10q10k10q10k.net

What changed in GROUP 1 AUTOMOTIVE INC's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of GROUP 1 AUTOMOTIVE INC's 2023 and 2024 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 2024 report.

+344 added−334 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-14)

Top changes in GROUP 1 AUTOMOTIVE INC's 2024 10-K

344 paragraphs added · 334 removed · 228 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+43 added−49 removed37 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 & 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.
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.
References to the Company’s website in this Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Form 10-K.
References to the Company’s website in this Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Form 10-K. 12
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.
Used Vehicle Sales In the used vehicle market, our dealerships compete both in their local markets 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.
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.
The U.K. is committed to the Paris Agreement, and 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 could increase the cost of the vehicles sold to us.
We also are subject to the Clean Water Act, analogous state statutes, and their implementing regulations which, among other things, prohibit discharges of pollutants into regulated waters without permits, require containment of potential discharges of oil or hazardous substances, and require preparation of spill contingency plans.
We also are subject to the Clean Water Act, analogous state statutes, and their implementing regulations which, among other things, prohibit discharges of pollutants into regulated waters, require containment of potential discharges of oil or hazardous substances, and require preparation of spill contingency plans.
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.
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 our franchise agreements. Refer to Note 3. Acquisitions and Note 4.
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.
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 39 collision centers that we operate. We also sell parts to wholesale customers.
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.
These regulations provide for various data protection requirements related to protection of customer’s PII, 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.
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.
The following charts present 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, 2024 (“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, 2024: New vehicle unit sales geographic mix (%) Franchises Region Geographic Market U.S.
Each of our franchise agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including unapproved changes of ownership or management and performance deficiencies in such areas as sales volume, sales effectiveness and customer satisfaction.
Each of our franchise agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including network consolidation efforts, unapproved changes of ownership or management and performance deficiencies in such areas as sales volume, sales effectiveness and customer satisfaction.
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.
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 to an agency model for selling new vehicles.
Insurance and Bonding Our operations expose us to the risk of various liabilities, including: • claims by employees, customers or other third parties for personal injury or property damage; • weather events, such as hail, flood, tornadoes and hurricanes; and • potential fines and civil and criminal penalties resulting from alleged violations of federal and state laws, regulatory requirements and other local laws in the jurisdictions in which we operate.
Insurance and Bonding Our operations expose us to the risk of various liabilities, including: • claims by employees, customers or other third parties for personal injury or property damage; • natural disasters, such as hail, flood, tornadoes, hurricanes and wildfires; and • potential fines and civil and criminal penalties resulting from alleged violations of federal and state laws, regulatory requirements and other local laws in the jurisdictions in which we operate.
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.
Item 1. Business General Group 1 Automotive, Inc. is a leading operator in the automotive retail industry. 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.
As a result, numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government, in locations affecting our business, to monitor and limit existing emissions of greenhouse gas (“GHG”), as well as to restrict or eliminate such future emissions.
As a result, numerous proposals have been made at the international, national and state levels of government, in locations affecting our business, to monitor and limit existing emissions of greenhouse gas (“GHG”), as well as to restrict or eliminate such future emissions.
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 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. Our dealership service departments perform vehicle repairs and service for customers under manufacturer warranties. We are reimbursed for those repairs and service by the manufacturer.
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.
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 network. However, under the U.K.
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.
Acquisitions completed within our existing markets or large dealership groups 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.
Certain health and safety standards promulgated by the Occupational Safety and Health Administration of the U.S. Department of Labor and related state agencies also apply to our operations. The threat of climate change continues to attract considerable attention in the U.S., U.K. and elsewhere globally.
Certain health and safety standards promulgated by the Occupational Safety and Health Administration of the U.S. Department of Labor and related state agencies also apply to our operations. In recent years, the threat of climate change has attracted considerable attention in the U.S., U.K. and elsewhere globally.
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.
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.
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. The agency model, if adopted by other manufacturers, would reduce revenues.
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, incur loaner expense, or incur floorplan interest expense, as has been historical practice.
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.
Texas 33.5 % 70 Massachusetts 7.8 % 20 California 7.2 % 7 Oklahoma 5.0 % 19 Georgia 3.5 % 9 Maryland 3.5 % 7 Florida 2.7 % 5 New Mexico 2.4 % 7 New Hampshire 2.3 % 5 South Carolina 2.1 % 6 New Jersey 2.0 % 8 Maine 1.5 % 6 Louisiana 1.3 % 6 Kansas 1.0 % 3 New York 0.8 % 2 Mississippi 0.4 % 1 Alabama 0.2 % 1 77.4 % 182 U.K.
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.
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. These developments could increase our costs of operation as well as reduce our volume of business.
Other factors unrelated to seasonality, such as changes in economic conditions, manufacturer incentive programs, supply issues, seasonal weather events and/or changes in foreign currency exchange rates may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income.
Other factors unrelated to seasonality, such as changes in economic conditions, manufacturer incentive programs, supply issues, seasonal weather events and/or changes in foreign currency exchange rates may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income. 11 Internet Website and Availability of Public Filings Our internet address is www.group1auto.com .
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.
Competition The automotive retail industry is highly competitive across all our service lines. 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.
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.
We have operations in geographically diverse markets that extend across 17 states in the U.S. and 72 towns and cities in the U.K. As of December 31, 2024, our retail network consists of 145 dealerships and 27 collision centers in the U.S. and 114 dealerships and 12 collision centers in the U.K.
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.
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. 9 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.
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.
The franchise agreements grant the franchised automobile dealership a non-exclusive right to sell the manufacturers or distributor’s brand of vehicles and offer related parts and service within a specified market area.
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.
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, 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.
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.
The Inchcape Acquisition approximately doubled our portfolio across the U.K. Consistent with our acquisition activity completed in 2022 through 2024, we intend to pursue opportunities in growth-positioned markets that are economically accretive to our existing markets. Our focus is on brand, geographic fit, and large dealership operations and/or dealership clusters that will provide attractive returns to our portfolio.
Most of our dealerships’ franchise agreements continue indefinitely and those with definite terms are renewed or superseded by a new agreement.
Most of our U.S. dealerships’ franchise agreements continue indefinitely and those with finite terms are renewed or superseded by a new agreement. In the U.K., many of our agreements have two-year rolling terms.
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.
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. 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 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.
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.
Our annual employee survey provides our management team with valuable insight into employees’ perception of workplace culture and progress on our corporate mission. The results inform our overall human capital management methods and other growth strategies.
The annual Group 1 “Your Voice Matters” Engagement Survey has become our primary employee listening platform for gathering feedback and promoting a performance-based culture. That feedback provides us with valuable insight into employees’ perception of workplace culture and progress on our corporate mission. The results inform our overall human capital management methods and other growth strategies.
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.
As innovative tools become available, we seek to quickly adopt those that provide a mutual benefit to our customers and Group 1. We want to replicate and grow our best practices across rooftops.
Gas and diesel-powered automobiles are one source of GHG emissions and in the recent past, the U.S. Environmental Protection Agency (“EPA”), together with the National Highway Traffic Safety Administration (“NHTSA”), implemented GHG emissions limits on vehicles manufactured for operation in the U.S.
Environmental Protection Agency (“EPA”), together with the National Highway Traffic Safety Administration (“NHTSA”), implemented GHG emissions limits on vehicles manufactured for operation in the U.S. Vehicle manufacturers in the U.S. are subject to regulations by the EPA and the NHTSA that establish corporate average fuel economy (“CAFE”) standards applicable to light-duty vehicles.
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.
In addition to cost savings opportunities, scale enables us to make the EV, facility, compliance, real estate, personnel development and training, and technology investments necessary to thrive in today’s retail automotive industry. Acquisition success depends upon our relationship with our OEM partners.
To help our workforce feel heard and supported, we solicit employee feedback through multiple channels. We leverage our intracompany communication platform, the Meta-based Workplace app, to bring our teams together digitally and provide our leadership team the ability to engage in more frequent, direct communication with our employees.
We leverage our intracompany communication platform to bring our teams together digitally and provide our leadership team with the ability to interact in more frequent, engaging and direct communication with our employees. Our management team routinely visits our stores, meeting with and soliciting feedback from employees at all levels.
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.
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. Human Capital Management Our human capital strategy is focused on attracting, developing, motivating and retaining top talent that will drive our success, enabling us to deliver market-leading business results.
Refer to Note 20. Segment Information within our Notes to Consolidated Financial Statements within this Form 10-K, for further information on our reportable segments. Refer to Note 4. Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements within this Form 10-K, for additional information regarding business dispositions.
Discontinued Operations Discontinued operations within the Consolidated Statements of Operations consists of activity associated with our Brazil operations, which were disposed of during the year ended December 31, 2022. Refer to Note 4. Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements for additional information regarding business dispositions.
We work closely with our OEMs and regularly communicate with them regarding material sourcing, marketing, recalls, safety and other factors that influence our business relationship and the customer experience. Competition The automotive retail industry is highly competitive across all our service lines.
We work closely with our OEMs and regularly communicate with them regarding material sourcing, marketing, recalls, safety and other factors that influence our business relationship and the customer experience. We seek to perform well in the markets in which we operate, generally meeting or exceeding OEM metrics on market share and customer retention.
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.
United Kingdom 22.6 % 153 100.0 % 335 4 Business Strategy Our business strategy is built on our commitment to maximize the return on investment for our stockholders. We intend to execute our business strategy through three interrelated pillars: • Growth; • Local Scale; and • Full Rooftop Potential.
On January 20, 2021, President Joe Biden issued an executive order recommitting the United States to participation in the Paris Agreement, which is a United Nations-sponsored, non-binding agreement for nations to limit their GHG emissions through individually determined reduction goals every five years after 2020.
Subsequent conferences have sought to build on the Paris Agreement, a United Nations-sponsored, non-binding agreement for nations to limit their GHG emissions through individually determined reduction goals every five years after 2020, by calling for various countries to phase out fossil fuels and subsidies related to the same, though none have been legally binding.
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. We believe that embracing DEI (“Diversity, Equity, and Inclusion”) allows us to attract and develop high-performing employees, which leads to a more engaged workforce and lower turnover.
The results of the annual engagement survey and employee discussions inform our overall human capital management methods and other growth strategies. In addition to providing career growth pathways for employees, our Board of Directors annually reviews management’s succession planning for key positions throughout the organization.
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.
Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements, for additional information regarding our acquisitions and dispositions. Local Scale We believe capturing opportunities from building local scale will provide us a competitive advantage and leverage through greater market representation and facilitate an improved customer experience.
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.
With our expansive portfolio of brands and service capabilities across significant geographical areas, we believe we can service the needs of our customers’ full families and friends. Using local scale, we will leverage our marketing prowess to drive business within our dealership clusters, while providing our customers a unique value proposition.
We believe that working together is critical to prepare for coming opportunities and changes affecting us internally and externally. 10 Training and Development We routinely create and offer department or job-specific training and professional development opportunities to meet employees’ needs. In addition to job specific courses, we also offer leadership training.
We routinely create and offer department or job-specific training and professional development opportunities to meet employees’ needs. Investments in our facilities and planned investments provide our employees working environments to meet their needs and the needs of the future. In addition to our broader workforce, we are focused on retaining and hiring technicians.
Removed
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.
Added
Growth Allocating our shareholders’ capital in support of maximizing our return on investment is our highest priority. When evaluating an acquisition, we run disciplined valuation models, with expectations based on our experience, incorporating growth and investment.
Removed
Pursuant to the terms and conditions set forth in the Brazil Agreement, Buyer agreed to acquire 100% of the issued and outstanding equity interests of our Brazilian operations (the “Brazil Disposal Group”) for approximately BRL 510 million in cash (the “Brazil Disposal”). On July 1, 2022, we completed the Brazil Disposal.
Added
We then compare the projected acquisition return to the expected return of repurchasing shares of our common stock, repaying debt, or using the capital for other uses. In 2024, we completed the acquisition of Inchcape Retail automotive operations (“Inchcape Retail”) in the U.K., consisting of 54 dealership locations, certain real estate and three collision centers (the “Inchcape Acquisition”).
Removed
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.
Added
Each OEM has acquisition eligibility criteria and our ability to meet these criteria across multiple brands provides an advantage to executing a growth strategy. We believe we can buy nearly any brand, so we can be selective with our acquisition target criteria.
Removed
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.
Added
We believe we have access to a broader selection of assets and asset groups, some of which require the significant capital investment our scale allows, given our ability to operate successfully across multiple brand partners.
Removed
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.
Added
We are growing and developing our retail talent internally by creating retail training academies within cluster markets. Our training is focused on creating consistent customer experiences across our rooftops. In addition to the enhancement of customer experience, local scale also allows us to reimagine how we handle our used vehicle inventory, including reconditioning and vehicle positioning.
Removed
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.
Added
We are focused on reducing the cost and increasing throughput efficiency of our vehicle reconditioning operations, by establishing a more consistent approach to reconditioning. Lower costs drive higher shareholder returns and faster reconditioning gives our staff back a valuable resource, time, which can be spent improving customer retention through more customer interaction.
Removed
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.
Added
Our business relies upon maximizing positive customer interactions to drive repeat and referral sales and service business.
Removed
A customer can step in and out of the buying process using AcceleRide®, while also working with a sales agent in one of our stores. The digital and in-store experiences do not have to be mutually exclusive.
Added
Disciplined inventory positioning, using our dealership clusters to best position used vehicles, allows us to drive the highest value. 5 Full Rooftop Potential We seek to optimize our operations at each of our rooftops including leveraging our dealership’s full potential and local scale advantage to improve operational efficiency.
Removed
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.
Added
Our scale amplifies the impact of replicating best practices and best practices lead to additional value extraction from existing stores and acquisition opportunities, which we believe to be a competitive advantage. We are prioritizing five areas for development in 2025.
Removed
With a focus on the aftersales impact on the customer journey, we have and will continue to increase customer retention through more convenient service hours, training of our service advisors, selling service contracts with vehicle sales and customer relationship management software that allows us to provide targeted marketing to our customers.
Added
F&I We are piloting programs that enhance the in-store and online F&I experience, allowing our customers to shop how they want, when they want, while improving the speed of service within our dealerships.
Removed
Employer of Choice Within Automotive Industry At Group 1, our employees are the cornerstone to our operations and business success. We seek to be the employer of choice within the automotive industry, by focusing on: • Talent Management and Employee Engagement; • Providing Training and Development; • Promoting Employee Safety and Well-Being; and • Market Competitive Compensation and Benefits.
Added
In addition, we believe we can extract further value from our top F&I performers by better managing their customer workflow, coupled with the assistance of virtual-based technology enhancements. Procurement We believe our scale provides us an advantage in the form of leverage to further improve our dealership costs.
Removed
Our management team routinely visits our stores, meeting with and soliciting feedback from employees at all levels. The results of the annual engagement survey and employee discussions inform our overall human capital management methods and other growth strategies. We routinely create and offer department or job-specific training and professional development opportunities to meet employees’ needs.
Added
We continue to negotiate discounts, service level improvements and preferential pricing from suppliers to our dealerships through providers who can service multiple locations across more than one geographic market. We also routinely evaluate dealership processes with the purpose of identifying best practices which can be shared amongst our dealership operations.
Removed
We maintain policies and procedures to mitigate personnel health and safety risks and to help prevent accidents. Partnering with health and safety expert, KPA, we take measures to ensure our working environments are safe and all employees receive department-specific training on how to avoid injury, report potential hazards and respond to emergencies.
Added
Used Vehicle Purchasing and Transfers Used vehicle profits are dependent on sourcing and our ability to fairly value the purchases we make. We have invested heavily in the technologies and processes we use to value used vehicle inventory. We have partnered with service providers to enable us to generate the most competitive market pricing available, across our dealership network.
Removed
In 2023, we hired a Health and Safety Manager for our U.S. operations, to lead our health and safety initiatives. We recognize the importance of providing support for our employees’ physical, mental and financial wellness. Our market competitive pay and benefits packages include paid family leave, flexible work schedules and a comprehensive health and wellness program.
Added
We sell multiple brands in most markets in which we operate through our franchised dealer network. We have thousands of customers enter our stores daily. We have invested in the people and processes at many of our stores to enable used vehicle sourcing directly from the service drive.
Removed
We offer medical, dental and vision insurance plans for employees and dependents, 401(k) matching and an employee stock purchase plan. In select locations, Group 1 also offers commuter benefits that save employees commuting costs through subsidized public transportation and parking fees. We continue to modify our benefits to maintain competitiveness and to better suit the needs of our diverse employees.
Added
As a result, we are able to offer many of our customers a value for their car at every service visit, leading to significant organic sourcing. We are perfecting these best practices for replication across our dealerships. In addition to sourcing, we have the ability to leverage our clusters of dealerships to sell our vehicles in the most advantageous location.
Removed
OEM Partner of Choice We regard our OEMs as strategic partners and rely on them to deliver high-quality products and services for our customers. Key to the success of our business is the determination to be great partners to our OEMs.
Added
We have developed disciplined processes to control the movement of our used vehicle inventory in order to maximize the selling price and throughput within our market clusters. Customer Experience Center We utilize central customer service centers to support our dealerships. We are investing in and developing new ways to support our customers and their dealership experience.
Removed
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.
Added
We know that customers have challenges connecting with dealership personnel which is why we have developed processes to enable our centralized customer service centers to better assist our customers with their in-store needs.

… 58 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

64 edited+43 added−19 removed63 unchanged
Biggest changeCurrently, the ultimate impact of these laws on our business is uncertain—the Governor of California has directed further consideration of the implementation deadlines for each of the laws, and there is potential for legal challenges to be filed with respect to the scope of the law—but, absent clarification or revisions to the law, alongside the SEC proposed rule, finalization and implementation may result in additional costs to comply with these disclosure requirements as well as increased costs of and restrictions on access to capital for us or our customers.
Biggest changeHowever, absent clarification or revisions to the law, finalization and implementation may result in additional costs to comply with these disclosure requirements, as well as increased costs of and restrictions on access to capital for us or our customers.
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.
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, civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition.
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.
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.
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.
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, F&I and services could adversely impact our sales and our margins.
If an unauthorized party is successful in obtaining trade secrets, PII, confidential, or otherwise protected information of our dealerships or our customers or in disrupting our operations through a cyberattack, the attack could result in loss of revenue, increase costs of doing business, negatively affect customer satisfaction and loyalty, and expose us to negative publicity.
If an unauthorized party is successful in obtaining trade secrets, PII, confidential, or otherwise protected information of our dealerships, our customers or our employees or in disrupting our operations through a cyberattack, the attack could result in loss of revenue, increase costs of doing business, negatively affect customer satisfaction and loyalty, and expose us to negative publicity.
We purchase insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks consisting of large deductibles and/or self-insured retentions. In certain instances, our insurance may not fully cover an insured loss depending on the magnitude and nature of the claim.
We purchase insurance policies for worker’s compensation, liability, auto physical damage, property, pollution, employee medical benefits and other risks consisting of large deductibles and/or self-insured retentions. 18 In certain instances, our insurance may not fully cover an insured loss depending on the magnitude and nature of the claim.
The automotive retail industry, and especially new vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, supply conditions, consumer transportation preferences, unemployment rates and credit availability.
The automotive retail industry, and especially vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, supply conditions, consumer transportation preferences, unemployment rates and credit availability.
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”).
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.
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
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.
The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures (“TCFD”) recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s (“ISSB”) climate-relate disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.
The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-relate disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.
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.
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, 2024 , 2023 and 2022 .
These changes, if adopted as proposed, may lead to additional transaction times for the sale of vehicles, complicate the transaction process, decrease customer satisfaction, and impose recordkeeping burdens on our employees, among other effects. If these regulations were to be enacted, it could have an adverse effect on our business and profitability.
These changes, if adopted as proposed, may lead to longer transaction times for the sale of vehicles, complicate the transaction process, decrease customer satisfaction, and impose recordkeeping burdens on our employees, among other effects. If these regulations were to be enacted, it could have an adverse effect on our business and profitability.
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. We are dependent on our relationships with manufacturers, which exercise a great degree of influence over our operations through the franchise agreements.
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. We are dependent on our relationships with manufacturers, which exercise a great degree of influence over our operations through the franchise and similar agreements.
If any of these factors limits our ability to integrate acquired dealerships into our operations successfully or on a timely basis, our expectations regarding future results of operations, including certain run-rate revenue and expense synergies expected to result from acquisitions, might not be met.
If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain run-rate revenue and expense synergies expected to result from acquisitions, might not be met.
Risk Factors, which could have a material adverse impact on our cash flows. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge could have an adverse effect on our results of operations. Refer to Note 12.
Risk Factors, which could have a material adverse impact on our cash flows. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge could have an adverse effect on our results of operations. Refer to Note 13.
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.
Business — Governmental Regulations for further discussion of environmental and regulations impacting our business. 21 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.
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.
Legal, Regulatory and Compliance Risks 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.
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.
In Europe, rising energy costs as a result of supply disruptions and increased winter demand for heating could place strain on our suppliers’ ability to maintain current production levels of vehicles and vehicle parts. Across the European Union, these energy constraints could result in nations or region s enacting emergency energy related policies, limiting energy availability for manufacturers.
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.
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 some consumers to purchase vehicles and F&I products could be even more limited, which could have a material adverse effect on our business and results of 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.
Business — Competition for further discussion of competition in our industry. 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.
Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those contracted by Mercedes Benz. The agency model, if adopted by other manufacturers, would reduce revenues.
Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those contracted by Mercedes Benz. The agency model, if adopted by other manufacturers, would reduce revenues with only the facilitation fee recorded as revenue.
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.
Our new vehicle days’ supply of inventory was approximately 44 days as of December 31, 2024, as compared to 37 days and 24 days for the years ended December 31, 2023 and 2022, respectively. It is impossible to predict with certainty when normalized production will resume at these manufacturers.
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.
The risk of slower future interest rate cuts or the maintenance of interest rates at current elevated 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.
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.
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. 15 Please see Item 1.
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.
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 the former Biden administration’s support for such actions, certain manufacturers announced plans to increase production of fuel-efficient vehicles and EVs.
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.
The OEMs have been and could continue to be impacted by disruptions to the economy, lower than anticipated EV adoption, higher supply chain costs than emerging EV manufacturer competitors, delays in increasing factory production, labor negotiations, parts shortages, including semiconductor chips, and other disruptions.
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.
In addition, acquisitions involve a number of particular risks, including, among other things: • incurring significantly higher capital expenditures and operating expenses; • failing to obtain manufacturers’ consents to acquisitions of additional franchises; • 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; • failing to implement or improve controls and policies and information systems; • impairing relationships with employees, manufacturers and customers; and • incorrectly valuing acquired entities.
Any failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations. Refer to Item 1. Business — Governmental Regulations for further discussion of automotive and other laws and regulations impacting our business.
Any failure to comply with these laws and regulations may result in administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the limitations on certain aspects of our operations. Refer to Item 1. Business — Governmental Regulations for further discussion of automotive and other laws and regulations impacting our business.
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.
While the proposed rule has been vacated, if similar regulations were implemented, our failure to adhere to 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.
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.
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.
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.
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. Our efforts to improve security and protect data result in increased capital and operating costs.
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.
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.
Our business activities in the U.S. and 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.
Operational risks associated with environmental laws and regulations may expose us to significant costs and liabilities. Our business activities in the U.S. and U.K. are subject to stringent federal, 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 other impacts to our U.K. and the U.S. regions and consolidated results of operations remain uncertain until such time as the other vehicle manufacturers provide additional details regarding their specific agency model plans. We are uncertain if agency models will be widely adopted in the U.K. or U.S.
The other impacts to our U.K. and the U.S. regions and consolidated results of operations remain uncertain until such time as the other vehicle manufacturers provide additional details regarding their specific agency model plans.
These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition.
These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition. 14 During the Current Year, the majority of our manufacturers’ production increased, driving an improvement in vehicles days’ supply.
With a potential increase in demand by consumers for EVs, and government support for such actions, we will incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.
Our compliance with these regulations may expose us to significant costs and liabilities. With a potential increase in demand by consumers for EVs, we will incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.
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.
Vehicle manufacturers may alter their distribution models. In 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.
For example, on April 12, 2023, the EPA proposed regulations establishing more stringent air emissions limits for light and medium-duty vehicles, which include passenger cars, vans, pickups, sedans and SUVs for model years 2027 through 2032.
For example, on March 20, 2024, the EPA finalized new emissions standards establishing more stringent air emissions limits for light and medium-duty vehicles, which include passenger cars, vans, pickups, sedans and SUVs for model years 2027 through 2032.
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.
During the years ended December 31, 2024, 2023 and 2022, we recognized $28.2 million , $25.1 million and $1.3 million , respectively, of intangible franchise rights impairment.
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.
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.
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.
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.
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.
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 have announced plans to explore an agency model for selling new vehicles.
In the ordinary course of business, we receive significant PII about our customers and our employees. A security incident to obtain such information could be caused by malicious insiders and third parties using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery, or other forms of deception.
A cybersecurity attack to obtain such information could be caused by malicious insiders and third parties using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery, or other forms of deception.
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.
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; • fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility; and • infrastructure readiness for the U.K.’s transition to EVs.
Our franchise agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including any unapproved changes of ownership or management, sales and customer satisfaction performance deficiencies and other material breaches of the franchise agreements. Manufacturers may also have a right of first refusal if we seek to sell dealerships.
These agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including network consolidation plans, any unapproved changes of ownership or management, sales and customer satisfaction performance deficiencies and other material breaches of the franchise agreements.
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.
As a result, we may not be able to realize the expected benefits that we seek to achieve from the acquisitions. 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.
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.
While EV sales continued to increase in the U.S. in 2024, challenges with EV technologies, including the development of the necessary charging infrastructure, continue to make headlines within the U.S. media market, raising concerns around consumer demand and interest in the products.
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.
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. Business — Governmental Regulations for information on our risks related to compliance with such laws and regulations.
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.
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.
Our common stock is traded publicly, and various securities analysts follow our financial results and frequently issue reports on the Company which include information about our historical financial results as well as their estimates of our future performance. These estimates are based on their own opinions and are often different from management’s estimates or expectations of our business.
We may fail to meet analyst and investor expectations, which could cause the price of our stock to decline. Our common stock is traded publicly, and various securities analysts follow our financial results and frequently issue reports on the Company which include information about our historical financial results as well as their estimates of our future performance.
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.
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.
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.
We are uncertain if agency models will be widely adopted in the U.K. or U.S. 16 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.
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.
Further increases or sharp declines in fuel prices could have a material adverse effect on our business and results of operations. 19 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.
Additionally, we cannot guarantee that the terms of any renewals will be as favorable to us as our current agreements. Although we are generally protected by automotive dealership franchise laws requiring “good cause” be shown for such termination, if such an instance occurs, we cannot guarantee that the termination of the franchise will not be successful.
Although we are generally protected in the U.S. by automotive dealership franchise laws requiring “good cause” be shown for such termination, if such an instance occurs, we cannot guarantee that the termination of the franchise will not be successful. A manufacturer may also limit the number of its dealerships that we may own overall or in a particular geographic area.
We have implemented security measures that are designed to detect and protect against cyberattacks.
We have implemented security measures that are designed to detect and protect against cyberattacks, as well as policies governing the deletion of PII, to limit the information exposed to a potential cyberattack.
Increased popularity in the ride-sharing subscription business model could adversely affect our new and used vehicle sales volumes, parts and service revenues and results of operations. Operational Risks A cybersecurity breach, including loss of confidential information or a breach of personally identifiable information (“PII”) about our customers or employees, could negatively affect operations and result in high costs.
Increased popularity in the ride-sharing subscription business model could adversely affect our new and used vehicle sales volumes, parts and service revenues and results of operations. Operational Risks We rely on third-party vendors and suppliers for key components of our business.
In addition, local economic, competitive and other conditions affect the performance of our dealerships.
In addition, local economic, competitive and other conditions affect the performance of 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.
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.
Any significant increase in existing tariffs on such goods and raw materials, or implementation of new tariffs, could increase production costs for OEM’s that would then be passed on to consumers, potentially leading to higher vehicle prices and reduced demand, which in turn could adversely affect our profits on the vehicles we sell.
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.
Quantitative and Qualitative Disclosures About Market Risk for additional analysis regarding our interest rate sensitivity. A significant portion of our vehicles purchased by customers are financed.
The success of our dealerships is dependent on vehicle manufacturers whom we rely exclusively on for our new vehicle inventory.
Quantitative and Qualitative Disclosures About Market Risk for additional analysis regarding our interest rate sensitivity. We are subject to risks associated with our dependence on manufacturer business relationships and agreements. The success of our business is dependent on vehicle manufacturers on whom we rely exclusively on for our new vehicle inventory.
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.
Should EV demand decline at the same time as more OEMs transiti on to EV models, this could have a material adverse effect on our business and results of operations. In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate. Refer to Item 7.
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.
Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders. 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.
We cannot predict the effects of future disruptions in the financial services industry on our financial condition and operations, nor that of our suppliers, vendors or customers. Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition.
These EV mandates could impact our vehicle manufacturers’ production mix and volumes, which in turn may impact our new vehicle sales and results of operations. Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition.
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.
The global economy experienced elevated levels of inflation beginning in 2022. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (“the Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms.
Removed
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.
Added
Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern about manufacturer viability. Increased tariffs may increase inflation, which would likely result in interest rates not decreasing as fast as expected and consumer demand declining as a result of increased costs of vehicle ownership.
Removed
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.
Added
As a result, during the Current Year, the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment. The impact of the lowering of interest rates on the levels of inflation and unemployment in the U.S., U.K. and Europe is uncertain.
Removed
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.
Added
The impact of these macroeconomic developments on our operations cannot be predicted with certainty. On January 29, 2025, the Federal Reserve held rates unchanged. On February 6, 2025, the Bank of England lowered interest rates by 25 basis points. Additionally, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs.
Removed
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.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders. 13 The U.K. government has established mandated targets for the sale of new zero emissions vehicles with increasing targets in future years.
Removed
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.
Added
The overall U.K. market fell short of those mandated targets in 2024, with consumer preferences skewed towards traditional internal combustion engine vehicles. The government targets established for 2025 are higher than those previously required in 2024, and are expected to further challenge new vehicle sales in 2025 and beyond.
Removed
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.
Added
In the Current Year, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s.
Removed
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.
Added
Additionally, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.
Removed
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.
Added
Many manufacturers of vehicles, parts and supplies are dependent on imported products and raw materials in their production.

… 46 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

17 edited+3 added−0 removed10 unchanged
Biggest changeOur cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access. These services are designed to monitor for both internal and external threats. Finally, we have implemented encrypted virtual private networks for remote connections. The above cybersecurity risk management processes are integrated into the Company’s overall enterprise risk management program.
Biggest changeThese services are designed to monitor both internal and external threats. We engage several third-party consultants in connection with our risk assessment and risk management, and we have established separate processes and procedures to oversee and identify cybersecurity risks associated with third parties. Finally, we have implemented encrypted virtual private networks for remote connections.
Our cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access, extraction, and deletion of certain sensitive data, large quantities of data, and other anomalous network traffic. These services are designed to monitor for both internal and external threats.
Our cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access, extraction, and deletion of certain sensitive data, large quantities of data, and other anomalous network traffic. These services are designed to monitor both internal and external threats.
However, we acknowledge that cybersecurity threats are continually evolving, and the possibility of future cybersecurity incidents remains. Processes designed to monitor for cybersecurity incidents are also intended to protect our data.
However, we acknowledge that cybersecurity threats are continually evolving, and the possibility of future cybersecurity incidents remains. Our processes designed to monitor cybersecurity incidents are also intended to protect our data.
Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks. 23
Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks.
Further, our employees that handle personally identifiable information are required to undergo training, including phishing exercises and awareness programs on the appropriate management, use and protection of that information. • Access Controls: We have endeavored to implement physical access controls to prevent access to endpoints that may leave Company data vulnerable to attack.
Further, our employees that handle PII are required to undergo training, including phishing exercises and awareness programs on the appropriate management, use and protection of that information. Access Controls We have endeavored to implement physical access controls to prevent access to endpoints that may leave Company data vulnerable to attack.
Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cyberattack will not occur. A successful attack on our IT systems could have significant consequences to our business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security.
Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cyberattack will not occur. A successful attack on our IT systems could have significant consequences to our business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security. See Item 1A.
We also have formed a cyber event incident team, composed of our CIO, Chief Financial Officer, Corporate Controller, Chief Legal Officer and vice president of Internal Audit, who upon the occurrence of a cybersecurity incident, would convene to assess the materiality of the event as well as the appropriate remediation and escalation procedures, including escalation to our Chief Executive Officer and the Board of Directors.
We also have formed a cyber event incident team, composed of our CIO, Chief Financial Officer, Corporate Controller, Chief Legal Officer and vice president of Internal Audit, who, upon the occurrence of a cybersecurity incident, convene to assess the materiality of the event as well as the appropriate remediation and escalation procedures, including escalation to our Chief Executive Officer, the Finance/Risk Management Committee, the Audit Committee and the Board of Directors.
In the event of any breach or cybersecurity incident, we have an incident response plan within our SIEM that is designed to provide for action to contain the incident, mitigate the impact, and restore normal operations efficiently.
In the event of any breach or cybersecurity incident, we have an incident response plan within our SIEM that is designed to provide for action to contain the incident, mitigate the impact and restore normal operations efficiently. We conduct annual reviews of our cyber incident response plan.
See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our IT systems. Board of Directors’ Oversight of Risks from Cybersecurity Threats The Board of Directors oversees risks from cybersecurity threats.
Risk Factors for additional information about the risks to our business associated with a breach or compromise to our IT systems. Board of Directors’ Oversight of Risks from Cybersecurity Threats The Board of Directors oversees risks from cybersecurity threats.
Our CIO and various members of the IT and Security team, meet regularly with members of management to address key security and privacy issues. Our CIO has more than 24 years of infrastructure and cybersecurity experience and holds various relevant certifications.
Our CIO and various members of the IT and Security team, meet regularly with members of management to address key security and privacy issues. Our CIO has more than 25 years of infrastructure and cybersecurity experience.
The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time. See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our information technology (“IT”) systems. We have implemented security measures that are designed to detect and protect against cyberattacks.
The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time. See Item 1A. Risk Factors for additional information about the risks to our business associated with a breach or compromise to our IT systems. We have implemented security measures that are designed to detect and protect against cyberattacks.
We conduct annual reviews of our cyber incident response plan. • Cybersecurity Training and Awareness: Cybersecurity awareness among our employees is promoted with regular training and awareness programs. Employees who access our systems are required to undergo annual cybersecurity training and, each year, employees are required to test their understanding of our cybersecurity policies.
Cybersecurity Training and Awareness Cybersecurity awareness among our employees is promoted with regular training and awareness programs. Employees who access our systems are required to undergo annual cybersecurity training and, each year, employees are required to test their understanding of our cybersecurity policies.
Cybersecurity risks are understood to be significant business risks, and as such, are considered as an important component of our enterprise-wide risk management approach. 22 Impact of Risks from Cybersecurity Threats As of the date of this Report, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company.
Cybersecurity risks are understood to be significant business risks, and as such, are considered as an important component of our enterprise-wide risk management approach. 23 Impact of Risks from Cybersecurity Threats As of the date of this Form 10-K, though the Company and our service providers have experienced certain cybersecurity incidents, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company.
Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks. We use a variety of layered applications to alert us to suspicious activity. • Incident Identification and Response: A security information and event management process (“SIEM”) has been implemented to help promptly identify cybersecurity incidents.
We use a variety of layered applications to alert us to suspicious activity. 22 Incident Identification and Response A security information and event management process (“SIEM”) has been implemented to help promptly identify cybersecurity incidents.
In particular, we seek to assess, identify and manage cybersecurity risks through the processes described below: • Risk Assessment: A multi-layered system designed to protect and monitor data and cybersecurity risk has been implemented. Regular assessments and testing of our cybersecurity safeguards are conducted by independent third-party cybersecurity experts.
Our processes and procedures align with the National Institute of Standards and Technology Cybersecurity Framework. In particular, we seek to assess, identify and manage cybersecurity risks through the processes described below: Risk Assessment A multi-layered system designed to protect and monitor data and cybersecurity risk has been implemented.
We also have a program in place to monitor our retained data by identifying PII and ensuring it is not stored outside of approved locations and systems. We have endeavored to use strong, up-to-date encryption algorithms and to regularly update and patch systems in an effort to guard against vulnerabilities.
We also have a program in place to monitor our retained data by identifying PII and ensuring it is not stored outside of approved locations and systems. We maintain policies that govern the deletion of PII to limit the information exposed to a potential cyberattack.
Similarly, we have sought to manage encryption keys with use of a secure key management system and rotation of keys after use. We have implemented secure protocols, including, e.g., HTTPS for web traffic and SFTP for file transfers. Processes designed to monitor for cybersecurity incidents are also intended to protect our data.
We have implemented secure protocols, including, e.g., hypertext transfer protocol secure for web traffic and secure file transfer protocol for file transfers. Processes designed to monitor cybersecurity incidents are also intended to protect our data. Our cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access.
Added
Regular assessments and testing of our cybersecurity safeguards are conducted by independent third-party cybersecurity experts. Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks.
Added
We have endeavored to use strong, up-to-date encryption algorithms and to regularly update and patch systems in an effort to guard against vulnerabilities. Similarly, we have sought to manage encryption keys with use of a secure key management system and rotation of keys after use.
Added
The above cybersecurity risk management processes are integrated into the Company’s overall enterprise risk management program.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
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.
Biggest changeAs of December 31, 2024, we had 259 dealerships as shown below by region and by whether the associated real estate is leased or owned: Dealerships Region Owned Leased United States 113 32 United Kingdom 66 48 Total 179 80 Item 3. Legal Proceedings For discussion of our legal proceedings, refer to Note 18.
Item 2. Properties We lease our corporate headquarters, located at 800 Gessner, Suite 500, Houston, Texas. We own our regional headquarters in the U.K.
Item 2. Properties We lease our corporate headquarters, located at 730 Town and Country Blvd, Suite 500, Houston, Texas. We own our regional headquarters in the U.K.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
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
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 43

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−1 removed3 unchanged
Biggest changeIssuer 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.
Biggest changeIssuer 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, 2024: 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) October 1, 2024 — October 31, 2024 23,200 $ 349.30 23,200 $ 166.7 November 1, 2024 — November 30, 2024 5,790 $ 399.22 5,790 $ 497.7 December 1, 2024 — December 31, 2024 51,310 $ 420.35 51,310 $ 476.1 Total 80,300 80,300 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Future share repurchases 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.
The timing of share repurchases 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.
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.
Item 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “GPI.” There were 33 holders of record of our common stock as of February 7, 2025.
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.
As of December 31, 2024, we had $476.1 million available under our current share repurchase authorization. Our share repurchase authorization does not have an expiration date. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information on share repurchases.
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
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 2019, and that all dividends were reinvested. 25 Base Period Indexed Returns for the Years Ended Company /Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Group 1 Automotive, Inc. $ 100.00 $ 131.92 $ 197.92 $ 184.34 $ 313.70 $ 436.25 S&P 500 Index — Total Return $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Peer Group $ 100.00 $ 146.65 $ 205.17 $ 189.46 $ 268.62 $ 285.44 26
Removed
On 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.
Added
On November 12 , 2024, our Board of Directors increased the Company’s share repurchase authorization to $500.0 million. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 trading plans or in privately negotiated transactions.

Item 7. Management's Discussion & Analysis

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

89 edited+25 added−36 removed24 unchanged
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.
Biggest changeReported Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 9,972.4 $ 8,774.6 $ 1,197.8 13.7 % $ 59.6 13.0 % Used vehicle retail sales 6,179.9 5,693.5 486.3 8.5 % 49.9 7.7 % Used vehicle wholesale sales 462.4 441.4 21.0 4.7 % 4.1 3.8 % Total used 6,642.3 6,135.0 507.3 8.3 % 54.0 7.4 % Parts and service sales 2,491.0 2,222.3 268.7 12.1 % 13.6 11.5 % F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 % Total revenues $ 19,934.3 $ 17,873.7 $ 2,060.6 11.5 % $ 130.1 10.8 % Gross profit: New vehicle retail sales $ 717.9 $ 767.0 $ (49.1) (6.4) % $ 4.7 (7.0) % Used vehicle retail sales 330.0 300.9 29.1 9.7 % 2.5 8.8 % Used vehicle wholesale sales (3.3) (3.8) 0.5 12.7 % (0.1) 15.4 % Total used 326.7 297.2 29.6 9.9 % 2.4 9.1 % Parts and service sales 1,367.7 1,214.2 153.5 12.6 % 7.7 12.0 % F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 % Total gross profit $ 3,241.0 $ 3,020.3 $ 220.7 7.3 % $ 17.9 6.7 % Gross margin: New vehicle retail sales 7.2 % 8.7 % (1.5) % Used vehicle retail sales 5.3 % 5.3 % 0.1 % Used vehicle wholesale sales (0.7) % (0.9) % 0.1 % Total used 4.9 % 4.8 % 0.1 % Parts and service sales 54.9 % 54.6 % 0.3 % Total gross margin 16.3 % 16.9 % (0.6) % Units sold: Retail new vehicles sold 203,677 175,566 28,111 16.0 % Retail used vehicles sold 209,687 187,656 22,031 11.7 % Wholesale used vehicles sold 52,600 43,763 8,837 20.2 % Total used 262,287 231,419 30,868 13.3 % Average sales price per unit sold: New vehicle retail $ 49,817 $ 50,325 $ (508) (1.0) % $ 296 (1.6) % Used vehicle retail $ 29,472 $ 30,340 $ (868) (2.9) % $ 238 (3.6) % Gross profit per unit sold: New vehicle retail sales $ 3,525 $ 4,369 $ (844) (19.3) % $ 23 (19.9) % Used vehicle retail sales $ 1,574 $ 1,604 $ (30) (1.9) % $ 12 (2.6) % Used vehicle wholesale sales $ (63) $ (86) $ 24 27.4 % $ (2) 29.7 % Total used $ 1,246 $ 1,284 $ (38) (3.0) % $ 9 (3.7) % F&I PRU $ 2,005 $ 2,043 $ (38) (1.9) % $ 7 (2.2) % Other: SG&A expenses $ 2,179.2 $ 1,926.8 $ 252.4 13.1 % $ 14.6 12.3 % SG&A as % gross profit 67.2 % 63.8 % 3.4 % Floorplan expense: Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 % $ 0.6 68.4 % Less: floorplan assistance (1) 88.4 71.2 17.2 24.2 % 0.1 24.1 % Net floorplan expense $ 20.1 $ (7.1) $ 27.2 $ 0.5 (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. 30 Same Store Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 8,785.0 $ 8,507.7 $ 277.4 3.3 % $ 40.8 2.8 % Used vehicle retail sales 5,454.4 5,499.0 (44.6) (0.8) % 32.7 (1.4) % Used vehicle wholesale sales 398.9 422.5 (23.6) (5.6) % 2.7 (6.2) % Total used 5,853.3 5,921.5 (68.2) (1.2) % 35.4 (1.7) % Parts and service sales 2,242.2 2,143.0 99.2 4.6 % 8.6 4.2 % F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 % Total revenues $ 17,633.7 $ 17,288.8 $ 344.9 2.0 % $ 86.6 1.5 % Gross profit: New vehicle retail sales $ 617.4 $ 745.3 $ (127.9) (17.2) % $ 2.9 (17.6) % Used vehicle retail sales 290.0 291.4 (1.4) (0.5) % 1.6 (1.0) % Used vehicle wholesale sales (3.3) (3.6) 0.3 7.8 % (0.1) 10.8 % Total used 286.7 287.8 (1.1) (0.4) % 1.5 (0.9) % Parts and service sales 1,222.0 1,169.8 52.2 4.5 % 4.9 4.0 % F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 % Total gross profit $ 2,879.3 $ 2,919.5 $ (40.2) (1.4) % $ 11.2 (1.8) % Gross margin: New vehicle retail sales 7.0 % 8.8 % (1.7) % Used vehicle retail sales 5.3 % 5.3 % — % Used vehicle wholesale sales (0.8) % (0.9) % — % Total used 4.9 % 4.9 % — % Parts and service sales 54.5 % 54.6 % (0.1) % Total gross margin 16.3 % 16.9 % (0.6) % Units sold: Retail new vehicles sold 175,397 170,119 5,278 3.1 % Retail used vehicles sold 185,494 180,946 4,548 2.5 % Wholesale used vehicles sold 45,410 42,141 3,269 7.8 % Total used 230,904 223,087 7,817 3.5 % Average sales price per unit sold: New vehicle retail $ 50,586 $ 50,368 $ 218 0.4 % $ 234 — % Used vehicle retail $ 29,405 $ 30,390 $ (986) (3.2) % $ 176 (3.8) % Gross profit per unit sold: New vehicle retail sales $ 3,520 $ 4,381 $ (861) (19.7) % $ 17 (20.0) % Used vehicle retail sales $ 1,563 $ 1,611 $ (47) (2.9) % $ 8 (3.5) % Used vehicle wholesale sales $ (74) $ (86) $ 12 14.4 % $ (2) 17.3 % Total used $ 1,242 $ 1,290 $ (49) (3.8) % $ 6 (4.3) % F&I PRU $ 2,087 $ 2,041 $ 46 2.2 % $ 5 2.0 % Other: SG&A expenses $ 1,960.4 $ 1,873.6 $ 86.8 4.6 % $ 8.9 4.2 % SG&A as % gross profit 68.1 % 64.2 % 3.9 % 31 Reported Operating Data — U.S.
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.
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 units sold.
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.
Floorplan Notes Payable within our Notes to Consolidated Financial Statements for additional discussion of our Revolving Credit Facility. 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.
All computations have been calculated using unrounded amounts for all periods presented. Retail new vehicle units sold for 2023 include new vehicle agency units sold under agency arrangements with certain manufacturers in the U.K.
All computations have been calculated using unrounded amounts for all periods presented. Retail new vehicle units sold include new vehicle agency units sold under agency arrangements with certain manufacturers in the U.K.
For these reasons, same store results allow management to manage and monitor the performance of the business and is also useful to investors. We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates.
For these reasons, same store results allow management to accurately manage and monitor the underlying performance of the business and is also useful to investors. We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates.
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.
Covenants Our Revolving Credit Facility, indentures governing our 4.00% and 6.375% 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.
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
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.
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, 2024 compared to 2023 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.
We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows. Refer to Note 13.
We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows. Refer to Note 14.
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.
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, 2024, 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 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.
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 2023 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2023 compared to fiscal year 2022.
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.
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. Refer to Note 14. Floorplan Notes Payable and Note 15.
Historically, various facets of our business have been directly or indirectly impacted by a variety of supply/demand factors, including vehicle inventories, consumer confidence, consumer transportation preferences, discretionary spending levels, availability and affordability of consumer credit, new vehicle introductions and innovations, manufacturer incentives, the COVID-19 pandemic, weather patterns, fuel prices, inflation and interest rates.
Historically, various facets of our business have been directly or indirectly impacted by a variety of supply/demand factors, including vehicle inventories, consumer confidence, consumer transportation preferences, discretionary spending levels, availability and affordability of consumer credit, new vehicle introductions and innovations, manufacturer incentives, weather patterns, fuel prices, inflation and interest rates.
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.
Floorplan Notes Payable within 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.
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.
The following table summarizes the commitment of our credit facilities as of December 31, 2024 (in millions): As of December 31, 2024 Total Commitment Outstanding Available U.S.
If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required. In 2023, we elected to perform a quantitative test.
If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required.
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.
Debt within our Notes to Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of December 31, 2024. Share 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.
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.
Consolidated Selected Comparisons — Year Ended December 31, 2024 compared to 2023 The following table (in millions) and discussion of our results of operations are on a consolidated basis, unless otherwise noted.
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.
Impairment of Assets During the Current Year and the Prior Year, we recorded no goodwill impairments. During the Current Year and Prior Year we recorded impairments of franchise rights of $28.2 million and $25.1 million for franchise agreements in the U.S. region, respectively.
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.
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.
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.
Recent Accounting Pronouncements Refer to Note 1. 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.
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%.
During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $161.5 million and $198.2 million, respectively. The year-over-year tax expense decrease was primarily due to lower pre-tax book income. The 2024 effective tax rate of 24.5% was lower than the 2023 effective tax rate of 24.8%.
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.
New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in units sold, as a result of the increase in vehicle inventory production generating downward pressure on new vehicle margins.
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.
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 $36.7 million, or 18.5%, as compared to the Prior Year.
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.
We are required to maintain the ratios detailed in the following table: As of December 31, 2024 Required Actual Total adjusted leverage ratio 2.79 Fixed charge coverage ratio > 1.20 3.56 Based on our position as of December 31, 2024, and our outlook as discussed within Item 7.
We review long-lived assets including property and equipment and ROU assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events).
We review long-lived assets including property and equipment and ROU assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). During the Current Year, there was no asset impairment charges associated with property and equipment and ROU assets.
On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $195.8 million.
On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $36.9 million.
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.
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. F&I same store gross profit, on a constant currency basis, underperformed the Prior Year, as described above in F&I same store revenues.
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.
F&I, net same store revenues, on a constant currency basis, underperformed the Prior Year, driven by decreases in income per contract for retail finance fees and service contracts.
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.
The global economy experienced elevated levels of inflation beginning in 2022. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the Federal Reserve, along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms .
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.
Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements for further discussion of the CDK Incident. 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.
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 .
For the Current Year, floorplan interest expense increased $44.4 million, or 69.3%, as compared to the Prior Year, driven primarily by an increase in inventories added to our floorplan 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.
We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance.
Our primary foreign currency exposure is to the GBP. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance.
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.
GAAP basis to the corresponding adjusted amounts (in millions): Years Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities: $ 586.3 $ 190.2 Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 133.3 504.6 Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity (36.6) 25.2 Adjusted net cash provided by operating activities $ 683.0 $ 720.0 CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities: $ (1,282.6) $ (366.1) Change in cash paid for acquisitions, associated with Floorplan notes payable 50.3 66.3 Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (31.9) (48.8) Adjusted net cash used in investing activities $ (1,264.2) $ (348.6) CASH FLOWS FROM FINANCING ACTIVITIES: Net cash provided by financing activities: $ 681.1 $ 185.2 Change in Floorplan notes payable, excluding floorplan offset (115.2) (547.3) Adjusted net cash provided by (used in) financing activities $ 565.9 $ (362.1) Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2024 compared to 2023 For the Current Year, net cash provided by operating activities increased by $396.1 million 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.
Revenues Total revenues in the U.S. during the Current Year increased $958.7 million, or 6.5%, as compared to the same period in the Prior Year, driven by the acquisition of stores and higher same store revenues. Total same store revenues in the U.S. during the Current Year increased $319.8 million, or 2.2%, as compared to the Prior Year.
(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.
The remaining available balance can be used for Ford new vehicle inventory financing. (4) The remaining available balance as of December 31, 2024, can be used for General Motors new and rental vehicle inventory financing.
The decrease in new vehicle retail same store gross profit per unit is due to modestly higher production and inventory levels of new vehicles as described above.
The decrease in new vehicle retail same store gross profit per unit sold is due to higher deliveries from our OEMs, leading to increasing inventory levels of new vehicles as described above.
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.
Total SG&A expenses in the U.S. during the Current Ye ar increased $81.1 million, or 5.0%, as compared to the Prior Year, primarily driven by higher same store SG&A expenses.
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.
For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Depreciation and amortization expense $ 113.1 $ 92.0 $ 21.1 22.9 % Asset impairments $ 33.0 $ 32.9 $ 0.1 0.3 % Restructuring charges $ 16.7 $ — $ 16.7 100.0 % Other operating (income) expense $ (10.0) $ — $ (10.0) (100.0) % Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 % Other interest expense, net $ 141.3 $ 99.8 $ 41.5 41.6 % Provision for income taxes $ 161.5 $ 198.2 $ (36.7) (18.5) % 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. and U.K. regions, 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, 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.
As of December 31, 2024, we had $476.1 million available under our current share repurchase authorization. During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.88 per share, which resulted in $24.7 million paid to common shareholders and $0.5 million to unvested RSA holders.
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.
During the Prior Year, we recorded total property and equipment and ROU asset impairment charges of $6.8 million in the U.S. region. During the Current Year, we recognized $4.8 million in intangible asset impairment associated with assets held for sale. Refer to Note 13. Intangible Franchise Rights and Goodwill, Note 11. Property and Equipment, Net and Note 12.
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.
Used vehicle wholesale same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by a decrease in wholesale used vehicle units sold. Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by i ncreases in customer pay, warranty and wholesale revenues reflecting increased business activity.
Total same store SG&A expenses in the U.S. during the Current Year increased $41.2 million or 2.7% as compared to the Prior Year, primarily driven by increased activity related to outside services and professional fees, loaner car and related expenses, insurance and taxes, advertising expenses, and rent and facilities expenses, including related taxes, insurance and utilities.
Total same store SG&A expenses in the U.S. during the Current Year increased $65.3 million or 4.2% as compared to the Prior Year, primarily driven by increased employee related costs, outside services, advertising expenses, loaner car and related expenses, and fees associated with the Inchcape Acquisition.
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.
Used vehicle wholesale same store gross profit outperformed the Prior Year, driven by an increase in same store gross profit per unit sold, coupled with an increase in same store units sold. Parts and service same store gross profit outperformed the Prior Year, as described above for parts and service same store revenues.
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%.
Total SG&A expenses in the U.K. during the Curre nt Year increased $171.3 million, or 56.4%, as compared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $21.6 million, or 7.1%, as compared to the Prior Year. On a constant currency basis, total same store SG& A expenses increased 4.2%.
We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments.
We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments. For the Current Year, $245.1 million was used to purchase property and equipment.
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.
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 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.
For further discussion, please refer to Note 16. 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 (refer to Note 14.
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.
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”), $500.0 million 6.375% Senior Notes due January 2030 (“6.375% Senior Notes”), real estate related debt and other debt, partially offset by interest income.
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.
Total same store gross profit in the U.S. during the Current Yea r decreased $27.7 million, or 1.1%, as compared to the Prior Year, driven by downward pressure on new vehicle margins, partially offset by increases from parts and service, F&I and used vehicle gross profit.
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.
Gross Profit Total gross profit in the U.K. during t he Current Year increased $150.0 million, or 36.6%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.
The increase in the Current Year was partially offset by the gain on the de-designation of a mortgage interest rate swap of $4.0 million. Refer to Note 14. Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt. Refer to Note 7 .
Additionally, the difference in the Current Year was partly due to a decrease in the gain recognized on the de-designation of a mortgage interest rate swap as compared to the Prior Year of approximately $3.8 million . Refer to Note 15. Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt. Refer to Note 8 .
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.
The tax rate decrease was primarily due to the mix of earnings and an increase in tax credits. 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.
Retail new vehicle units sold for 2023 include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles due to their net presentation within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
Region — Year Ended December 31, 2024 compared to 2023 Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues.
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.
We ended the Current Year with a U.K. new vehicle inventory supply of 45 days, three days lower than the Prior Year. Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year, driven by lower used vehicle retail pricing, partially offset by more units sold.
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.
This underperformance was partially offset by improvement in parts and service and used vehicle gross margins. 34 SG&A Expenses SG&A as a percentage of gross profit increased 139 basis points and increased 332 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
(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.
(5) The outstanding balance excludes $590.1 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. 42 We have other credit facilities in the U.S. and the U.K. with third-party financial institutions, most of which are affiliated with the automobile manufacturers that provide financing for portions of our new, used and loaner vehicle inventories.
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.
The remaining available balance can be used for vehicle inventory financing. (2) The outstanding balance of $106.8 million is related to outstanding letters of credit of $11.8 million and $95.0 million in USD borrowings.
The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. While new vehicle inventory levels remain depressed compared to pre-COVID-19 pandemic levels, manufacturer vehicle deliveries were higher in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold.
Manufacturer vehicle deliveries were higher in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year created downward pressure on pricing and margins.
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”).
In 2024, we elected to perform a quantitative test on the U.K. reporting unit and a qualitative test on the U.S. reporting unit. Based on the tests performed for the U.S. and U.K. reporting units in the fourth quarter of 2024, no im pairments of goodwill were recorded during the Current 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.
Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2024 compared to 2023 For the Current Year, net cash provided by financing activities increased by $495.9 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $928.1 million.
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.
This increase was driven by higher revenues across all business lines except used vehicle retail sales. New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset by lower pricing.
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.
We anticipate we will generate sufficient cash flows from operations, coupled with cash on hand and available borrowing capacity under our credit facilities, to fund our working capital requirements, service our debt and meet any other recurring operating expenditures. 40 Available Liquidity Resources We had the following sources of liquidity available (in millions): December 31, 2024 Cash and cash equivalents $ 34.4 Floorplan offset accounts 288.2 Available capacity under Acquisition Line 893.2 Total liquidity $ 1,215.8 Cash Flows We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility.
(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.
(In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 1,862.3 $ 1,341.0 $ 521.3 38.9 % $ 59.6 34.4 % Used vehicle retail sales 1,629.2 1,234.8 394.4 31.9 % 49.9 27.9 % Used vehicle wholesale sales 138.6 127.1 11.5 9.1 % 4.1 5.8 % Total used 1,767.8 1,361.9 405.9 29.8 % 54.0 25.8 % Parts and service sales 438.3 289.0 149.3 51.7 % 13.6 47.0 % F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 % Total revenues $ 4,161.5 $ 3,059.5 $ 1,102.0 36.0 % $ 130.1 31.8 % Gross profit: New vehicle retail sales $ 146.0 $ 120.8 $ 25.2 20.9 % $ 4.7 16.9 % Used vehicle retail sales 80.8 60.2 20.6 34.3 % 2.5 30.0 % Used vehicle wholesale sales (7.8) (6.3) (1.5) (23.4) % (0.1) (21.7) % Total used 73.0 53.9 19.1 35.5 % 2.4 31.0 % Parts and service sales 248.0 167.8 80.2 47.8 % 7.7 43.2 % F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 % Total gross profit $ 560.1 $ 410.1 $ 150.0 36.6 % $ 17.9 32.2 % Gross margin: New vehicle retail sales 7.8 % 9.0 % (1.2) % Used vehicle retail sales 5.0 % 4.9 % 0.1 % Used vehicle wholesale sales (5.6) % (5.0) % (0.7) % Total used 4.1 % 4.0 % 0.2 % Parts and service sales 56.6 % 58.1 % (1.5) % Total gross margin 13.5 % 13.4 % 0.1 % Units sold: Retail new vehicles sold 46,015 32,757 13,258 40.5 % Retail used vehicles sold 56,717 42,039 14,678 34.9 % Wholesale used vehicles sold 15,377 12,307 3,070 24.9 % Total used 72,094 54,346 17,748 32.7 % Average sales price per unit sold: New vehicle retail $ 43,765 $ 42,488 $ 1,277 3.0 % $ 1,401 (0.3) % Used vehicle retail $ 28,725 $ 29,373 $ (648) (2.2) % $ 880 (5.2) % Gross profit per unit sold: New vehicle retail sales $ 3,174 $ 3,689 $ (515) (14.0) % $ 103 (16.8) % Used vehicle retail sales $ 1,425 $ 1,432 $ (7) (0.5) % $ 45 (3.6) % Used vehicle wholesale sales $ (508) $ (514) $ 6 1.3 % $ (7) 2.6 % Total used $ 1,013 $ 991 $ 22 2.2 % $ 34 (1.2) % F&I PRU $ 906 $ 904 $ 2 0.2 % $ 29 (3.0) % Other: SG&A expenses $ 475.2 $ 303.9 $ 171.3 56.4 % $ 14.6 51.5 % SG&A as % gross profit 84.8 % 74.1 % 10.7 % 36 Same Store Operating Data — U.K.
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.
Total same store gross margin in the U.K. decreased 52 basis points, driven by margin declines across all lines of business attributable to the factors as described above under gross profit. 38 SG&A Expenses SG&A as a percentage of gross profit increased by 1,074 and 787 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
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.
Used vehicle retail same store gross profit outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold, partially offset by lower same store gross profit per unit sold, as described above for used vehicle retail same store revenues.
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.
Floorplan Line (1) $ 1,500.0 $ 1,042.4 $ 457.6 Acquisition Line (2) 1,000.0 106.8 893.2 Total Revolving Credit Facility 2,500.0 1,149.3 1,350.7 FMCC facility (3) 300.0 200.0 100.0 GM Financial Facility (4) 348.1 189.5 158.6 Total U.S. credit facilities (5) $ 3,148.1 $ 1,538.8 $ 1,609.3 (1) The available balance at December 31, 2024, includes $286.3 million of immediately available funds.
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.
OEM incentives have increased in the Current Year, leading to the improved new vehicle F&I penetration. Gross Profit Total gross profit in the U.S. during the Current Year increased $70.7 million, or 2.7%, as compared to the Prior Year, driven by the acquisition of stores, partially offset by lower same store gross profit.
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.
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.
(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.
(In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/(Decrease) % Change Revenues: New vehicle retail sales $ 8,110.1 $ 7,433.6 $ 676.6 9.1 % Used vehicle retail sales 4,550.7 4,458.7 92.0 2.1 % Used vehicle wholesale sales 323.8 314.4 9.4 3.0 % Total used 4,874.5 4,773.1 101.4 2.1 % Parts and service sales 2,052.7 1,933.3 119.4 6.2 % F&I, net 735.6 674.3 61.3 9.1 % Total revenues $ 15,772.9 $ 14,814.2 $ 958.7 6.5 % Gross profit: New vehicle retail sales $ 571.8 $ 646.1 $ (74.3) (11.5) % Used vehicle retail sales 249.2 240.8 8.5 3.5 % Used vehicle wholesale sales 4.5 2.6 2.0 76.7 % Total used 253.7 243.3 10.4 4.3 % Parts and service sales 1,119.7 1,046.4 73.3 7.0 % F&I, net 735.6 674.3 61.3 9.1 % Total gross profit $ 2,680.9 $ 2,610.1 $ 70.7 2.7 % Gross margin: New vehicle retail sales 7.1 % 8.7 % (1.6) % Used vehicle retail sales 5.5 % 5.4 % 0.1 % Used vehicle wholesale sales 1.4 % 0.8 % 0.6 % Total used 5.2 % 5.1 % 0.1 % Parts and service sales 54.5 % 54.1 % 0.4 % Total gross margin 17.0 % 17.6 % (0.6) % Units sold: Retail new vehicles sold 157,662 142,809 14,853 10.4 % Retail used vehicles sold 152,970 145,617 7,353 5.0 % Wholesale used vehicles sold 37,223 31,456 5,767 18.3 % Total used 190,193 177,073 13,120 7.4 % Average sales price per unit sold: New vehicle retail $ 51,440 $ 52,052 $ (613) (1.2) % Used vehicle retail $ 29,749 $ 30,619 $ (871) (2.8) % Gross profit per unit sold: New vehicle retail sales $ 3,627 $ 4,524 $ (897) (19.8) % Used vehicle retail sales $ 1,629 $ 1,653 $ (24) (1.5) % Used vehicle wholesale sales $ 121 $ 81 $ 40 49.3 % Total used $ 1,334 $ 1,374 $ (40) (2.9) % F&I PRU $ 2,368 $ 2,338 $ 30 1.3 % Other: SG&A expenses $ 1,704.0 $ 1,622.9 $ 81.1 5.0 % SG&A as % gross profit 63.6 % 62.2 % 1.4 % 32 Same Store Operating Data — U.S.
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.
F&I same store gross profit outperformed the Prior Year, as described above for F&I same store revenues. Total same store gross margin in the U.S. decreased 58 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail.
These increases were primarily driven by increased employee-related expenses and facilities-related expenses as a result of higher activity and continued inflationary pressures, coupled with increased demonstration and loaner car expenses compared to the Prior Year.
The increases on a total same store basis were primarily driven by fees associated with the Inchcape Acqui sition, coupled with increased employee related costs, demonstration and loaner car expenses and advertising costs, offset by lower facilities costs compared to the Prior Year.
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.
No goodwill impairments were recorded on any reporting units during the Prior Year. T he quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units.
On an adjusted basis for the same period, adjusted net cash used in investing activities decreased by $114.7 million, driven by a $203.6 million decrease in acquisition activity, offset by a $59.4 million decrease in sales proceeds due to the sale of the Brazil Disposal Group in the Prior Year, which did not reoccur in the Current Year and a $30.0 million increase in purchases of property and equipment.
On an adjusted basis for the same period, adjusted net cash used in investing activities increased by $915.7 million, primarily due to a $926.8 million increase in acquisition activity, and a $59.7 million increase in purchases of property and equipment, including real estate, partially offset by a $52.8 million increase in proceeds from disposition of franchises and property and equipment.
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.
This outperformance reflects increased business activity for warranty and customer pay services, supported by increased same store technician headcount through our technician recruiting and retention efforts, providing greater capacity to meet increased demand.
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.
Revenues Total revenues in the U.K. during the Curren t Year increased $1.1 billion, or 36.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and changes in foreign currency exchange rates.
The decrease on an adjusted basis was primarily driven by a $285.6 million increase in inventory levels, a $149.9 million decrease in net income, a $32.7 million increase in contracts-in-transit and vehicle receivables and a $27.3 million decrease in accounts payable and accrued expenses, partially offset by a $319.1 million increase in Floorplan notes payable — manufacturer affiliates.
The decrease on an adjusted basis was primarily driven by a $103.5 million decrease in net income, a $440.1 million decrease in floorplan notes payable – manufacturer affiliates, partially offset by a $313.2 million decrease in inventory levels, a $126.8 million decrease in contracts-in-transit and vehicle receivables and a $51.5 million increase in accounts payable and accrued expenses. 41 Sources and Uses of Liquidity from Investing Activities — Year Ended December 31, 2024 compared to 2023 For the Current Year, net cash used in investing activities increased by $916.5 million, 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.
Total same store revenues in the U.K. during the Current Year increased $25.1 million, or 0.8%, as compared to the Prior Year, primarily driven by the positive impact of changes in foreign currency exchange rates, outperformances in new vehicle retail sales and parts and service, offset by lower used vehicle sales and F&I.
The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.21 a t December 31, 2022, to £1 to $1.27 at December 31, 2023, or an increase in the value of the GBP of 5.2%.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rat e has fluctuated from £1 to $1.273 at December 31, 2023, to £1 to $1.254 at December 31, 2024, or a slight decrease in the value of the GBP of 1.5%.
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.
On November 12 , 2024 , our Board of Directors increased the share repurchase authorization to $500.0 million. For the Current Year, 518,465 shares were repurchased, at an average price of $311.67 per share, for a total of $161.6 million, excluding excise taxes of $1.4 million.

… 70 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−1 removed5 unchanged
Biggest changeBased 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.
Biggest changeBased on variable-rate borrowings outstanding of $2.9 billion and $2.4 billion during the Current Year and Prior Year, respectively, a 100 basis point change in interest rates would have resulted in an approximate $19.9 million and a $14.4 million change to our annual interest expense, respectively, after consideration of the average interest rate swaps in effect during the periods. 43 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.
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.
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, 2024, and from which we may incur future gains or losses from changes in market interest rates and/or foreign currency exchange rates.
A 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.
A 10% devaluation in average foreign currency exchange rates for GBP to USD would have resulted in a $378.3 million and $278.1 million decrease to our revenues for the Current Year and Prior Year, respectively. For additional information about our market sensitive financial instruments, see Note 8. Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements.
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.
During the Current Year and Prior Year, we recognized $88.4 million and $71.2 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.
Removed
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.
Added
From time to time we may enter into foreign currency exchange rate cash flow hedges in connection with pending acquisition-related payments denominated in a foreign currency.

Other GPI 10-K year-over-year comparisons