e11vk
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2005
OR
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
Commission
File Number 001-13461
A. Full title of the plan and address of the plan, if different from that of the issuer named
below:
Group 1 Automotive, Inc. 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
Group 1 Automotive, Inc.
950 Echo Lane, Suite 100
Houston, Texas 77024
REQUIRED INFORMATION
The following financial statements and reports, which have been prepared pursuant to the
requirements of the Employee Retirement Income Security Act of 1974, are filed for the Group 1
Automotive, Inc. 401K Savings Plan:
Financial Statements and Supplemental Schedule
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits — December 31, 2005 and 2004
Statement of Changes in Net Assets Available for Benefits — Year ended December 31, 2005
Notes to Financial Statements — December 31, 2005 and 2004
Schedule H, Line 4a — Delinquent Deposits of Participant Contributions
Supplemental Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
Signature
Exhibits
23.1 Consent of Weinstein Spira & Company, P.C.
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
Houston, Texas
FINANCIAL STATEMENTS
December 31, 2005 and 2004
CONTENTS
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
Report of Independent Registered Public Accounting Firm
Plan Administrator
Group 1 Automotive, Inc. 401(k) Savings Plan
We have audited the accompanying Statements of Net Assets Available for Benefits of the Group 1
Automotive, Inc. 401(k) Savings Plan as of December 31, 2005 and 2004, the related Statement of
Changes in Net Assets Available for Benefits for the year ended December 31, 2005, the supplemental
Schedule H, Line 4a — Schedule of Delinquent Deposits of Participant Contributions for the year
ended December 31, 2005, and the supplemental Schedule H, Line 4i — Schedule of Assets (Held at End
of Year) as of December 31, 2005. These financial statements and supplemental schedules are the
responsibility of the Plan’s management. Our responsibility is to express an opinion on these
financial statements and supplemental schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States) Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Group 1 Automotive, Inc. 401(k) Savings Plan
as of December 31, 2005 and 2004, and the changes in the net assets available for benefits for the
year ended December 31, 2005, in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental Schedule H, Line 4a — Schedule of Delinquent Deposits of
Participant Contributions for the year ended December 31, 2005 and the supplemental Schedule H,
Line 4i — Schedule of Assets (Held at End of Year) as of December 31, 2005 are presented for the
purpose of additional analysis and are not a required part of the basic financial statements but
are supplementary information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Houston, Texas
May 20, 2006
-1-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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December 31, |
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2005 |
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2004 |
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ASSETS |
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Investments (Note 3) |
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$ |
89,165,114 |
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$ |
74,974,376 |
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Participant Loans |
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3,828,244 |
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3,239,319 |
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Receivables |
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Employer contribution |
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258,317 |
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312,330 |
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Participant contributions |
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812,199 |
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995,938 |
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Accrued income |
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1,250 |
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30,812 |
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1,071,766 |
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1,339,080 |
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Cash |
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85,501 |
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76,497 |
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Net Assets Available for Benefits |
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$ |
94,150,625 |
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$ |
79,629,272 |
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The accompanying notes are an integral part of these financial statements.
-2-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 2005
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Additions to Net Assets Attributed To: |
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Investment income: |
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Net appreciation in fair value of investments (Note 3) |
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$ |
2,909,542 |
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Interest and dividends |
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3,485,307 |
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$ |
6,394,849 |
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Contributions: |
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Employer |
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4,079,840 |
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Participant |
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13,109,792 |
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Rollover |
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1,583,926 |
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18,773,558 |
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Total Additions |
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25,168,407 |
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Deductions From Net Assets Attributed To: |
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Benefits paid to participants |
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10,486,301 |
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Administrative expenses |
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160,753 |
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Total Deductions |
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10,647,054 |
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Net Increase |
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14,521,353 |
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Net Assets Available for Benefits -
Beginning of Year |
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79,629,272 |
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Net Assets Available for Benefits — End of Year |
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$ |
94,150,625 |
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The accompanying notes are an integral part of these financial statements.
-3-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
Note 1 — Description of Plan
The following description of the Group 1 Automotive, Inc. (Company or Sponsor) 401(k) Savings Plan
(Plan) provides only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan’s provisions.
General: The Plan is a defined contribution plan, adopted July 1, 1999, covering all
employees of the Company who have six months of service and are age eighteen and over. The Plan
was amended October 21, 2004 to state that effective January 1, 2005, all employees of the Company
who have 90 days of service and are age eighteen and over are eligible to participate. It is
subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions: Each year, participants may contribute up to 15% of pretax annual eligible
compensation, as defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution plans. Participants
direct the investment of their contributions into various investment options offered by the Plan,
including shares of Company stock. The Company may contribute a discretionary amount based on the
amount the participant contributes to the Plan. The Board of Directors shall determine, by
business unit, whether employer matching contributions will be made for the plan year, the matching
percentage, and the percentage of a participant’s compensation upon which the match shall be based
for each payroll period. The matching Company contribution may be in the form of cash or shares of
Company stock or a combination, but has been historically in cash. Contributions are subject to
certain limitations.
Participant Accounts: Each participant’s account is credited with the participant’s
contribution and allocation of (a) the Company’s contribution, and (b) Plan earnings, and, at
times, charged with an allocation of administrative expenses. Allocations are based on participant
contributions, participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the participant’s vested account.
Retirement, Death and Disability: A participant is entitled to 100% of his or her account
balance upon retirement, death or disability.
Vesting: Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the remainder of their account plus earnings thereon is based on years of
continuous service. A participant’s interest in the contributions made by the employer begins
vesting at 20% after one year of service, increasing 20% each year thereafter, with the participant
100% vested after 5 years.
-4-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Forfeitures: The Plan allows the use of forfeitures to pay for Plan administrative
expenses or to reduce employer contributions to the Plan. At December 31, 2005 and 2004, forfeited
nonvested accounts totaled $227,562 and $78,646, respectively. Also, in 2005, forfeited nonvested
accounts were used to reduce employer contributions by $70,000 and to pay for plan administrator
expenses of $102,145.
Payment of Benefits: On termination of service due to death, disability, or retirement, a
participant will receive a lump-sum amount equal to the value of the participant’s vested interest
in his or her account. The participant may elect to have the distribution received in cash or in
shares of Company stock.
In-service Withdrawals: A participant may withdraw from his or her rollover contribution
account any or all amounts held in such account at any time. A participant who has attained age
591/2 may withdraw from his or her account an amount not exceeding his or her vested account balance.
A participant who has suffered financial hardship may withdraw the lesser of his or her vested
account balance or the amount of financial hardship as defined in the Plan.
Loan Provisions: Participants may borrow from their fund accounts the lesser of 50% of
their vested account balance or $50,000. The loans are secured by the balance in the participant’s
account and bear interest.
Note 2 — Summary of Significant Accounting Policies
Investment Valuation and Income Recognition: The Plan’s investments are stated at fair
value. Quoted market prices are used to value investments in common stock and mutual funds.
Shares of common/collective funds are valued at the net asset value of shares held by the Plan at
year-end. Participant loans are reported at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
Basis of Accounting: The financial statements are prepared on the accrual basis of
accounting.
-5-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the Sponsor to make
estimates and assumptions that affect certain reported amounts and disclosures, and actual results
may differ from these estimates. It is at least reasonably possible that a significant change may
occur in the near term for the estimates of investment valuation.
Risks and Uncertainties: The Plan provides for various investment options. The underlying
investment securities are exposed to various risks, such as interest rate, market and credit risks.
Due to the level of risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the near term and that
such changes could materially affect participants’ account balances and the amounts reported in the
statement of assets available for benefits.
Payment of Benefits: Benefits are recorded when paid.
Note 3 — Investments
The following presents the Plan’s assets:
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2005 |
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2004 |
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American Growth Fund of America |
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$ |
14,887,118 |
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$ |
8,870,317 |
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Merrill Lynch Retirement Preservation Trust |
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14,156,391 |
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13,138,670 |
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Merrill Lynch Bond Core Fund |
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13,085,609 |
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10,850,377 |
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Van Kampen Growth and Income Fund |
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9,415,007 |
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7,161,271 |
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Allianz NFJ Small Cap Value Fund |
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9,313,272 |
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— |
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Merrill Lynch Equity Index Trust |
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4,875,879 |
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4,820,682 |
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MFS International Growth Fund |
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4,425,128 |
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2,206,659 |
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ING Pilgrim International Fund |
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4,408,283 |
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3,595,177 |
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The Oakmark Equity and Income Fund |
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4,392,826 |
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3,872,206 |
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Merrill Lynch Fundamental Growth Fund |
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3,957,500 |
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4,160,937 |
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Delaware Group Trend Fund |
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3,245,655 |
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2,670,343 |
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Group 1 Automotive, Inc. |
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3,002,444 |
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2,835,507 |
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Federated International Equity Fund |
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2 |
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1,285,952 |
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Massachusetts Investors Growth Stock Fund |
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— |
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2,479,210 |
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PIMCO Small Cap Value Fund |
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— |
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7,027,068 |
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$ |
89,165,114 |
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$ |
74,974,376 |
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-6-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
During 2005, the Plan’s investments (including gains and losses on investments bought and sold, as
well as held during the year) appreciated in value as follows:
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Mutual funds |
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$ |
2,670,923 |
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Common/collective funds |
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225,747 |
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Group 1 Automotive, Inc. common stock |
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12,872 |
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$ |
2,909,542 |
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Note 4 — Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan subject to the provisions of
ERISA. In the event of plan termination, participants would become 100% vested in the employer
contributions.
Note 5 — Parties-in-Interest
Parties-in-interest are defined under Department of Labor regulations as any fiduciary of the Plan,
any party rendering service to the Plan, the employer and certain others. Merrill Lynch Trust
Company is the trustee as defined by the Plan and, therefore, transactions with them qualify as
party-in-interest transactions. Fees paid by the Plan to Merrill Lynch for administrative services
rendered amounted to $161,446 for the year ended December 31, 2005. Certain Plan administrative
costs have been paid by the Company.
The Plan held the following party-in-interest investments:
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2005 |
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2004 |
Group 1 Automotive, Inc. Common Stock |
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$ |
3,002,444 |
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$ |
2,835,507 |
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Merrill Lynch Retirement Preservation Trust |
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14,156,391 |
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13,138,670 |
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Merrill Lynch Bond Core Fund |
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13,085,609 |
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10,850,377 |
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Merrill Lynch Equity Index Trust |
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4,875,879 |
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4,820,682 |
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Merrill Lynch Fundamental Growth Fund |
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3,957,500 |
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4,160,937 |
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Participant Loans |
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3,828,244 |
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3,239,319 |
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Note 6 — Terminated Participants
Included in net assets available for benefits are amounts allocated to individuals who have elected
to withdraw from the Plan but have not been paid. As of December 31, 2005 and 2004, amounts
allocated to these individuals totaled $64,647 and $2,969, respectively.
-7-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Note 7 — Income Tax Status
The Internal Revenue Service has ruled in a letter dated September 24, 2001, that the Plan is
designed under the applicable sections of the Internal Revenue Code (IRC) and, therefore, is not
subject to tax under present income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The Plan has been amended to comply with
IRS guidelines and the Sponsor believes that the Plan continues to qualify and to operate as
designed.
-8-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
SCHEDULE H, LINE 4a — DELINQUENT DEPOSITS OF PARTICIPANT CONTRIBUTIONS
Year Ended December 31, 2005
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Name of Plan Sponsor:
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Group 1 Automotive, Inc. |
Employer Identification Number:
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76-0506313 |
Three-Digit Plan Number:
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001 |
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Participant Contributions of the Current Plan Year Not Deposited Into
the Plan Within the Time Period Described in 29 CFR 2510.3-102 |
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$ |
26,660 |
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Plus: Delinquent Deposits of Prior Year Participant Contributions Not
Corrected Prior to the Current Plan Year |
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1,051 |
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Total Delinquent Participant Contributions (line 4a of Schedule H) |
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27,711 |
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Less: Amount fully corrected under the DOL’s Voluntary Fiduciary
Correction Program (VFC Program) and PTE 2002-51 |
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(27,711 |
) |
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Delinquent Deposits of Participant Contributions Constituting
Nonexempt Prohibited Transactions |
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$ |
— |
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-9-
GROUP 1 AUTOMOTIVE, INC. 401(K) SAVINGS PLAN
SCHEDULE H, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2005
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Name of Plan Sponsor:
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Group 1 Automotive, Inc. |
Employer Identification Number:
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76-0506313 |
Three-Digit Plan Number:
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001 |
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Issuer, or |
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Fair |
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Similar Party |
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Description of Investment |
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Value |
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Mutual Funds |
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American Funds |
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American Growth Fund of America |
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$ |
14,887,118 |
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Delaware Management Holdings, Inc. |
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Delaware Group Trend Fund |
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3,245,655 |
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Federated Investors, Inc. |
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Federated International Equity Fund |
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2 |
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ING Investments, LLC |
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ING Pilgrim International Fund |
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4,408,283 |
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MFS Investment Management |
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MFS International Growth Fund |
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4,425,128 |
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* Merrill Lynch Trust Company |
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Merrill Lynch Bond Core Fund |
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13,085,609 |
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* Merrill Lynch Trust Company |
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Merrill Lynch Fundamental Growth Fund |
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3,957,500 |
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Oakmark |
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The Oakmark Equity and Income Fund |
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4,392,826 |
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Van Kampen Investments |
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Van Kampen Growth and Income Fund |
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9,415,007 |
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Allianz Funds |
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Allianz NFJ Small Cap Value Fund |
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9,313,272 |
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Common Stock |
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* Group 1 Automotive, Inc. |
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Group 1 Automotive, Inc. |
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3,002,444 |
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Common/Collective Funds |
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* Merrill Lynch Trust Company |
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Merrill Lynch Equity Index Trust |
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4,875,879 |
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* Merrill Lynch Trust Company |
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Merrill Lynch Retirement Preservation Trust |
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14,156,391 |
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Total Investments |
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$ |
89,165,114 |
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* Participant Loans |
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Interest rates ranging from 5% to 15% |
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$ |
3,828,244 |
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* Denotes party-in-interest |
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All investments are participant-directed; therefore cost information is not required.
-10-
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Group 1
Automotive, Inc. 401(k) Savings Plan Administrator (or other persons who administer the employee
benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
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June 28, 2006 |
Group 1 Automotive,Inc. 401(k) savings Plan
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/s/ J. Brooks O'Hara
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J. Brooks O'Hara |
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Vice President, Human Resources
Plan Administrator |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
|
23.1 |
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Consent of Independent Registered Public Accounting Firm |