SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED, AS OF OCTOBER 7, 1996)
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 001-13461
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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 Group 1 Automotive, Inc. 401K Savings Plan (the "Plan") is subject
to the Employee Retirement Income Security Act of 1974.
Item 4. In lieu of the requirements of Items 1, 2 and 3 of this Form
11-K, the following financial statements of the Plan, notes thereto, and Report
of Independent Auditors thereon are being filed in this Report:
(a) Report of Independent Auditors
(b) Statement of Net Assets available for Benefits - December 31,
2001 and 2000
(c) Statement of Changes in Net Assets available for Benefits - Year
ended December 31, 2001; and
(d) Notes to Financial Statements.
The Consent of Independent Auditors to the incorporation by reference
of the foregoing financial statements in the Registration Statement on Form S-8
(No. 333-80399) pertaining to the Plan is being filed as Exhibit 23.1 to this
Report.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
Houston, Texas
FINANCIAL STATEMENTS
December 31, 2001 and 2000
CONTENTS
REPORT OF INDEPENDENT AUDITORS ............................................................................... 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ......................................................... 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS .......................................................................................... 3
NOTES TO FINANCIAL STATEMENTS ........................................................................... 4
SUPPLEMENTAL SCHEDULES
SCHEDULE OF NONEXEMPT TRANSACTIONS....................................................................... 8
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) .......................................... 9
REPORT OF INDEPENDENT AUDITORS
Plan Administrator
Group 1 Automotive, Inc. 401(k) Savings Plan
Houston, Texas
We have audited the accompanying statements of net assets available for benefits
of Group 1 Automotive, Inc. 401(k) Savings Plan (the Plan) as of December 31,
2001 and 2000 and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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 Plan as of
December 31, 2001 and 2000 and the changes in net assets available for benefits
for the year ended December 31, 2001 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 schedules of Schedule of
Nonexempt Transactions and Schedule H, Line 4i - Schedule of Assets (Held at End
of Year) 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. 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.
/s/ CROWE, CHIZEK AND COMPANY LLP
Crowe, Chizek and Company LLP
South Bend, Indiana
May 22, 2002
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1.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
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2001 2000
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ASSETS
Investments (Note 4) $35,962,699 $32,066,763
Receivables
Employer contribution 327,025 218,869
Participant contributions 420,581 467,031
Accrued income 27,587 24,900
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775,193 710,800
Cash 42,530 11,138
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NET ASSETS AVAILABLE FOR BENEFITS $36,780,422 $32,788,701
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See accompanying notes to financial statements.
2.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2001
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net depreciation in fair value of investments (Note 4) $ (4,169,331)
Interest and dividends 620,851
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(3,548,480)
Contributions
Employer 2,225,480
Participant 6,950,593
Rollover 1,252,096
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10,428,169
Transfers from other plans (Note 3) 478,643
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Total additions 7,358,332
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 3,259,833
Administrative expenses 106,778
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Total deductions 3,366,611
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NET INCREASE 3,991,721
Net assets available for benefits
Beginning of year 32,788,701
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End of year $ 36,780,422
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See accompanying notes to financial statements.
3.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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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. 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. 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. The matching Company contribution may be in the
form of cash or shares of Company Stock or a combination. Contributions are
subject to certain limitations. Certain Plan administrative costs have been paid
by the Company.
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 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 is 100% vested
after five years of credited service.
Forfeitures: The Plan was amended during 2001 to allow the Plan to use
forfeitures to pay for Plan administrative expenses. During the year ended
December 31, 2001, forfeited nonvested accounts of $188,938 were used to reduce
employer contributions by $93,265 and to pay for Plan administrative expenses of
$95,673. As of December 31, 2001 there were $90,910 remaining forfeited
nonvested amounts which will be used to reduce future employer contributions or
pay for Plan administrative expenses.
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(Continued)
4.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
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 of her rollover
contribution account any or all amounts held in such account at any time. A
participant who has attained age 59 1/2 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. Shares of
mutual funds are valued at the net asset value of shares held by the Plan at
year end.
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.
Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the plan
administrator 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.
Payment of Benefits: Benefits are recorded when paid.
NOTE 3 - TRANSFERS FROM OTHER PLANS
During 2001, two qualified plans of the Sponsor were merged into the Plan. The
participants of the other plans became participants of this plan as of the date
of the merger. The assets of the other plans were transferred to the Plan after
the merger date.
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(Continued)
5.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 4 - INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
2001 2000
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Massachusetts Investors Growth Stock Fund $ 9,456,513 $11,852,312
Merrill Lynch Retirement Preservation Trust 5,022,518 3,257,583
Merrill Lynch Equity Index Trust 4,340,649 4,891,622
Van Kampen American Value Fund 3,249,192 3,074,548
Federated International Equity Fund 2,983,671 3,260,287
Mercury Total Return Bond Fund 2,852,347 1,758,227
Group 1 Automotive, Inc. Common Stock 2,075,791 278,516
The Oakmark Equity and Income Fund 1,905,388 --
Black Rock Balanced Portfolio -- 2,111,450
During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$4,169,331 as follows:
2001
------------
Mutual funds $ (4,276,423)
Common/Collective Funds (608,726)
Common Stock 715,818
------------
$ (4,169,331)
============
NOTE 5 - 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 6 - 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, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan to Merrill Lynch for services rendered
amounted to $106,778 for the year ended December 31, 2001.
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(Continued)
6.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 6 - PARTIES-IN-INTEREST (Continued)
The Plan held the following party-in-interest investments:
2001 2000
------------ ------------
Group 1 Automotive, Inc. common stock $ 2,075,791 $ 278,516
Merrill Lynch Retirement Preservation Trust 5,022,518 3,257,583
Merrill Lynch Equity Index Trust 4,340,649 4,891,622
Merrill Lynch Fundamental Growth Fund 516,870 --
NOTE 7 - 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, 2001 and 2000, amounts allocated to these individuals totaled
$8,997 and $45,997, respectively.
NOTE 8 - 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
and, therefore, is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the Internal
Revenue Code to maintain its qualification. The Plan has been amended to comply
with IRS guidelines and the plan sponsor believes that the Plan continues to
qualify and to operate as designed.
There are some issues related to the calculation of eligible compensation
subject to 401(k) deferrals and employer matching contributions as defined by
the Plan document. Management intends to address these issues in accordance with
the procedures prescribed by the Internal Revenue Service.
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7.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
SCHEDULE OF NONEXEMPT TRANSACTIONS
December 31, 2001
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Name of Plan Sponsor: Group 1 Automotive, Inc.
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Employer Identification Number: 76-0506313
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Three-Digit Plan Number: 001
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(a) IDENTITY OF PARTY INVOLVED
Group 1
(b) RELATIONSHIP TO PLAN, EMPLOYER, OR OTHER PARTY-IN INTEREST
Plan Sponsor
(c) DESCRIPTION TO TRANSACTIONS INCLUDING MATURITY DATE, RATE OF INTEREST,
COLLATERAL, PAR OR MATURITY VALUE
Employee wage deferrals of $4,496 and loan repayments of $1,874 for January
through July, September and December of 2001 were not deposited into the
Plan by the Plan Sponsor until January 28, 2002
(d) PURCHASE PRICE
$ -0-
(e) SELLING PRICE
$ -0-
(f) LEASE RENTAL
$ -0-
(g) EXPENSES INCURRED IN CONNECTION WITH TRANSACTION
$ -0-
(h) COST OF ASSET
$6,370
(i) CURRENT VALUE OF ASSET
$6,370
(j) NET GAIN OR (LOSS) ON EACH TRANSACTION
$ -0-
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8.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
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Name of Plan Sponsor: Group 1 Automotive, Inc.
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Employer Identification Number: 76-0506313
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Three-Digit Plan Number: 001
---------------------------------------------
(c)
Description of Investment
(b) Including Maturity Date, (e)
Identity of Issue Rate of Interest, Par or (d) Current
(a) or Borrower Maturity Value Cost Value
----------------- ------------------------- ---- -------
Mercury Total Return Bond
Fund Mutual Fund, # $ 2,852,347
223,714 units
* Group 1 Automotive, Inc. Common Stock, # 2,075,791
72,809 shares
Massachusetts Investors Growth Stock
Fund Mutual Fund, # 9,456,513
733,632 units
* Merrill Lynch Retirement Preservation
Trust Collective Trust, # 5,022,518
5,022,518 units
Van Kampen American Value Fund Mutual Fund, # 3,249,192
172,554 units
Federated International Equity Fund Mutual Fund, # 2,983,671
198,119 units
* Merrill Lynch Equity Index Trust Collective Trust, # 4,340,649
53,854 units
The Oakmark Equity and Income Fund Mutual Fund, # 1,905,388
102,330 units
* Merrill Lynch Fundamental Mutual Fund, # 516,870
Growth Fund 28,541 units
Delaware Group Trend Fund Mutual Fund,
41,249 units # 731,340
Van Kampen Growth and Mutual Fund,
Income Fund 67,087 units # 1,141,157
Participant Loans Interest rates ranging
from 4.5% to 13% 1,687,263
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$ 35,962,699
===============
* denotes party-in-interest
# All investments are participant directed therefore cost information is not
required.
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9.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the Company (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.
Group 1 Automotive, Inc.
401(k) Savings Plan
----------------------------------------
Date: June 19, 2002 By: /s/ Brooks O'Hara
Brooks O'Hara
Vice President, Human Resources
Plan Administrator
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Independent Auditors