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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number: 1-13461
Group 1 Automotive, Inc.
(Exact name of registrant as specified in its charter) 
Delaware76-0506313
(State of other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  800 Gessner,Suite 50077024
     Houston,TX(Zip code)
(Address of principal executive offices)
(713) 647-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTicker symbol(s)Name of exchange on which registered
Common stock, par value $0.01 per shareGPINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerþ¨Accelerated filer
Non-accelerated filer
¨
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if that registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  þ
As of October 24, 2022, the registrant had 14,580,748 shares of common stock outstanding.


TABLE OF CONTENTS
 

i

GLOSSARY OF DEFINITIONS

The following are abbreviations and definitions of terms used within this report:
TermsDefinitions
BrexitWithdrawal of the U.K. from the European Union
BRLBrazilian Real (R$)
COVID-19 pandemicCoronavirus disease first emerging in December 2019 and resulting in the ongoing global pandemic in 2020, 2021 and 2022
EPSEarnings per share
F&IFinance, insurance and other
FMCCFord Motor Credit Company
GBPBritish Pound Sterling (£)
LIBORLondon Interbank Offered Rate
OEMOriginal equipment manufacturer
PRUPer retail unit
RSARestricted stock award
SECSecurities and Exchange Commission
SG&ASelling, general and administrative
SOFRSecured Overnight Financing Rate
USDUnited States Dollar ($)
U.K.United Kingdom
U.S.United States of America
U.S. GAAPAccounting principles generally accepted in the U.S.
VSCVehicle service contract










1

Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). These forward-looking statements include, but are not limited to, statements concerning the Company’s strategy, future operation performance, future liquidity and availability of financing, capital allocation, the completion of future acquisitions and divestitures, business trends in the retail automotive industry and changes in regulations. When used in this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may” and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are based on the Company’s expectations and beliefs as of the date of this Form 10-Q concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable when and as made, there can be no assurance that future developments affecting the Company will be those that are anticipated. The Company’s forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the risks set forth in Item 1A. Risk Factors of this Form 10-Q.
For additional information regarding known material factors that could cause actual results to differ from projected results, refer to Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”), as well as Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk of this Form 10-Q.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertake no responsibility and expressly disclaim any duty, to update any such statements, whether as a result of new information, new developments or otherwise, or to publicly release the result of any revision of the forward-looking statements after the date they are made, except to the extent required by law.
2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Unaudited)
(In millions, except share data)
September 30, 2022December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$20.5 $14.9 
Contracts-in-transit and vehicle receivables, net222.2 218.9 
Accounts and notes receivable, net184.4 177.9 
Inventories1,185.6 1,073.1 
Prepaid expenses 24.8 30.6 
Other current assets18.9 50.4 
Current assets classified as held for sale38.6 100.3 
TOTAL CURRENT ASSETS1,695.1 1,666.2 
Property and equipment, net of accumulated depreciation of $534.4 and $513.5, respectively
2,037.6 1,957.8 
Operating lease assets246.9 267.8 
Goodwill1,612.2 1,420.2 
Intangible franchise rights482.1 392.3 
Other long-term assets177.6 45.0 
TOTAL ASSETS$6,251.5 $5,749.4 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Floorplan notes payable — credit facility and other, net of offset account of $206.1 and $268.6, respectively
$542.0 $295.0 
Floorplan notes payable — manufacturer affiliates, net of offset account of $12.4 and $3.3, respectively
203.9 236.0 
Current maturities of long-term debt141.5 220.4 
Current operating lease liabilities22.8 25.9 
Accounts payable468.0 457.8 
Accrued expenses and other current liabilities263.7 258.6 
Current liabilities classified as held for sale5.2 49.9 
TOTAL CURRENT LIABILITIES1,647.1 1,543.6 
Long-term debt1,800.9 1,815.3 
Long-term operating lease liabilities236.5 256.6 
Deferred income taxes227.7 180.9 
Other long-term liabilities125.2 127.7 
Commitments and Contingencies (Note 12)
STOCKHOLDERS’ EQUITY:
Common stock, $0.01 par value, 50,000,000 shares authorized; 25,239,507 and 25,336,054 shares issued, respectively
0.3 0.3 
Additional paid-in capital336.8 325.8 
Retained earnings2,922.3 2,345.9 
Accumulated other comprehensive income (loss)(4.7)(156.2)
Treasury stock, at cost; 10,020,687 and 8,160,228 shares, respectively
(1,040.5)(690.4)
TOTAL STOCKHOLDERS’ EQUITY2,214.1 1,825.2 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$6,251.5 $5,749.4 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
3

GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
REVENUES:
New vehicle retail sales$1,883.3 $1,513.9 $5,479.8 $4,828.6 
Used vehicle retail sales1,488.6 1,230.4 4,353.9 3,302.3 
Used vehicle wholesale sales89.6 106.0 278.9 278.0 
Parts and service sales515.6 416.5 1,491.1 1,152.2 
Finance, insurance and other, net186.3 146.0 549.5 431.3 
Total revenues4,163.4 3,412.8 12,153.1 9,992.3 
COST OF SALES:
New vehicle retail sales1,676.7 1,352.4 4,861.6 4,411.4 
Used vehicle retail sales1,412.6 1,133.3 4,100.6 3,038.6 
Used vehicle wholesale sales91.1 98.7 276.8 257.9 
Parts and service sales230.5 189.7 668.5 515.0 
Total cost of sales3,410.8 2,774.1 9,907.4 8,222.9 
GROSS PROFIT752.6 638.7 2,245.8 1,769.5 
Selling, general and administrative expenses450.9 376.3 1,329.6 1,056.2 
Depreciation and amortization expense21.8 19.2 65.9 56.8 
Asset impairments 1.7 0.8 1.7 
INCOME FROM OPERATIONS279.9 241.5 849.4 654.7 
Floorplan interest expense6.5 4.3 17.7 20.5 
Other interest expense, net19.6 13.1 55.5 39.8 
Other income(3.4) (3.4) 
INCOME BEFORE INCOME TAXES257.2 224.1 779.6 594.4 
Provision for income taxes60.2 51.6 182.1 132.2 
Net income from continuing operations197.1 172.5 597.5 462.2 
Net (loss) income from discontinued operations(1.3)(0.4)(2.9)2.8 
NET INCOME$195.7 $172.1 $594.6 $465.0 
BASIC EARNINGS PER SHARE:
Continuing operations$12.61 $9.40 $36.55 $25.16 
Discontinued operations(0.09)(0.02)(0.18)0.15 
Total$12.53 $9.37 $36.38 $25.31 
DILUTED EARNINGS PER SHARE:
Continuing operations$12.57 $9.35 $36.43 $25.05 
Discontinued operations(0.09)(0.02)(0.18)0.15 
Total$12.48 $9.33 $36.25 $25.21 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic15.2 17.8 15.9 17.8 
Diluted15.2 17.8 15.9 17.8 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
4

GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
NET INCOME$195.7 $172.1 $594.6 $465.0 
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustments:
Unrealized foreign currency translation adjustments(31.2)(11.5)(59.3)(6.7)
Reclassification of cumulative foreign currency translation adjustments associated with the Brazil Disposal122.8  122.8  
Reclassification of other cumulative foreign currency translation adjustments1.5  1.5  
Foreign currency translation adjustments, net of reclassifications93.1 (11.5)65.1 (6.7)
Net unrealized gain (loss) on interest rate risk management activities, net of tax:
Unrealized gain (loss) arising during the period, net of tax (provision) benefit of $(9.8), $0.2, $(26.1) and $(4.9), respectively
31.9 (0.6)84.8 16.1 
Reclassification adjustment for (gain) loss included in interest expense, net of tax (provision) benefit of $(0.4), $0.6, $0.5 and $1.9, respectively
(1.4)1.8 1.6 6.1 
Reclassification related to de-designated interest rate swaps, net of tax benefit of $, $, $ and $0.7, respectively
   2.4 
Unrealized gain on interest rate risk management activities, net of tax30.4 1.3 86.4 24.5 
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX123.5 (10.2)151.5 17.9 
COMPREHENSIVE INCOME$319.3 $161.9 $746.1 $482.9 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
5

GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 
(Unaudited)
(In millions, except share and per share data)
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury StockTotal
 SharesAmount
BALANCE, JUNE 30, 202225,258,744 $0.3 $331.8 $2,732.5 $(128.3)$(931.8)$2,004.5 
Net income— — — 195.7 — — 195.7 
Other comprehensive income, net of taxes— — — — 123.5 — 123.5 
Purchases of treasury stock— — — — — (105.4)(105.4)
Net issuance of treasury shares to stock compensation plans and other(19,237)— (1.2)— — (3.3)(4.5)
Stock-based compensation— — 6.2 — — — 6.2 
Dividends declared ($0.38 per share)
— — — (6.0)— — (6.0)
BALANCE, SEPTEMBER 30, 202225,239,507 $0.3 $336.8 $2,922.3 $(4.7)$(1,040.5)$2,214.1 
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury StockTotal
 SharesAmount
BALANCE, DECEMBER 31, 202125,336,054 $0.3 $325.8 $2,345.9 $(156.2)$(690.4)$1,825.2 
Net income— — — 594.6 — — 594.6 
Other comprehensive income, net of taxes— — — — 151.5 — 151.5 
Purchases of treasury stock— — — — — (359.5)(359.5)
Net issuance of treasury shares to stock compensation plans and other(96,547)— (10.2)— — 9.4 (0.8)
Stock-based compensation— — 21.2 — — — 21.2 
Dividends declared ($1.11 per share)
— — — (18.2)— — (18.2)
BALANCE, SEPTEMBER 30, 202225,239,507 $0.3 $336.8 $2,922.3 $(4.7)$(1,040.5)$2,214.1 






See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
6

GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 
(Unaudited)
(In millions, except share and per share data)
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury StockTotal
 SharesAmount
BALANCE, JUNE 30, 202125,357,677 $0.3 $313.6 $2,099.1 $(155.9)$(503.1)$1,754.0 
Net income— — — 172.1 — — 172.1 
Other comprehensive loss, net of taxes— — — — (10.2)— (10.2)
Net issuance of treasury shares to stock compensation plans(14,621)— 0.8 — — 2.3 3.2 
Stock-based compensation— — 5.7 — — — 5.7 
Dividends declared ($0.34 per share)
— — — (6.3)— — (6.3)
BALANCE, SEPTEMBER 30, 202125,343,056 $0.3 $320.2 $2,265.0 $(166.1)$(500.8)$1,918.6 
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury StockTotal
 SharesAmount
BALANCE, DECEMBER 31, 202025,433,048 $0.3 $308.3 $1,817.9 $(184.0)$(492.8)$1,449.6 
Net income— — — 465.0 — — 465.0 
Other comprehensive income, net of taxes— — — — 17.9 — 17.9 
Purchases of treasury stock— — — — — (18.6)(18.6)
Net issuance of treasury shares to stock compensation plans(89,992)— (7.1)— — 10.7 3.6 
Stock-based compensation— — 19.0 — — — 19.0 
Dividends declared ($0.98 per share)
— — — (17.9)— — (17.9)
BALANCE, SEPTEMBER 30, 202125,343,056 $0.3 $320.2 $2,265.0 $(166.1)$(500.8)$1,918.6 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
7

GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
 Nine Months Ended September 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$594.6 $465.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization66.9 57.9 
Change in operating lease assets22.6 18.1 
Deferred income taxes17.4 7.7 
Asset impairments7.1 1.7 
Stock-based compensation21.2 19.0 
Amortization of debt discount and issuance costs2.3 1.8 
Gain on disposition of assets(40.8)(2.1)
Loss on extinguishment of debt 3.8 
Unrealized loss on derivative instruments 1.4 
Other1.3 2.0 
Changes in assets and liabilities, net of acquisitions and dispositions:
Accounts payable and accrued expenses51.0 (21.6)
Accounts and notes receivable(7.3)19.2 
Inventories(156.6)643.0 
Contracts-in-transit and vehicle receivables(6.6)43.1 
Prepaid expenses and other assets6.4 (10.0)
Floorplan notes payable manufacturer affiliates
(23.9)(112.5)
Deferred revenues(0.3)(1.1)
Operating lease liabilities(21.9)(18.9)
Net cash provided by operating activities533.4 1,117.5 
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions, net, including repayment of sellers’ floorplan notes payable of $7.7 and $5.3, respectively
(424.2)(74.6)
Proceeds from disposition of franchises, property and equipment132.6 19.8 
Purchases of property and equipment(93.3)(88.4)
Proceeds from sale of discontinued operations, net59.4  
Other(0.5)(20.4)
Net cash used in investing activities(325.9)(163.5)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facility floorplan line and other
7,548.3 5,796.1 
Repayments on credit facility floorplan line and other
(7,294.2)(6,479.2)
Borrowings on credit facility acquisition line
286.0 67.3 
Repayments on credit facility acquisition line
(411.3)(59.9)
Debt issuance costs(4.6) 
Borrowings on other debt296.0 110.0 
Principal payments on other debt(246.5)(143.7)
Proceeds from employee stock purchase plan15.9 11.9 
Payments of tax withholding for stock-based compensation(9.1)(8.3)
Repurchases of common stock, amounts based on settlement date(359.5)(18.6)
Dividends paid(18.1)(17.9)
Other(1.2) 
Net cash used in financing activities(198.4)(742.2)
Effect of exchange rate changes on cash(7.2)(2.1)
Net increase in cash and cash equivalents1.9 209.7 
CASH AND CASH EQUIVALENTS, beginning of period18.7 87.3 
CASH AND CASH EQUIVALENTS, end of period$20.5 $296.9 
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
8

GROUP 1 AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION AND CONSOLIDATION AND ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying Condensed Consolidated Financial Statements and notes thereto, have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Results for interim periods are not necessarily indicative of the results that can be expected for a full year and therefore should be read in conjunction with the Company’s audited Financial Statements and notes thereto included within the Company’s 2021 Form 10-K. All intercompany balances and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements reflect the consolidated accounts of the parent company, Group 1 Automotive, Inc. (the “Company”), and its subsidiaries, all of which are wholly owned.
On November 12, 2021, the Company entered into a Share Purchase Agreement (the “Brazil Agreement”) with Original Holdings S.A. (“Buyer”). 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 the Company’s Brazilian operations (the “Brazil Disposal Group”) for approximately BRL 510.0 million in cash (the “Brazil Disposal”). On July 1, 2022, the Company completed the Brazil Disposal. The Brazil Disposal Group met the criteria to be reported as held for sale and 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. The Brazil Disposal Group was previously included in the Brazil segment. Effective as of the fourth quarter of 2021, the Company is aligned into two reportable segments: U.S. and U.K. Refer to Note 5. Segment Information for additional information on the Company’s segments.
Unless otherwise specified, disclosures in these Condensed Consolidated Financial Statements reflect continuing operations only. Certain prior-period amounts, primarily related to the Brazil Discontinued Operations, have been reclassified in the Condensed Consolidated Financial Statements and accompanying notes to conform to current-period presentation. Refer to Note 4. Discontinued Operations and Other Divestitures for additional information.
Certain amounts in the Condensed Consolidated Financial Statements and the accompanying notes may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented. These Condensed Consolidated Financial Statements reflect, in the opinion of management, all normal recurring adjustments necessary to fairly state, in all material respects, the Company’s financial position and results of operations for the periods presented.
Use of Estimates
The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances; however, actual results could differ materially from such estimates. The significant estimates made by management in the accompanying Condensed Consolidated Financial Statements include, but not limited to, inventory valuation adjustments, reserves for future chargebacks on finance, insurance and VSC fees, self-insured property and casualty insurance exposure, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of goodwill and intangible franchise rights and reserves for potential litigation.

9

GROUP 1 AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)
2. REVENUES
The following tables present the Company’s revenues disaggregated by its geographical segments (in millions):
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
U.S.U.K.TotalU.S.U.K.Total
New vehicle retail sales$1,586.9 $296.4 $1,883.3 $4,581.8 $898.0 $5,479.8 
Used vehicle retail sales1,212.1 276.5 1,488.6 3,447.6 906.3 4,353.9 
Used vehicle wholesale sales61.3 28.3 89.6 177.6 101.2 278.9 
Total new and used vehicle sales2,860.3 601.2 3,461.5 8,207.0 1,905.5 10,112.5 
Parts and service sales (1)
453.8 61.8 515.6 1,307.7 183.4 1,491.1 
Finance, insurance and other, net (2)
170.2 16.1 186.3 498.1 51.4 549.5 
Total revenues$3,484.3 $679.1 $4,163.4 $10,012.8 $2,140.3 $12,153.1 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
U.S.U.K.TotalU.S.U.K.Total
New vehicle retail sales$1,208.5 $305.4 $1,513.9 $3,958.9 $869.7 $4,828.6 
Used vehicle retail sales902.3 328.0 1,230.4 2,481.7 820.5 3,302.3 
Used vehicle wholesale sales68.0 38.1 106.0 179.6 98.4 278.0 
Total new and used vehicle sales2,178.8 671.5 2,850.3 6,620.2 1,788.7 8,408.9 
Parts and service sales (1)
353.1 63.4 416.5 982.0 170.2 1,152.2 
Finance, insurance and other, net (2)
130.5 15.6 146.0 389.4 41.9 431.3 
Total revenues$2,662.4 $750.4 $3,412.8 $7,991.6 $2,000.7 $9,992.3 
(1) The Company has elected not to disclose revenues related to remaining performance obligations on its maintenance and repair services as the duration of these contracts is less than one year.
(2) Includes variable consideration recognized of $5.3 million and $5.1 million during the three months ended September 30, 2022 and 2021, respectively, and $22.2 million and $18.7 million during the nine months ended September 30, 2022 and 2021, respectively, relating to performance obligations satisfied in previous periods on the Company’s retrospective commission income contracts. Refer to Note 8. Receivables, Net and Contract Assets for the balance of the Company’s contract assets associated with revenues from the arrangement of financing and sale of service and insurance contracts.
3. ACQUISITIONS
The Company accounts for business combinations under the acquisition method of accounting, under which the Company allocates the purchase price to the assets acquired and liabilities assumed based on an estimate of fair value.
Prime Acquisition
In November 2021, the Company completed the acquisition of the Prime Automotive Group (“Prime”), including 28 dealerships, certain real estate and three collision centers in the Northeastern U.S. (collectively referred to as the “Prime Acquisition”), for aggregate consideration of $934.2 million.
The Company analyzed and assessed all available information related to property and equipment and property lease contracts, determining the preliminary fair values established in 2021,were appropriate and no material adjustments were recorded to these fair values in the nine months ended September 30, 2022. The Company previously recorded a $33.4 million deposit for the purchase of an additional dealership as part of the Prime Acquisition, which had not closed as of December 31, 2021. As of September 30, 2022, the Company is still waiting for distributor approval to obtain ownership of the additional dealership. Pursuant to the purchase agreement with the seller, the seller initiated legal action against the distributor to compel the approval of the sale of the dealership. In March 2022, upon the contractual release of funds from escrow to the seller related to the dealership, the deposit was recognized as additional consideration paid and reflected as additional goodwill, resulting in total consideration associated with the Prime Acquisition of $967.6 million. If such legal action is resolved within the 12-month measurement period following the acquisition date, the Company will make an adjustment to reflect the fair value of the acquisition of this dealership. The results of the Prime Acquisition are included in the U.S. segment. The goodwill is deductible for income tax purposes.
10

GROUP 1 AUTOMOTIVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)
The following table summarizes the consideration paid and aggregate amounts of assets acquired and liabilities assumed (in millions):
Total consideration$967.6 
Identifiable assets acquired and liabilities assumed
Inventories136.7 
Property and equipment266.8 
Intangible franchise rights135.3 
Operating lease assets58.3 
Other assets (1)
62.2 
Total assets acquired659.3 
Operating lease liabilities56.6 
Other liabilities (2)
38.3 
Total liabilities assumed94.9 
Total identifiable net assets564.4 
Goodwill$403.2 
(1) Other assets acquired in connection with the Prime Acquisition include $55.3 million of assets classified as held for sale as of the acquisition date. See the table below for additional details.
(2) Other liabilities assumed in connection with the Prime Acquisition include $1.7 million of liabilities classified as held for sale as of the acquisition date. See the table below for additional details.
Prime assets classified as held for sale as of the acquisition date (in millions)
Inventories$10.4 
Property and equipment