ASBURY AUTOMOTIVE GROUP INC

Previous wording

•significant disruptions in the production and delivery of vehicles and parts for any reason, including supply shortages, natural disasters, severe weather, civil unrest, both at home and abroad, product recalls, work stoppages or other occurrences that are outside of our control;

Current wording

•significant disruptions in the production and delivery of vehicles and parts, or our business operations, for any reason, including supply shortages, natural disasters, severe weather including hurricanes and hail, civil unrest, both at home and abroad, product recalls, work stoppages or other occurrences that are outside of our control;

Previous wording

We are one of the largest automotive retailers in the United States. As of June 30, 2025, through our Dealerships segment, we owned and operated 189 new vehicle franchises (146 dealership locations), representing 31 brands of automobiles, within 13 states. As of June 30, 2025, we also operated 37 collision centers, and Total Care Auto, Powered by Landcar ("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 services; 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 six months ended June 30, 2025, our new vehicle revenue brand mix consisted of 30% luxury, 40% imports and 30% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.

Current wording

We are one of the largest automotive retailers in the United States. As of September 30, 2025, through our Dealerships segment, we owned and operated 230 new vehicle franchises (175 dealership locations), representing 36 brands of automobiles, within 15 states. As of September 30, 2025, we also operated 39 collision centers, and Total Care Auto, Powered by Landcar ("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 services; 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 nine months ended September 30, 2025, our new vehicle revenue brand mix consisted of 31% luxury, 41% imports and 29% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.

Previous wording

On July 21, 2025 the Company completed its previously announced acquisition of substantially all of the assets, including real property and businesses of The Herb Chambers Companies (the "Herb Chambers Dealerships") pursuant to a Purchase and Sale Agreement (the "Transaction Agreement") with various entities that comprise the Herb Chambers automotive group (the "Herb Chambers acquisition") for an aggregate purchase price of approximately $1.82 billion which includes $750 million for goodwill, approximately $610 million for the real estate and leasehold improvements and approximately $460.0 million for new vehicles, used vehicles, service loaner vehicles, fixed assets and parts and supplies. The acquisition was primarily funded with borrowings under Asbury’s existing senior credit facility, borrowings under the 2025 Real Estate Facility and cash on hand. The Herb Chambers acquisition comprised 33 dealerships, 52 franchises and three collision centers and real property and businesses of the Herb Chambers Dealerships (collectively, the "Businesses").

Current wording

On July 21, 2025, the Company completed its previously announced acquisition of substantially all of the assets, including real property and businesses of The Herb Chambers Companies (the "Herb Chambers Dealerships") pursuant to a Purchase and Sale Agreement (the "Transaction Agreement") with various entities that comprise the Herb Chambers automotive group (the "Herb Chambers acquisition") for an aggregate purchase price of approximately $1.78 billion. The acquisition was primarily funded with borrowings under Asbury’s existing senior credit facility and borrowings under the 2025 Real Estate Facility. The Herb Chambers acquisition comprised 33 dealerships, 52 franchises and three collision centers and real property and businesses of the Herb Chambers Dealerships (collectively, the "Businesses").

Previous wording

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. In response, 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.

Current wording

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.

Previous wording

•Consolidated revenue for the six months ended June 30, 2025, increased to $8.52 billion, compared to $8.45 billion for the prior year.

Current wording

•Consolidated revenue for the nine months ended September 30, 2025, increased to $13.32 billion, compared to $12.68 billion for the prior year.

Previous wording

•Consolidated gross profit for the six months ended June 30, 2025, decreased marginally to $1,476.1 million, compared to $1,480.7 million for the prior year.

Current wording

•Consolidated gross profit for the nine months ended September 30, 2025, increased to $2.28 billion, compared to $2.20 billion for the prior year.

Previous wording

•The increase in consolidated revenue is primarily due to an increase in new vehicles units sold offset partially by a decrease in used vehicle units sold. The decrease in consolidated gross profit is primarily due to lower gross profit per vehicle sold for new vehicles as margins continue to shift downward from the historic highs in recent years as well as a decrease in F&I gross profit.. The lower new vehicle gross profit per vehicle sold and F&I gross profit was partially offset by an increase in growth in our parts and services gross profit and a slight increase in used vehicle gross profit per vehicle sold.

Current wording

•The increase in consolidated revenue is primarily due to an increase in new vehicles units sold and parts and service volume growth offset partially by a decrease in used vehicle units sold. The increase in consolidated gross profit is primarily due to an increase in growth in our parts and services gross profit, an increase in used vehicle gross profit per vehicle sold which 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.

Previous wording

Total revenue during the second quarter of 2025 increased by $127.0 million (3%) compared to the second quarter of 2024, due to a $139.0 million (6%) increase in new vehicle revenue, a $20.6 million (4%) increase in parts and service revenue partially offset by a $22.3 million (2%) decrease in used vehicle revenue and a $10.4 million (5%) decrease in F&I, net revenue. During the three months ended June 30, 2025, gross profit increased by $21.2 million (3%) driven by a $14.9 million (4%) increase in parts and service gross profit, a $7.9 million (13%) increase in used vehicle gross profit and a $4.9 million (3%) increase in new vehicle gross profit, partially offset by a $6.6 million (4%) decrease in F&I gross profit.

Current wording

Total revenue during the third quarter of 2025 increased by $564.2 million (13%) compared to the third quarter of 2024, due to a $365.4 million (17%) increase in new vehicle revenue, a $117.5 million (9%) increase in used vehicle revenue, a $66.3 million (11%) increase in parts and service revenue and a $14.9 million (8%) increase in F&I, net revenue. During the three months ended September 30, 2025, gross profit increased by $84.5 million (12%) driven by a $52.0 million (15%) increase in parts and service gross profit, a $15.9 million (9%) increase in F&I gross profit, a $10.6 million (7%) increase in new vehicle gross profit and a $5.9 million (10%) increase in used vehicle gross profit.

Previous wording

Income from operations during three months ended June 30, 2025 increased by $156.9 million (156%) compared to three months ended June 30, 2024, primarily due to a $135.4 million decrease in asset impairments in addition to the $21.2 million (3%) increase in gross profit.

Current wording

Income from operations during the three months ended September 30, 2025 increased by $9.9 million (4%) compared to three months ended September 30, 2024, primarily due to the $84.5 million (12%) increase in gross profit offset by a $60.6 million (13%) increase in selling, general and administrative expenses and an $11.7 million increase in asset impairment expense.

Previous wording

Total other expenses, net decreased by $8.9 million (14%) during the second quarter of 2025 as compared to the second quarter of 2024, primarily as a result of a $3.7 million decrease in other interest expense, net, a $2.9 million decrease in floor plan interest expense and a $2.3 million increase in the gain on dealership divestitures, net. Income before income taxes increased $165.7 million to $203.8 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Overall, net income increased by $124.6 million during the second quarter of 2025 as compared to the second quarter of 2024.

Current wording

Total other expenses, net decreased by $20.6 million (33%) during the third quarter of 2025 as compared to the third quarter of 2024, primarily as a result of a $30.7 million increase in the gain on dealership divestitures, net offset by a $5.6 million increase in other interest expense, net and a $4.4 million increase in floor plan interest expense. Income before income taxes increased $30.5 million to $200.2 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Overall, net income increased by $20.8 million during the third quarter of 2025 as compared to the third quarter of 2024.

Previous wording

For the three months ended June 30, 2025, new vehicle revenue increased by $139.0 million (6%) due to an increase in new vehicle units sold of 1,758 (4%) and an $1,122 (2%) increase in revenue per new vehicle sold as compared to the three months ended June 30, 2024. Same store new vehicle revenue increased by $180.4 million, driven by an increase in new vehicles sold of 2,803 (7%) and an $851 (2%) increase in revenue per new vehicle sold as compared to the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2025, new vehicle revenue increased by $365.4 million (17%) due to an increase in new vehicle units sold of 5,463 (13%) and an $1,830 (4%) increase in revenue per new vehicle sold as compared to the three months ended September 30, 2024. Same store new vehicle revenue increased by $172.9 million, driven by an increase in new vehicles sold of 2,835 (7%) and a $663 (1%) increase in revenue per new vehicle sold as compared to the three months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2025, new vehicle gross profit and same store new vehicle gross profit increased by $4.9 million (3%) and $6.0 million (4%), respectively. Same store new vehicle gross margin for the three months ended June 30, 2025 decreased 31 basis points to 6.9%. A similar decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.

Current wording

For the three months ended September 30, 2025, new vehicle gross profit and same store new vehicle gross profit increased by $10.6 million (7%) and decreased by $5.6 million (4%), respectively. Same store new vehicle gross margin for the three months ended September 30, 2025, decreased 79 basis points to 6.2%. A 58 basis points decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.

Previous wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended June 30, 2025, was approximately 16.1 million which increased as compared to approximately 15.6 million during the three months ended June 30, 2024. The increase in SAAR period over period reflects higher inventory supply coupled with the effects of the CDK outage in June 2024, which negatively impacted sales in the prior year. Consumer demand for new vehicles around the earlier part of the second quarter of 2025 was driven by automobile tariff uncertainty. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Current wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended September 30, 2025, was approximately 16.3 million which increased as compared to approximately 15.6 million during the three months ended September 30, 2024. The increase in SAAR period over period reflects higher consumer demand for new vehicles driven by automobile tariff uncertainty and expiring electric vehicle federal tax credits. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Previous wording

For the three months ended June 30, 2025, used vehicle revenue decreased by $22.3 million (2%) compared to the same period of the prior year, due to a $37.8 million (3%) decrease in used vehicle retail revenue offset by a $15.5 million (11%) increase in used vehicle wholesale revenue. Same store used vehicle revenue increased by $2.2 million, largely due to a $17.0 million (12%) increase in used vehicle wholesale revenue, offset by a $14.8 million (1%) decrease in used vehicle retail revenue. Total used vehicle retail unit sales decreased by 6% while same store used vehicle retail unit sales decreased by 4% during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Used vehicle revenue and unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. Revenue per used vehicle retailed increased in the second quarter of 2025, along with gross profit margins on both an all store and same store basis.

Current wording

For the three months ended September 30, 2025, used vehicle revenue increased by $117.5 million (9%) compared to the same period of the prior year, due to a $78.3 million (7%) increase in used vehicle retail revenue and a $39.3 million (27%) increase in used vehicle wholesale revenue. Same store used vehicle revenue increased by $22.0 million, largely due to a $28.3 million (20%) increase in used vehicle wholesale revenue, offset by a $6.4 million (1%) decrease in used vehicle retail revenue. Total used vehicle retail unit sales increased by 1% while same store used vehicle retail unit sales decreased by 4% during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Used vehicle revenue and unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. Revenue per used vehicle retailed increased in the third quarter of 2025, on both an all store and same store basis.

Previous wording

For the three months ended June 30, 2025, total Company and same store used vehicle retail gross profit margins increased by 69 basis points and 60 basis points, respectively, as compared to the three months ended June 30, 2024. Increases in used vehicle gross margins, on both a total Company and same store basis, were largely driven by a tighter market for used vehicles during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2025, total Company and same store used vehicle retail gross profit margins increased by 13 basis points and decreased by 9 basis points, respectively, as compared to the three months ended September 30, 2024. Increases in used vehicle gross margins on a total Company basis were largely driven by the addition of the Herb Chambers Dealerships during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2025, used vehicle retail gross profit margins increased from 4.8% to 5.5% and 4.9% to 5.5% respectively, for all stores and on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit increased $5.9 million (11%) for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 and increased $6.0 million (11%) on a same store basis for the same periods. On a total company basis, our gross profit per used vehicle retailed increased $257 (18%), and on a same store basis, our gross profit per used vehicle retailed increased $226 (15%) when compared to the prior year period, which was primarily driven by increases in used vehicle market prices due to the increase in demand in the quarter as a result of tariff uncertainty.

Current wording

For the three months ended September 30, 2025, used vehicle retail gross profit margins increased from 4.9% to 5.0% for all stores and decreased 5.0% to 4.9% on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit increased $5.4 million (10%) for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 and decreased $1.3 million (2%) on a same store basis for the same periods. On a total company and same store basis, our gross profit per used vehicle retailed increased $130 (9%), and $22 (1%), respectively, when compared to the prior year period, which was primarily driven by increases in used vehicle market prices due to the tight used vehicle inventory market.

Previous wording

The $20.6 million (4%) increase in parts and service revenue was primarily due to a $13.1 million (4%) increase in customer pay revenue and a $12.0 million (15%) increase in warranty revenue offset by a $3.1 million (5%) decrease in collision revenue and a $1.3 million (1%) decrease in wholesale parts revenue. Same store parts and service revenue increased by $31.5 million (6%) to $590.8 million during the three months ended June 30, 2025 from $559.3 million during the three months ended June 30, 2024. The increase in same store parts and service revenue was due to a $21.0 million (7%) increase in customer pay revenue, a $12.9 million (17%) increase in warranty revenue and a $0.7 million (1%) increase in wholesale parts revenue, partially offset by a $3.1 million (5%) decrease in collision revenue. The average age of vehicles in 2025 is historically high at 12.8 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Current wording

The $66.3 million (11%) increase in parts and service revenue was primarily due to a $43.7 million (14%) increase in customer pay revenue, a $19.0 million (21%) increase in warranty revenue, a $2.6 million (1%) increase in wholesale parts revenue and a $1.0 million (1%) increase in collision revenue. Same store parts and service revenue increased by $24.5 million (4%) to $591.1 million during the three months ended September 30, 2025 from $566.6 million during the three months ended September 30, 2024. The increase in same store parts and service revenue was due to a $19.3 million (6%) increase in customer pay revenue, a $6.9 million (8%) increase in warranty revenue and a $1.2 million (1%) increase in wholesale parts revenue, partially offset by a $3.0 million (4%) decrease in collision revenue. The average age of vehicles in 2025 is historically high at 12.8 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Previous wording

For the three months ended June 30, 2025, total parts and service gross profit increased by $14.9 million (4%) to $354.8 million and same store total parts and service gross profit increased by $21.6 million (7%) to $349.5 million when compared to the same period of the prior year. The all store and same store increase is primarily due to increased customer pay and warranty volume, which is in line with the increasing trend of aged vehicles but was offset by decreases in body shop and wholesale parts activity.

Current wording

For the three months ended September 30, 2025, total parts and service gross profit increased by $52.0 million (15%) to $389.1 million and same store total parts and service gross profit increased by $24.2 million (7%) to $347.6 million when compared to the same period of the prior year. The all store and same store increase is primarily due to increased customer pay and warranty volume, which is in line with the increasing trend of aged vehicles.

Previous wording

F&I revenue, net decreased by $10.4 million (5%) during the second quarter of 2025 when compared to the second quarter of 2024, as a result of a 1% decrease in total retail units sold and a $67 (3%) decrease in F&I per vehicle retailed.

Current wording

F&I revenue, net increased by $14.9 million (8%) during the third quarter of 2025 when compared to the third quarter of 2024, as a result of a 7% increase in total retail units sold and a $41 (2%) increase in F&I per vehicle retailed.

Previous wording

On a same store basis, F&I revenue, net decreased by $7.6 million (4%) during three months ended June 30, 2025 when compared to three months ended June 30, 2024, as a result ofa 4% decrease in F&I per vehicle retailed offset bya 2% increasein total retail units sold. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Current wording

On a same store basis, F&I revenue, net increased by $2.1 million (1%) during the three months ended September 30, 2025 when compared to the three months ended September 30, 2024, primarily due toa 2% increasein total retail units sold. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Previous wording

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 three months ended June 30, 2025, TCA generated $15.6 million revenue, after dealership eliminations, consisting primarily of earned premiums and $5.0 million investment income from the investment portfolio. F&I revenue decreased by $16.3 million (51%) for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Current wording

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 three months ended September 30, 2025, TCA generated $23.7 million revenue, after dealership eliminations, consisting primarily of earned premiums and $5.5 million investment income from the investment portfolio. F&I revenue decreased by $5.9 million (20%) for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Previous wording

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 three months ended June 30, 2025, TCA recorded $13.8 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Current wording

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 three months ended September 30, 2025, TCA recorded $13.2 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Previous wording

As we continue to integrate TCA, we expect a rollout of TCA products to our Koons stores in the fourth quarter of 2025 and our Herb Chambers stores beginning in 2026. With the ownership of TCA, while the combined profitability of the transaction is higher, the timing of revenue and cost recognition isdeferred and amortized over the life of the contract. We expect that this rollout will result in lower F&I revenue and gross profit over the next two to three years due to the change in how the revenue from these contracts are earned.

Current wording

As we continue to integrate TCA, we expect a rollout of TCA products to our Koons stores in the fourth quarter of 2025 and our Herb Chambers stores beginning in 2026. With the ownership of TCA, while the combined profitability of the transaction is higher, the timing of revenue and cost recognition isdeferred and amortized over the life of the contract. We expect that this rollout will result in lower F&I revenue and gross profit over the next few years due to the change in how revenue is earned from these contracts. The extent of the lower F&I revenue and gross profit will vary due to various factors including, but not limited to, SAAR levels and the Company's acquisition and divestiture activity.

Previous wording

SG&A expense as a percentage of gross profit decreased 198 basis points from 65.2% for the three months ended June 30, 2024 to 63.2% for thethree months ended June 30, 2025, while same store SG&A expense as a percentage of gross profit decreased 183 basis points to 62.9% over the same period in 2025. The decrease in SG&A expense as a percentage of gross profit on a total company and same store basis during thethree months ended June 30, 2025 is primarily the result of lower rent and related expenses (inclusive of a $5.0 million insurance recovery in the period)and higher gross profits for thethree months ended June 30, 2025 as compared to the three months ended June 30, 2024. On a total company basis, SG&A expense decreased by $1.1 million for thethree months ended June 30, 2025 as compared to the three months ended June 30, 2024 primarily due to a decrease in rent and related expenses of$7.5 million offset by an increase in other expenses arising from transaction costs of $2.2 million associated with an acquisition.

Current wording

SG&A expense as a percentage of gross profit increased 71 basis points from 65.0% for the three months ended September 30, 2024 to 65.7% for thethree months ended September 30, 2025, while same store SG&A expense as a percentage of gross profit decreased 58 basis points to 64.0% over the same period in 2025. The increase in SG&A expense as a percentage of gross profit on a total company basis during the three months ended September 30, 2025 is primarily due to an increase of $30.6 million in personnel expenses driven by the Herb Chambers acquisition and an increase in other expenses of $24.9 million due to transaction costs incurred of $9.6 million associated with the Herb Chambers acquisition and other outside service costs related to legal and professional fees incurred. The decrease in SG&A expense as a percentage of gross profit on a same store basis during the three months ended September 30, 2025 is primarily the result of higher gross profits for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Previous wording

Floor plan interest expense decreased by $2.9 million to $18.1 million during the three months ended June 30, 2025 as compared to $21.0 million floor plan interest expense for the three months ended June 30, 2024 primarily due to lower interest rates and higher balances held in our floor plan offset accounts during the three months ended June 30, 2025 as compared to the same period in the prior year.

Current wording

Floor plan interest expense increased by $4.4 million to $26.7 million during the three months ended September 30, 2025 as compared to $22.3 million floor plan interest expense for the three months ended September 30, 2024 primarily due to lower balances held in our offset accounts during the three months ended September 30, 2025 as compared to the same period in the prior year.

Previous wording

During the three months ended June 30, 2024, we sold one Nissan franchise (one dealership location) in Denver, Colorado, and one Nissan franchise (one dealership location) in Atlanta, Georgia. The Company recorded a pre-tax gain totaling $3.6 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures, net.

Current wording

During the three months ended September 30, 2024, we sold one Nissan franchise (one dealership location) in Denver, Colorado, and one Nissan franchise (one dealership location) in Atlanta, Georgia. The Company recorded a pre-tax gain totaling $5.0 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures, net.

Previous wording

The $41.1 million increase in income tax expense was primarily the result of a $165.7 million increase in income before income taxes. Our effective tax rate for the three months ended June 30, 2025 was 25.0% compared to 26.1% in the prior year comparative period, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation as well as the favorable effects of amended state income tax returns, which are discrete items, and unfavorable effects of various permanent tax adjustments such as executive compensation. We estimate our effective tax rate for the year ended December 31, 2025 at 25.5%. This estimated effective tax rate includes the effects of the deferred tax impact related to an increase in our estimated future state effective tax rate due to the acquisition of the Herb Chambers Dealerships.

Current wording

The $9.7 million increase in income tax expense was primarily the result of a $30.5 million increase in income before income taxes and the impact on our deferred taxes due to the acquisition of the Herb Chambers Businesses. Our effective tax rate for the three months ended September 30, 2025 was 26.5% compared to 25.6% in the prior year comparative period, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation as well as the favorable effects of amended state income tax returns, which are discrete items, and unfavorable effects of various permanent tax adjustments such as executive compensation. We estimate our effective tax rate for the year ended December 31, 2025 at 25.5%. This estimated effective tax rate includes the effects of the deferred tax impact related to an increase in our estimated future state effective tax rate due to the acquisition of the Herb Chambers Businesses.

Previous wording

Total revenue for the six months ended June 30, 2025 increased by $74.2 million (1%) compared to the six months ended June 30, 2024, due to a $212.9 million (5%) increase in new vehicle revenue and a $17.9 million (2%) increase in parts and service revenue, offset by a $143.4 million (5%) decrease in used vehicle revenue and a $13.2 million (3%) decrease in F&I, revenue, net. The $4.6 million decrease in gross profit during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was driven by a $14.8 million (5%) decrease in new vehicle gross profit and a $13.8 million (4%) decrease in F&I gross profit, offset by a $23.4 million (3%) increase in parts and service gross profit and a $0.6 million increase in used vehicle gross profit.

Current wording

Total revenue for the nine months ended September 30, 2025 increased by $638.4 million (5%) compared to the nine months ended September 30, 2024, due to a $578.2 million (9%) increase in new vehicle revenue, an $84.2 million (5%) increase in parts and service revenue and a $1.8 million increase in F&I, revenue, net, offset by a $25.8 million (1%) decrease in used vehicle revenue. The $79.9 million (4%) increase in gross profit during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was driven by a $75.5 million (7%) increase in parts and service gross profit, a $6.4 million (3%) increase in used vehicle gross profit and a $2.2 million increase in F&I gross profit, offset by a $4.2 million (1%) decrease in new vehicle gross profit.

Previous wording

Income from operations during the six months ended June 30, 2025 increased by $128.4 million (35%), compared to the six months ended June 30, 2024, primarily due to a $121.1 million decrease in asset impairment charges and a $13.3 million (1%) decrease in SG&A expense, partially offset by a $4.6 million decrease in gross profit and a $1.3 million (4%) increase in depreciation and amortization expense.

Current wording

Income from operations during the nine months ended September 30, 2025 increased by $138.3 million (23%), compared to the nine months ended September 30, 2024, primarily due to a $109.4 million decrease in asset impairment charges and a $79.9 million (4%) increase in gross profit, partially offset by a $47.3 million (3%) increase in SG&A expense and a $3.6 million (7%) increase in depreciation and amortization expense.

Previous wording

Total other expenses, net decreased by $16.9 million (13%) as a result of a $6.4 million increase in gain on dealership divestitures, net, a decrease of $5.4 million (6%) in other interest expense, net, and a $5.0 million (11%) decrease in floor plan interest expense recorded during the six months ended June 30, 2025 when compared to the same period of the prior year. Income before income taxes increased $145.3 million (62%) to $379.2 million for the six months ended June 30, 2025. Overall, net income increased by $109.7 million (63%) during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Current wording

Total other expenses, net decreased by $37.5 million (20%) as a result of a $37.1 million increase in gain on dealership divestitures, net, recorded during the nine months ended September 30, 2025 when compared to the same period of the prior year. Income before income taxes increased $175.8 million (44%) to $579.5 million for the nine months ended September 30, 2025. Overall, net income increased by $130.4 million (43%) during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025, new vehicle revenue increased by $212.9 million (5%) due to an increase in new vehicle units sold of 2,577 (3%) and a $956 (2%) increase in revenue per new vehicle sold as compared to the six months ended June 30, 2024. Same store new vehicle revenue increased by $296.3 million (7%), driven by an increase in new vehicles sold of 4,582 (6%) and a $739 (1%) increase in revenue per new vehicle sold as compared to the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, new vehicle revenue increased by $578.2 million (9%) due to an increase in new vehicle units sold of 8,040 (6%) and a $1,270 (3%) increase in revenue per new vehicle sold as compared to the nine months ended September 30, 2024. Same store new vehicle revenue increased by $460.7 million (8%), driven by an increase in new vehicles sold of 7,262 (6%) and a $723 (1%) increase in revenue per new vehicle sold as compared to the nine months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025, new vehicle gross profit and same store new vehicle gross profit decreased by $14.8 million (5%) and $10.7 million (3%), respectively. Same store new vehicle gross margin for the six months ended June 30, 2025 decreased 76 basis points to 6.8%. A similar decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.

Current wording

For the nine months ended September 30, 2025, new vehicle gross profit and same store new vehicle gross profit decreased by $4.2 million (1%) and $17.0 million (4%), respectively as compared to the same period in the prior year. Same store new vehicle gross margin for the nine months ended September 30, 2025 decreased 78 basis points to 6.6%. A 67 basis points decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.

Previous wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the six months ended June 30, 2025 was approximately 16.3 million which increased as compared to approximately 15.5 million during the six months ended June 30, 2024. The increase in SAAR period over period reflects higher inventory supply coupled with the effects of the CDK outage in June 2024, which negatively impacted sales in the prior year. Consumer demand for new vehicles was driven by automobile tariff uncertainty. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Current wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the nine months ended September 30, 2025 was approximately 16.3 million which increased as compared to approximately 15.6 million during the nine months ended September 30, 2024. The increase in SAAR period over period reflects higher inventory supply and consumer demand for new vehicles driven by automobile tariff uncertainty and expiring electric vehicle federal tax credits. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Previous wording

For the six months ended June 30, 2025, used vehicle revenue decreased by $143.4 million (5%) compared to the same period of the prior year, due to a $150.2 million (6%) decrease in used vehicle retail revenue partially offset by a $6.8 million (2%) increase in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $88.5 million (3%) due to a $99.1 million (4%) decrease in used vehicle retail revenue partially offset by a $10.6 million (4%) increase in used vehicle wholesale revenue. Total used vehicle retail unit sales decreased by 8% while same store used vehicle retail sales decreased 6% during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Used vehicle unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. Revenue per used vehicle retailed increased duringsix months ended June 30, 2025 compared to the same period of the prior year, along with gross profit margins on both an all store and same store basis.

Current wording

For the nine months ended September 30, 2025, used vehicle revenue decreased by $25.8 million (1%) compared to the same period of the prior year, due to a $71.9 million (2%) decrease in used vehicle retail revenue partially offset by a $46.1 million (10%) increase in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $68.2 million (2%) due to a $106.7 million (3%) decrease in used vehicle retail revenue partially offset by a $38.5 million (9%) increase in used vehicle wholesale revenue. Both total used vehicle retail unit sales and same store used vehicle retail sales decreased by 5% during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Used vehicle unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. Revenue per used vehicle retailed increased during nine months ended September 30, 2025 compared to the same period of the prior year.

Previous wording

For the six months ended June 30, 2025, total company and same store gross profit margins increased by 22 basis points and 14 basis points, respectively, as compared to the six months ended June 30, 2024. Increases in used vehicle gross margins, on both a total Company and same store basis, were largely driven by higher prices for used vehicles during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, total company and same store gross profit margins increased by 18 basis points and 6 basis points, respectively, as compared to the nine months ended September 30, 2024. Increases in used vehicle gross margins, on both a total Company and same store basis, were largely driven by higher prices for used vehicles during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025, used vehicle retail gross profit margins increased from 5.1% to 5.4% and 5.3% to 5.4%, respectively, for all stores and on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit decreased $2.9 million (2%) for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 and decreased $2.1 million (2%) on a same store basis for the same period. On a total company basis, our gross profit per used vehicle retailed increased $98 (6%), and on a same store basis, our gross profit per used vehicle retailed increased $68 (4%) when compared to the prior period, which was primarily driven by increases in used vehicle market prices due to the surge in demand as a result of tariff uncertainty.

Current wording

For the nine months ended September 30, 2025, used vehicle retail gross profit margins increased from 5.1% to 5.2% for all stores and remained consistent on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit increased $2.6 million (1%) for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 and decreased $3.4 million (2%) on a same store basis for the same period. On a total company basis, our gross profit per used vehicle retailed increased $108 (7%), and on a same store basis, our gross profit per used vehicle retailed increased $52 (3%) when compared to the prior period, which was primarily driven by increases in used vehicle market prices due to the surge in demand as a result of tariff uncertainty.

Previous wording

The $17.9 million (2%) increase in parts and service revenue was primarily due to a $25.0 million (15%) increase in warranty revenue and a $10.3 million (2%) increase in customer pay revenue, offset by a $9.1 million (4%) decrease in wholesale parts revenue and an $8.3 million (6%) decrease in collision revenue. Same store parts and service revenue increased by $39.2 million (3%) from $1.13 billion for the six months ended June 30, 2024 to $1.17 billion for the six months ended June 30, 2025. The increase in same store parts and service revenue was due to a $26.9 million (17%) increase in warranty revenue and a $25.5 million (4%) increase in customer pay revenue, offset by an $8.3 million (6%) decrease in collision revenue and a $4.9 million (2%) decrease in wholesale parts revenue. Consumers are owning a vehicle for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Current wording

The $84.2 million (5%) increase in parts and service revenue was primarily due to a $54.0 million (6%) increase in customer pay revenue and a $44.0 million (18%) increase in warranty revenue, offset by a $7.3 million (3%) decrease in collision revenue and a $6.5 million (2%) decrease in wholesale parts revenue. Same store parts and service revenue increased by $63.5 million (4%) from $1.68 billion for the nine months ended September 30, 2024 to $1.74 billion for the nine months ended September 30, 2025. The increase in same store parts and service revenue was due to a $44.4 million (5%) increase in customer pay revenue and a $34.0 million (14%) increase in warranty revenue, offset by an $11.2 million (5%) decrease in collision revenue and a $3.6 million (1%) decrease in wholesale parts revenue. Consumers are owning a vehicle for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Previous wording

For the six months ended June 30, 2025, total parts and service gross profit increased by $23.4 million (3%) to $697.5 million, and same store total parts and service gross profit increased by $36.5 million (6%) to $685.8 million when compared to the same period of the prior year. The all store and same store increases are primarily a result of increased customer pay and warranty volume and reconditioning and preparation, which is in line with the increasing trend of aged vehicles; however these increases were offset by decreases in body shop and wholesale parts activity.

Current wording

For the nine months ended September 30, 2025, total parts and service gross profit increased by $75.5 million (7%) to $1,086.6 million, and same store total parts and service gross profit increased by $60.5 million (6%) to $1,023.9 million when compared to the same period of the prior year. The all store and same store gross profit increases are primarily a result of increased customer pay and warranty volume and reconditioning and preparation, which is in line with the increasing trend of aged vehicles; however these increases were offset by decreases in body shop and wholesale parts activity.

Previous wording

On a same store basis, F&I revenue, net decreased by $6.4 million during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024 as a result of a a $50 decrease in F&I per vehicle retailed. We are seeing slightly lower gross profit in our F&I products as customers look for ways to manage lower monthly payments in a higher interest rate environment.

Current wording

On a same store basis, F&I revenue, net decreased by $4.9 million during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 primarily as a result of a $36 decrease in F&I per vehicle retailed. We are seeing slightly lower gross profit in our F&I products as customers look for ways to manage lower monthly payments in a higher interest rate environment.

Previous wording

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 six months ended June 30, 2025, TCA generated $46.6 million of revenue, consisting primarily of earned premiums and $9.7 million investment income from the investment portfolio. F&I revenue decreased by $13.0 million (22%) for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Current wording

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 nine months ended September 30, 2025, TCA generated $70.3 million of revenue, consisting primarily of earned premiums and $15.2 million investment income from the investment portfolio. F&I revenue decreased by $18.9 million (21%) for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.