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
For the fiscal year ended December 31, 2003
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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 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) Statements of Net Assets available for Benefits - December 31,
2003 and 2002
(c) Statement of Changes in Net Assets available for Benefits -
Year ended December 31, 2003; 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.
Houston, Texas
FINANCIAL STATEMENTS
December 31, 2003 and 2002
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ................... 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 H, LINE 4a - DELINQUENT DEPOSITS OF
PARTICIPANT CONTRIBUTIONS ........................................ 8
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR).... ... 9
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
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,
2003 and 2002 and the related statement of changes in net assets available for
benefits for the year ended December 31, 2003. 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 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 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, 2003 and 2002 and the changes in net assets available for benefits
for the year ended December 31, 2003 in conformity with U.S. generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of delinquent
deposits of participant contributions and 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
are the responsibility of the Plan's management. The supplemental schedules have
been subjected to the auditing procedures applied in the audit of the 2003 basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 2003 basic financial statements taken as a whole.
/S/ CROWE CHIZEK AND COMPANY LLC
--------------------------------
CROWE CHIZEK AND COMPANY LLC
South Bend, Indiana
May 12, 2004
1.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003 and 2002
2003 2002
----------- -----------
ASSETS
Investments (Note 3) $56,815,884 $41,184,654
Receivables
Employer contribution 137,800 410,869
Participant contributions 589,016 636,977
Accrued income 29,698 29,177
Other 16,998 -
----------- -----------
773,512 1,077,023
Cash 32,152 13,233
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $57,621,548 $42,274,910
=========== ===========
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, 2003
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation in fair value of investments (Note 3) $ 8,573,890
Interest and dividends 827,219
-----------
9,401,109
Contributions
Employer 2,959,075
Participant 9,246,569
Rollover 1,211,446
-----------
13,417,090
-----------
Total additions 22,818,199
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 7,268,793
Administrative expenses 202,768
-----------
Total deductions 7,471,561
-----------
NET INCREASE 15,346,638
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 42,274,910
-----------
End of year $57,621,548
===========
See accompanying notes to financial statements.
3.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
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. 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. Effective
January 1, 2003, matching contributions are calculated 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 is 100% vested
after five years of credited service.
Forfeitures: The Plan allows the use of forfeitures to pay for Plan
administrative expenses or to reduce employer contributions to the Plan. During
the year ended December 31, 2003, forfeited nonvested accounts of $236,317 were
used to reduce employer contributions by $64,325 and to pay for Plan
administrative expenses of $171,992. As of December 31, 2003 there were $55,671
remaining forfeited nonvested amounts that will be used to reduce future
employer contributions or pay for Plan administrative expenses.
(Continued)
4.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
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 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.
Estimates: The preparation of financial statements in conformity with U.S.
generally accepted accounting principles 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.
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.
(Continued)
5.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Payment of Benefits: Benefits are recorded when paid.
NOTE 3 - INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
2003 2002
---- ----
Group 1 Automotive, Inc. Common Stock $3,584,963 $2,730,169
Massachusetts Investors Growth Stock Fund 9,941,307 8,060,011
Merrill Lynch Retirement Preservation Trust 9,101,606 7,239,562
Merrill Lynch Bond Core Fund 6,956,566 -
Merrill Lynch Equity Index Trust 4,544,927 3,327,816
PIMCO Small Cap Value Fund 4,349,437 2,851,533
Van Kampen Growth and Income Fund 4,308,916 2,483,470
The Oakmark Equity and Income Fund 3,257,158 2,560,409
Mercury Total Return Bond Fund - 4,814,478
During 2003, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$8,573,890 as follows:
Mutual funds $ 6,302,097
Common/collective funds 969,625
Group 1 Automotive, Inc. common stock 1,302,168
---------------
$ 8,573,890
===============
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.
(Continued)
6.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
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 $202,768 for the year ended December 31, 2003. Certain Plan
administrative costs have been paid by the Company.
The Plan held the following party-in-interest investments:
2003 2002
---- ----
Group 1 Automotive, Inc. common stock $ 3,584,963 $ 2,730,169
Merrill Lynch Retirement Preservation Trust 9,101,606 7,239,562
Merrill Lynch Bond Core Fund 6,956,566 -
Merrill Lynch Equity Index Trust 4,544,927 3,327,816
Merrill Lynch Fundamental Growth Fund 2,827,502 1,771,300
Participant Loans 2,161,144 1,955,568
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, 2003 and 2002, amounts allocated to these individuals totaled
$19,663 and $0, respectively.
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
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.
7.
SUPPLEMENTAL SCHEDULES
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
SCHEDULE H, LINE 4a - DELINQUENT DEPOSITS OF PARTICIPANT CONTRIBUTIONS
Year ended December 31, 2003
Name of Plan Sponsor: Group 1 Automotive, Inc.
Employer Identification Number: 76-0506313
Three-Digit Plan Number: 001
Participant Contributions of the Current Plan Year Not Deposited
Into the Plan Within the Time Period Described in 29 CFR 2510.3-102 $12,288
Plus: Delinquent Deposits of Prior Year Participant Contributions
Not Corrected Prior to the Current Plan Year 1,797
-------
Total Delinquent Participant Contributions (line 4a of Schedule H) 14,085
Less: Amount fully corrected under the DOL's Voluntary Fiduciary
Correction Program (VFC Program) and PTE 2002-51 -
-------
Delinquent Deposits of Participant Contributions Constituting
Nonexempt Prohibited Transactions $14,085(1)
=======
(1) Of this amount $14,085 has been fully corrected outside of the VFC Program.
8.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
Name of Plan Sponsor: Group 1 Automotive, Inc.
Employer Identification Number: 76-0506313
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
--- ----------- -------------- ---- -----
Mutual Funds
Delaware Management Holdings, Inc. Delaware Group Trend Fund # $ 1,602,461
Federated Investors, Inc. Federated International Equity Fund # 2,667,473
ING Investments, LLC ING Pilgrim International Fund # 1,512,400
MFS Investment Management Massachusetts Investors Growth Stock # 9,941,307
Fund
* Merrill Lynch Trust Company Merrill Lynch Bond Core Fund # 6,956,566
* Merrill Lynch Trust Company Merrill Lynch Fundamental Growth # 2,827,502
Fund
Oakmark The Oakmark Equity and Income Fund # 3,257,158
Pacific Investment Management Co. PIMCO Small Cap Value Fund # 4,349,437
Van Kampen Investments Van Kampen American Value Fund # 24
Van Kampen Investments Van Kampen Growth and Income Fund # 4,308,916
Common Stock
* Group 1 Automotive, Inc. Common Stock # 3,584,963
Common/Collective Funds
* Merrill Lynch Trust Company Merrill Lynch Equity Index Trust # 4,544,927
* Merrill Lynch Trust Company Merrill Lynch Retirement Preservation # 9,101,606
Trust
Participant Loans
* Participant Loans Interest rates ranging from 5% to 15% 2,161,144
-----------
$56,815,884
===========
-------------
* Denotes party-in-interest
# All investments are participant directed therefore cost information is not
required.
9.
GROUP 1 AUTOMOTIVE, INC. 401(k) SAVINGS PLAN
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 18, 2004
/S/ BROOKS O'HARA
-------------------------------
Brooks O'Hara
Vice President, Human Resources
Plan Administrator
10.
(Continued)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
23.1 Consent of Independent Auditors