Company: GPI
Filing Date: 2025-04-25
Form Type: 10-Q
Source: 0001031203-25-000029
Chunk: 84

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-04-25
Form: 10-Q
Item: Part I, Item 2
Chunk 84
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 the Current Quarter, we recognized an impairment charge of $2.7 million associated with the anticipated termination of certain franchises in the U.K in the second quarter of 2025. The impairment charge was offset by a $2.3 million gain recognized as a result of the increase in value during the Current Quarter of previously impaired assets held for sale.

Restructuring Charges

During the Current Quarter, we incurred $11.1 million of restructuring charges. Restructuring charges primarily consist of planned workforce realignment, strategic closing of certain facilities and systems integrations, among other efforts to increase operational efficiency and profitability in connection with the integration of the Inchcape Retail acquisition with our U.K. business.

Refer to Note 4. Restructuring within our Notes to Condensed Consolidated Financial Statements for further discussion of our restructuring plan.

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. Outstanding borrowings largely fluctuate based on our levels of new and used vehicle inventory. To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.

Total floorplan interest expense during the Current Quarter, increased $6.4 million, or 31.0%, as compared to the Prior Year Quarter. The increase in floorplan interest expense during the Current Quarter was driven primarily by an increase in inventories added to our floorplan due to improvements in manufacturer production as well as acquisitions.

Refer to Note 7. Financial Instruments and Fair Value Measurements within our Notes to Condensed Consolidated Financial Statements for additional discussion of interest rate swaps. 

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Other Interest Expense, Net  

Other interest expense, net consists of interest charges primarily on our 4.00% Senior Notes, 6.375% Senior Notes, real estate related debt and other debt, partially offset by interest income.   

Other interest expense, net during the Current Quarter, increased $10.5 million, or 35.7%, as compared to the Prior Year Quarter. The increase in other interest expense, net during the Current Quarter was primarily attributable to interest expense associated with the 6.375% Senior Notes issued in 2024, as well as additional real estate related debt in our U.S. and U.K. regions. Refer to Note 9. Debt within our Notes to Condensed Consolid