Company: GPI
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001031203-25-000061
Chunk: 126

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 126
---
 with the integration of the Inchcape Retail acquisition with our U.K. business. The Company anticipates implementing further restructuring plans in the U.K. in future periods to reduce costs.

Refer to Note 5. Restructuring within our Notes to Condensed Consolidated Financial Statements for further discussion of our restructuring plan.

43

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 decreased $7.5 million, 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,