AUTONATION, INC.

Previous wording

AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States. As of June 30, 2025, we owned and operated 322 new vehicle franchises from 244 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region. Our stores, which we believe include some of the most recognizable and well known in our key markets, sell 30 different new vehicle brands. The core brands of new vehicles that we sell, representing approximately 88% of the new vehicles that we sold during the six months ended June 30, 2025, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche). As of June 30, 2025, we also owned and operated 52 AutoNation-branded collision centers, 26 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, a mobile automotive repair and maintenance business, and an auto finance company.

Current wording

AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States. As of September 30, 2025, we owned and operated 323 new vehicle franchises from 244 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region. Our stores, which we believe include some of the most recognizable and well known in our key markets, sell 30 different new vehicle brands. The core brands of new vehicles that we sell, representing approximately 89% of the new vehicles that we sold during the nine months ended September 30, 2025, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche). As of September 30, 2025, we also owned and operated 52 AutoNation-branded collision centers, 26 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, a mobile automotive repair and maintenance business, and an auto finance company.

Previous wording

At June 30, 2025, we had four reportable segments: (1) Domestic, (2) Import, (3) Premium Luxury, and (4) AutoNation Finance. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Ford, General Motors, and Stellantis. Our Import segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Toyota, Honda, Hyundai, Subaru, and Nissan. Our Premium Luxury segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Lexus, Audi, and Jaguar Land Rover. The franchises in each of our Domestic, Import, and Premium Luxury segments also sell used vehicles, parts and automotive services, and automotive finance and insurance products. AutoNation Finance is our captive auto finance company, which provides indirect financing to qualified retail customers on vehicles we sell.

Current wording

At September 30, 2025, we had four reportable segments: (1) Domestic, (2) Import, (3) Premium Luxury, and (4) AutoNation Finance. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Ford, General Motors, and Stellantis. Our Import segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Toyota, Honda, Hyundai, and Subaru. Our Premium Luxury segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Lexus, Audi, and Jaguar Land Rover. The franchises in each of our Domestic, Import, and Premium Luxury segments also sell used vehicles, parts and automotive services, and automotive finance and insurance products. AutoNation Finance is our captive auto finance company, which provides indirect financing to qualified retail customers on vehicles we sell.

Previous wording

For the six months ended June 30, 2025, new vehicle sales accounted for 49% of our total revenue and 14% of our total gross profit. Used vehicle sales accounted for 29% of our total revenue and 10% of our total gross profit. Our parts and service operations, while comprising 17% of our total revenue, contributed 47% of our total gross profit. Our finance and insurance sales, while comprising 5% of our total revenue, contributed 29% of our total gross profit.

Current wording

For the nine months ended September 30, 2025, new vehicle sales accounted for 49% of our total revenue and 14% of our total gross profit. Used vehicle sales accounted for 29% of our total revenue and 10% of our total gross profit. Our parts and service operations, while comprising 17% of our total revenue, contributed 47% of our total gross profit. Our finance and insurance sales, while comprising 5% of our total revenue, contributed 29% of our total gross profit.

Previous wording

The tariffs announced by the U.S. government beginning in the first quarter of 2025 on vehicles and parts imported from other countries could increase our costs or consumer prices and limit the availability of inventory and/or reduce demand for the products and services we offer, which in turn could have a material adverse effect on our business and results of operations. The policies and announcements regarding tariffs on imported goods have been evolving and remain highly fluid. The ultimate impact of any tariffs is uncertain and will depend on various factors, including whether the tariffs are maintained and/or implemented, the duration of the tariffs and the timing of their implementation, the amount, scope, and nature of the tariffs, and the related responses from other countries, manufacturers, and/or consumers.

Current wording

The tariffs announced by the U.S. government beginning in the first quarter of 2025 on vehicles and parts imported from other countries could increase our costs and/or consumer prices and limit the availability of inventory and/or reduce demand for the products and services we offer, which in turn could have a material adverse effect on our business and results of operations. The policies and announcements regarding tariffs on imported goods have been evolving and remain highly fluid. The ultimate impact of any tariffs is uncertain and will depend on various factors, including whether the tariffs are maintained and/or implemented, the duration of the tariffs and the timing of their implementation, the amount, scope, and nature of the tariffs, and the related responses from other countries, manufacturers, and/or consumers.

Previous wording

The 2025 Budget Reconciliation Act (the “Act”), signed into law in July 2025, introduces several provisions with direct implications for the automotive retail industry, particularly in areas of taxation, consumer incentives, and electric vehicle (“EV”) policies. The Act provides beneficial tax provisions for dealerships and new car buyers while creating uncertainty in the EV market due to the accelerated phasing out of EV tax credits. While we are encouraged by the potential uplift certain provisions of the Act may have on our business and the automotive retail industry, we currently do not expect the impact will be material to our results of operations.

Current wording

The 2025 Budget Reconciliation Act (the “Act”), signed into law in July 2025, introduces several provisions with direct implications for the automotive retail industry, particularly in areas of taxation, consumer incentives, and EV policies. The Act provides beneficial tax provisions for dealerships and new car buyers while creating uncertainty in the EV market due to the accelerated phasing out of EV tax credits. While we are encouraged by the potential uplift certain provisions of the Act may have on our business and the automotive retail industry, we currently do not expect the impact will be material to our results of operations.

Previous wording

During the three months ended June 30, 2025, we had net income of $86.4 million and diluted earnings per share of $2.26, as compared to net income of $130.2 million and diluted earnings per share of $3.20 during the same period in 2024.

Current wording

During the three months ended September 30, 2025, we had net income of $215.1 million and diluted earnings per share of $5.65, as compared to net income of $185.8 million and diluted earnings per share of $4.61 during the same period in 2024.

Previous wording

Our total gross profit increased 10% during the second quarter of 2025 compared to the same period in the prior year, driven by increases in parts and service gross profit of 12%, finance and insurance gross profit of 13%, and used vehicle gross profit of 13%, partially offset by a decrease in new vehicle gross profit of 4%, each as compared to the second quarter of 2024. Parts and service results benefited primarily from an increase in gross profit from customer-pay service, warranty service, and the preparation of vehicles for sale. Finance and insurance gross profit benefited from an increase in vehicle unit volume and higher realized margins on service contracts. Used vehicle gross profit benefited from an increase in used vehicle unit volume. New vehicle gross profit was adversely impacted by a decrease in gross profit per vehicle retailed (“PVR”) resulting from an increase in supply of new vehicle inventory, which has resulted in moderation of margins following post-pandemic elevated levels. Additionally, gross profit in the prior year period was adversely impacted by the CDK system outage that occurred in June 2024 and caused disruption and adverse impacts to our business, including our productivity.

Current wording

Our total gross profit increased 5% during the third quarter of 2025 compared to the same period in the prior year, driven by increases in finance and insurance gross profit of 12% and parts and service gross profit of 7%, partially offset by a decrease in new vehicle gross profit of 15%, each as compared to the third quarter of 2024. Finance and insurance gross profit benefited from higher realized margins on vehicle service contracts and an increase in vehicle unit volume. Parts and service results benefited primarily from increases in gross profit from customer-pay service and the preparation of vehicles for sale. New vehicle gross profit was adversely impacted by a decrease in gross profit per vehicle retailed (“PVR”) resulting from higher average vehicle costs, a shift in mix toward hybrid vehicles and electric vehicles, which have relatively lower average gross profit PVR, and continued moderation of margins following post-pandemic elevated levels.

Previous wording

Our new vehicle inventory units at June 30, 2025 and 2024, were 42,600 and 47,000, respectively. We have typically not experienced significant losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices. We monitor our new vehicle inventory values as compared to net realizable values. Our new vehicle inventory was net of cumulative write-downs of $1.0 million at June 30, 2025, and $2.0 million at December 31, 2024.

Current wording

Our new vehicle inventory units at September 30, 2025 and 2024, were 43,200 and 46,000, respectively. We have typically not experienced significant losses on the sale of new vehicle inventory, in part due to incentives provided by manufacturers to promote sales of new vehicles and our inventory management practices. We monitor our new vehicle inventory values as compared to net realizable values. Our new vehicle inventory was net of cumulative write-downs of $2.7 million at September 30, 2025, and $2.0 million at December 31, 2024.

Previous wording

We recondition the majority of used vehicles acquired for retail sale in our parts and service departments and capitalize the related costs to the used vehicle inventory. We monitor our used vehicle inventory values as compared to net realizable values. Typically, used vehicles that are not sold on a retail basis are sold at wholesale auctions. Our used vehicle inventory balance was net of cumulative write-downs of $7.1 million at June 30, 2025, and $7.8 million at December 31, 2024.

Current wording

We recondition the majority of used vehicles acquired for retail sale in our parts and service departments and capitalize the related costs to the used vehicle inventory. We monitor our used vehicle inventory values as compared to net realizable values. Typically, used vehicles that are not sold on a retail basis are sold at wholesale auctions. Our used vehicle inventory balance was net of cumulative write-downs of $6.1 million at September 30, 2025, and $7.8 million at December 31, 2024.

Previous wording

As of June 30, 2025, we have $222.0 million of goodwill related to the Domestic reporting unit, $523.2 million related to the Import reporting unit, $482.1 million related to the Premium Luxury reporting unit, $75.2 million related to the Mobile Service reporting unit, $78.4 million related to the AutoNation Finance reporting unit, and $4.6 million related to the Collision Center reporting unit.

Current wording

As of September 30, 2025, we have $221.9 million of goodwill related to the Domestic reporting unit, $523.4 million related to the Import reporting unit, $496.0 million related to the Premium Luxury reporting unit, $75.2 million related to the Mobile Service reporting unit, $78.4 million related to the AutoNation Finance reporting unit, and $4.6 million related to the Collision Center reporting unit.

Previous wording

We may first perform a qualitative assessment to determine whether it is more likely than not that a franchise right asset is impaired. We elected to perform quantitative franchise rights impairment tests for our annual impairment tests as of April 30, 2025. As a result of the quantitative tests, we determined the franchise rights carrying values for nine stores exceeded their fair values, and we recorded non-cash franchise rights impairment charges of $71.7 million to reduce the carrying value of the stores’ franchise agreements to their estimated fair values. We also identified 10 stores that, while they each had franchise rights fair value in excess of carrying value, had lower relative performance compared to our total store population. We will continue to monitor these stores, as well as all stores, for events or changes in circumstances that may indicate potential impairment. The remainder of our stores had franchise rights with calculated fair values that substantially exceeded their carrying values.

Current wording

We may first perform a qualitative assessment to determine whether it is more likely than not that a franchise right asset is impaired. We elected to perform quantitative franchise rights impairment tests for our annual impairment tests as of April 30, 2025. As a result of the quantitative tests, we determined the franchise rights carrying values for nine stores exceeded their fair values, and we recorded non-cash franchise rights impairment charges of $71.7 million during the three months ended June 30, 2025, to reduce the carrying value of the stores’ franchise agreements to their estimated fair values. We also identified 10 stores that, while they each had franchise rights fair value in excess of carrying value, had lower relative performance compared to our total store population. We will continue to monitor these stores, as well as all stores, for events or changes in circumstances that may indicate potential impairment. The remainder of our stores had franchise rights with calculated fair values that substantially exceeded their carrying values.

Previous wording

As of June 30, 2025, we had 76 stores with franchise rights totaling $851.5 million.

Current wording

As of September 30, 2025, we had 78 stores with franchise rights totaling $967.4 million.

Previous wording

Same store new vehicle revenue PVR increased during the three months ended June 30, 2025, as compared to the same period in 2024, largely due to increases in the average selling prices for vehicles in all franchised dealership segments. In addition, same store revenue PVR benefited from a 3% shift in mix toward larger vehicles, such as trucks and sport utility vehicles, that have relatively higher average selling prices.

Current wording

Same store new vehicle revenue PVR increased during the three months ended September 30, 2025, as compared to the same period in 2024, largely due to increases in the average selling prices for vehicles in all franchised dealership segments. In addition, same store revenue PVR benefited from a 6% shift in mix to hybrid vehicles and electric vehicles and a 2% shift in mix toward larger vehicles, such as trucks and sport utility vehicles, that have relatively higher average selling prices. Increases in same store new vehicle revenue PVR were partially offset by a 2% shift in mix toward Domestic vehicles.

Previous wording

Same store new vehicle revenue PVR increased during the six months ended June 30, 2025, as compared to the same period in 2024, largely due to increases in the average selling price for vehicles across all three segments and a 2% shift in mix away from Import vehicles, which have relatively lower average selling prices.

Current wording

Same store new vehicle revenue PVR increased during the nine months ended September 30, 2025, as compared to the same period in 2024, largely due to increases in the average selling price for vehicles across all franchised dealership segments.

Previous wording

Same store new vehicle gross profit PVR decreased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in supply of new vehicle inventory as compared to the prior year, which has resulted in moderation of margins following post-pandemic elevated levels. While new vehicle unit profitability has recently started to stabilize sequentially, we expect that it may continue to moderate throughout 2025 and may be further impacted by the recently announced tariffs.

Current wording

Same store new vehicle gross profit PVR decreased during the nine months ended September 30, 2025, as compared to the same period in 2024, due in part to an increase in supply of new vehicle inventory as compared to the prior year, which has resulted in moderation of margins following post-pandemic elevated levels, as well as an increase in average vehicle costs and a shift in mix to hybrid vehicles and electric vehicles, which have relatively lower average gross profit PVR. We expect that new vehicle unit profitability may continue to moderate, in part due to the tariffs announced earlier this year.

Previous wording

The following table details net new vehicle inventory carrying expense, consisting of new vehicle floorplan interest expense, net of floorplan assistance earned (amounts received from manufacturers specifically to support store financing of new vehicle inventory). Floorplan interest rates are variable and, therefore, increase and decrease with changes in the underlying benchmark rates. Floorplan assistance is accounted for as a component of new vehicle gross profit in accordance with GAAP.

Current wording

The following table details net new vehicle inventory carrying expense, consisting of new vehicle floorplan interest expense, net of floorplan assistance earned (amounts received from manufacturers specifically to support store financing of new vehicle inventory). Floorplan interest rates are variable and, therefore, increase and decrease with changes in the underlying benchmark rates. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information. Floorplan assistance is based on a percentage of the manufacturer’s suggested retail price or a flat rate per vehicle and is accounted for as a component of new vehicle gross profit when the related vehicle is sold, in accordance with GAAP.

Previous wording

The net new vehicle inventory carrying expense decreased during the six months ended June 30, 2025, as compared to the same period in 2024, due to a decrease in floorplan interest expense and an increase in floorplan assistance. Floorplan interest expense decreased primarily due to lower average interest rates. Floorplan assistance increased due to higher new vehicle sales, partially offset by a decrease in the floorplan assistance rate per unit.

Current wording

The net new vehicle inventory carrying expense decreased during the three months ended September 30, 2025, as compared to the same period in 2024, due to a decrease in floorplan interest expense, partially offset by a decrease in floorplan assistance. Floorplan interest expense decreased due to lower average interest rates and lower average vehicle floorplan balances. Floorplan assistance decreased primarily due to a decrease in the floorplan assistance rate per unit, partially offset by higher new vehicle sales.

Previous wording

The net new vehicle inventory carrying expense decreased during the three months ended June 30, 2025, as compared to the same period in 2024, due to a decrease in floorplan interest expense and an increase in floorplan assistance. Floorplan interest expense decreased due to lower average interest rates and lower average vehicle floorplan balances. Floorplan assistance increased primarily due to higher new vehicle sales.

Current wording

The net new vehicle inventory carrying expense decreased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to a decrease in floorplan interest expense as a result of lower average interest rates and lower average vehicle floorplan balances.

Previous wording

Same store retail used vehicle revenue increased during the three months ended June 30, 2025, as compared to the same period in 2024, due to an increase in same store unit volume as the prior year was adversely impacted by a decrease in productivity during the CDK outage. Wholesale used vehicle revenue decreased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to a shift in mix to lower-value used vehicles.

Current wording

Same store retail used vehicle revenue increased during the three months ended September 30, 2025, as compared to the same period in 2024, due to an increase in same store unit volume, particularly for higher-priced used vehicles, and an increase in same store revenue PVR. Same store volume in the prior year was adversely impacted by the residual effects of the CDK outage. Wholesale used vehicle revenue decreased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to a shift in mix to lower-value used vehicles.

Previous wording

Same store used vehicle revenue PVR and used vehicle gross profit PVR were relatively flat during the three months ended June 30, 2025, as compared to the same period in 2024, as used vehicle unit pricing and profitability have been stabilizing due in part to our initiatives to achieve more optimal levels and mix of used vehicle inventory. Wholesale used vehicle gross profit increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in used vehicle wholesale values.

Current wording

Same store used vehicle gross profit PVR decreased during the three months ended September 30, 2025 as compared to the same period in 2024, primarily due to an increase in acquisition costs, partially offset by the adverse impact of the residual effects of the CDK outage in the prior year. Wholesale used vehicle gross profit increased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in used vehicle wholesale values.

Previous wording

Same store retail used vehicle revenue increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in same store unit volume as the prior year was adversely impacted by a decrease in productivity during the CDK outage. The increase in same store unit volume was partially offset by a 1% shift in mix from used vehicles to new vehicles due in part to increases in supply of new vehicle inventory and manufacturer new vehicle incentives to customers, including low-interest financing and customer rebates. Wholesale used vehicle revenue decreased during the six months ended June 30, 2025, as compared to the same period in 2024, due to a shift in mix to lower-value used vehicles.

Current wording

Same store retail used vehicle revenue increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in same store unit volume as the prior year was adversely impacted by the CDK outage. The increase in same store unit volume was partially offset by a 1% shift in mix from used vehicles to new vehicles. Wholesale used vehicle revenue decreased during the nine months ended September 30, 2025, as compared to the same period in 2024, due to a shift in mix to lower-value used vehicles.

Previous wording

Same store used vehicle gross profit PVR increased during the six months ended June 30, 2025, as compared to the same period in 2024, as used vehicle unit profitability has been stabilizing due in part to our initiatives to achieve more optimal levels and mix of used vehicle inventory.

Current wording

Same store used vehicle revenue and gross profit PVR during the nine months ended September 30, 2025, was relatively flat as compared to the same period in 2024, as used vehicle unit profitability has been stabilizing due in part to our initiatives to achieve more optimal levels and mix of used vehicle inventory.

Previous wording

Parts and service revenue and gross profit across all revenue types benefited from an increase in repair order volume, due in part to the prior year being adversely impacted by the CDK outage, which disrupted our sales and service processes, and an increase in technician headcount and improved efficiency. Warranty repair order volume also benefited from an increase in manufacturer recalls. Parts and service revenue and gross profit associated with warranty service and customer-pay service benefited from higher value repair orders.

Current wording

Parts and service revenue and gross profit associated with customer-pay service, the preparation of vehicles for sale, and warranty service benefited from higher value repair orders. Parts and service revenue and gross profit associated with the preparation of vehicles for sale also benefited from an increase in repair order volume due to an increase in technician headcount, as well as the adverse impact of the residual effects of the CDK outage in the prior year. Parts and service revenue and gross profit associated with warranty service also benefited from improved parts and labor rates and an increase in repair order volume due to an increase in technician headcount.

Previous wording

Parts and service revenue and gross profit across all revenue types benefited from an increase in repair order volume, due in part to the prior year being adversely impacted by the CDK outage, which disrupted our sales and service processes, and an increase in technician headcount and improved efficiency. Warranty repair order volume also benefited from an increase in manufacturer recalls. Parts and service revenue and gross profit associated with customer-pay service and warranty service benefited from higher value repair orders.

Current wording

Parts and service revenue and gross profit across all revenue types benefited from an increase in repair order volume, due in part to the prior year being adversely impacted by the CDK outage, which disrupted our sales and service processes, and an increase in technician headcount. Parts and service revenue and gross profit associated with warranty service also benefited from an increase in manufacturer recalls, improved parts and labor rates, and higher value repair orders. Parts and service revenue and gross profit associated with customer-pay service also benefited from higher value repair orders.

Previous wording

Same store finance and insurance revenue and gross profit increased during the six months ended June 30, 2025, as compared to the same period in 2024, due to increases in vehicle unit volume and finance and insurance gross profit PVR. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher product penetration, partially offset by an increase in retail vehicle sales financed through AutoNation Finance. In addition, finance and insurance gross profit in the prior year was adversely impacted by the CDK outage.

Current wording

Same store finance and insurance revenue and gross profit increased during the three months ended September 30, 2025, as compared to the same period in 2024, due to increases in finance and insurance gross profit PVR and vehicle unit volume. Finance and insurance gross profit PVR benefited primarily from higher realized margins on vehicle service contracts. Product penetration in the prior year was adversely impacted by the residual effects of the CDK outage.

Previous wording

Same store finance and insurance revenue and gross profit increased during the three months ended June 30, 2025, as compared to the same period in 2024, due to increases in vehicle unit volume and finance and insurance gross profit PVR. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher product penetration, partially offset by an increase in retail vehicle sales financed through AutoNation Finance. In addition, finance and insurance gross profit in the prior year was adversely impacted by the CDK outage.

Current wording

Same store finance and insurance revenue and gross profit increased during the nine months ended September 30, 2025, as compared to the same period in 2024, due to increases in finance and insurance gross profit PVR and vehicle unit volume. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts, partially offset by an increase in retail vehicle sales financed through AutoNation Finance. In addition, finance and insurance gross profit in the prior year was adversely impacted by the CDK outage.

Previous wording

Domestic segment income increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in finance and insurance gross profit, approximately 65% of which was due to an increase in finance and insurance gross profit PVR of $235 and 35% was due to higher new vehicle unit volume. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher product penetration. In addition, Domestic segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Domestic segment income increased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in finance and insurance gross profit, approximately 55% of which was driven by an increase in finance and insurance gross profit PVR of $241 primarily due to higher realized margins on vehicle service contracts, and 45% of which was due to higher vehicle unit volume. Domestic segment income also benefited from a decrease in SG&A expenses resulting from the divestitures we completed in the third quarters of 2024 and 2025. In addition, Domestic segment income in the prior year was adversely impacted by the residual effects of the CDK outage.

Previous wording

Domestic revenue increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, over 95% of which was due to an increase in new vehicle unit volume, which contributed to growth in our market share. New vehicle unit volume benefited from better execution in our marketing and sales activities, increases in supply of new vehicle inventory and manufacturer incentives to customers, and sustained consumer demand, which accelerated in the later part of March 2025 into April 2025 following tariff-related announcements. The increase in new vehicle revenue was partially offset by a decrease in new vehicle revenue of approximately $30 million related to the divestitures we completed in the third quarter of 2024. In addition, Domestic revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Domestic revenue increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately 90% of which was due to an increase in new vehicle unit volume. New vehicle unit volume benefited from sustained consumer demand, better execution in our sales pipeline, and an acceleration of consumer demand for electric vehicles resulting from the phasing out of EV tax credits through the end of the third quarter of 2025. The increase in new vehicle unit volume was partially offset by a decrease in new vehicle revenue of approximately $70 million related to the divestitures we completed in the third quarters of 2024 and 2025. In addition, Domestic revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Previous wording

Domestic segment income increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in finance and insurance gross profit, approximately half of which was due to higher vehicle unit volume and half was driven by an increase in finance and insurance gross profit PVR of $289. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher product penetration. Domestic segment income also benefited, to a lesser extent, from an increase in parts and service gross profit, largely due to increases in gross profit associated with the preparation of vehicles for sale of $4.3 million and customer-pay service of $3.9 million. In addition, Domestic segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Domestic segment income increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in finance and insurance gross profit, approximately 60% of which was due to an increase in finance and insurance gross profit PVR of $237 driven by higher realized margins on vehicle service contracts. Domestic segment income also benefited from a decrease in SG&A expenses resulting from the divestitures we completed in the third quarters of 2024 and 2025. In addition, Domestic segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Previous wording

Import revenue increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately 55% of which was due to an increase in average selling prices, with new vehicle revenue PVR up $1,107. New vehicle revenue also benefited from an increase in new vehicle unit volume as a result of better execution in our marketing and sales activities, increases in supply of new vehicle inventory and manufacturer incentives to customers, and sustained consumer demand, which accelerated in the later part of March 2025 into April 2025 following tariff-related announcements. Import revenue also benefited from an increase in parts and service revenue, largely due to increases in revenue associated with warranty service of $49.1 million and the preparation of vehicles for sale of $16.3 million. In addition, Import revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Import revenue increased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately 60% of which was due to higher new vehicle unit volume and 40% of which was driven by an increase in average selling prices, with new vehicle revenue PVR up $864. New vehicle unit volume benefited from sustained consumer demand, better execution in our sales pipeline, and an acceleration of consumer demand for hybrid vehicles and electric vehicles resulting from the phasing out of EV tax credits through the end of the third quarter of 2025. Import revenue also benefited from an increase in parts and service revenue, largely due to increases in revenue associated with customer-pay service of $10.3 million and warranty service of $10.0 million. In addition, Import revenue in the prior year was adversely impacted by the residual effects of the CDK outage.

Previous wording

Import segment income increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in parts and service gross profit, largely resulting from increases in gross profit associated with warranty service of $14.2 million and the preparation of vehicles for sale of $6.7 million. Import segment income also benefited, to a lesser extent from an increase in finance and insurance gross profit, approximately half of which was due to higher vehicle unit volume and half was driven by an increase in finance and insurance gross profit PVR of $82. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher product penetration. In addition, Import segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage. The increases in Import segment income were partially offset by an increase in SG&A expenses of $9.2 million, largely due to an increase in performance-driven compensation expense.

Current wording

Import segment income increased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in parts and service gross profit, largely resulting from increases in gross profit associated with customer-pay service of $6.7 million and warranty service of $6.1 million. In addition, Import segment income in the prior year was adversely impacted by the residual effects of the CDK outage. Increases in Import segment income were partially offset by an increase in SG&A expenses of $13.3 million, largely due to an increase in performance-driven compensation expense.

Previous wording

Import revenue increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately 60% of which was due to an increase in average selling prices, with new vehicle revenue PVR up $821. New vehicle revenue also benefited from an increase in new vehicle unit volume as a result of better execution in our marketing and sales activities, increases in supply of new vehicle inventory and manufacturer incentives to customers, and sustained consumer demand, which accelerated in the later part of March 2025 into April 2025 following tariff-related announcements. Import revenue also benefited from an increase in parts and service revenue, largely due to increases in revenue associated with warranty service of $24.2 million and the preparation of vehicles for sale of $13.8 million. In addition, Import revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Import revenue increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately half of which was due to higher new vehicle unit volume and half was driven by an increase in average selling prices, with new vehicle revenue PVR up $1,025. New vehicle unit volume benefited from sustained consumer demand, better execution in our sales pipeline, and an acceleration of consumer demand for hybrid vehicles and electric vehicles resulting from the phasing out of EV tax credits through the end of the third quarter of 2025. Import revenue also benefited from an increase in parts and service revenue, largely due to increases in revenue associated with warranty service of $59.1 million and the preparation of vehicles for sale of $21.8 million. In addition, Import revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Previous wording

Import segment income increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in parts and service gross profit, largely resulting from increases in gross profit associated with warranty service of $30.2 million and the preparation of vehicles for sale of $8.0 million. In addition, Import segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage. The increases in Import segment income were partially offset by an increase in SG&A expenses of $20.5 million, largely due to an increase in performance-driven compensation expense.

Current wording

Import segment income increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in parts and service gross profit, largely resulting from increases in gross profit associated with warranty service of $36.3 million and customer-pay service of $11.5 million. In addition, Import segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage. The increases in Import segment income were partially offset by an increase in SG&A expenses of $33.8 million, largely due to an increase in performance-driven compensation expense.

Previous wording

Premium Luxury revenue increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, over 95% of which was due to an increase in new vehicle unit volume, which contributed to growth in our market share. New vehicle unit volume benefited from better execution in our marketing and sales activities, increases in supply of new vehicle inventory and manufacturer incentives to customers, and sustained consumer demand, which accelerated in the later part of March 2025 into April 2025 following tariff-related announcements. In addition, Premium Luxury revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Current wording

Premium Luxury revenue increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in new vehicle revenue, approximately 75% of which was due to higher new vehicle unit volume and 25% was driven by an increase in average selling prices, with new vehicle revenue PVR up $1,317. New vehicle unit volume benefited from sustained consumer demand, better execution in our sales pipeline, and an acceleration of consumer demand for hybrid vehicles and electric vehicles resulting from the phasing out of EV tax credits through the end of the third quarter of 2025. Premium Luxury revenue also benefited from an increase in used vehicle retail revenue, approximately 75% of which was due to higher used vehicle unit volume, particularly for higher-priced used vehicles, and 25% of which was due to an increase in average selling prices, with used vehicle revenue PVR up $421. In addition, Premium Luxury revenue in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage.

Previous wording

Premium Luxury segment income increased during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in parts and service gross profit, largely due to increases in gross profit associated with warranty service of $12.2 million and customer-pay service of $9.1 million. Premium Luxury segment income also benefited from an increase in finance and insurance gross profit, approximately half of which was due to an increase in vehicle unit volume and half of which was due to a $170 increase in finance and insurance gross profit PVR driven by higher realized margins on vehicle service contracts and higher product penetration. In addition, Premium Luxury segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage. The increases in Premium Luxury segment income were partially offset by an increase in SG&A expenses of $17.2 million, largely due to an increase in performance-driven compensation expense.

Current wording

Premium Luxury segment income increased during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in finance and insurance gross profit, approximately 55% of which was due to a $176 increase in finance and insurance gross profit PVR driven by higher realized margins on vehicle service contracts, and 45% of which was due to an increase in vehicle unit volume. Premium Luxury segment income also benefited from increases in gross profit associated with customer-pay service of $16.5 million and warranty service of $11.5 million. In addition, Premium Luxury segment income in the prior year was adversely impacted by a decrease in productivity as a result of the CDK outage. The increases in Premium Luxury segment income were partially offset by an increase in SG&A expenses of $28.0 million, largely due to an increase in performance-driven compensation expense.

Previous wording

ANF income increased $1.3 million during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in interest and fee income from the growth in average managed receivables of $980.2 million as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores.

Current wording

ANF recognized income of $1.5 million during the three months ended September 30, 2025, and a loss of $6.2 million during the three months ended September 30, 2024. The current year period benefited from an increase in interest and fee income from the growth in average managed receivables of $1.1 billion as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores.

Previous wording

ANF recognized income of $2.1 million during the six months ended June 30, 2025, and a loss of $4.3 million during the six months ended June 30, 2024. The current year period benefited from an increase in interest and fee income from the growth in average managed receivables of $876.5 million as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores.

Current wording

ANF recognized income of $3.6 million during the nine months ended September 30, 2025, and a loss of $10.5 million during the nine months ended September 30, 2024. The current year period benefited from an increase in interest and fee income from the growth in average managed receivables of $877.4 million as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores.

Previous wording

SG&A expenses increased during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in compensation expense, an increase in insurance-related expenses, and acquisitions and newly opened stores. The increase in compensation expense was largely due to an increase in performance-driven compensation and an increase indeferred compensation obligations of $9.7 million as a result of changes in market performance of the underlying investments, partially offset by certain one-time compensation of approximately $43 million paid to commission-based associates in the prior year to ensure business continuity as a result of the CDK outage. In addition, SG&A expenses benefited from the divestitures we completed in the third quarter of 2024. As a percentage of total gross profit, SG&A expenses decreased to 67.0% during the three months ended June 30, 2025, from 71.0% in the same period in 2024, primarily due to prior year gross profit and SG&A expenses being adversely impacted by the CDK outage in the prior year.

Current wording

SG&A expenses increased during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in compensation expense largely driven by an increase in performance-driven compensation expense, an increase in acquisition-related expenses of $8.0 million, andacquisitions and newly opened stores. The increases in SG&A expenses were partially offset by the divestitures we completed in the third quarters of 2024 and 2025. As a percentage of total gross profit, SG&A expenses for the three months ended September 30, 2025, were flat as compared to the same period in 2024.

Previous wording

SG&A expenses increased slightly during thesix months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase in compensation expense, an increase in insurance-related expenses, an increase in advertising expenses to support vehicle sales, and acquisitions and newly opened stores. The increase in compensation expense was largely due to an increase in performance-driven compensation, partially offset by certain one-time compensation of approximately $43 million paid to commission-based associates in the prior year to ensure business continuity as a result of the CDK outage. In addition, SG&A expenses benefited from the divestitures we completed in the third quarter of 2024. As a percentage of total gross profit, SG&A expenses decreased to 67.2% during the six months June 30, 2025, from 68.6% in the same period in 2024, primarily due to prior year gross profit and SG&A expenses being adversely impacted by the CDK outage in the prior year.

Current wording

SG&A expenses increased during thenine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase in compensation expense, an increase in acquisition-related expenses of $10.1 million, an increase in advertising expenses to support vehicle sales, and acquisitions and newly opened stores. The increase in compensation expense was largely due to an increase in performance-driven compensation, partially offset by certain one-time compensation of approximately $43 million paid to commission-based associates in the prior year to ensure business continuity as a result of the CDK outage. In addition, SG&A expenses benefited from the divestitures we completed in the third quarters of 2024 and 2025. As a percentage of total gross profit, SG&A expenses decreased to 67.7% during the nine months ended September 30, 2025, from 68.6% in the same period in 2024, due to prior year gross profit and SG&A expenses being adversely impacted by the CDK outage in the prior year and effective cost management.

Previous wording

Other Income, Net includes asset impairments and gains or losses associated with business/property divestitures, among other items.

Current wording

Other Income, Net includes asset impairments and gains or losses associated with business/property divestitures, among other items. During the three months ended September 30, 2025, we recognized $40 million in insurance recoveries received under our cybersecurity insurance policies for business interruption and related losses caused by the CDK outage that occurred in the prior year. During the three months ended September 30, 2024, we recognized $55.3 million related to net gains on business/property divestitures, which were partially offset by asset impairments of $7.8 million.