Company: GPI
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001031203-25-000061
Chunk: 67

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 1
Chunk 67
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, or 24.0%, as compared to the Prior Year Quarter. For the Current Year, floorplan interest expense increased $0.6 million, or 0.8%, as compared to the Prior Year. The decrease in floorplan interest expense during the Current Quarter was driven primarily by a decrease in new vehicle inventories coupled with decreased floorplan interest rates compared to the Prior Year Quarter. Floorplan interest expense during the Current Year remained flat.

Refer to Note 8. Financial Instruments and Fair Value Measurements within our Notes to Condensed Consolidated Financial Statements for additional discussion of interest rate swaps.

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 $8.2 million, or 20.6%, as compared to the Prior Year Quarter. For the Current Year, other interest expense, net, increased $27.9 million, or 27.3%, as compared to the Prior Year. The increase in other interest expense, net during the Current Quarter and Current Year was primarily attributable to interest expense associated with the 6.375% Senior Notes issued in 2024, as well as interest expense attributable to the Acquisition Line and other debt. Refer to Note 10. Debt within our Notes to Condensed Consolidated Financial Statements for additional discussion of our debt.

Provision for Income Taxes

Provision for income taxes of $23.0 million during the Current Quarter decreased by $19.4 million, or 45.7%, as compared to the Prior Year Quarter. For the Current Year, our provision for income taxes of $106.8 million decreased by $26.7 million, or 20.0%, as compared to the Prior Year. The tax expense decrease in the Current Quarter and Current Year, as compared to the Prior Year Quarter and Prior Year, was primarily due to lower pre-tax income. Our Current Quarter effective tax rate of 63.7% was higher than the Prior Year Quarter’s effective tax rate of 26.6%, primarily due to the non-deductible U.K. goodwill impairment of $93.0 million in the Current Quarter compared to the Prior Year Quarter.

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