Company: GPI
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0001031203-25-000049
Chunk: 19

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.Cash and Cash Equivalents, Contracts-In-Transit and Vehicle Receivables, Accounts and Notes Receivable, Accounts Payable, Variable Rate Long-Term Debt and Floorplan Notes PayableThe fair values of these financial instruments approximate their carrying values due to the short-term nature of the instruments and/or the existence of variable interest rates.Fixed Rate Long-Term DebtThe Company estimates the fair value of its $750.0 million 4.00% Senior Notes due August 2028 (“4.00% Senior Notes”) and the $500 million 6.375% Senior Notes due January 2030 (“6.375% Senior Notes”) using quoted prices for the identical liability (Level 1) and estimates the fair value of its fixed-rate mortgage facilities using a present value method based on current market interest rates for similar types of financial instruments (Level 2). Refer to Note 9. Debt for further discussion of the Company’s long-term debt arrangements. The carrying value and fair value of the Company’s fixed rate long-term debt were as follows (in millions):June 30, 2025December 31, 2024Carrying Value (1)Fair ValueCarrying Value (1)Fair Value4.00% Senior Notes$750.0 $725.8 $750.0 $701.5 6.375% Senior Notes500.0 515.2 500.0 502.4 Real estate related129.1 127.1 140.6 136.4 Total$1,379.1 $1,368.1 $1,390.6 $1,340.4 (1) Carrying value excludes unamortized debt issuance costs.

Derivative Financial Instruments The Company holds interest rate swaps to hedge against variability of interest payments indexed to SOFR. The Company’s interest rate swaps are measured at fair value utilizing a SOFR forward yield curve matched to the identical maturity term of the instrument being measured. Observable inputs utilized in the income approach valuation method incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. The fair value of the interest rate swaps also considers the credit risk of the Company for instruments in a liability position or the counterparty for instruments in an asset position. The credit risk is calculated using the spread