our debt agreements.
Certain of our mortgage agreements contain cross-default provisions that, in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default. As of December 31, 2023, we were in compliance with the requirements of the financial covenants under our debt agreements.
Business — General for an overview of our operations. Additionally, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2021 compared to fiscal year 2020.
Business — General for an overview of our operations. Additionally, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2022 compared to fiscal year 2021.
Future share repurchases and the payment of any future dividends are subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, covenant compliance, changes in laws and regulations, current economic environment and other factors considered relevant. 38
Future share repurchases and the payment of any future dividends are subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, covenant compliance, changes in laws and regulations, current and predicted economic environment and other factors considered relevant. 43
Consolidated Selected Comparisons — Year Ended December 31, 2022 compared to 2021 The following table (in millions) and discussion of our results of operations is on a consolidated basis, unless otherwise noted.
Consolidated Selected Comparisons — Year Ended December 31, 2023 compared to 2022 The following table (in millions) and discussion of our results of operations is on a consolidated basis, unless otherwise noted.
Floorplan Notes Payable in the Notes to Consolidated Financial Statements). In accordance with U.S. GAAP, we report floorplan financed with lenders affiliated with our vehicle manufacturers (excluding the cash flows from or to manufacturer-affiliated lenders participating in our syndicated lending group) within Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.
In accordance with U.S. GAAP, we report floorplan financed with lenders affiliated with our vehicle manufacturers (excluding the cash flows from or to manufacturer-affiliated lenders participating in our syndicated lending group) within Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.
The following table summarizes the commitment of our credit facilities as of December 31, 2022 (in millions): As of December 31, 2022 Total Commitment Outstanding Available U.S.
The following table summarizes the commitment of our credit facilities as of December 31, 2023 (in millions): As of December 31, 2023 Total Commitment Outstanding Available U.S.
Credit Facilities, Debt Instruments and Other Financing Arrangements Our various credit facilities, debt instruments, and other financing arrangements are used to finance the purchase of inventory and real estate, provide acquisition funding, and provide working capital for general corporate purposes.
Credit Facilities, Debt Instruments and Other Financing Arrangements Our various credit facilities, debt instruments and other financing arrangements are used to finance the purchase of inventory and real estate, acquisitions and working capital for general corporate purposes.
New vehicle retail same store gross profit outperformed the Prior Year, driven by an increase in new vehicle retail same store gross profit per unit sold, partially offset by a decrease in same store retail new vehicle unit sales.
New vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in same store new vehicle retail units sold.
During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.50 per share, which resulted in $23.0 million paid to common shareholders and $0.7 million to unvested RSA holders.
During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.80 per share, which resulted in $24.6 million paid to common shareholders and $0.6 million to unvested RSA holders.
Based on the qualitative test performed for the U.S. and U.K. reporting units in the fourth quarter of 2022, no quantitative test was deemed necessary. No goodwill impairments were recorded on any reporting units during the Current Year and for the year ended December 31, 2021 (the “Prior Year”).
Based on the quantitative goodwill test performed for the U.S. and U.K. reporting units in the fourth quarter of 2023, no impairments of goodwill were recorded during the Current Year. No goodwill impairments were recorded on any reporting units during the year ended December 31, 2022 (the “Prior Year”).
Impairment of Assets No goodwill impairments were recorded during the Current Year and the Prior Year. During the Current Year, we recorded impairment of franchise rights of $1.3 million for franchise agreements in the U.S. segment. No impairments of intangible franchise rights were recorded during the Prior Year.
Impairment of Assets No goodwill impairments were recorded during the Current Year and the Prior Year. During the Current Year and Prior Year we recorded impairment of franchise rights of $25.1 million and $1.3 million for franchise agreements in the U.S. region, respectively.
(4) The outstanding balance excludes $270.1 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and rental vehicle financing not associated with any of our U.S. credit facilities.
(5) The outstanding balance excludes $287.8 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and rental vehicle financing not associated with any of our U.S. credit facilities.
Total SG&A expenses in the U.S. during the Current Year increased $281.9 million, or 22.8%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store SG&A expenses.
Total SG&A expenses in the U.S. during the Current Year increased $106.0 million, or 7.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store SG&A expenses.
We are required to maintain the ratios detailed in the following table: As of December 31, 2022 Required Actual Total adjusted leverage ratio 1.89 Fixed charge coverage ratio > 1.20 5.61 Based on our position as of December 31, 2022, and our outlook as discussed within Item 7.
We are required to maintain the ratios detailed in the following table: As of December 31, 2023 Required Actual Total adjusted leverage ratio 2.06 Fixed charge coverage ratio > 1.20 4.63 Based on our position as of December 31, 2023, and our outlook as discussed within Item 7.
Gross Profit Total gross profit in the U.K. during the Current Year increased $31.7 million, or 9.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store results. Total same store gross profit in the U.K. during the Current Year increased $10.6 million, or 3.1%, as compared to the Prior Year.
Gross Profit Total gross profit in the U.K. during the Current Year increased $27.3 million, or 7.1%, as compared to the Prior Year, driven by higher same store results and the acquisition of stores . Total same store gross profit in the U.K. during the Current Year increased $20.0 million, or 5.3%, as compared to the Prior Year.
Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps. 34 Other Interest Expense, Net Other interest expense, net consists of interest charges primarily on our 4.00% Senior Notes, real estate related debt and other debt, partially offset by interest income.
Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps. 39 Other Interest Expense, Net Other interest expense, net consists of interest charges primarily on our $750.0 million 4.00% Senior Notes due August 2028 (“4.00% Senior Notes”), real estate related debt and other debt, partially offset by interest income.
GAAP basis to the corresponding adjusted amounts (in millions): Years Ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities: $ 585.9 $ 1,259.6 Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 319.7 (491.5) Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity 10.1 (12.7) Adjusted net cash provided by operating activities $ 915.7 $ 755.5 CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities: $ (484.6) $ (1,251.7) Change in cash paid for acquisitions, associated with Floorplan notes payable 25.3 137.9 Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (3.9) (7.0) Adjusted net cash used in investing activities $ (463.2) $ (1,120.8) CASH FLOWS FROM FINANCING ACTIVITIES: Net cash used in financing activities: $ (67.3) $ (74.0) Change in Floorplan notes payable, excluding floorplan offset (351.2) 373.2 Adjusted net cash (used in) provided by financing activities $ (418.6) $ 299.2 Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2022 compared to 2021 For the Current Year, net cash provided by operating activities decreased by $673.7 million, as compared to the Prior Year.
GAAP basis to the corresponding adjusted amounts (in millions): Years Ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities: $ 190.2 $ 585.9 Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 504.6 319.7 Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity 25.2 10.1 Adjusted net cash provided by operating activities $ 720.0 $ 915.7 CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities: $ (366.1) $ (484.6) Change in cash paid for acquisitions, associated with Floorplan notes payable 66.3 25.3 Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (48.8) (3.9) Adjusted net cash used in investing activities $ (348.6) $ (463.2) CASH FLOWS FROM FINANCING ACTIVITIES: Net cash provided by (used in) financing activities: $ 185.2 $ (67.3) Change in Floorplan notes payable, excluding floorplan offset (547.3) (351.2) Adjusted net cash used in financing activities $ (362.1) $ (418.6) Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2023 compared to 2022 For the Current Year, net cash provided by operating activities decreased by $395.8 million as compared to the Prior Year.
Total same store gross margin decreased 8 basis points, primarily driven by a decrease in same store used vehicle gross margin, for the reasons described above for used vehicle retail and wholesale same store gross profit. In addition, same store parts and service gross margin declined slightly, largely due to increased labor costs.
Total same store gross margin decreased 144 basis points, primarily driven by the reasons described above for same store gross profit per unit sold for new vehicle retail, used vehicle retail, used vehicle wholesale and F&I, net. In addition, same store parts and service gross margin declined slightly, largely due to increased labor costs.
On a constant currency basis, total same store gross profit increased 15.2% driven by improvements in new vehicle retail sales, parts and service sales and F&I, net, partially offset by downward pressures on used vehicle margins.
On a constant currency basis, total same store gross profit increased 4.5% driven by improvements in new vehicle retail, parts and service and F&I, net gross profit, partially offset by a decline in total used vehicle gross profit.
For the Years Ended December 31, 2022 2021 Increase/ (Decrease) % Change Depreciation and amortization expense $ 88.4 $ 77.4 $ 10.9 14.1 % Asset impairments $ 2.1 $ 1.7 $ 0.4 24.5 % Floorplan interest expense $ 27.3 $ 27.6 $ (0.4) (1.3) % Other interest expense, net $ 77.5 $ 55.8 $ 21.7 38.9 % Provision for income taxes $ 231.1 $ 175.5 $ 55.6 31.7 % Depreciation and Amortization Expense Depreciation and amortization expense for the Current Year was higher compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. region, as we continue to strategically add dealership related real estate to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and the overall customer experience.
For the Years Ended December 31, 2023 2022 Increase/ (Decrease) % Change Depreciation and amortization expense $ 92.0 $ 88.4 $ 3.7 4.1 % Asset impairments $ 32.9 $ 2.1 $ 30.7 NM Floorplan interest expense $ 64.1 $ 27.3 $ 36.8 134.9 % Other interest expense, net $ 99.8 $ 77.5 $ 22.3 28.7 % Provision for income taxes $ 198.2 $ 231.1 $ (32.9) (14.2) % NM - not meaningful Depreciation and Amortization Expense Depreciation and amortization expense for the Current Year increased compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. region, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $231.1 million and $175.5 million, respectively. The year-over-year tax expense increase was primarily due to higher pre-tax book income. The 2022 effective tax rate of 23.5% was higher than the 2021 effective tax rate of 21.9%.
During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $198.2 million and $231.1 million, respectively. The year-over-year tax expense decrease was primarily due to lower pre-tax book income. The 2023 effective tax rate of 24.8% was higher than the 2022 effective tax rate of 23.5%.
On an adjusted basis for the same period, adjusted net cash used in financing activities increased by $717.7 million.
On an adjusted basis for the same period, adjusted net cash used in financing activities decreased by $56.4 million.
Available Liquidity Resources We had the following sources of liquidity available (in millions): December 31, 2022 Cash and cash equivalents $ 47.9 Floorplan offset accounts 153.6 Available capacity under Acquisition Line 437.2 Total liquidity $ 638.6 Cash Flows We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility (as defined in Note 13.
Available Liquidity Resources We had the following sources of liquidity available (in millions): December 31, 2023 Cash and cash equivalents $ 57.2 Floorplan offset accounts 275.2 Available capacity under Acquisition Line 462.8 Total liquidity $ 795.2 Cash Flows We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility.
To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.
Outstanding borrowings largely fluctuate based on our levels of new and used vehicle inventory. To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.
Sources and Uses of Liquidity from Investing Activities — Year Ended December 31, 2022 compared to 2021 For the Current Year, net cash used in investing activities decreased by $767.1 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in investing activities decreased by $657.5 million.
Sources and Uses of Liquidity from Investing Activities — Year Ended December 31, 2023 compared to 2022 For the Current Year, net cash used in investing activities decreased by $118.5 million, as compared to the Prior Year.
For further discussion, please see Note 15. Income Taxes within our Notes to Consolidated Financial Statements. Liquidity and Capital Resources Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S. Floorplan Line and FMCC Facility levels (see Note 13.
Liquidity and Capital Resources Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S. Floorplan Line and FMCC Facility levels (see Note 13.
Gross Profit Total gross profit in the U.S. during the Current Year increased $492.8 million, or 23.6%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store results.
Gross Profit Total gross profit in the U.S. during the Current Year increased $27.8 million, or 1.1%, as compared to the Prior Year, driven by the acquisition of stores.
On November 16, 2022, our Board of Directors increased the share repurchase authorization by $161.0 million to $200.0 million. During the Current Year, 3,021,023 shares were repurchased at an average price of $172.54 per share, for a total of $521.2 million. As of December 31, 2022, we had $163.4 million available under our current stock repurchase authorization.
On August 2, 2023, our Board of Directors increased the share repurchase authorization to $250.0 million. During the Current Year, 729,582 shares were repurchased at an average price of $236.78 per share, for a total of $172.8 million. As of December 31, 2023, we had $143.3 million available under our current stock repurchase authorization.
This increase was primarily driven by higher used vehicle retail sales prices, higher parts and service sales and higher F&I PRU, partially offset by fewer new vehicle unit sales and used vehicle wholesale unit sales.
This increase was driven by higher revenues from new vehicle retail, parts and service and used vehicle wholesale, partially offset by lower used vehicle retail and F&I, net.
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, due to a decrease in used vehicle retail same store gross profit per unit sold and a slight decrease in same store retail used vehicle unit sales.
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by an increase in used vehicle retail units sold.
Total SG&A expenses in the U.K. during the Current Year increased $24.2 million, or 10.0%, as compared to the Prior Year, primarily driven by increases in same store SG&A and the acquisition of stores. Total same store SG&A expenses in the U.K. during the Current Year increased $13.1 million, or 5.6%, as compared to the Prior Year.
Total SG&A expenses in the U.K. during the Current Year increased $37.4 million, or 14.0%, as compared to the Prior Year, primarily driven by increases in same store SG&A and the full year impact of prior period acquisitions.
Revenues Total revenues in the U.S. during the Current Year increased $2.6 billion, or 23.8%, as compared to the Prior Year, primarily driven by the acquisition of stores and higher same store revenues. Total same store revenues in the U.S. during the Current Year increased $486.4 million, or 4.6%, as compared to the Prior Year.
Revenues Total revenues in the U.S. during the Current Year increased $1,387.1 million, or 10.3%, as compared to the Prior Year, driven by higher same store revenues and the acquisition of stores. Total same store revenues in the U.S. during the Current Year increased $747.5 million, or 5.7%, as compared to the Prior Year.
Total same store gross profit in the U.S. during the Current Year increased $85.0 million, or 4.2%, as compared to the Prior Year, primarily driven by higher same store gross profit from new vehicle retail sales, parts and service sales and F&I, net, partially offset by downward pressures on used vehicle margins.
Total same store gross profit in the U.S. during the Current Year decreased $55.5 million, or 2.2%, as compared to the Prior Year, primarily driven by downward pressures on new vehicle margins and lower F&I PRU.
During the Current Year and Prior Year , we recorded property and equipment impairment charges of $0.8 million and $1.7 million in the U.S. region, respectively. See Note 12. Intangible Franchise Rights and Goodwill, Note 10. Property and Equipment, Net and Note 11. Leases within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments.
During the Current Year and Prior Year, we recorded total property and equipment and ROU asset impairment charges of $6.8 million and $0.8 million in the U.S. region, respectively. See Note 12. Intangible Franchise Rights and Goodwill, Note 10. Property and Equipment, Net and Note 11.
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by increased business activity across all of our parts and service business lines with the reduction of COVID-19 restrictions compared to the Prior Year.
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by i ncreases in all business lines, reflecting increased business activity.
In response to inflationary pressures and macroeconomic conditions, the U.S. Federal Reserve, along with other central banks, including in the U.K., increased interest rates throughout 2022. Additionally, U.S.
The global economy continues to experience inflation. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve, along with other central banks, including in the U.K., increased interest rates throughout 2022 and maintained rates at elevated levels throughout 2023.
Our used vehicle wholesale same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle wholesale same store gross profit per unit sold, coupled with a decrease in same store wholesale used vehicle unit sales. The decrease was driven by efforts to sell more used vehicles through retail sales rather than the wholesale market.
Used vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, coupled with lower same store used vehicle retail units sold.
F&I, net same store revenues, on a constant currency basis, outperformed the Prior Year, driven by improved penetration rates and higher income per contract for finance and VSCs.
F&I, net same store revenues, on a constant currency basis, outperformed the Prior Year, driven by an increase in retail units sold, partially offset by decreases in income per contract for retail finance fees and service contracts.
New and used vehicle retail revenues benefited from the sale of approximately 30,500 units from our online digital platform, AcceleRide®, during the Current Year, a 55.5% increase as compared to the Prior Year. New vehicle retail same store revenues underperformed the Prior Year, driven by a shortage in new vehicle inventory, leading to fewer unit sales.
New and used vehicle retail revenues benefited from the sale of approximately 45,000 units from our online digital platform, AcceleRide®, during the Current Year, a 47.7% increase as compared to the Prior Year. New vehicle retail same store revenues outperformed the Prior Year, driven by strong new vehicle retail pricing coupled with more units sold.
Floorplan Interest Expense Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or a benchmark rate. Outstanding borrowings largely fluctuate based on our levels of new and used vehicle inventory.
Leases within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments. Floorplan Interest Expense Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or other benchmark rates.
Parts and service same store gross profit outperformed the Prior Year, as described above for parts and service revenues. F&I, net same store gross profit outperformed the Prior Year, as described above for F&I, net same store revenues.
The decrease in used vehicle wholesale same store gross profit per unit sold was driven by higher wholesale vehicle acquisition costs. 34 Parts and service same store gross profit outperformed the Prior Year, as described above for same store revenues. F&I, net same store gross profit, underperformed the Prior Year, as described above for F&I, net same store revenues.
Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt. Provision for Income Taxes Provision for income taxes from continuing operations during the Current Year increased $55.6 million, or 31.7%, as compared to the Prior Year.
Financial Instruments and Fair Value Measurements within our Notes to the Consolidated Financial Statements for additional discussion of the de-designation of the mortgage interest rate swap. Provision for Income Taxes Provision for income taxes from continuing operations during the Current Year decreased $32.9 million, or 14.2%, as compared to the Prior Year.
Additionally, tax benefits from the U.K. tax rate change in the Prior Year did not recur in the Current Year. We believe that it is more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences.
We believe that it is more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences. For further discussion, please see Note 15. Income Taxes within our Notes to Consolidated Financial Statements.
This decrease was partially offset by higher same store new vehicle retail sales prices outpacing same store new vehicle costs of sales. 29 SG&A Expenses SG&A as a percentage of gross profit declined 36 basis points and increased 118 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
SG&A Expenses SG&A as a percentage of gross profit increased 344 basis points and 303 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
The available borrowings may be limited from time to time, based on certain debt covenants. (3) The available balance as of December 31, 2022, includes $13.4 million of immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing.
(3) The available balance as of December 31, 2023, includes $38.5 million of immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing. (4) The remaining available balance as of December 31, 2023, can be used for General Motors new and rental vehicle inventory financing.
New vehicle retail same store gross profit, on a constant currency basis, outperformed the Prior Year, due to an increase in new vehicle retail same store gross profit per unit sold, resulting from increased prices as discussed above, coupled with a slight increase in new vehicle retail unit sales.
New vehicle retail same store gross profit, on a constant currency basis, outperformed the Prior Year, due to an increase in new vehicle retail units sold, partially offset by a decrease in new vehicle retail gross profit per unit sold as a result of the increase in vehicle inventory supply as described above generating downward pressure on new vehicle margins.
For the Current Year, $155.5 million was used to purchase property and equipment, primarily consisting of $115.5 million in capital expenditures from continuing operations and $39.6 million in purchases of real estate associated with existing dealership operations. 36 Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2022 compared to 2021 For the Current Year, net cash used in financing activities decreased by $6.6 million, as compared to the Prior Year.
For the Current Year, $185.4 million was used to purchase property and equipment. 41 Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2023 compared to 2022 For the Current Year, net cash provided by financing activities increased by $252.5 million, as compared to the Prior Year.
(In millions, except unit data) For the Years Ended December 31, 2022 2021 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 1,214.0 $ 1,133.3 $ 80.7 7.1 % $ (146.4) 20.0 % Used vehicle retail sales 1,141.8 1,082.5 59.3 5.5 % (126.8) 17.2 % Used vehicle wholesale sales 125.8 133.6 (7.8) (5.8) % (13.3) 4.2 % Total used 1,267.6 1,216.1 51.5 4.2 % (140.2) 15.8 % Parts and service sales 248.2 229.8 18.4 8.0 % (28.9) 20.6 % F&I, net 65.2 56.4 8.8 15.6 % (7.4) 28.7 % Total revenues $ 2,795.1 $ 2,635.6 $ 159.4 6.0 % $ (322.8) 18.3 % Gross profit: New vehicle retail sales $ 112.0 $ 77.4 $ 34.6 44.7 % $ (13.3) 61.9 % Used vehicle retail sales 63.5 72.5 (9.0) (12.4) % (6.9) (2.9) % Used vehicle wholesale sales (2.6) 7.6 (10.2) (134.4) % 0.3 (138.3) % Total used 60.9 80.1 (19.2) (24.0) % (6.6) (15.7) % Parts and service sales 144.7 137.3 7.5 5.5 % (16.6) 17.6 % F&I, net 65.2 56.4 8.8 15.6 % (7.4) 28.7 % Total gross profit $ 382.9 $ 351.2 $ 31.7 9.0 % $ (44.2) 21.6 % Gross margin: New vehicle retail sales 9.2 % 6.8 % 2.4 % Used vehicle retail sales 5.6 % 6.7 % (1.1) % Used vehicle wholesale sales (2.1) % 5.7 % (7.8) % Total used 4.8 % 6.6 % (1.8) % Parts and service sales 58.3 % 59.7 % (1.4) % Total gross margin 13.7 % 13.3 % 0.4 % Units sold: Retail new vehicles sold 29,780 27,861 1,919 6.9 % Retail used vehicles sold 39,068 36,448 2,620 7.2 % Wholesale used vehicles sold 11,996 14,696 (2,700) (18.4) % Total used 51,064 51,144 (80) (0.2) % Average sales price per unit sold: New vehicle retail $ 40,766 $ 40,678 $ 88 0.2 % $ (4,915) 12.3 % Used vehicle retail $ 29,227 $ 29,701 $ (474) (1.6) % $ (3,247) 9.3 % Gross profit per unit sold: New vehicle retail sales $ 3,762 $ 2,779 $ 983 35.4 % $ (448) 51.5 % Used vehicle retail sales $ 1,624 $ 1,988 $ (364) (18.3) % $ (177) (9.4) % Used vehicle wholesale sales $ (217) $ 516 $ (734) (142.1) % $ 25 (146.9) % Total used $ 1,192 $ 1,565 $ (374) (23.9) % $ (130) (15.6) % F&I PRU $ 948 $ 878 $ 70 8.0 % $ (107) 20.2 % Other: SG&A expenses $ 266.5 $ 242.2 $ 24.2 10.0 % $ (30.7) 22.7 % SG&A as % gross profit 69.6 % 69.0 % 0.6 % 31 Same Store Operating Data — U.K.
(In millions, except unit data) For the Years Ended December 31, 2023 2022 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 1,341.0 $ 1,214.0 $ 127.0 10.5 % $ 13.9 9.3 % Used vehicle retail sales 1,234.8 1,141.8 93.0 8.1 % 3.7 7.8 % Used vehicle wholesale sales 127.1 125.8 1.3 1.0 % 0.1 0.9 % Total used 1,361.9 1,267.6 94.3 7.4 % 3.8 7.1 % Parts and service sales 289.0 248.2 40.8 16.4 % 2.5 15.4 % F&I, net 67.6 65.2 2.4 3.7 % 0.4 3.1 % Total revenues $ 3,059.5 $ 2,795.1 $ 264.4 9.5 % $ 20.4 8.7 % Gross profit: New vehicle retail sales $ 120.8 $ 112.0 $ 8.8 7.9 % $ 1.5 6.5 % Used vehicle retail sales 60.2 63.5 (3.3) (5.1) % 0.1 (5.2) % Used vehicle wholesale sales (6.3) (2.6) (3.7) (142.5) % — (141.2) % Total used 53.9 60.9 (7.0) (11.5) % — (11.5) % Parts and service sales 167.8 144.7 23.1 15.9 % 1.3 15.1 % F&I, net 67.6 65.2 2.4 3.7 % 0.4 3.1 % Total gross profit $ 410.1 $ 382.9 $ 27.3 7.1 % $ 3.1 6.3 % Gross margin: New vehicle retail sales 9.0 % 9.2 % (0.2) % Used vehicle retail sales 4.9 % 5.6 % (0.7) % Used vehicle wholesale sales (5.0) % (2.1) % (2.9) % Total used 4.0 % 4.8 % (0.8) % Parts and service sales 58.1 % 58.3 % (0.2) % Total gross margin 13.4 % 13.7 % (0.3) % Units sold: Retail new vehicles sold 32,757 29,780 2,977 10.0 % Retail used vehicles sold 42,039 39,068 2,971 7.6 % Wholesale used vehicles sold 12,307 11,996 311 2.6 % Total used 54,346 51,064 3,282 6.4 % Average sales price per unit sold: New vehicle retail $ 42,488 $ 40,766 $ 1,722 4.2 % $ 439 3.1 % Used vehicle retail $ 29,373 $ 29,227 $ 147 0.5 % $ 88 0.2 % Gross profit per unit sold: New vehicle retail sales $ 3,689 $ 3,762 $ (73) (1.9) % $ 47 (3.2) % Used vehicle retail sales $ 1,432 $ 1,624 $ (193) (11.9) % $ 1 (11.9) % Used vehicle wholesale sales $ (514) $ (217) $ (297) (136.4) % $ (3) (135.1) % Total used $ 991 $ 1,192 $ (201) (16.8) % $ — (16.9) % F&I PRU $ 904 $ 948 $ (44) (4.6) % $ 5 (5.1) % Other: SG&A expenses $ 303.9 $ 266.5 $ 37.4 14.0 % $ 2.7 13.0 % SG&A as % gross profit 74.1 % 69.6 % 4.5 % 36 Same Store Operating Data — U.K.
The increase in new vehicle retail same store gross profit per unit sold reflects the strong pricing resulting from the shortage of new vehicle inventory discussed above. Used vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold.
Our used vehicle wholesale same store gross profit underperformed the Prior Year, driven by a decrease in used vehicle wholesale same store gross profit per unit sold, partially offset by an increase in same store wholesale used vehicle units sold.
F&I, net same store gross profit, on a constant currency basis, outperformed the Prior Year as described above in F&I, net same store revenues. Total same store gross margin in the U. K. increased 42 basis points, driven by improvements in new vehicle retail gross margin due to higher prices from increased customer demand and vehicle supply constraints, described above.
F&I, net same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in F&I, net same store revenues, as described above.
The remaining available balance can be used for inventory financing. (2) The outstanding balance of $315.5 million is related to outstanding letters of credit of $12.2 million and $303.3 million in borrowings.
The remaining available balance can be used for vehicle inventory financing. (2) The outstanding balance of $337.2 million is related to outstanding letters of credit of $12.2 million and $325.0 million in borrowings. The borrowings outstanding under the Acquisition Line included $325.0 million USD borrowings. The available borrowings may be limited from time to time, based on certain debt covenants.
Revenues Total revenues in the U.K. during the Current Year increased $159.4 million, or 6.0%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by the negative impact of foreign currency exchange rates.
Revenues Total revenues in the U.K. during the Current Year increased $264.4 million, or 9.5%, as compared to the Prior Year, driven by higher same store results and the acquisition of stores. Total same store revenues in the U.K. during the Current Year increased $218.7 million, or 7.9%, as compared to the Prior Year.
(In millions, except unit data) For the Years Ended December 31, 2022 2021 Increase/(Decrease) % Change Revenues: New vehicle retail sales $ 6,238.5 $ 5,371.4 $ 867.1 16.1 % Used vehicle retail sales 4,531.5 3,356.3 1,175.2 35.0 % Used vehicle wholesale sales 238.8 232.2 6.6 2.8 % Total used 4,770.2 3,588.5 1,181.8 32.9 % Parts and service sales 1,761.4 1,361.4 399.9 29.4 % F&I, net 656.9 525.0 132.0 25.1 % Total revenues $ 13,427.1 $ 10,846.3 $ 2,580.8 23.8 % Gross profit: New vehicle retail sales $ 713.5 $ 533.4 $ 180.2 33.8 % Used vehicle retail sales 250.3 281.8 (31.5) (11.2) % Used vehicle wholesale sales 2.6 17.3 (14.7) (85.0) % Total used 252.9 299.0 (46.1) (15.4) % Parts and service sales 959.0 732.1 226.8 31.0 % F&I, net 656.9 525.0 132.0 25.1 % Total gross profit $ 2,582.3 $ 2,089.5 $ 492.8 23.6 % Gross margin: New vehicle retail sales 11.4 % 9.9 % 1.5 % Used vehicle retail sales 5.5 % 8.4 % (2.9) % Used vehicle wholesale sales 1.1 % 7.4 % (6.4) % Total used 5.3 % 8.3 % (3.0) % Parts and service sales 54.4 % 53.8 % 0.7 % Total gross margin 19.2 % 19.3 % — % Units sold: Retail new vehicles sold 124,934 118,211 6,723 5.7 % Retail used vehicles sold 145,632 125,409 20,223 16.1 % Wholesale used vehicles sold 25,076 24,790 286 1.2 % Total used 170,708 150,199 20,509 13.7 % Average sales price per unit sold: New vehicle retail $ 49,934 $ 45,439 $ 4,495 9.9 % Used vehicle retail $ 31,116 $ 26,763 $ 4,353 16.3 % Gross profit per unit sold: New vehicle retail sales $ 5,711 $ 4,512 $ 1,199 26.6 % Used vehicle retail sales $ 1,719 $ 2,247 $ (528) (23.5) % Used vehicle wholesale sales $ 104 $ 697 $ (594) (85.1) % Total used $ 1,481 $ 1,991 $ (509) (25.6) % F&I PRU $ 2,428 $ 2,155 $ 273 12.7 % Other: SG&A expenses $ 1,516.9 $ 1,234.9 $ 281.9 22.8 % SG&A as % gross profit 58.7 % 59.1 % (0.4) % 27 Same Store Operating Data — U.S.
(In millions, except unit data) For the Years Ended December 31, 2023 2022 Increase/(Decrease) % Change Revenues: New vehicle retail sales $ 7,433.6 $ 6,238.5 $ 1,195.0 19.2 % Used vehicle retail sales 4,458.7 4,531.5 (72.8) (1.6) % Used vehicle wholesale sales 314.4 238.8 75.6 31.7 % Total used 4,773.1 4,770.2 2.8 0.1 % Parts and service sales 1,933.3 1,761.4 171.9 9.8 % F&I, net 674.3 656.9 17.3 2.6 % Total revenues $ 14,814.2 $ 13,427.1 $ 1,387.1 10.3 % Gross profit: New vehicle retail sales $ 646.1 $ 713.5 $ (67.4) (9.4) % Used vehicle retail sales 240.8 250.3 (9.5) (3.8) % Used vehicle wholesale sales 2.6 2.6 — (1.9) % Total used 243.3 252.9 (9.6) (3.8) % Parts and service sales 1,046.4 959.0 87.5 9.1 % F&I, net 674.3 656.9 17.3 2.6 % Total gross profit $ 2,610.1 $ 2,582.3 $ 27.8 1.1 % Gross margin: New vehicle retail sales 8.7 % 11.4 % (2.7) % Used vehicle retail sales 5.4 % 5.5 % (0.1) % Used vehicle wholesale sales 0.8 % 1.1 % (0.3) % Total used 5.1 % 5.3 % (0.2) % Parts and service sales 54.1 % 54.4 % (0.3) % Total gross margin 17.6 % 19.2 % (1.6) % Units sold: Retail new vehicles sold 142,809 124,934 17,875 14.3 % Retail used vehicles sold 145,617 145,632 (15) — % Wholesale used vehicles sold 31,456 25,076 6,380 25.4 % Total used 177,073 170,708 6,365 3.7 % Average sales price per unit sold: New vehicle retail $ 52,052 $ 49,934 $ 2,118 4.2 % Used vehicle retail $ 30,619 $ 31,116 $ (497) (1.6) % Gross profit per unit sold: New vehicle retail sales $ 4,524 $ 5,711 $ (1,187) (20.8) % Used vehicle retail sales $ 1,653 $ 1,719 $ (65) (3.8) % Used vehicle wholesale sales $ 81 $ 104 $ (23) (21.8) % Total used $ 1,374 $ 1,481 $ (107) (7.3) % F&I PRU $ 2,338 $ 2,428 $ (90) (3.7) % Other: SG&A expenses $ 1,622.9 $ 1,516.9 $ 106.0 7.0 % SG&A as % gross profit 62.2 % 58.7 % 3.4 % 32 Same Store Operating Data — U.S.
Total same store revenues in the U.K. during the Current Year decreased $2.8 million, or 0.1%, as compared to the Prior Year, driven by the negative impact of foreign currency exchange rates. On a constant currency basis, total same store revenues increased 11.6%, driven by outperformances across all revenue streams except used vehicle wholesale sales.
Total same store SG&A expenses in the U.K. during the Current Year increased $33.0 million, or 12.5%, as compared to the Prior Year. On a constant currency basis, total same store SG&A expenses increased 11.6%.
The increase was partially offset by a decrease in same store used vehicle retail gross margin, resulting from inflationary impacts on our used vehicle customers and the ongoing new vehicle supply shortage, and a decrease in parts and service same store margins due to increased labor costs. 33 SG&A Expenses SG&A as a percentage of gross profit increased 62 and 165 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Total same store gross margin in the U.K. decreased 32 basis points, primarily driven by lower same store total used gross margin caused by inflationary impacts on our used vehicle customers and higher used vehicle acquisition prices. 38 SG&A Expenses SG&A as a percentage of gross profit increased by 450 and 480 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
The increase in other interest expense, net during the Current Year, was primarily attributable to the additional 4.00% Senior Notes issued in October 2021 and an increase in borrowings used to acquire property in our U.S. region, primarily related to the Prime Acquisition. Refer to Note 14.
For the Current Year, other interest expense, net, increased $22.3 million, or 28.7%, as compared to the Prior Year. The increase in other interest expense, net during the Current Year was primarily attributable to the additional borrowings used to acquire property in our U.S. region.
Floorplan Line (1) $ 1,200.0 $ 693.3 $ 506.7 Acquisition Line (2) 752.7 315.5 437.2 Total revolving credit facility 1,952.7 1,008.7 944.0 FMCC facility (3) 300.0 41.8 258.2 Total U.S. credit facilities (4) $ 2,252.7 $ 1,050.5 $ 1,202.2 (1) The available balance at December 31, 2022, includes $140.2 million of immediately available funds.
Floorplan Line (1) $ 1,200.0 $ 1,121.6 $ 78.4 Acquisition Line (2) 800.0 337.2 462.8 Total Revolving Credit Facility 2,000.0 1,458.7 541.3 FMCC facility (3) 300.0 118.1 181.9 GM Financial Facility (4) 84.5 37.9 46.6 Total U.S. credit facilities (5) $ 2,384.5 $ 1,614.8 $ 769.7 (1) The available balance at December 31, 2023, includes $236.7 million of immediately available funds.
For the Current Year, floorplan interest expense decreased $0.4 million, or 1.3%, as compared to the Prior Year, driven primarily by lower realized losses on our interest rate swap portfolio in the Current Year, due to increases in corresponding interest rates and an unrealized loss on interest rate swaps of $3.4 million in the Prior Year which did not recur in the Current Year.
For the Current Year, floorplan interest expense increased $36.8 million, or 134.9%, as compared to the Prior Year, driven primarily by an increase in inventories due to improvements in manufacturer production as well as acquisitions, partially offset by realized gains on our interest rate swap portfolio due to increases in corresponding interest rates. Refer to Note 7 .
On an adjusted basis for the same period, adjusted net cash provided by operating activities increased by $160.3 million. The increase on an adjusted basis was primarily driven by a $932.2 million increase in adjusted net floorplan borrowings, partially offset by a $811.8 million increase in inventory levels.
On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $195.8 million.
All computations have been calculated using unrounded amounts for all periods presented. 24 The following tables summarize our operating results on a reported basis and on a same store basis for the Current Year, as compared to the Prior Year.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. 29 The following tables summarize our operating results on a reported basis and on a same store basis for the Current Year, as compared to the Prior Year.
These decreases were driven by inflationary impacts on customers coupled with the ongoing new vehicle supply shortage impacting the supply of used vehicles. Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by the increases in parts and service same store revenues.
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in parts and service same store revenues, as discussed above, while maintaining gross margin relatively flat compared to the prior year.
We ended the Current Year with a U.K. new vehicle inventory supply of 36 days, 3 days higher than the Prior Year. Used vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, despite a modest decline in retail used vehicle unit sales, as increased demand drove higher prices on a constant currency basis.
We ended the Current Year with a U.K. new vehicle inventory suppl y of 48 days, twelve d ays higher than the Prior Year , but below pre-COVID-19 pandemic levels . Used vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, primarily driven by more units sold, coupled with higher used vehicle retail pricing.
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, primarily driven by increased sales prices. The shortage of new vehicle inventory, despite recent manufacturers’ production improvements, drove strong pricing.
On a constant currency basis, total same store revenues increased 7.2%, driven by outperformances across all of our business lines except used vehicle wholesale sales. New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold, coupled with higher new vehicle retail pricing.
In addition, our ability to expediently adjust our cost structure in response to changes in new vehicle sales volumes also tempers any negative impact of such sales volume changes. Recent Events Our manufacturers’ production continued at reduced levels in the Current Year, despite recent production improvements in the latter half of 2022 for some of those manufacturers.
In addition, our ability to expediently adjust our cost structure in response to changes in new vehicle sales volumes also tempers any negative impact of such sales volume changes. Recent Events On October 7, 2023, Hamas, an internationally designated terrorist organization and ruling party of the Gaza strip in Palestine, launched an attack on Israel.
Our new vehicle days’ supply of inventory was approximately 24 days at December 31, 2022, as compared to 12 days and 53 days, at December 31, 2021 and 2020, respectively. Current Year increases of new vehicle days’ supply of inventory were seen for most manufacturers.
Challenges with EV technologies continue to make headlines within the U.S. media market, raising concerns around consumer demand and interest in the products. Our new vehicle days’ supply of inventory was approximately 37 days at December 31, 2023, as compared to 24 and 12, at December 31, 2022 and 2021, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA 10% devaluation in average foreign currency exchange rates for the GBP to the USD would have resulted in a $254.1 million and $239.6 million decrease to our revenues for the Current Year and Prior Year, respectively. For additional information about our market sensitive financial instruments, see Note 7.
Biggest changeA 10% devaluation in average foreign currency exchange rates for GBP to USD would have resulted in a $278.1 million and $254.1 million decrease to our revenues for the Current Year and Prior Year, respectively. For additional information about our market sensitive financial instruments, see Note 7. Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to a variety of market risks, including interest rate risk and foreign currency exchange rate risk. We address interest rate risks primarily through the use of interest rate swaps. We do not currently hedge foreign exchange risk, as discussed further below.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to a variety of market risks, including interest rate risk and foreign currency exchange rate risk. We address interest rate risks primarily through the use of interest rate swaps. We do not currently hedge foreign currency exchange risk, as discussed further below.
The following quantitative and qualitative information is provided regarding our foreign currency exchange rates and financial instruments to which we are a party at December 31, 2022, and from which we may incur future gains or losses from changes in market interest rates and/or foreign currency rates.
The following quantitative and qualitative information is provided regarding our foreign currency exchange rates and financial instruments to which we are a party at December 31, 2023, and from which we may incur future gains or losses from changes in market interest rates and/or foreign currency exchange rates.
During the Current Year and Prior Year, we recognized $56.0 million and $54.2 million, respectively, of interest assistance as a reduction of new vehicle cost of sales. Foreign Currency Exchange Rates The functional currency of our U.K. subsidiaries is the GBP.
During the Current Year and Prior Year, we recognized $71.2 million and $56.0 million, respectively, of interest assistance as a reduction of new vehicle cost of sales. Foreign Currency Exchange Rates The functional currency of our U.K. subsidiaries is the GBP.
Based on variable-rate borrowings outstanding of $1.9 billion and $1.6 billion during the Current Year and Prior Year, respectively, a 100 basis-point change in interest rates would have resulted in an approximate $9.8 million and a $14.8 million change to our annual interest expense, respectively, after consideration of the average interest rate swaps in effect during the periods.
Based on variable-rate borrowings outstanding of $2.4 billion and $1.9 billion during the Current Year and Prior Year, respectively, a 100 basis-point change in interest rates would have resulted in an approximate $14.4 million and a $9.8 million change to our annual interest expense, respectively, after consideration of the average interest rate swaps in effect during the periods.
Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements. Item 8. Financial Statements and Supplementary Data Refer to our Consolidated Financial Statements beginning on page F-1 for the information required by this Item and incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Item 8. Financial Statements and Supplementary Data Refer to our Consolidated Financial Statements beginning on page F-1 for the information required by this Item and incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
We do not enter into derivative or other financial instruments for speculative or trading purposes. Interest Rates We have interest rate risk on our variable-rate debt obligations, primarily consisting of our U.S. Floorplan Line.
We do not enter into derivative or other financial instruments for speculative or trading purposes. Interest Rates We have interest rate risk on our variable-rate debt obligations.

Other GPI 10-K year-over-year comparisons