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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This MD&A should be read in conjunction with the accompanying audited consolidated financial statements and notes. Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking Statements" and Part I, Item 1A. Risk Factors for a discussion of these risks and uncertainties. An analysis of our consolidated results of operations for 2024 and 2023 and year-to-year comparisons between 2024 and 2023 can be found in MD&A in Part II, Item 7 of the Company’s Form 10-K for the year ended December 31, 2024.

OVERVIEW

We are one of the largest automotive retailers in the United States. As of December 31, 2025, through our Dealerships segment, we owned and operated 223 new vehicle franchises (171 dealership locations), representing 36 brands of automobiles, within 15 states. We also operated 39 collision centers, and Total Care Auto, Powered by Asbury ("TCA"), our F&I product provider. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts, and collision repair service; and finance and insurance products. The finance and insurance products are provided by both TCA and independent third parties. The F&I products offered by TCA are sold through affiliated dealerships. For the year ended December 31, 2025, our new vehicle revenue brand mix consisted of 40% imports, 32% luxury, and 28% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.

Our Dealerships segment revenues are derived primarily from: (i) the sale of new vehicles; (ii) the sale of used vehicles to individual retail customers ("used retail") and to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" are collectively referred to as "used"); (iii) repair and maintenance services, collision repair, the sale of automotive replacement parts, and the reconditioning of used vehicles (collectively referred to as "parts and service"); and (iv) the arrangement of third-party vehicle financing and the sale of a number of vehicle protection products. F&I products are offered by dealerships to customers in connection with the purchase of vehicles through either TCA or independent third parties. We evaluate the results of our new and used vehicle sales based on unit volumes and gross profit per vehicle sold, our parts and service operations based on aggregate gross profit, and our F&I business based on F&I gross profit per vehicle sold. Amounts presented have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute due to rounding.

Our Dealerships segment gross profit margin varies with our revenue mix. Historically, the sales of new vehicles generally results in a lower gross profit margin than used vehicle sales, sales of parts and service, and sales of F&I products. As a result, when used vehicle, parts and service, and F&I revenue increase as a percentage of total revenue, we expect our overall gross profit margin to increase. However, during and after the COVID-pandemic, new vehicle gross profit margins have been above historical levels and higher than used vehicle gross margins as a result of inventory disruptions from supply chain issues.

Our TCA segment revenues, reflected in F&I revenue, net, are derived from the sale of various vehicle protection products including vehicle service contracts, GAP, prepaid maintenance contracts, and appearance protection contracts. These products are sold through company-owned dealerships. TCA's F&I revenues also include investment gains or losses and income earned associated with the performance of TCA's investment portfolio.

Our TCA segment gross profit margin can vary due to incurred claims expense and the performance of our investment portfolio. Certain F&I products may result in higher gross profit margins to TCA. Therefore, the product mix of F&I products sold by TCA can affect the gross profits earned. In addition, interest rate volatility based on economic and market conditions outside the control of the Company, may increase or reduce TCA segment gross profit margins as well as the fair market values of certain securities within our investment portfolio. Fair market values typically fluctuate inversely to the fluctuations in interest rates.

Selling, general and administrative ("SG&A") expenses consist primarily of fixed and incentive-based compensation, advertising, rent, insurance, utilities, and other customary operating expenses. A significant portion of our cost structure is variable (such as sales commissions) or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long-term. We evaluate commissions paid to salespeople as a percentage of retail vehicle gross profit, advertising expense on a per vehicle retailed ("PVR") basis, and all other SG&A expenses in the aggregate as a percentage of total gross profit. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the consolidated financial statements.

Our continued organic growth is dependent upon the execution of our balanced automotive retailing and service business strategy, the continued strength of our brand mix, and the production and allocation of desirable vehicles from the automobile

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manufacturers whose brands we sell. Our vehicle sales have historically fluctuated with product availability as well as local and national economic conditions, including consumer confidence, availability of consumer credit, fuel prices, and employment levels.

In addition, our ability to sell certain new and used vehicles can be negatively impacted by a number of factors, some of which are outside of our control. Certain manufacturers continue to be hampered by the lack of availability of parts and key components from suppliers which has impacted new vehicle inventory levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these production slowdowns or when normalized production will resume at these manufacturers.

Recent Events

Herb Chambers acquisition

On July 21, 2025, the Company completed the Herb Chambers acquisition, thereby acquiring substantially all of the assets including the real property related thereto, for a total purchase price of approximately $1.76 billion. The acquisition was financed by borrowings under our new vehicle floor plan and used vehicle floor plan facilities, revolving credit facility and borrowings under a real estate facility. The Herb Chambers acquisition comprised 33 dealerships and three collision centers.

Macroeconomic and geopolitical considerations

The demand and availability for and pricing of our products and services may be adversely impacted by economic conditions and financial developments, including increasing interest rates, rising inflation, high energy prices, a potential recessionary environment and other factors. The automotive retail industry is influenced by general economic conditions, particularly consumer confidence and consumer spending, interest rates, fuel prices, exchange rates, technology and business model changes, supply conditions, consumer transportation preferences, credit availability, and the unemployment rate. Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern regarding manufacturer viability. In addition, local economic, competitive and other conditions affect the performance of our dealerships. Our results of operations depend substantially on general economic conditions and consumer spending in those regions where we maintain operations.

Tariffs and trade risks

A significant portion of our business involves the sale of vehicles, parts, or vehicles composed of, or maintenance and repair services including, parts that are manufactured outside the U.S. Changes or increases in tariffs, trade restrictions, fluctuations in foreign currency exchange rates, the negotiation of new trade agreements, non-tariff trade barriers, local content requirements, uncertainty surrounding global trade policies, and the imposition of new or retaliatory tariffs against certain countries or covering certain products, including vehicles and parts, may affect our competitive position and impair our ability to sell and service vehicles and parts, and have a material adverse effect on our results of operations.

In late January 2025, the U.S. government commenced a broad review of U.S. trade relations, following which it began issuing numerous executive orders and other public policy statements imposing or threatening to impose tariffs on certain countries, materials, and industries, including the automotive industry. Such tariffs include a 25% tariff on imports of automobiles and certain automobile parts, with different rates for some countries as a result of respective trade deals. In response, certain impacted countries have imposed or threatened various corresponding retaliatory tariffs and other actions. If maintained, these and other newly announced tariffs and actions and the potential escalation of trade disputes are expected to affect the automotive industry generally, including manufacturers, distributors and retailers of vehicles, parts and supplies. The extent of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of vehicles, products and raw materials, and exemptions or exclusions that may be granted. Should tariffs increase and be sustained, our inventory acquisition and carrying costs, and the production costs for many of our manufacturer, distributor and supplier partners, may be increased, which costs may be passed on to us and consumers through higher prices for many new vehicles and certain parts we sell. These increased prices may adversely affect our new vehicle sales and related finance and insurance sales and may adversely impact demand for such vehicles and parts, and could materially and adversely affect the results of our operations.

See “Item 1A. Risk Factors” in Part I of this report for additional information about risks and uncertainties facing our Company.

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Financial Highlights

Highlights related to our financial condition and results of operations include the following:

•Consolidated revenue for the year ended December 31, 2025 increased to $18.00 billion, compared to $17.19 billion for the prior year.

•Consolidated gross profit for the year ended December 31, 2025 increased to $3.07 billion, compared to $2.95 billion for the prior year.

•The increase in consolidated revenue and consolidated gross profit was primarily due to the effects of the Herb Chambers acquisition and growth in parts and services gross profit. This increase was offset by lower gross profit per vehicle sold for new vehicles as margins continue to shift downward from the historic highs in recent years.

•The effects of dealership divestitures also impacted consolidated revenue and gross profit. During the year ended December 31, 2025, we divested 24 franchises (15 dealership locations). These divested dealerships contributed approximately $436.3 million of revenue during the year ended December 31, 2025.

•Our capital allocation priorities were supported by share repurchases of approximately 432,752 shares for $99.9 million during the year ended December 31, 2025.

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CONSOLIDATED RESULTS OF OPERATIONS

We assess the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance. As such, for the following discussion, same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first full month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period for same store reporting.

The Company's full year results for 2025 include the results of the Herb Chambers dealerships acquired in July 2025. Accordingly, the increases in revenue, gross profit and income from operations for 2025 compared to 2024 are largely a result of this acquisition.

The Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions, except per share data)

REVENUE:

GROSS PROFIT:

OPERATING EXPENSES:

OTHER (INCOME) EXPENSES:

Gain on dealership divestitures, net (80.2) (8.6) (71.6) NM

______________________________

NM—Not Meaningful

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For the Year Ended December 31,

REVENUE MIX PERCENTAGES:

Used retail vehicles 25.3 % 26.8 %

Used vehicle wholesale 3.8 % 3.6 %

Parts and service 13.9 % 13.7 %

Finance and insurance, net 4.3 % 4.5 %

GROSS PROFIT MIX PERCENTAGES:

Used retail vehicles 7.8 % 7.8 %

Used vehicle wholesale 0.6 % 0.6 %

Parts and service 47.9 % 45.8 %

Finance and insurance, net 23.4 % 24.1 %

GROSS PROFIT MARGIN 17.1 % 17.2 %

SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT 64.7 % 64.0 %

Total revenue during 2025 increased by $810.4 million (5%) compared to 2024, due to a $646.5 million (7%) increase in new vehicle revenue, a $152.1 million (6%) increase in parts and service revenue, a $7.2 million increase in used vehicle revenue and a $4.6 million (1%) increase in F&I revenue.

The $123.0 million (4%) increase in gross profit during 2025 was the result of a $121.3 million (9%) increase in parts and service gross profit, a $13.6 million (6%) increase in used vehicle gross profit and a $6.5 million (1%) increase in F&I gross profit, partially offset by an $18.4 million (3%) decrease in new vehicle gross profit. Our total gross profit margin decreased 9 basis points from 17.2% in 2024 to 17.1% in 2025.

Income from operations during 2025 increased by $25.0 million (3%) compared to 2024, primarily due to a $123.0 million (4%) increase in gross profit and an $8.5 million (6%) decrease in asset impairments, partially offset by a $99.0 million (5%) increase in selling, general and administrative expenses and an $8.5 million (6%) increase in depreciation and amortization expense.

Total other expenses, net decreased by $61.9 million (24%) from expenses of $260.3 million in 2024 to $198.4 million of expenses in 2025, primarily due to a $71.6 million (828%) increase in gain on dealership divestitures, net, partially offset by an $8.3 million (5%) increase in other interest expense, net and a $1.3 million (1%) increase in floor plan interest expense. As a result, income before income taxes increased by $86.9 million (15%) to $662.2 million in 2025. The $25.3 million (17%) increase in income tax expense was primarily attributable to the 15% increase in income before taxes, and a 50 basis point increase in the 2025 effective tax rate. Overall, net income increased by $61.6 million (14%) from $430.3 million in 2024 to $492.0 million in 2025.

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New Vehicle—

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions, except for per vehicle data)

As Reported:

Revenue:

Gross profit:

Total new vehicle gross profit $ 621.9 $ 640.4 $ (18.4) (3) %

New vehicle units:

Same Store:

Revenue:

Gross profit:

Total new vehicle gross profit $ 556.8 $ 605.8 $ (49.0) (8) %

New vehicle units:

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New Vehicle Metrics—

For the Year Ended December 31, Increase(Decrease) %Change

As Reported:

Gross profit per new vehicle sold $ 3,432 $ 3,697 $ (265) (7) %

New vehicle gross margin 6.5 % 7.2 % (0.7) %

Luxury:

Gross profit per new vehicle sold $ 6,814 $ 7,018 $ (204) (3) %

New vehicle gross margin 9.1 % 9.7 % (0.6) %

Import:

New vehicle gross margin 5.7 % 6.5 % (0.9) %

Domestic:

New vehicle gross margin 4.8 % 5.6 % (0.8) %

Same Store:

New vehicle gross margin 6.4 % 7.3 % (0.8) %

Luxury:

Gross profit per new vehicle sold $ 6,874 $ 7,042 $ (168) (2) %

New vehicle gross margin 9.3 % 9.7 % (0.4) %

Import:

New vehicle gross margin 5.6 % 6.6 % (1.0) %

Domestic:

New vehicle gross margin 4.7 % 5.7 % (0.9) %

During 2025, new vehicle revenue increased by $646.5 million (7%) when compared to 2024, as a result of a 5% increase in new vehicle unit sales, combined with a 3% increase in revenue per new vehicle sold which increased to $52,406 for the year ended December 31, 2025, from $51,090 for the year ended December 31, 2024. Same store new vehicle revenue increased by $316.0 million (4%) mainly driven by an increase in the number of units sold which increased by 4,392 (3%) for the year ended December 31, 2025 as compared to the same period in the prior year. In addition, same store revenue per new vehicle sold increased from $51,285 for the year ended December 31, 2024 to $51,830 for the year ended December 31, 2025.

New vehicle gross profit decreased by $18.4 million (3%) for the year ended December 31, 2025 when compared to the same period in the prior year, as a result of a 7% decrease in gross profit per new vehicle sold which decreased from $3,697 for the year ended December 31, 2024 to $3,432 for the year ended December 31, 2025, partially offset by a 5% increase in unit volumes sold. Same store new vehicle gross profit decreased by $49.0 million (8%) in 2025 as a result of an 11% decrease in gross profit per new vehicle sold. Same store new vehicle gross margin decreased 83 basis points from 7.3% for the year ended December 31, 2024 to 6.4% for the year ended December 31, 2025. The decrease in our new vehicle gross profit margin was primarily attributable to the softening of the historically high new vehicle margins seen in recent years.

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the year ended December 31, 2025 was approximately 16.2 million which increased as compared to approximately 15.8 million during the year ended December 31, 2024. The increase in SAAR period over period reflects higher inventory supply, including fleet, coupled with increased consumer demand due to concerns with respect to rising vehicle prices in light of, among other things, tariffs. In

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addition, we saw increased demand for new electric vehicles before the expiration of federal tax credits in September 2025. We ended the year with approximately 52 days of supply of new vehicle inventory which reflects an increase from 49 days of supply as of December 31, 2024, but remains well below historical levels.

Used Vehicle—

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions, except for per vehicle data)

As Reported:

Revenue:

Gross profit:

Used vehicle wholesale gross profit 19.7 16.8 2.9 17 %

Used vehicle retail units:

Same Store:

Revenue:

Gross profit:

Used vehicle retail gross profit $ 218.5 $ 219.8 $ (1.4) (1) %

Used vehicle wholesale gross profit 20.9 17.0 3.9 23 %

Used vehicle retail units:

Used Vehicle Metrics—

For the Year Ended December 31, Increase(Decrease) %Change

As Reported:

Used vehicle retail gross margin 5.3 % 5.0 % 0.3 %

Same Store:

Gross profit per used vehicle retailed $ 1,660 $ 1,558 $ 102 7 %

Used vehicle retail gross margin 5.3 % 5.1 % 0.2 %

Used vehicle revenue increased by $7.2 million, due to a $63.5 million (10%) increase in used vehicle wholesale revenue, partially offset by a $56.3 million (1%) decrease in used vehicle retail revenue. Same store used vehicle revenue decreased by $185.0 million (4%) due to a $210.9 million (5%) decrease in used vehicle retail revenue, partially offset by a $25.9 million

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(4%) increase in used vehicle wholesale revenue. Used vehicle revenues and unit volume have continued to contract during 2025, on both an all store and same store basis. Used vehicle revenue and unit volumes continue to be negatively impacted by the affordability headwinds and lack of inventory availability, especially in vehicles with lower mileage.

Offsetting volume declines, we reported higher used vehicle retail gross profit margins for the year ended December 31, 2025 as compared to the same period in the prior year. Total Company and same store used vehicle retail gross profit margins increased 30 and 22 basis points, respectively, to 5.3% for the year ended December 31, 2025 as compared to the same period in the prior year. We attribute the increases in used vehicle retail gross profit margins to improved sourcing and disciplined execution focused on profitability over units sold.

We believe that our used vehicle inventory continues to be well-aligned with current consumer demand, with approximately 38 days of supply as of December 31, 2025.

Parts and Service—

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions)

As Reported:

Parts and service gross profit:

Total parts and service gross margin 58.7 % 57.4 % 1.4 %

Same Store:

Parts and service gross profit:

Total parts and service gross margin 58.8 % 57.7 % 1.1 %

* Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed and is included as a reduction of Parts and service cost of sales within the accompanying consolidated statements of income upon the sale of the vehicle.

The $152.1 million (6%) increase in parts and service revenue was due to a $95.8 million (8%) increase in customer pay revenue, a $66.4 million (19%) increase in warranty revenue, partially offset by a $4.9 million (1%) decrease in wholesale parts revenue and a $5.1 million (2%) decrease in collision revenue. Same store parts and service revenue increased $73.7 million

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(3%) from $2,212.70 million in 2024 to $2,286.4 million in 2025. The increase in same store parts and service revenue was due to a $52.0 million (4%) increase in customer pay revenue and a $38.2 million (12%) increase in warranty revenue, partially offset by a $13.8 million (5%) decrease in collision revenue and a $2.7 million (1%) decrease in wholesale parts revenue.

Parts and service gross profit, excluding reconditioning and preparation, increased by $107.9 million (10%) to $1,211.9 million and same store gross profit, excluding reconditioning and preparation, increased by $57.2 million (5%) to $1,100.1 million. The $57.2 million increase in same store gross profit, excluding reconditioning and preparation, is primarily due to a $41.0 million (6%) increase in customer pay gross profit and a $21.7 million (12%) increase in warranty gross profit, partially offset by a $5.8 million (5%) decrease in collision gross profit. Wholesale parts gross profit held steady on a same store basis for the year ended year ended December 31, 2025 as compared to the same period in the prior year. As a result of the shortage of new vehicle inventory in recent years, coupled with inflationary headwinds, many customers have elected to keep their current vehicles longer which has generated additional customer pay gross profit for the service departments. In addition, the increasing complexity of vehicles due to advanced systems is increasing the frequency of recalls resulting in an increase in warranty gross profit. We continue to focus on increasing our customer pay parts and service revenue over the long-term by improving the customer experience, providing competitive benefits to our technicians, capitalizing on our dealership training programs and upgrading equipment.

Finance and Insurance, net—

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions, except for per vehicle data)

As Reported:

Finance and insurance, net revenue $ 770.6 $ 766.0 $ 4.6 1 %

Finance and insurance, net gross profit $ 718.1 $ 711.6 $ 6.5 1 %

Finance and insurance, net per vehicle sold $ 2,214 $ 2,197 $ 17.0 1 %

Same Store:

Finance and insurance, net revenue $ 715.7 $ 733.3 $ (17.6) (2) %

Finance and insurance, net gross profit $ 663.2 $ 678.9 $ (15.7) (2) %

Finance and insurance, net per vehicle sold $ 2,224 $ 2,238 $ (14.0) (1) %

F&I revenue, net increased by $4.6 million (1%) in 2025 when compared to 2024 primarily as a result of a $17 (1%) increase in F&I per vehicle retailed which was partially offset by a decline in new and used retail unit sales.

On a same store basis, F&I revenue, net decreased by $17.6 million (2%) in 2025 when compared to 2024 primarily as a result of a 2% decrease in new and used retail unit sales and a $14 (1%) decrease in F&I per vehicle retailed.

The financial results of the TCA segment, after dealership eliminations, are as follows:

For the Year Ended December 31, Increase(Decrease) %Change

(Dollars in millions)

Finance and insurance, revenue $ 91.1 $ 120.6 $ (29.5) (24) %

Finance and insurance, cost of sales $ 52.5 $ 54.4 $ (1.9) (3) %

Finance and insurance, gross profit $ 38.6 $ 66.2 $ (27.6) (42) %

TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP, appearance protection contracts and lease wear-and-tear contracts. TCA's products are sold through our automobile dealerships.

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the years ended December 31,

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2025 and 2024, TCA generated $91.1 million and $120.6 million, respectively, of revenue, consisting primarily of earned premium and $20.7 million and $17.8 million, respectively, from the investment portfolio.

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the years ended December 31, 2025 and 2024, TCA recorded $52.5 million and $54.4 million, respectively, of cost of sales consisting primarily of claims expense paid to affiliated dealerships. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated upon consolidation.

We completed the rollout of TCA's service offerings in our Florida market and the Koons platform during the year ended December 31, 2025. We expect to complete the rollout to all of our dealerships in 2026 by offering TCA products on our Herb Chambers platform; however, no assurance can be given that the rollout will be completed with the timeframe contemplated.

Selling, General and Administrative Expense—

2025 % of GrossProfit 2024 % of GrossProfit

(Dollars in millions)

As Reported:

Same Store:

SG&A expense as a percentage of gross profit increased 66 basis points from 64.0% in 2024 to 64.7% in 2025. Same store SG&A expense as a percentage of gross profit increased 16 basis points from 63.5% in 2024 to 63.7% in 2025. The increase in SG&A as a percentage of gross profit is primarily the result of higher cost in personnel and other categories in SG&A expense partially offset by higher gross profits for 2025 as compared to 2024. SG&A expense as reported for the year ended December 31, 2025 increased by $99.0 million (0.7%) as compared to the year ended December 31, 2024 primarily due to the acquisition of the Herb Chambers stores in July 2025 and an increase in professional and legal fees including those related to the Herb Chambers acquisition ($15.4 million) and the Tekion implementation project ($8.6 million) which was partially offset by an insurance recovery of $15.0 million. On a same store basis, the increase in SG&A expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 is due to an increase in professional and legal fees offset by the insurance recovery of $15.0 million and the decrease in personnel costs of $5.5 million.

Asset Impairments —

During the year ended December 31, 2025, we recognized asset impairment charges of $141.0 million as compared to $149.5 million of impairment charges during the year ended December 31, 2024. The asset impairment charges resulted from our annual franchise rights impairment tests and the classification of certain asset disposal groups as held for sale which resulted in additional franchise rights impairment charges.

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Floor Plan Interest Expense —

Floor plan interest expense increased by $1.3 million to $91.2 million during 2025 compared to $89.9 million during 2024 due to floor plan interest expense related to the Herb Chambers stores acquired in July 2025 and an increase in unused credit facility fees of $2.5 million. These increases were offset by a reduction in interest rates year over year.

Other Interest Expense —

Other interest expense increased $8.3 million (5%) from $179.1 million in 2024 to $187.5 million in 2025. The increase is primarily due to higher loaner payable interest expense driven by higher loaner vehicle balances, as well as interest expense on our revolving credit agreement during the year ended December 31, 2025.

Gain on Dealership Divestitures, Net —

During the year ended December 31, 2025, we sold 24 franchises (15 dealership locations) for an aggregate purchase price of approximately $566.5 million. The Company recorded a pre-tax gain totaling $80.2 million, which is presented in our accompanying consolidated statements of income as a gain on dealership divestitures, net.

During the year ended December 31, 2024, we sold five franchises (5 dealership locations) for an aggregate purchase price of approximately $196.3 million. The Company recorded a pre-tax gain totaling $8.6 million, which is presented in our accompanying consolidated statements of income as a gain on dealership divestitures, net.

During the year ended December 31, 2023, we sold one franchise (one dealership location) for proceeds of $30.7 million. The Company recorded a pre-tax gain totaling $13.5 million.

Income Tax Expense —

The $25.3 million (17%) increase in income tax expense was primarily the result of a $86.9 million (15%) increase in income before income taxes. Our effective tax rate increased 50 basis points from 25.2% in 2024 to 25.7% in 2025. The increase in our effective tax rate was primarily due to our acquisition and divestiture activity. Stores acquired are located in relatively high tax rate states while the stores divested are located in relatively low or no tax rate states.

Refer to Note 16 "Income Taxes" for additional information regarding income taxes.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2025, we had total available liquidity of $927.1 million, which consisted of cash and cash equivalents of $28.2 million (excluding $12.2 million held by TCA), available funds in our floor plan offset accounts of $151.6 million and $747.3 million of availability under our revolving credit facility. The borrowing capacities under our revolving credit facility and our used vehicle revolving floor plan facility are limited by borrowing base calculations and, from time to time, may be further limited by our required compliance with certain financial covenants. For more information on our financial covenants, see "Covenants and Defaults" and "Share Repurchases and Dividend Restrictions" below.

We continually evaluate our liquidity and capital resources based upon (i) our cash and cash equivalents on hand, (ii) the funds that we expect to generate through future operations, (iii) current and expected borrowing availability under our 2023 Senior Credit Facility (discussed further below), (iv) amounts in our new vehicle floor plan notes payable offset accounts, and (v) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, financings, acquisitions, dispositions, equity and/or debt repurchases, dividends, or other capital expenditures. We believe we will have sufficient liquidity to meet our debt service and working capital requirements; commitments and contingencies; debt repayment, maturity and repurchase obligations; acquisitions; capital expenditures; and any operating requirements for at least the next twelve months and the foreseeable future.

Material Indebtedness

We currently are party to the following material credit facilities and agreements and have the following material indebtedness outstanding. For a more detailed description of the material terms of these agreements and facilities, and this indebtedness, see Note 14 "Debt" included in the notes to consolidated financial statements.

•2023 Senior Credit Facility—On October 20, 2023, the Company and certain of its subsidiaries entered into a fourth amended and restated credit agreement with Bank of America, N.A. ("Bank of America"), as administrative agent, and the other lenders party thereto (the "2023 Senior Credit Facility"). The 2023 Senior Credit Facility amended and

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restated the Company’s pre-existing third amended and restated credit agreement, dated as of September 25, 2019, among the Company, certain of its subsidiaries, Bank of America, as administrative agent, and the other lenders party thereto.

On April 9, 2025, the Company obtained an amendment to the 2023 Senior Credit Facility by and among the Company, as a borrower, certain of its subsidiaries, as vehicle borrowers, Bank of America, as administrative agent, and the other lenders party thereto. The Amendment, among other things, provided for the following, subject to satisfaction of certain other customary conditions in each case:

Revolving Credit Facility—An increase of the aggregate commitments from $500.0 million to $925.0 million under the Revolving Credit Facility for, among other things, acquisitions, working capital and capital expenditures, including a $50.0 million sub-limit for letters of credit. As of December 31, 2025, we had $25.2 million in outstanding letters of credit, resulting in $747.3 million of borrowing availability. We began the year with no amounts drawn on our revolving credit facility. During the year ended December 31, 2025, we had borrowings of $2.15 billion and $2.03 billion in repayments, resulting in $120.0 million of outstanding borrowings as of December 31, 2025.

New Vehicle Floor Plan Facility—An increase of the aggregate commitments from $1.93 billion to $2.25 billion under the New Vehicle Floor Plan Facility which allows us to transfer cash as an offset to floor plan notes payable. These transfers reduce the amount of outstanding new vehicle floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts within one to two days. As a result of the use of this floor plan offset account, we experienced a reduction in floor plan interest expense on our consolidated statements of income. As of December 31, 2025, we had $1.57 billion outstanding under the New Vehicle Floor Plan Facility, which includes $65.0 million classified in loaner vehicles notes payable which is included in accounts payable and accrued liabilities in our consolidated balance sheets. As of December 31, 2025, we held $150.7 million in the floor plan notes payable offset account.

Used Vehicle Floor Plan Facility—A $375.0 million Used Vehicle Floor Plan Facility to finance the acquisition of used vehicle inventory and for working capital and capital expenditures, as well as to refinance used vehicles. We began the year with $100.7 million amounts drawn on our Used Vehicle Floor Plan Facility. During the year ended December 31, 2025, we had additional borrowings of $650.0 million and $425.7 million in repayments resulting in $325.0 million outstanding borrowings as of December 31, 2025. We had fully utilized our borrowing capacity under the Used Vehicle Floor Plan Facility based on our borrowing base calculation as of December 31, 2025.

At our option, we have the ability to re-designate a portion of our availability under the Revolving Credit Facility to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility. The maximum amount we are allowed to re-designate is determined based on aggregate commitments under the Revolving Credit Facility, less $50.0 million. In addition, we are able to re-designate any amounts moved to the New Vehicle Floor Plan Facility or the Used Vehicle Floor Plan Facility back to the Revolving Credit Facility.

In addition to the payment of interest on borrowings outstanding under the 2023 Senior Credit Facility, we are required to pay a quarterly commitment fee on total unused commitments thereunder. The fee for unused commitments under the Revolving Credit Facility is between 0.15% and 0.40% per year, based on the Company's total lease adjusted leverage ratio, and the fee for unused commitments under the New Vehicle Facility Floor Plan and the Used Vehicle Floor Plan Facility is 0.15% per year.

•Manufacturer affiliated new vehicle floor plan and other financing facilities—We have a floor plan facility with the Ford Motor Credit Company ("Ford Credit") to purchase new Ford and Lincoln vehicle inventory. Our floor plan facility with Ford Credit was amended in July 2020 and can be terminated by either the Company or Ford Credit with a 30-day notice period. We have also established a floor plan offset account with Ford Credit, which operates in a similar manner to our floor plan offset account with Bank of America. As of December 31, 2025, we had $343.1 million, which is net of $1.0 million in our floor plan offset account, outstanding under our floor plan facility. Neither our floor plan facility with Ford Credit nor our facilities for loaner vehicles have stated borrowing limitations.

•2029 and 2032 Senior Notes—On November 19, 2021, the Company completed its offering of $800.0 million aggregate principal amount of 4.625% senior notes due 2029 (the "2029 Senior Notes") and $600.0 million aggregate principal amount of 5.000% senior notes due 2032 (the "2032 Senior Notes"). The 2029 Senior Notes and 2032 Senior Notes mature on November 15, 2029 and February 15, 2032, respectively. Interest is payable semiannually, on

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November 15 and May 15 of each year. The 2029 Senior Notes and the 2032 Senior Notes were offered, together with additional borrowings and cash on hand, to (i) fund the LHM Acquisition and (ii) pay related fees and expenses.

The 2029 Notes and 2032 Notes have been fully and unconditionally guaranteed, on a joint and several basis, by substantially all of our subsidiaries other than the TCA Non-Guarantor Subsidiaries. In addition, the notes are subject to customary covenants, events of default and optional redemption revisions. The 2029 Senior Notes and the 2032 Senior Notes are not required to be registered under the Securities Act of 1933.

•2028 and 2030 Senior Notes—On February 19, 2020, the Company completed its offering of senior unsecured notes, consisting of $525.0 million aggregate principal amount of the Existing 2028 Notes and $600.0 million aggregate principal amount of the Existing 2030 Notes. The 2028 Notes and 2030 Notes mature on March 1, 2028 and March 1, 2030, respectively. Interest is payable semiannually, on March 1 and September 1 of each year. The 2028 Notes and the 2030 Notes were offered, together with additional borrowings and cash on hand, to (i) fund the acquisition of substantially all of the assets of Park Place, (ii) redeem all of our outstanding $600.0 million aggregate principal amount of 6.0% Senior Subordinated Notes due 2024 (the "6.0% Notes") and (iii) pay fees and expenses.

On March 24, 2020, the Company redeemed $245.0 million aggregate principal million of the 2028 Notes and $280.0 million aggregate principal amount of the 2030 Notes pursuant to a special mandatory redemption.

In September 2020, the Company completed an add-on issuance of $250.0 million aggregate principal amount of additional senior notes consisting of $125.0 million aggregate principal amount of additional 2028 Notes at a price of 101.00% of par, plus accrued interest from September 1, 2020, and $125.0 million aggregate principal amount of additional 2030 Notes (together with the additional 2028 Notes, the "Additional Notes") at a price of 101.75% of par, plus accrued interest from September 1, 2020 (the "September 2020 Offering"). After deducting the initial purchasers' discounts of $2.8 million, we received net proceeds of approximately $250.6 million from the September 2020 Offering. The $3.5 million premium paid by the initial purchasers of the Additional Notes was recorded as a component of long-term debt on our consolidated balance sheets and is being amortized as a reduction of interest expense over the remaining term of the Notes. The proceeds of the September 2020 Offering were used to redeem certain seller notes issued in connection with the acquisition of Park Place.

The 2028 Notes and the 2030 Notes are guaranteed, jointly and severally, on a senior unsecured basis, by each of our existing and future restricted subsidiaries, other than the TCA Non-Guarantor Subsidiaries. In addition, the Notes are subject to customary covenants, events of default and optional redemption revisions. The 2028 Notes and the 2030 Notes were required to be registered under the Securities Act of 1933 within 270 days of the closing date for the offering of each respective series. The Company completed the registration of the 2028 Notes and 2030 Notes in October 2020.

•Mortgage Financings—We have multiple mortgage agreements with finance companies affiliated with our vehicle manufacturers ("captive mortgages"). As of December 31, 2025 we had total mortgage notes payable outstanding of $27.2 million which are collateralized by the associated real estate.

•2025 Wells Fargo Real Estate Facility—On July 21, 2025, certain subsidiaries of the Company borrowed $546.5 million (the “2025 Real Estate Facility”) under a real estate term loan credit agreement, dated as of July 21, 2025 (the “Real Estate Credit Agreement”) by and among the Company, certain of the Company’s subsidiaries that own or lease the real estate financed thereunder, as borrowers, Wells Fargo Bank, National Association, as administrative agent, and the various financial institutions parties thereto, as lenders. The Real Estate Facility matures ten years from the initial funding date. The Company used the proceeds from these borrowings, together with other available funds, to finance the Herb Chambers acquisition. As of December 31, 2025, we had $537.4 million of outstanding borrowings under the 2025 Real Estate Facility.

•2021 Real Estate Facility—On December 17, 2021, we entered into a real estate term loan credit agreement with Bank of America, N.A., as administrative agent and the other lenders party thereto, which provided for term loans in an aggregate amount equal to $689.7 million (the "2021 Real Estate Facility"). As of December 31, 2025, we had $442.1 million of outstanding borrowings under the 2021 Real Estate Facility. There is no further borrowing availability under the 2021 Real Estate Facility.

•2021 BofA Real Estate Facility—On May 10, 2021, we entered into a real estate term loan credit agreement (the "2021 BofA Real Estate Credit Agreement"), by and among the Company and certain of its subsidiaries, Bank of America, N.A., as administrative agent and the various financial institutions party thereto, as lenders, which provided for term loans in an aggregate amount equal to $184.4 million, subject to customary terms and conditions (the "2021 BofA Real Estate Facility"). As of December 31, 2025, we had $151.2 million of outstanding borrowings under the

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2021 BofA Real Estate Facility. There is no further borrowing availability under the 2021 BofA Real Estate Credit Agreement. On May 25, 2022, certain of our subsidiaries entered into amendments to our 2021 BofA Real Estate Facility to replace the benchmark reference rate of LIBOR to SOFR, effective June 1, 2022. See Note 14 "Debt" for further details.

•2018 BofA Real Estate Facility—On November 13, 2018, we entered into a real estate term loan credit agreement (as amended, restated or supplemented from time to time, the "2018 BofA Real Estate Credit Agreement") with Bank of America, as lender, providing for term loans in an aggregate amount not to exceed $128.1 million, subject to customary terms and conditions (the "2018 BofA Real Estate Facility"). In November 2025, we paid off the aggregate principal amounts remaining under the 2018 BofA Real Estate Facility for an aggregate amount of approximately $34.2 million.

•2018 Wells Fargo Master Loan Facility—On November 16, 2018, certain of our subsidiaries entered into a master loan agreement (the "2018 Wells Fargo Master Loan Agreement") with Wells Fargo as lender, which provides for term loans to certain of our subsidiaries that are borrowers under the 2018 Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (the "2018 Wells Fargo Master Loan Facility"). Our right to make draws under the 2018 Wells Fargo Master Loan Facility terminated on June 30, 2020. On November 16, 2018 and June 26, 2020, we borrowed an aggregate amount of $25.0 million and $69.4 million, respectively, under the 2018 Wells Fargo Master Loan Facility, the proceeds of which were used for general corporate purposes. As of December 31, 2025, we had $57.2 million outstanding borrowings under the 2018 Wells Fargo Master Loan Facility. There is no further borrowing availability under the 2018 Wells Fargo Master Loan Facility. On and with effect from June 1, 2022, certain of our subsidiaries entered into an amendment to our 2018 Wells Fargo Master Loan Agreement to replace the benchmark reference rate of LIBOR to SOFR. See Note 14 "Debt" for further details.

•2015 Wells Fargo Master Loan Facility—On February 3, 2015, certain of our subsidiaries entered into an amended and restated master loan agreement (the "2015 Wells Fargo Master Loan Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as lender, which provides for term loans to certain of our subsidiaries that are borrowers under the 2015 Wells Fargo Master Loan Agreement in an aggregate amount not to exceed $100.0 million (the "2015 Wells Fargo Master Loan Facility"). The outstanding balance under this agreement in the amount of $31.6 million was paid off in May 2025.

•2013 BofA Real Estate Facility—On September 26, 2013, we entered into a real estate term loan credit agreement (the "2013 BofA Real Estate Credit Agreement") with Bank of America, N.A., as lender, providing for term loans in an aggregate amount not to exceed $75.0 million, subject to customary terms and conditions (the "2013 BofA Real Estate Facility"). In June 2023, the Company prepaid the aggregate principal amounts remaining under the 2013 BofA Real Estate Facility for an aggregate amount of approximately $23.9 million with cash on hand.

Covenants and Defaults

We are subject to a number of customary covenants in our various debt and lease agreements, including those described below. We were in compliance with all of our covenants as of December 31, 2025. Failure to comply with any of our debt covenants would constitute a default under the relevant debt agreements, which would entitle the lenders under such agreements to terminate our ability to borrow under the relevant agreements and accelerate our obligations to repay outstanding borrowings, if any, unless compliance with the covenants were waived. In many cases, defaults under one of our agreements could trigger cross-default provisions in our other agreements. If we are unable to remain in compliance with our financial or other covenants, we would be required to seek waivers or modifications of our covenants from our lenders, or we would need to raise debt and/or equity financing or sell assets to generate proceeds sufficient to repay such debt. We cannot give any assurance that we would be able to successfully take any of these actions on terms, or at times, that may be necessary or desirable.

The representations and covenants contained in the 2021 Real Estate Facility, 2021 BofA Real Estate Credit Agreement, 2018 BofA Real Estate Credit Agreement, 2018 Wells Fargo Master Loan Agreement, the 2025 Real Estate Facility, and the related documents are customary for financing transactions of this nature, including, among others, requirements to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case, as applicable. In addition, certain other covenants could restrict our ability to incur additional debt, pay dividends or acquire or dispose of assets. Each of these agreements provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. Upon the occurrence of an event of default, we could be required by the applicable agreement to immediately repay all amounts outstanding thereunder.

The representations and covenants contained in the agreement governing the 2023 Senior Credit Facility are customary for financing transactions of this nature including, among others, a requirement to comply with a minimum consolidated fixed charge coverage ratio and maximum consolidated total lease adjusted leverage ratio, in each case as set out in the agreement

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governing the 2023 Senior Credit Facility. In addition, certain other covenants could restrict the Company's ability to incur additional debt, pay dividends or acquire or dispose of assets. The agreement governing the 2023 Senior Credit Facility also provides for events of default that are customary for financing transactions of this nature, including cross-defaults to other material indebtedness. In certain instances, an event of default under either the Revolving Credit Facility or the Used Vehicle Floor Plan Facility could be, or result in, an event of default under the New Vehicle Floor Plan Facility, and vice versa. Upon the occurrence of an event of default, the Company could be required to immediately repay all amounts outstanding under the applicable facility.

The 2023 Senior Credit Facility and the Indentures currently allow for restricted payments without limit so long as our Consolidated Total Leverage Ratio (as defined in the 2023 Senior Credit Facility and the Indentures) is no greater than 3.0 to 1.0 after giving effect to such proposed restricted payments. Restricted payments generally include items such as dividends, share repurchases, unscheduled repayments of subordinated debt, or purchases of certain investments. Subject to our continued compliance with a consolidated fixed charge coverage ratio and a maximum consolidated total lease adjusted leverage ratio, in each case as set out in the Indentures, restricted payments capacity additions (or subtractions if negative) equal to a base level plus the cumulative amount of (i) 50% of our net income (as defined in the 2023 Senior Credit Facility) plus (ii) 100% of any cash proceeds we receive from the sale of equity interests minus (iii) the dollar amount of share purchases made and dividends paid during the defined measurement periods, subject to certain exceptions. In the event that our Consolidated Total Leverage Ratio does (or would) exceed 3.0 to 1.0, the 2023 Senior Credit Facility and the Indentures would then also allow for restricted payments under mutually exclusive parameters, subject to certain exclusions. The Company may otherwise make restricted payments only up to the aforementioned cumulative capacity. Our restricted payment capacity balance as of December 31, 2025 and 2024 was $1.34 billion and $1.22 billion, respectively.

Share Repurchases and Dividend Restrictions

Our ability to repurchase shares or pay dividends on our common stock is subject to our compliance with the covenants and restrictions described in "Covenants and Defaults" above.

On May 15, 2024, the Company announced that its Board of Directors approved an increase of $256.2 million in the Company's common share repurchase authorization to $400.0 million (the "New Share Repurchase Authorization"), for the repurchase of our common stock in open market transactions or privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements. The extent that the Company repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, legal requirements and other corporate considerations. The repurchase program may be modified, suspended or terminated at any time without prior notice.

During the year ended December 31, 2025, we repurchased 432,752 shares of our common stock under our repurchase program for a total of $99.9 million and an additional 44,212 shares of our common stock for $13.7 million from employees in connection with a net share settlement feature of employee equity-based awards.

As of December 31, 2025, we had remaining authorization to repurchase up to an additional $175.9 million of our common stock. Any repurchases will be subject to applicable limitations in our debt or other financing agreements that may be in existence from time to time.

Contractual Obligations

As of December 31, 2025, we had significant contractual obligations related to our floor plan notes payable disclosed in Notes 11 and 12, operating lease liabilities disclosed in Note 19 and long-term debt arrangements discussed in Note 14. Disclosures related to our commitments and contingencies are outlined in Note 21. All note references are to the notes to our consolidated financial statements included elsewhere herein.

Cash Flows

Classification of Cash Flows Associated with Floor Plan Notes Payable

Borrowings and repayments of floor plan notes payable through our 2023 Senior Credit Facility ("Non-Trade"), and all floor plan notes payable relating to used vehicles (together referred to as "Floor Plan Notes Payable—Non-Trade"), are classified as financing activities on the accompanying consolidated statements of cash flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "Floor Plan Notes Payable—Trade") is classified as an operating activity on the accompanying consolidated statements of cash flows. Borrowings of non-trade floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activity in the accompanying consolidated statements of cash flows. Cash flows related

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to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to our 2023 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturers from which we purchased the related inventory. The majority of our floor plan notes are payable to our 2023 Senior Credit Facility, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles and certain loaner vehicle programs.

Floor plan borrowings are required by all vehicle manufacturers for the purchase of new vehicles, and all floor plan lenders require amounts borrowed for the purchase of a vehicle to be repaid within a short time period after the related vehicle is sold. As a result, we believe that it is important to understand the relationship between the cash flows of all of our floor plan notes payable and new vehicle inventory in order to understand our working capital and operating cash flow and to be able to compare our operating cash flow to that of our competitors (i.e., if our competitors have a different mix of trade and non-trade floor plan financing as compared to us). In addition, we include all floor plan borrowings and repayments in our internal operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts. We believe that splitting the cash flows of floor plan notes payable between operating activities and financing activities, while all new vehicle inventory activity is included in operating activities, results in significantly different operating cash flow than if all the cash flows of floor plan notes payable were classified together in operating activities.

Adjusted cash flow provided by operating activities includes borrowings and repayments of floor plan notes payable non-trade and used floor plan notes payable borrowing base changes. Adjusted cash flow provided by operating activities may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations, we also review the related GAAP measures. We believe that the adjustments related to cash flows associated with our used vehicle borrowing base, floor plan offset accounts and the impact of acquisitions and divestitures eliminates cash flow volatility and provides an adjusted operating cash flow metric that best reflects our results of operations and our management of inventory and related financing activities.

We have provided below a reconciliation of cash flow provided by operating activities, as if all changes in floor plan notes payable, except for (i) borrowings associated with acquisitions and repayments associated with divestitures and (ii) borrowings and repayments associated with the purchase of used vehicle inventory and (iii) changes in the floor plan offset accounts were classified as an operating activity for both floor plan notes payable - non-trade and floor plan notes payable - trade.

For the Year Ended December 31,

(In millions)

Cash provided by operating activities, as reported $ 775.2 $ 671.2 $ 313.0

Change in Floor Plan Notes Payable Non-Trade, net (57.2) (5.2) 1,018.9

Adjusted cash flow provided by operating activities $ 651.4 $ 688.4 $ 705.3

Operating Activities—

Net cash provided by operating activities totaled $775.2 million, $671.2 million, and $313.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. Adjusted cash flow provided by operating activities totaled $651.4 million, $688.4 million, and $705.3 million for the years ended December 31, 2025, 2024, and 2023, respectively. Adjusted cash flow provided by operating activities includes net income, adjustments to reconcile net income to net cash provided by operating activities, changes in working capital, changes in used vehicle borrowing base, changes in floor plan notes payable - non-trade and trade, excluding the impact of offsets, and excluding operating cash flows associated with acquisitions and divestitures related to loaner vehicles and new vehicle inventories financed through floor plan notes payable - trade.

The $37.0 million decrease in adjusted cash flow provided by operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024, was primarily the result of the following:

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•decrease of $56.7 million related to the change in accounts payable and accrued liabilities;

•decrease of $51.7 million in other current assets, net; and

•decrease of $24.4 million in net income and non-cash adjustments to net income.

The decrease in our adjusted cash flow provided by operating activities was partially offset by:

•$59.4 million increase related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2025 compared to 2024;

•$31.3 million increase related to other long-term assets and liabilities, net; and

•increase of $8.2 million in inventory, net of floor plan notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and divestitures.

The $16.9 million decrease in our adjusted cash flow provided by operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily the result of the following:

•decrease of $86.6 million in net income and non-cash adjustments to net income;

•$100.9 million decrease related to the change in accounts payable and accrued liabilities; and

•$24.8 million related to a decrease in inventory, net of floor plan notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and divestitures.

The decrease in our adjusted cash flow provided by operating activities was partially offset by:

•$118.1 million decrease related to the change in other current assets, net;

•$69.4 million decrease related to sale volume and the timing of collection of accounts receivable and contracts-in-transit during 2024 compared to 2023; and

•$8.2 million decrease in other long-term assets and liabilities, net.

Investing Activities—

Net cash used in investing activities totaled $1.46 billion, $137.2 million, and $1.68 billion for the years ended December 31, 2025, 2024, and 2023 respectively. Cash flows from investing activities relate primarily to capital expenditures, acquisitions, divestitures, and the sale of property and equipment.

Capital expenditures, excluding the purchase of real estate, were $186.0 million, $162.6 million, and $142.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. There were no purchases related to real estate for the year ended December 31, 2023. Purchases of real estate totaled $19.3 million and $145.6 million for the years ended December 31, 2025, and 2024, respectively. In addition, we purchased previously leased facilities for $11.9 million during the year ended December 31, 2024.

We expect that capital expenditures during 2026 will total approximately $250.0 million to upgrade or replace our existing facilities, construct new facilities, expand our service capacity, and invest in technology and equipment. In addition, as part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations. No assurances can be provided that we will have or be able to access capital at times or on terms in amounts deemed necessary to execute this strategy.

On July 21, 2025, we completed the acquisition of the Herb Chambers dealerships for a total purchase price of approximately $1.76 billion, which includes $292.0 million of new vehicle floor plan financing, $623.3 million of borrowings under a revolving credit facility, and $546.5 million of borrowings under a real estate facility.

On December 11, 2023, we completed the acquisition of the Jim Koons Dealerships for a total purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets

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held for sale related to Koons Lexus of Wilmington. The sources of the purchase price included borrowings under Asbury’s existing credit facility and cash on hand.

During the year ended December 31, 2023, we sold one franchise (one dealership location) for proceeds of $30.7 million. The Company recorded a pre-tax gain totaling $13.5 million.

Proceeds from the sale of assets, unrelated to a dealership divestiture, was $6.5 million and $16.3 million for the years ended December 31, 2024 and 2023, respectively. We did not have proceeds from the sale of assets, unrelated to a dealership divestiture, for the year ended December 31, 2025.

During the years ended December 31, 2025, 2024, and 2023, we purchased $189.4 million, $165.0 million and $195.2 million of debt securities. We did not purchase any equity securities in 2025, 2024 or 2023.

During the years ended December 31, 2025, 2024, and 2023, we also received proceeds of $132.8 million, $149.8 million, and $60.3 million from the sale of debt securities respectively and $51.8 million from the sale of equity securities in 2023. We did not have any proceeds from the sale of equity securities in 2025 or 2024.

Financing Activities—

Net cash provided by financing activities totaled $653.1 million and $1.18 billion for the years ended December 31, 2025 and 2023, respectively. Net cash used in financing activities totaled $510.3 million for the year ended December 31, 2024.

During the years ended December 31, 2025, 2024, and 2023, we had non-trade floor plan borrowings of $10.38 billion, $9.45 billion, and $8.39 billion, respectively. Included in our non-trade floor plan borrowings, were borrowings of $325.0 million, $100.7 million, and $307.1 million for the years ended December 31, 2025, 2024, and 2023, respectively, related to our used vehicle floor plan facility.

During the years ended December 31, 2025, 2024 and 2023, we borrowed $2.15 billion, $1.21 billion, and $329.0 million, and repaid $2.03 billion, $1.21 billion and $329.0 million, respectively, on our revolving line of credit.

In addition, during the years ended December 31, 2025 and 2023 we had non-trade floor plan borrowings of $262.7 million and $256.1 million, respectively, related to acquisitions. The majority of our floor plan notes are payable to parties unaffiliated with the entities from which we purchase our new vehicle inventory, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles. We did not have any dealership acquisitions in 2024.

During the years ended December 31, 2025, 2024, and 2023, we made non-trade floor plan repayments of $10.21 billion, $9.66 billion, and $7.06 billion, respectively. In addition, during the years ended December 31, 2025 and 2024, we had floor plan repayments associated with dealership divestitures of $90.7 million and $34.1 million, respectively. During 2023, we did not have any floor plan repayments associated with dealership divestitures.

Proceeds from borrowings totaled $546.5 million for the year ended December 31, 2025. We did not have proceeds from borrowings for the years ended December 31, 2024 and 2023, respectively.

Repayments of borrowings totaled $234.1 million, $71.4 million and $126.0 million, for the years ended December 31, 2025, 2024, and 2023, respectively.

During the years ended December 31, 2025, 2024, and 2023 we repurchased 432,752, 830,297, and 1,316,167 shares of our common stock under our Repurchase Program for a total of $99.9 million, $183.0 million and $258.1 million and 44,212, 46,941 and 48,262 shares of our common stock for $12.8 million, $10.2 million and $11.4 million from employees in connection with a net share settlement feature of employee equity-based awards, respectively.

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Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements during any of the periods presented other than those disclosed in Note 21 "Commitments and Contingencies" of the Company's consolidated financial statements.

Guarantor Financial Information

As of December 31, 2025, the Company had outstanding $405.0 million of 4.500% Senior Notes due 2028 and $445.0 million of 4.750% Senior Notes due 2030. As explained in Note 14 of the Company's consolidated financial statements as of and for the year ended December 31, 2025, the Senior Notes have been fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by each existing and future restricted subsidiary of the Company (the "Guarantor Subsidiaries"), which are listed in Exhibit 21, with the exception of Landcar Administration Company, Landcar Agency, Inc. and Landcar Casualty Company and their respective subsidiaries (collectively, the "TCA Non-Guarantor Subsidiaries").

The following tables present summarized financial information for the Company and the Guarantor Subsidiaries on a combined basis after elimination of (i) intercompany transactions and balances among Asbury and the Guarantor Subsidiaries and (ii) assets, liabilities, and equity in earnings from and investments in any non-guarantor subsidiaries.

Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries

As of December 31,

(In millions)

Current assets - affiliates $ 0.5

Non-current assets $ 7,614.8

Current liabilities $ 2,995.7

Current liabilities - affiliates $ 21.9

Non-current liabilities $ 3,623.0

Summarized Statement of Operations Data for Asbury and Guarantor Subsidiaries

For the Year Ended December 31,

(In millions)

Income from operations $ 808.8

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the financial statements, and reported amounts of revenues and expenses during the periods presented. On an ongoing basis, management evaluates their estimates and assumptions and the effects of any such revisions are reflected in the financial statements, in the period in which they are determined to be necessary. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our consolidated financial statements. Set forth below are the policies and estimates that we have identified as critical to our business operations and understanding our results of operations, based on the high degree of judgment or complexity in their application.

Goodwill and Manufacturer Franchise Rights

Goodwill represents the excess cost of an acquired business over the fair market value of its identifiable assets and liabilities. We have determined, based on how we integrate acquisitions into our business, how the components of our business

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share resources and interact with one another, and how we review the results of our operations, that we have several geographic region-based operating segments. We have determined the dealerships in each of our operating segments are components that are aggregated into geographic region-based operating segments which are also our reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our franchised dealerships offer new and used vehicles, parts and service, and arrange for third-party vehicle financing and the sale of insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways) and (v) operate under similar regulatory environments. Our TCA segment also represents a reporting unit for the purpose of testing goodwill for impairment.

Our only other significant identifiable intangible assets are our rights under franchise agreements with manufacturers, which are recorded at an individual franchise level. The fair value of our manufacturer franchise rights are determined at the acquisition date, by discounting the projected cash flows specific to each franchise. We have determined that manufacturer franchise rights have an indefinite life as there are no economic, contractual or other factors that limit their useful lives, and they are expected to generate cash flows indefinitely due to the historically long lives of the manufacturers' brand names. Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business.

We do not amortize goodwill and other intangible assets that are deemed to have indefinite lives. We review goodwill and manufacturer franchise rights for impairment annually as of October 1st, or more often if events or circumstances indicate that any impairment may have occurred. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative assessment for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors we consider in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events. If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required.

As a result of our annual franchise rights impairment tests as of October 1, 2025, we identified several dealerships with franchise rights carrying values that exceeded their fair values due to the underperformance of certain stores. As a result, we recognized a $115.0 million pre-tax non-cash impairment charge related to our franchise rights intangible assets during the year ended December 31, 2025.

In connection with our annual goodwill impairment tests, we performed qualitative impairment tests of goodwill as of October 1, 2025. For all reporting units, for which a qualitative impairment test was performed as of October 1, 2025, the fair values exceeded their carrying amounts. We believe that the fair value of our reporting units is substantially in excess of its carrying amount.

We also recorded a franchise rights impairment charge of $26.0 million during the year ended December 31, 2025 related to dealerships that met the assets held for sale criteria during 2025. The quantitative impairment test of the disposal group included a comparison of the estimated fair value, less costs to sell, to the carrying value of the disposal group. This asset impairment charge is reflected in asset impairments in our consolidated statements of income.

In total, we recognized asset impairments of $141.0 million, $149.5 million and $117.2 million during the years ended December 31, 2025, 2024, and 2023, respectively.

We continue to monitor developments related to macroeconomic conditions and the performance of our stores and reporting units. It is reasonably possible that future developments could have a negative effect on the estimates and assumptions utilized in our impairment assessments and could result in material impairment charges in future periods.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to risk from changes in interest rates on a significant portion of our outstanding indebtedness. Based on $2.62 billion of total variable interest rate debt, which includes our floor plan notes payable, amounts drawn on our used vehicle floor plan, revolver and certain mortgage liabilities, outstanding as of December 31, 2025, a 100 basis point change in interest rates would result in a change of $26.2 million in annual interest expense.

We periodically receive floor plan assistance from certain automobile manufacturers, which is primarily accounted for as a reduction in our new vehicle inventory cost. Floor plan assistance reduced our cost of sales for the years ended December 31,

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2025, 2024, and 2023, by $113.4 million, $99.7 million and $87.0 million, respectively. We cannot provide assurance as to the future amount of floor plan assistance and these amounts may be negatively impacted due to future changes in interest rates.

As part of our strategy to mitigate our exposure to fluctuations in interest rates, we have various interest rate swap agreements. All of our interest rate swaps qualify for cash flow hedge accounting treatment and do not contain any ineffectiveness.

As of December 31, 2025 we had four interest rate swap agreements. These swaps are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR. The following table provides information on the attributes of each swap as of December 31, 2025:

(In millions)

These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to other interest expense in the same period or periods during which the hedged transactions affect earnings. For additional information about the effect of our derivative instruments, please refer to Note 15 "Financial Instruments and Fair Value" within the accompanying consolidated financial statements.

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Item 8.Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 61

Consolidated Balance Sheets as of December 31, 2025 and 2024 65

Notes to Consolidated Financial Statements 71

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Asbury Automotive Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Asbury Automotive Group, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Valuation of Manufacturer Franchise Rights

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2008.

Atlanta, Georgia

February 20, 2026

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Asbury Automotive Group, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Asbury Automotive Group, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Asbury Automotive Group, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of The Herb Chambers Companies, which is included in the 2025 consolidated financial statements of the Company and constituted $1.89 billion of total assets as of December 31, 2025 and $1.16 billion of revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of The Herb Chambers Companies.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 20, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Atlanta, Georgia

February 20, 2026

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ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value and share data)

As of December 31,

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 40.4 $ 69.4

Short term investments 0.5 14.4

OPERATING LEASE RIGHT-OF-USE ASSETS 240.6 220.1

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Floor plan notes payable—trade, net $ 343.1 $ 349.9

Floor plan notes payable—non-trade, net 1,683.9 1,344.8

Current maturities of long-term debt 479.2 114.7

Current maturities of operating leases 27.6 28.1

Accounts payable and accrued liabilities 780.3 761.4

Liabilities associated with assets held for sale 1.8 1.9

OTHER LONG-TERM LIABILITIES 57.1 56.4

COMMITMENTS AND CONTINGENCIES (Note 21)

SHAREHOLDERS' EQUITY:

Accumulated other comprehensive income 40.6 56.8

Total liabilities and shareholders' equity $ 11,618.2 $ 10,337.0

See accompanying Notes to Consolidated Financial Statements

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ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

For the Year Ended December 31,

REVENUE:

COST OF SALES:

OPERATING EXPENSES:

OTHER EXPENSES (INCOME):

Floor plan interest expense 91.2 89.9 9.6

Gain on dealership divestitures, net (80.2) (8.6) (13.5)

EARNINGS PER COMMON SHARE:

Basic—

Diluted—

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Performance share units 0.1 0.1 0.1

See accompanying Notes to Consolidated Financial Statements

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ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

For the Year Ended December 31,

Other comprehensive income (loss) - net of tax:

Change in fair value of cash flow swaps (29.6) (3.2) (22.6)

Income tax benefit associated with cash flow swaps 7.1 0.9 5.1

Unrealized gains (losses) on available-for-sale debt securities 8.1 (2.5) 5.2

See accompanying Notes to Consolidated Financial Statements

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ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in millions)

Shares Amount Shares Amount

Comprehensive Income:

Share-based compensation — — 23.5 — — — — 23.5

Comprehensive Income:

Share-based compensation — — 26.7 — — — — 26.7

Comprehensive Income:

Share-based compensation — — 27.7 — — — — 27.7

See accompanying Notes to Consolidated Financial Statements

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ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

For the Year Ended December 31,

CASH FLOW FROM OPERATING ACTIVITIES:

Gain on divestitures, net (80.2) (8.6) (13.5)

Other adjustments, net 5.1 6.7 (4.0)

Floor plan notes payable—trade, net (6.8) 154.8 144.1

Accounts payable and accrued liabilities (36.0) 12.8 119.5

Operating lease liabilities (30.2) (27.2) (26.7)

Other long-term assets and liabilities, net (18.7) (17.1) (18.8)

CASH FLOW FROM INVESTING ACTIVITIES:

Capital expenditures—excluding real estate (186.0) (162.6) (142.3)

Capital expenditures—real estate (19.3) (145.6) —

Purchases of previously leased real estate — (11.9) —

Purchases of debt securities—available-for-sale (189.4) (165.0) (195.2)

Proceeds from the sale of debt securities—available-for-sale 132.8 149.8 60.3

Proceeds from the sale of equity securities — — 51.8

Proceeds from the sale of assets — 6.5 16.3

CASH FLOW FROM FINANCING ACTIVITIES:

Floor plan borrowings—acquisitions 262.7 — 256.1

Floor plan repayments—divestitures (90.7) (34.1) —

Proceeds from borrowings 546.5 — —

Payment of debt issuance costs (5.7) — (1.2)

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For the Year Ended December 31,

Net cash provided by (used in) financing activities 653.1 (510.3) 1,175.8

Net (decrease) increase in cash and cash equivalents (29.0) 23.7 (189.6)

CASH AND CASH EQUIVALENTS, beginning of period 69.4 45.7 235.3

CASH AND CASH EQUIVALENTS, end of period $ 40.4 $ 69.4 $ 45.7

See Note 18 for supplemental cash flow information

See accompanying Notes to Consolidated Financial Statements

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ASBURY AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(December 31, 2025, 2024, and 2023)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Asbury Automotive Group, Inc., a Delaware corporation organized in 2002 (the "Company"), is one of the largest automotive retailers in the United States. Our store operations are conducted by our subsidiaries.

As of December 31, 2025, we owned and operated 223 new vehicle franchises (171 vehicle dealership locations), representing 36 brands of automobiles, and 39 collision centers in 15 states. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services (collectively referred to as "parts and services" or "P&S"); and finance and insurance ("F&I") products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection ("GAP") debt cancellation and prepaid maintenance. The finance and insurance products are provided by Total Care Auto, Powered by Asbury ("TCA") and independent third parties. The Company manages its operations in two reportable segments: Dealerships and TCA.

Our operating results are generally subject to seasonal variations. Demand for new vehicles is generally highest during the second and third quarters of each year and, accordingly, we expect our revenues to generally be higher during these periods. In addition, we typically experience higher sales of luxury vehicles in the fourth quarter, which have higher average selling prices and gross profit per vehicle retailed. Revenues and operating results may be impacted significantly from quarter to quarter by changing economic conditions, inventory availability, vehicle manufacturer incentive programs, or adverse weather events.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and reflect the consolidated accounts of the Company and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. If necessary, reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements in order to conform to current presentation. Amounts presented have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ materially from these estimates. Estimates and assumptions are reviewed quarterly, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Estimates made in the accompanying consolidated financial statements include, but are not limited to, those relating to inventory valuation reserves, reserves for chargebacks against revenue recognized from the sale of finance and insurance products, reserves for self-insurance programs, and certain assumptions related to goodwill and dealership franchise rights intangible assets.

Cash and Cash Equivalents

Cash and cash equivalents include investments in money market accounts and short-term certificates of deposit, which have maturity dates of less than 90 days when purchased.

Restricted Cash and Securities

TCA places securities on statutory deposit with certain state agencies to retain the right to do business in those states. Securities held on deposit with various state regulatory authorities had a fair value of $4.1 million at December 31, 2025. These securities are reflected in investments in our consolidated balance sheets.

Short-Term Investments

Short-term investments consist of debt securities that are callable or have a maturity date within the next 12 months and are classified as current assets. Debt securities classified as short-term investments are designated as available-for-sale as management intends to hold these securities for indefinite periods of time or may sell the securities in response to changes in interest rates, prepayments, or other similar factors. Available-for-sale debt securities are reported at fair market value with any unrealized gain or loss, net of applicable income tax, reported in other comprehensive income, as a separate component of

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shareholders’ equity. Premiums and discounts on debt securities classified as short-term investments are amortized or accreted using the effective interest method over the period from the purchase date to the expected maturity or call date of the related security and are reported in net income.

Investments

Investments consist of available-for-sale debt securities. These securities are classified as non-current investments as they are not intended to fund current operations or have stated call dates or maturity dates beyond the next 12 months.

Debt securities classified as non-current investments are designated as available-for-sale as management intends to hold these securities for indefinite periods of time or may sell the securities in response to changes in interest rates, prepayments, or other similar factors. Available-for-sale debt securities included in non-current investments are reported at fair market value with any unrealized gain or loss, net of applicable income tax, reported in other comprehensive income, as a separate component of shareholders’ equity. Premiums and discounts on debt securities included in non-current investments are amortized or accreted, as applicable, using the effective interest method over the period from the purchase date to the expected maturity or call date of the related security and are reported in net income.

We review the debt securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors. Some factors evaluated include changes in credit ratings, financial conditions of the issuer, recent payment activity, and other industry specific economic conditions. If a security is considered to have a potential credit loss, we compare the present value of expected cash flows to the amortized cost basis of the security to estimate the allowance for credit losses. The amount of the allowance is limited to the gross unrealized loss on an individual security. An unrealized loss on a debt security is generally considered to not be related to credit when the fair value of the security is below the carrying value of the security primarily due to changes in risk-free interest rates and when there has not been a significant deterioration in the financial condition of the issuer. If the Company no longer has the intent or ability to hold a security in an unrealized loss position until recovery of the security’s cost basis, a loss is realized immediately in net income.

Contracts-In-Transit

Contracts-in-transit represent receivables from third-party finance companies for the portion of new and used vehicle purchase price financed by customers through sources arranged by us.

Inventories

Inventories are stated at the lower of cost and net realizable value. We use the specific identification method to value vehicle inventories and parts and accessories are valued at the lower of cost or net realizable value. Our new vehicle sales history indicates that the vast majority of the new vehicles we sell are sold for, or in excess of, our cost to purchase those vehicles. Therefore, we generally do not maintain a reserve for new vehicle inventory. We maintain a reserve for used vehicle inventory where cost basis exceeds net realizable value. In assessing lower of cost and net realizable value for used vehicles, we consider (i) the aging of our used vehicles, (ii) historical sales experience of used vehicles, and (iii) current market conditions and trends in used vehicle sales. We also review and consider the following metrics related to used vehicle sales (both on a recent and longer-term historical basis): (i) days of supply in our used vehicle inventory, (ii) used vehicle units sold at less than original cost as a percentage of total used vehicles sold, and (iii) average vehicle selling price of used vehicle units sold at less than original cost. We then determine the appropriate level of reserve required to reduce our used vehicle inventory to the lower of cost and net realizable value, and record the resulting adjustment in the period in which we determine a loss has occurred. The level of reserve determined to be appropriate for each reporting period is considered to be a permanent inventory write-down, and therefore is only released upon the sale of the related inventory.

We receive assistance from certain automobile manufacturers in the form of advertising and floor plan interest credits. Manufacturer advertising credits that are reimbursements of costs associated with specific advertising programs are recognized as a reduction of advertising expense in the period they are earned. All other manufacturer advertising and certain floor plan interest credits are accounted for as purchase discounts, and are recorded as a reduction of inventory and recognized as a reduction to new vehicle cost of sales in the accompanying consolidated statements of income in the period the related vehicle is sold.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Depreciation is included in depreciation and amortization on the accompanying consolidated statements of income. Leasehold

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improvements are capitalized and amortized over the lesser of the remaining lease term or the useful life of the related asset. The ranges of estimated useful lives are as follows (in years):

Buildings and improvements 10-40

Machinery and equipment 5-10

Furniture and fixtures 3-10

Company vehicles 3-5

Expenditures for major additions or improvements, which extend the useful lives of assets, are capitalized. Minor replacements, maintenance and repairs, which do not improve or extend the lives of such assets, are expensed as incurred. We capitalize interest on borrowings during the active construction period of capital projects. Capitalized interest is added to the cost of the assets and is depreciated over the estimated useful lives of the assets.

We review property and equipment for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When we test our long-lived assets for impairment, we first compare the carrying amount of the underlying assets to their net recoverable value by reviewing the undiscounted cash flows expected from the use and eventual disposition of the underlying assets. If the carrying amount of the underlying assets is less than their net recoverable value, then we calculate an impairment equal to the excess of the carrying amount over the fair market value, and the impairment loss would be charged to operations in the period identified.

Acquisitions

Acquisitions are accounted for under the acquisition method of accounting and the assets acquired and liabilities assumed are recorded at their fair value at the acquisition date. Results of acquired businesses, which are primarily dealerships, are included in our accompanying consolidated statements of income commencing on the date of acquisition. Our acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. Goodwill is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Upon the completion of purchase accounting, the fair value of our manufacturer franchise rights are determined as of the acquisition date, by discounting the projected cash flows specific to each franchise. Included in this analysis are market participant assumptions related to the cash flows directly attributable to the franchise rights, including year-over-year and terminal growth rates, working capital requirements, weighted average cost of capital and future EBITDA margins.

Goodwill and Franchise Rights

Goodwill represents the excess cost of an acquired business over the estimated fair market value of its identifiable net assets. We have determined that, based on how we integrate acquisitions into our business, how the components of our business share resources and interact with one another, and how we review the results of our operations, that we have several geographic region operating segments which consist of our dealerships. We have determined that the dealerships in each of our operating segments are components that are aggregated into three geographic region reporting units for the purpose of testing goodwill for impairment, as they (i) have similar economic characteristics, (ii) offer similar products and services (all of our dealerships offer new and used vehicles, service, parts and third-party finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our dealerships distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments. Our dealership operating segments are aggregated into our Dealerships reportable segment. Goodwill associated with TCA is tested for impairment at the operating segment level which is the same as the reporting unit for this business.

Our only significant identifiable intangible assets, other than goodwill, are our rights under franchise agreements with manufacturers, which are recorded at an individual franchise level. The fair value of our manufacturer franchise rights are determined as of the acquisition date, by discounting the projected cash flows specific to each franchise. We have determined that manufacturer franchise rights have an indefinite life, as there are no economic, contractual or other factors that limit their useful lives, and they are expected to generate cash flows indefinitely due to the historically long lives of the manufacturers' brand names. Furthermore, to the extent that any agreements evidencing our manufacturer franchise rights would expire, we expect that we would be able to renew those agreements in the ordinary course of business.

Goodwill and manufacturer franchise rights are deemed to have indefinite lives and therefore are not subject to amortization. We review goodwill and manufacturer franchise rights for impairment annually as of October 1st, or more often if events or circumstances indicate that impairment may have occurred. We are subject to financial statement risk to the extent

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that goodwill becomes impaired due to decreases in the fair value of our automotive retail business or manufacturer franchise rights become impaired due to decreases in the fair value of our individual franchises.

Debt Issuance Costs

Debt issuance costs are presented as a contra-liability within current maturities of long-term debt or long-term debt on our consolidated balance sheets, except for debt issuance costs associated with our line-of-credit arrangements, which are presented as an asset within other current assets or other long-term assets on our consolidated balance sheets. Debt issuance costs are amortized to floor plan interest expense and other interest expense, net in the accompanying consolidated statements of income through maturity using the effective interest method or the straight-line method for our line-of-credit arrangements.

Derivative Instruments and Hedging Activities

From time to time, we utilize derivative financial instruments to manage our interest rate risk. The types of risks hedged are those relating to the variability of cash flows caused by fluctuations in interest rates. We document our risk management strategy and assess hedge effectiveness at each interest rate swap's inception and during the term of each hedge. Derivatives are reported at fair value on the accompanying consolidated balance sheets.

The changes in fair value on our hedges is reported as a component of accumulated other comprehensive loss on the accompanying consolidated balance sheets, and reclassified to other interest expense, net in the accompanying consolidated statements of income in the period during which the hedged transaction affects earnings.

Self-insurance Programs

We are self-insured for most of our employee medical claims and maintain stop-loss insurance for large-dollar individual claims. We have high-deductible insurance programs for workers compensation, property and general liability claims. We maintain and review our claim and loss history to assist in assessing our expected future liability for these claims. We also use professional service providers, such as account administrators and actuaries, to help us accumulate and assess this information. Provisions for retained losses and deductibles are made by charges to expense based upon periodic evaluations of the estimated ultimate liabilities on reported and unreported claims.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers ("Topic 606"). Under that guidance, the transaction price is attributed to the underlying performance obligations in the contract and revenue is deferred and recognized as income as the Company satisfies the performance obligations in the contract. Incremental costs of obtaining a contract with a customer are capitalized and amortized to the extent that the Company expects to recover those costs. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or performing a service. Sales and other taxes we collect, concurrent with revenue-producing activities, are excluded from revenue.

New vehicle and used vehicle retail

Revenue from the sale of new and used vehicles is recognized when the terms of the customer contract are satisfied which generally occurs with the signing of the sales contract and transfer of control of the vehicle to the customer. Payment is generally received at the time of sale or from a third-party financial institution within a short period of time following the sale of the vehicle. Amounts due from third-party financial institutions are reflected in contracts-in-transit or vehicle receivables within accounts receivable, net on our consolidated balance sheets. Costs associated with incidental items that are immaterial in the context of the contract are accrued at the time of sale.

Used vehicle wholesale

Proceeds from the sale of these vehicles are recognized in used vehicle revenue upon transfer of control to end-users at auction.

Sale of vehicle parts and accessories

The Company recognizes revenue upon transfer of control to the customer which occurs at a point in time. Payment is typically received when control of the parts and accessories transfers to the customer or within 30 days of such time. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers

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prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized.

Vehicle repair and maintenance services

The Company provides vehicle repair and maintenance services to its customers pursuant to the terms and conditions included within the customer contract ("repair order"). Payments for services are typically received upon completion of the services or within 30 days following the completion of the services. Satisfaction of this performance obligation creates an asset with no alternative use for which an enforceable right to payment for performance to date exists within our contractual agreements. As such, the Company recognizes revenue over time as the Company satisfies its performance obligation. Additionally, the Company has determined that parts and labor are not individually distinct in the context of a repair order and therefore treated as a single performance obligation. Certain of these services are provided by the Dealerships segment to TCA customers in connection with claims related to TCA's vehicle protection products. Revenues recorded by the Dealerships segment and the associated claims expense recorded by the TCA segment are eliminated upon consolidation.

Finance and Insurance, net

Within the Dealerships segment, we receive commissions from third-party lending and insurance institutions for arranging customer financing and from the sale of vehicle service contracts, guaranteed asset protection debt cancellation, and other products, to end-users. In addition, we record commissions received from our TCA segment related to the sale of TCA's various vehicle protection F&I products. TCA offers extended vehicle service contracts, prepaid maintenance contracts, key replacement contracts, guaranteed asset protection contracts, paintless dent repair contracts, appearance protection contracts, tire and wheel, and lease wear and tear contracts. In addition, TCA provides the required contractual liability insurance if needed. The majority of these service contracts are sold through affiliated automobile dealerships. Finance and insurance commission revenue is recognized at the point of sale since our performance obligation is to arrange financing or facilitating the sale of a third party's products or services to our customers.

The dealerships commission arrangements with TCA, third-party lenders and insurance administrators consists of fixed ("upfront") and variable consideration. Variable consideration includes commission chargebacks ("chargebacks") in the event a contract is prepaid, defaulted upon, or terminated by the end-user. The Company reserves for future chargebacks based on historical chargeback experience and the termination provisions of the applicable contract, and these reserves are established in the same period that the related revenue is recognized. Commissions revenue and related reserves for future chargebacks in connection with the sale of TCA F&I products by our dealerships, are eliminated in consolidation.

We also participate in future profits pursuant to retrospective commission arrangements, which meet the definition of variable consideration, for certain insurance products associated with a third-party portfolio. The Company estimates the amount of variable consideration to be included in the transaction price based on historical payment trends and further constrains the variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. In making these assessments the Company considers the likelihood and magnitude of a potential reversal of revenue and updates its assessment when uncertainties associated with the constraint are removed.

Within our TCA segment, all revenue, other than investment and interest income, is the result of contracts with customers. Each contract is considered to have a single performance obligation which extends over the life of the contract. Revenue is recognized ratably over the contract term based on earnings factors that align with the performance obligation. We capitalize costs to obtain customer contracts, employee sales commissions, and amortize those costs over the estimated life of the contract. Amortization of costs to obtain customer contracts is included in selling, general and administrative expenses. The portion of commissions that are paid to affiliated dealerships are eliminated upon consolidation. Unearned premium reserves are established to cover the unexpired portion of premiums written.

Deferred Revenue

We earn and recognize premium revenue related to the TCA segment over the period of the related service contract. Accordingly, we record deferred revenue and we ratably recognize revenue over the service contract period.

Unpaid Losses and Loss Adjustment Expense Reserve

Losses and loss adjustment expense reserves represent management's best estimate of the ultimate net cost of all reported and unreported losses incurred through December 31, 2025. The Company does not discount liabilities for unpaid losses or unpaid loss adjustment expense reserves. The reserves for unpaid losses and loss adjustment expenses are estimated using individual case-basis valuation and statistical analysis. Those estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in such estimates, management believes the reserves for losses and loss

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adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known; such adjustments are included in income from operations.

Claims are counted when incidents that may result in a liability are reported and are based on policy coverage.

Internal Profit

Revenues and expenses associated with internal work performed by our parts and service departments on new and used vehicle inventory are eliminated in consolidation. The gross profit earned by our parts and service departments for internal work performed is included as a reduction of parts and service cost of sales on the accompanying consolidated statements of income upon the sale of the vehicle. The costs incurred by our new and used vehicle departments for work performed by our parts and service departments is included in either new vehicle cost of sales or used vehicle cost of sales on the accompanying consolidated statements of income, depending on the classification of the vehicle serviced. We eliminate the internal profit on vehicles that remain in inventory at period end.

Intersegment Eliminations

TCA's vehicle protection products are sold through affiliated dealerships and the revenue from the related commissions are included in finance and insurance, net revenues in the Dealerships segment before consolidation. The corresponding claims expense incurred and the amortization of deferred acquisition costs is recorded as a cost of sales in the TCA segment. The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's vehicle protection products. Revenues recorded by the Dealerships segment and the associated claims expense recorded by the TCA segment are eliminated upon consolidation. Intersegment revenues and profits from contracts and services are eliminated in consolidation. See Note 20 "Segment Information" for further details.

Share-Based Compensation

We record share-based compensation expense under the fair value method on a straight-line basis over the vesting period, unless the awards are subject to performance conditions, in which case we recognize the expense over the requisite service period of each separate vesting tranche. In addition, we account for the forfeiture of share-based awards as they occur.

Share Repurchases

Share repurchases may be made from time-to-time in open market transactions or through privately negotiated transactions under the authorization approved by the Board of Directors. Periodically, the Company may retire repurchased shares of common stock previously held by the Company as treasury stock. In accordance with our accounting policy, we allocate any excess share repurchase price over par value between additional paid-in capital, which is limited to amounts initially recorded for the same issue, and retained earnings.

During the years ended December 31, 2025, 2024 and 2023, the Company repurchased 432,752, 830,297 and 1,316,167 shares and retired 432,752, 830,297 and 1,370,371 shares of our common stock under our share repurchase program, respectively. On May 15, 2024, the Company announced that its Board of Directors approved an increase of $256.2 million in the Company's common share repurchase authorization to $400.0 million (the "New Share Repurchase Authorization"). As of December 31, 2025, the Company had $175.9 million remaining on its share repurchase authorization. The share repurchase authorization does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without further notice.

Earnings per Common Share

Basic earnings per common share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. The Company excluded 4,718, 1,349, and 2,086 restricted share units and 159, 1,898, and 60 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from its computation of diluted earnings per share for the years ended December 31, 2025, 2024 and 2023, respectively, because they were anti-dilutive. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share.

Advertising

We expense costs of advertising as incurred and production costs when the advertising initially takes place, net of certain advertising credits and other discounts received from certain automobile manufacturers. Advertising expense totaled $68.9 million, $61.8 million and $47.5 million for the years ended December 31, 2025, 2024 and 2023, which was net of earned

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ABG US Equity

ABG · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8.Financial Statements and Supplementary Data

ABG US Equity☆

ABG · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8.Financial Statements and Supplementary Data

ABG US Equity