AUTONATION, INC.

Previous wording

AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States. As of June 30, 2026, we owned and operated 327 new vehicle franchises from 246 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 major brands of new vehicles that we sell, representing approximately 88% of the new vehicles that we sold during the six months ended June 30, 2026, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche). As of June 30, 2026, we also owned and operated 52 AutoNation-branded collision centers, 24 AutoNation USA stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, 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, 2026, we owned and operated 319 new vehicle franchises from 242 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 major brands of new vehicles that we sell, representing approximately 88% of the new vehicles that we sold during the nine months ended September 30, 2026, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche). As of September 30, 2026, we also owned and operated 51 AutoNation-branded collision centers, 24 AutoNation USA stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers, and an auto finance company.

Previous wording

For the six months ended June 30, 2026, new vehicle sales accounted for 47% of our total revenue and 12% 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 18% of our total revenue, contributed 49% 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, 2026, new vehicle sales accounted for 47% of our total revenue and 12% of our total gross profit. Used vehicle sales accounted for 29% of our total revenue and 9% of our total gross profit. Our parts and service operations, while comprising 18% of our total revenue, contributed 50% of our total gross profit. Our finance and insurance sales, while comprising 5% of our total revenue, contributed 29% of our total gross profit. Our earnings mix is increasingly shifting toward products and services with recurring income streams including parts and service operations and income generated through our captive finance company.

Previous wording

In the second quarter of 2026, U.S. industry retail new vehicle unit sales, which includes sales in markets in which we do not compete, was relatively flat, with a decrease in April offset by increases in May and June, as compared to the same periods in the second quarter of 2025. New vehicle unit sales benefited from accelerated consumer demand in April 2025 following tariff-related announcements, and consumer demand and industry new vehicle unit sales stabilized in the later part of the second quarter of 2025.

Current wording

In the third quarter of 2026, U.S. industry retail new vehicle unit sales, which includes sales in markets in which we do not compete, decreased approximately 2%, as compared to the third quarter of 2025. New vehicle unit sales in the prior year benefited from the acceleration in consumer demand for hybrid and electric vehicles resulting from the phasing out of electric vehicle (“EV”) tax credits at the end of the third quarter of 2025.

Previous wording

During the three months ended June 30, 2026, we had net income of $182.1 million and diluted earnings per share of $5.39, as compared to net income of $86.4 million and diluted earnings per share of $2.26 during the same period in 2025.

Current wording

During the three months ended September 30, 2026, we had net income of $162.3 million and diluted earnings per share of $4.87, as compared to net income of $215.1 million and diluted earnings per share of $5.65 during the same period in 2025.

Previous wording

unit volume in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025, as well as a decrease in gross profit per vehicle retailed (“PVR”) resulting from higher average vehicle costs. Used vehicle gross profit was adversely impacted by a decrease in used vehicle retail unit volume primarily due to supply constraints on lower-priced used vehicles. Finance and insurance gross profit was adversely impacted by a decrease in vehicle unit volume, largely offset by an increase in finance and insurance gross profit PVR reflecting higher realized margins on vehicle service contracts and higher gross profit per transaction associated with arranging customer financing. Parts and service results benefited primarily from increases in gross profit associated with customer-pay service of 7% and wholesale parts sales of 9%.

Current wording

Our total gross profit decreased 2% during the third quarter of 2026, compared to the same period in the prior year, driven by decreases in new vehicle gross profit of 8%, used vehicle gross profit of 9%, and finance and insurance gross profit of 7%, partially offset by an increase in parts and service gross profit of 3%, each as compared to the third quarter of 2025. New vehicle gross profit was adversely impacted by a decrease in EV unit volume in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025, as well as a decrease in gross profit per vehicle retailed (“PVR”) resulting from higher average vehicle costs. Used vehicle gross profit was adversely impacted by a decrease in wholesale gross profit and a decrease in used vehicle retail unit volume primarily due to supply constraints on lower-priced used vehicles. Finance and insurance gross profit was adversely impacted primarily by a decrease in vehicle unit volume. Parts and service results benefited primarily from increases in gross profit associated with customer-pay service of 5% and wholesale parts of 9%.

Previous wording

Our new vehicle inventory units at June 30, 2026 and 2025, were 45,283 and 42,600, 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 $0.2 million at June 30, 2026, and $1.2 million at December 31, 2025.

Current wording

Our new vehicle inventory units at September 30, 2026 and 2025, were 43,831 and 43,215, 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 $1.6 million at September 30, 2026, and $1.2 million at December 31, 2025.

Previous wording

Our used vehicle inventory units at June 30, 2026 and 2025, were 34,777 and 35,802, respectively. 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 $5.7 million at June 30, 2026, and $5.8 million at December 31, 2025.

Current wording

Our used vehicle inventory units at September 30, 2026 and 2025, were 35,527 and 33,911, respectively. 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 $6.0 million at September 30, 2026, and $5.8 million at December 31, 2025.

Previous wording

Parts, accessories, and other inventory are carried at the lower of cost or net realizable value. We estimate the amount of potentially damaged and/or excess and obsolete inventory based upon historical experience, manufacturer return policies, and industry trends. Our parts, accessories, and other inventory balance was net of cumulative write-downs of $9.0 million at June 30, 2026, and $9.5 million at December 31, 2025.

Current wording

Parts, accessories, and other inventory are carried at the lower of cost or net realizable value. We estimate the amount of potentially damaged and/or excess and obsolete inventory based upon historical experience, manufacturer return policies, and industry trends. Our parts, accessories, and other inventory balance was net of cumulative write-downs of $7.8 million at September 30, 2026, and $9.5 million at December 31, 2025.

Previous wording

We prepare our Unaudited Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimates on an ongoing basis, and we base our estimates on historical experience and various other assumptions we believe to be reasonable. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our Unaudited Condensed Consolidated Financial Statements. For additional discussion of our critical accounting estimates, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K.

Current wording

We prepare our Unaudited Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimates on an ongoing basis, and we base our estimates on historical experience and various other assumptions we believe to be reasonable. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our Unaudited Condensed Consolidated

Previous wording

Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment as of April 30, 2026, for our Domestic, Import, Premium Luxury, AutoNation Finance, and Collision Center reporting units and determined that it was not more likely than not that the fair values of these reporting units were less than their carrying amounts. For our Mobile Service reporting unit, we elected to perform a quantitative goodwill impairment test as of April 30, 2026, and no impairment charges resulted from this quantitative test. The fair value of the Mobile Service reporting unit substantially exceeded its carrying value as of April 30, 2026. The quantitative goodwill impairment test is dependent on many variables used to determine the fair value of a reporting unit. See Note 15 of the Notes to Unaudited Condensed Consolidated Financial

Current wording

Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment as of April 30, 2026, for our Domestic, Import, Premium Luxury, AutoNation Finance, and Collision Center reporting units and determined that it was not more likely than not that the fair values of these reporting units were less than their carrying amounts. For our Mobile Service reporting unit, we elected to perform a quantitative goodwill impairment test as of April 30, 2026, and no impairment charges resulted from this quantitative test. The fair value of the Mobile Service reporting unit substantially exceeded its carrying value as of April 30, 2026. The quantitative goodwill impairment test is dependent on many variables used to determine the fair value of a reporting unit. See Note 15 of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on how the fair values and carrying values of our reporting units are derived for the quantitative goodwill impairment test.

Previous wording

The following discussions of new vehicle, used vehicle, parts and service, and finance and insurance results are on a same store basis. The differences between reported amounts and same store amounts in revenue and gross profit of these lines of business in the tables below are related to acquisition and divestiture activity, as well as the opening of AutoNation USA used vehicle stores, as applicable.

Current wording

The following discussions of new vehicle, used vehicle, parts and service, and finance and insurance results are on a same store basis. The differences between reported amounts and same store amounts in revenue and gross profit of these lines of business in the tables below are primarily related to acquisition and divestiture activity, as applicable.

Previous wording

Same store new vehicle revenue decreased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to a decrease in same store unit volume largely as a result of the prior year period benefiting from accelerated consumer demand in the later part of March 2025 into April 2025 following tariff-related announcements and a decrease in EV unit volume in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025.

Current wording

Same store new vehicle revenue decreased during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to a decrease in same store unit volume, particularly in the Domestic segment. New vehicle unit volume was adversely impacted by a decrease in EV unit volume of approximately 60% in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025.

Previous wording

Same store new vehicle revenue decreased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to a decrease in same store unit volume, particularly in the Domestic and Premium Luxury segments, largely as a result of the prior year period benefiting from accelerated consumer demand in April 2025 following tariff-related announcements and a decrease in EV unit volume in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025.

Current wording

Same store new vehicle revenue decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to a decrease in same store unit volume, particularly in the Domestic and Premium Luxury segments, largely as a result of the prior year period benefiting from accelerated consumer demand in the later part of March 2025 into April 2025 following tariff-related announcements and a decrease in EV unit volume of approximately 50% in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025.

Previous wording

Same store new vehicle gross profit PVR decreased during the three months ended June 30, 2026, as compared to the same period in 2025, reflecting an increase in average vehicle costs across all franchised dealership segments due in part to a decrease in manufacturer incentives.

Current wording

Same store new vehicle gross profit PVR decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, reflecting an increase in average vehicle costs across all franchised dealership segments due in part to a decrease in manufacturer incentives.

Previous wording

The net new vehicle inventory carrying expense decreased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to a decrease in floorplan interest expense, partially offset by a decrease in floorplan assistance. Floorplan interest expense decreased as a result of lower average interest rates, partially offset by higher average vehicle floorplan balances. Floorplan assistance decreased due to lower new vehicle sales, partially offset by an increase in the average floorplan assistance per unit.

Current wording

The net new vehicle inventory carrying expense decreased during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to a decrease in floorplan interest expense. Floorplan interest expense decreased as a result of lower average interest rates, partially offset by higher average vehicle floorplan balances.

Previous wording

The net new vehicle inventory carrying expense decreased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to a decrease in floorplan interest expense, partially offset by a decrease in floorplan assistance. Floorplan interest expense decreased as a result of lower average interest rates, partially offset by higher average vehicle floorplan balances. Floorplan assistance decreased due to lower new vehicle sales, partially offset by an increase in the average floorplan assistance per unit.

Current wording

The net new vehicle inventory carrying expense decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to a decrease in floorplan interest expense, partially offset by a decrease in floorplan assistance. Floorplan interest expense decreased as a result of lower average interest rates, partially offset by higher average vehicle floorplan balances. Floorplan assistance decreased due to lower new vehicle sales, partially offset by an increase in the average floorplan assistance per unit.

Previous wording

Same store retail used vehicle revenue was relatively flat during the three months ended June 30, 2026, as compared to the same period in 2025, reflecting a decrease in same store retail unit volume primarily due to supply constraints on lower-priced used vehicles, largely offset by an increase in same store revenue PVR.

Current wording

Same store retail used vehicle revenue decreased during the three months ended September 30, 2026, as compared to the same period in 2025, reflecting a decrease in same store retail unit volume primarily due to supply constraints on lower-priced used vehicles, partially offset by an increase in same store revenue PVR.

Previous wording

Same store retail used vehicle revenue was relatively flat during the six months ended June 30, 2026, as compared to the same period in 2025, reflecting a decrease in same store retail unit volume primarily due to supply constraints on lower-priced used vehicles, largely offset by an increase in same store revenue PVR.

Current wording

Same store retail used vehicle revenue decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, reflecting a decrease in same store retail unit volume primarily due to supply constraints on lower-priced used vehicles, largely offset by an increase in same store revenue PVR.

Previous wording

Same store used vehicle revenue PVR increased during the six months ended June 30, 2026, as compared to the same period in 2025, reflecting an increase in the average selling price of used vehicles across all franchised dealership segments primarily due to a 3% shift in mix to higher-priced vehicles including late-model and lower-mileage used vehicles.

Current wording

Same store used vehicle revenue PVR increased during the nine months ended September 30, 2026, as compared to the same period in 2025, reflecting an increase in the average selling price of used vehicles across all franchised dealership segments primarily due to a 3% shift in mix to higher-priced vehicles including late-model and lower-mileage used vehicles.

Previous wording

Same store parts and service revenue increased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to increases in revenue associated with wholesale parts sales of $40.4 million and customer-pay service of $20.2 million, partially offset by a decrease in revenue associated with the preparation of vehicles for sale of $18.4 million.

Current wording

Same store parts and service revenue increased during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to increases associated with wholesale parts of $38.5 million and customer-pay service of $12.8 million, partially offset by a decrease associated with the preparation of vehicles for sale of $12.9 million.

Previous wording

Same store parts and service gross profit was relatively flat during the three months ended June 30, 2026, as compared to the same period in 2025, reflecting an increase in gross profit associated with customer-pay service of $11.6 million and wholesale parts sales of $4.7 million, partially offset by a decrease in gross profit associated with the preparation of vehicles for sale of $12.5 million. Gross profit as a percentage of revenue decreased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to a shift in mix to wholesale parts sales, which have relatively lower margins.

Current wording

Same store parts and service gross profit increased during the three months ended September 30, 2026, as compared to the same period in 2025, reflecting increases associated with customer-pay service of $5.6 million and wholesale parts of $4.3 million, partially offset by a decrease associated with the preparation of vehicles for sale of $7.0 million. Same store gross profit as a percentage of revenue decreased to 47.5% for the three months ended September 30, 2026, as compared to 48.7% for the same period in 2025, primarily due to a shift in mix to wholesale parts, which have relatively lower margins than our core After-Sales business lines, due to an increase in wholesale parts volume driven by new commercial agreements. Absent the mix shift, gross profit as a percentage of revenue from our core After-Sales business lines was stable.

Previous wording

Parts and service revenue and gross profit associated with customer-pay service benefited from an increase in repair order volume due in part to an increase in technician headcount. Wholesale parts revenue and gross profit increased primarily due to an increase in volume driven by new commercial agreements. Parts and service revenue and gross profit associated with the preparation of vehicles for sale was adversely impacted by lower new and used vehicle unit volume, margin compression, and lower value repair orders.

Current wording

Parts and service revenue and gross profit associated with customer-pay service benefited from an increase in repair order volume due in part to an increase in technician headcount and higher value repair orders. Wholesale parts revenue and gross profit increased primarily due to an increase in volume driven by new commercial agreements. Parts and service revenue and gross profit associated with the preparation of vehicles for sale was adversely impacted by lower new and used vehicle unit volume.

Previous wording

Same store parts and service revenue increased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to increases in revenue associated with wholesale parts sales of $66.5 million and customer-pay service of $41.7 million, partially offset by a decrease in revenue associated with the preparation of vehicles for sale of $26.2 million.

Current wording

Same store parts and service revenue increased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to increases associated with wholesale parts of $105.1 million and customer-pay service of $42.5 million, partially offset by a decrease associated with the preparation of vehicles for sale of $39.0 million.

Previous wording

Same store parts and service gross profit slightly increased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to an increase in gross profit associated with customer-pay service of $24.9 million and wholesale parts sales of $9.6 million, partially offset by a decrease in gross profit associated with the preparation of vehicles for sale of $21.3 million. Gross profit as a percentage of revenue decreased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to a shift in mix to wholesale parts sales, which have relatively lower margins.

Current wording

Same store parts and service gross profit increased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to increases associated with customer-pay service of $26.5 million and wholesale parts of $14.1 million, partially offset by a decrease associated with the preparation of vehicles for sale of $28.3 million. Same store gross profit as a percentage of revenue decreased to 48.0% during the nine months ended September 30, 2026, as compared to 49.0% the same period in 2025, primarily due to a shift in mix to wholesale parts, which have relatively lower margins than our core After-Sales business lines, due to an increase in wholesale parts volume driven by new commercial agreements. Absent the mix shift, gross profit as a percentage of revenue from our core After-Sales business lines was stable.

Previous wording

Parts and service revenue and gross profit associated with customer-pay service benefited from an increase in repair order volume due in part to an increase in technician headcount. Wholesale parts revenue and gross profit increased primarily due to an increase in volume driven by new commercial agreements. Parts and service revenue and gross profit associated with the preparation of vehicles for sale was adversely impacted by lower new and used vehicle unit volume, margin compression, and lower value repair orders.

Current wording

Parts and service revenue and gross profit associated with customer-pay service benefited from an increase in repair order volume due in part to an increase in technician headcount. Wholesale parts revenue and gross profit increased primarily due to an increase in volume driven by new commercial agreements. Parts and service revenue and gross profit associated with the preparation of vehicles for sale was adversely impacted by lower new and used vehicle unit volume and lower value repair orders.

Previous wording

As we continue to grow our AutoNation Finance business and increase our finance penetration rates associated with vehicles sold through our stores, we expect that income related to arranging customer financing will shift to AutoNation Finance and that the resulting decrease in finance and insurance gross profit will be offset by greater future profitability generated by our AutoNation Finance business. Interest income on financing provided through AutoNation Finance is recognized over the contractual term of the related loans. See “AutoNation Finance” for additional information.

Current wording

As we continue to grow our AutoNation Finance business and increase our finance penetration rates associated with vehicles sold through our stores, we expect that upfront commission income related to arranging customer financing will shift to recurring finance income in AutoNation Finance and that the resulting decrease in finance and insurance gross profit will be offset by greater future profitability generated by our AutoNation Finance business. Interest income on financing provided through AutoNation Finance is recognized over the contractual term of the related loans. See “AutoNation Finance” for additional information.

Previous wording

Same store finance and insurance revenue and gross profit decreased during the six months ended June 30, 2026, as compared to the same period in 2025, reflecting a decrease in vehicle unit volume, largely offset by an increase in finance and insurance gross profit PVR. Finance and insurance gross profit PVR benefited primarily from higher realized margins on vehicle service contracts and higher gross profit per transaction associated with arranging customer financing, partially offset by an increase in retail vehicle sales financed through AutoNation Finance.

Current wording

Same store finance and insurance revenue and gross profit decreased during the three months ended September 30, 2026, as compared to the same period in 2025, approximately 65% of which was due to a decrease in vehicle unit volume and 35% of which was due to a decrease in finance and insurance gross profit PVR. Finance and insurance gross profit PVR was adversely impacted by an increase in vehicle protection product cancellations and an increase in retail vehicle sales financed through AutoNation Finance, partially offset by higher realized margins on vehicle service contracts and higher gross profit per transaction associated with arranging customer financing.

Previous wording

Same store finance and insurance revenue and gross profit decreased during the three months ended June 30, 2026, as compared to the same period in 2025, reflecting a decrease in vehicle unit volume, largely offset by an increase in finance and insurance gross profit PVR. Finance and insurance gross profit PVR benefited primarily from higher realized margins on vehicle service contracts and higher gross profit per transaction associated with arranging customer financing, partially offset by an increase in retail vehicle sales financed through AutoNation Finance.

Current wording

Same store finance and insurance revenue and gross profit decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, reflecting a decrease in vehicle unit volume, partially offset by an increase in finance and insurance gross profit PVR. Finance and insurance gross profit PVR benefited from higher realized margins on vehicle service contracts and higher gross profit per transaction associated with arranging customer financing, partially offset by an increase in vehicle protection product cancellations and an increase in retail vehicle sales financed through AutoNation Finance.

Previous wording

Domestic segment income decreased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to decreases in new and used vehicle unit volume, as well as a decrease in new vehicle gross profit PVR of $345 resulting from an increase in average vehicle costs driven in part by a decrease in manufacturer incentives. These decreases were partially offset by an increase in finance and insurance gross profit PVR of $159 due to higher realized margins on service contracts and higher gross profit per transaction associated with arranging customer financing, and a decrease in SG&A expenses of $7.1 million.

Current wording

Domestic segment income decreased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to a decrease in retail vehicle unit volume, which adversely impacted new vehicle gross profit, used vehicle gross profit, and finance and insurance gross profit. Retail used vehicle unit volume decreased primarily due to supply constraints on lower-priced used vehicles. In addition, new vehicle gross profit was adversely impacted by a decrease in new vehicle gross profit PVR of $265 resulting from an increase in average vehicle costs driven in part by a decrease in manufacturer incentives. The decreases in Domestic segment income were partially offset by an increase in finance and insurance gross profit PVR of $158 due to higher realized margins on service contracts and higher gross profit per transaction associated with arranging customer financing and a decrease in SG&A expenses of $10.5 million.

Previous wording

Premium Luxury revenue increased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to $82.3 million in revenue from the acquisitions we completed in the third quarter of 2025 and second quarter of 2026, and increases in used vehicle revenue and parts and service revenue. Used vehicle revenue increased due to an increase in used vehicle revenue PVR of $3,536 reflecting a shift in mix to late-model and lower-mileage used vehicles, which have relatively higher average selling prices, partially offset by a decrease in used vehicle unit volume due to supply constraints on lower-priced used vehicles. Parts and service revenue benefited from an increase in revenue associated with customer-pay service of $20.4 million. The increases in Premium Luxury revenue were partially offset by a decrease in new vehicle unit volume as a result of the prior year period benefiting from accelerated consumer demand in April 2025 following tariff-related announcements and a decrease in EV unit volume in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025.

Current wording

Premium Luxury revenue increased during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to increases in used vehicle revenue and parts and service revenue, which were favorably impacted by revenue from acquisitions of $40.5 million and $27.9 million, respectively. The increases in Premium Luxury revenue were partially offset by a decrease in new vehicle revenue largely due to a decrease in EV unit volume of approximately 60% in the current year period due in part to the phasing out of EV tax credits at the end of the third quarter of 2025, partially offset by new vehicle revenue from acquisitions of $50.3 million.

Previous wording

AutoNation Finance (“ANF”), our captive auto finance company, provides indirect financing to qualified retail customers on vehicles we sell. This business provides us an opportunity to extend our relationship with the customer beyond the vehicle sale and participate in the customer’s entire vehicle ownership cycle. As a result, we are able to diversify our sources of income, generate additional profits, cash flows, and sales, and increase customer retention.

Current wording

AutoNation Finance (“ANF”), our captive auto finance company, provides indirect financing to qualified retail customers on vehicles we sell. This business provides us an opportunity to extend our relationship with the customer beyond the vehicle sale and participate in the customer’s entire vehicle ownership cycle. As a result, we are able to diversify our sources of income, generate additional profits, cash flows, and sales, and increase customer retention. In addition, ANF represents an increasingly important component of our earnings mix. Our integrated origination platform allows us to optimize allocations among third-party lenders, manufacturer-affiliated lenders, and ANF based on customer needs, risk-adjusted returns, and available funding capacity. As the portfolio continues to grow, we expect ANF to become a larger contributor to our earnings and cash flow.

Previous wording

We use non-recourse funding facilities, including warehouse facilities and asset-backed term funding transactions, as well as free cash flows from operations to fund the auto loans receivable of ANF. See Notes 6 and 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information about our auto loans receivables and related non-recourse debt, respectively.

Current wording

We use non-recourse funding facilities, including warehouse facilities and asset-backed term funding transactions, as well as free cash flows from operations to fund the auto loans receivable of ANF. See Notes 6 and 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information about our auto loans receivable and related non-recourse debt, respectively.

Previous wording

ANF income increased during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to an increase in interest and fee income from the growth in average managed receivables of $942.5 million as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores. ANF continues to realize operational efficiencies as the portfolio scales, resulting in reduced direct expenses as a percentage of the managed portfolio.

Current wording

ANF income increased during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to an increase in interest and fee income from the growth in average managed receivables of $875.5 million as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores. ANF continues to realize operational efficiencies as the portfolio scales, resulting in reduced direct expenses as a percentage of the managed portfolio.

Previous wording

ANF income increased during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to an increase in interest and fee income from the growth in average managed receivables of $1.0 billion as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores. ANF continues to realize operational efficiencies as the portfolio scales, resulting in reduced direct expenses as a percentage of the managed portfolio.

Current wording

ANF income increased during the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to an increase in interest and fee income from the growth in average managed receivables of $1.0 billion as we continue to grow our ANF business and increase our finance penetration rates associated with vehicles sold through our stores. ANF continues to realize operational efficiencies as the portfolio scales, resulting in reduced direct expenses as a percentage of the managed portfolio.

Previous wording

Our Selling, General, and Administrative (“SG&A”) expenses consist primarily of compensation, including store and corporate salaries, commissions, and incentive-based compensation, as well as advertising (net of reimbursement-based manufacturer advertising rebates), and store and corporate overhead expenses, which include occupancy costs, outside service costs, information technology expenses, service loaner and rental inventory expenses, legal, accounting, and professional services, and general corporate expenses. The following table presents the major components of our SG&A expenses.

Current wording

Our Selling, General, and Administrative (“SG&A”) expenses consist primarily of compensation, including store and corporate salaries, commissions, and incentive-based compensation, as well as advertising (net of reimbursement-based manufacturer advertising rebates), and store and corporate overhead expenses, which include occupancy costs, outside service costs, information technology expenses, service loaner inventory expenses, legal, accounting, and professional services, and general corporate expenses. The following table presents the major components of our SG&A expenses.

Previous wording

SG&A expenses increased during thesix months ended June 30, 2026, as compared to the same period in 2025, primarily due to the impact of acquisitions, net of divestitures, of $15.2 million, an increase in advertising costs to support vehicle sales, an increase in self-insured losses of $7.8 million related to unfavorable claim development and hailstorms, and investments targeting customer experience. The increases in SG&A expenses were largely offset by a $22.1 million decrease in performance-driven compensation expense. As a percentage of total gross profit, SG&A expenses increased to 69.5% during thesix months ended June 30, 2026, from 67.2% in the same period in 2025, primarily due to the increases in SG&A expenses as described above and moderation of gross profit.

Current wording

SG&A expenses decreased slightly during the three months ended September 30, 2026, as compared to the same period in 2025, primarily due to an $18.3 million decrease in performance-driven compensation expense, a $10.2 million decrease in deferred compensation obligations as result of changes in market performance of the underlying investments, and an $8.0 million decrease in acquisition expenses. The decreases in SG&A expenses were partially offset by the impact of acquisitions, net of divestitures, of $16.3 million, a $12.2 million increase in self-insured losses primarily related to weather-related events, and an increase in advertising costs to increase traffic in our parts and service business. As a percentage of total gross profit, SG&A expenses for the three months ended September 30, 2026, increased as compared to the same period in 2025, primarily reflecting less operating leverage resulting from lower variable operations gross profit and investments in acquisitions and growth initiatives.

Previous wording

SG&A expenses increased slightly during the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to the impact of acquisitions, net of divestitures, of $8.6 million and an increase in advertising costs to support vehicle sales. The increases in SG&A expenses were largely offset by a $16.3 million decrease in performance-driven compensation expense. As a percentage of total gross profit, SG&A expenses for the three months ended June 30, 2026, increased as compared to the same period in 2025, primarily due to the increases in SG&A expenses as described above and moderation of gross profit.

Current wording

SG&A expenses increased during thenine months ended September 30, 2026, as compared to the same period in 2025, primarily due to the impact of acquisitions, net of divestitures, of $38.4 million and an increase in advertising costs to support vehicle sales and increase traffic in our parts and service business, partially offset by a $44.8 million decrease in performance-driven compensation expense. As a percentage of total gross profit, SG&A expenses increased to 69.8% for thenine months ended September 30, 2026, from 67.7% in the same period in 2025, primarily reflecting less operating leverage resulting from lower variable operations gross profit and investments in acquisitions and growth initiatives.

Previous wording

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

Current wording

Other Expense, Net generally includes asset impairments, gains or losses associated with business/property divestitures, and legal settlements, 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 June 2024.

Previous wording

Floorplan interest expense was $43.7 million for the three months ended June 30, 2026, compared to $45.3 million for the same period in 2025. The decrease in floorplan interest expense of $1.6 million was due to lower average interest rates, partially offset by higher average vehicle floorplan balances.

Current wording

Floorplan interest expense was $45.4 million for the three months ended September 30, 2026, compared to $47.5 million for the same period in 2025. The decrease in floorplan interest expense of $2.1 million was due to lower average interest rates, partially offset by higher average vehicle floorplan balances.

Previous wording

Floorplan interest expense was $85.5 million for the six months ended June 30, 2026, compared to $91.8 million for the same period in 2025. The decrease in floorplan interest expense of $6.3 million was primarily due to lower average interest rates, partially offset by higher average vehicle floorplan balances.

Current wording

Floorplan interest expense was $130.9 million for the nine months ended September 30, 2026, compared to $139.3 million for the same period in 2025. The decrease in floorplan interest expense of $8.4 million was primarily due to lower average interest rates, partially offset by higher average vehicle floorplan balances.