Financial Analysis

Business Combinations During the six months ended June 30, 2026, we acquired two retail automotive franchises in the U.S., which generated $152.4 million of revenue and $10.5 million of pre-tax income from our date of acquisition through June 30, 2026. During the six months ended June 30, 2025, we made no acquisitions. Our financial statements include the results of operations of the acquired entities from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in our consolidated condensed financial statements and may be subject to adjustment pending completion of final valuation. The following table summarizes the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the six months ended June 30, 2026, and 2025: Six Months Ended June 30, 2026 2025 Accounts receivable $ $ Inventories 23.9 Other current assets Property and equipment 108.3 Indefinite-lived intangibles 537.6 Other noncurrent assets Current liabilities (0.1) Noncurrent liabilities Total cash used in acquisitions $ 669.7 $ The following unaudited consolidated pro forma results of operations for the three and six months ended June 30, 2026, and 2025 give effect to acquisitions consummated during 2026 and 2025 as if they had occurred on January 1, 2025. This pro forma information is based on historical results of operations, adjusted for the income statement effects of incremental interest expense directly resultin …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"Commitments and Contingent Liabilities We are involved in litigation which may relate to claims brought by governmental authorities, issues with customers, and employment related matters, including class action claims and purported class action claims. As of June 30, 2026, we were not party to any legal proceedings, including class action lawsuits that, individually or in the aggregate, are reasonably expected to have a material adverse effect on our results of operations, financial condition, or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations, financial condition, or cash flows. We lease land and facilities, including certain dealerships and office space. Pursuant to the leases for some of our larger facilities, we are required to comply with specified financial ratios, including a ""rent coverage"" ratio and a debt to EBITDA ratio, each as defined. For these leases, non-compliance with the ratios may require us to post collateral in the form of a letter of credit. A breach of the other lease covenants gives rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. Refer to the disclosures provided in Note 3 for further description of our leases. We have sold a number of dealerships to third …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

The following tables disaggregate our retail automotive segment revenue by product type and geographic location for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2026 2025 2026 2025 New vehicle $ 3,375.4 $ 3,188.1 $ 6,456.1 $ 6,436.1 Used vehicle 2,471.9 2,259.4 4,901.3 4,523.5 Finance and insurance, net 211.0 208.2 413.3 413.6 Service and parts 867.1 853.4 1,731.0 1,679.0 Fleet and wholesale 375.6 378.6 766.4 754.1 Total retail automotive dealership revenue $ 7,301.0 $ 6,887.7 $ 14,268.1 $ 13,806.3 Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2026 2025 2026 2025 U.S. $ 4,367.8 $ 4,165.3 $ 8,248.4 $ 8,205.6 U.K. 2,224.7 2,085.8 4,572.4 4,409.0 Germany, Italy, Japan, and Australia 708.5 636.6 1,447.3 1,191.7 Total retail automotive dealership revenue $ 7,301.0 $ 6,887.7 $ 14,268.1 $ 13,806.3 The following table disaggregates our retail commercial truck segment revenue by product type for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, Retail Commercial Truck Dealership Revenue 2026 2025 2026 2025 New truck $ 594.3 $ 655.6 $ 995.5 $ 1,182.8 Used truck 86.6 52.7 138.8 116.5 Finance and insurance, net 4.5 4.0 8.0 8.5 Service and parts 237.7 226.7 469.9 448.7 Other 4.7 4.6 10.2 10.8 Total retail commercial truck dealership revenue $ 927.8 $ 943.6 $ 1,622.4 $ 1,767.3

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Intangible Assets The following is a summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets during the six months ended June 30, 2026: Goodwill Other Indefinite- Lived Intangible Assets Balance, January 1, 2026 $ 2,435.7 $ 1,164.2 Additions 400.8 136.8 Disposals (13.8) (2.6) Impairment (0.8) Foreign currency translation (9.1) (3.3) Balance, June 30, 2026 $ 2,813.6 $ 1,294.3 As of June 30, 2026, the goodwill balance for reporting units within our Retail Automotive, Retail Commercial Truck, and Other reportable segments was $2,237.1 million, $498.6 million, and $77.9 million, respectively. There is no goodwill recorded in our Non-Automotive Investments reportable segment. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Leases We lease land and facilities, including certain dealerships and office space. Our property leases are generally for an initial period between 5 and 20 years and are typically structured to include renewal options at our election. We include renewal options that we are reasonably certain to exercise in the measurement of our lease liabilities and right-of-use assets. We also have equipment leases that primarily relate to office and computer equipment, service and shop equipment, company vehicles, and other miscellaneous items. These leases are generally for a period of less than 5 years. We do not have any material leases, individually or in the aggregate, classified as a finance leasing arrangement. We estimate the total undiscounted rent obligations under these leases, including any extension periods that we are reasonably certain to exercise, to be $5.3 billion as of June 30, 2026. Some of our lease arrangements include rental payments that are adjusted based on an index or rate, such as the Consumer Price Index (CPI). As the rate implicit in the lease is generally not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term for an amoun …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Long-Term Debt Long-term debt consisted of the following: June 30, 2026 December 31, 2025 U.S. credit agreement revolving credit line $ 540.0 $ 333.0 U.K. credit agreement revolving credit line 13.3 87.6 3.75% senior subordinated notes due 2029 497.7 497.3 Mortgage facilities 992.3 792.5 Other debt 452.7 455.1 Total long-term debt 2,496.0 2,165.5 Less: current portion (377.3) (355.0) Net long-term debt $ 2,118.7 $ 1,810.5 U.S. Credit Agreement Our U.S. credit agreement with Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, and Daimler Truck Financial Services USA LLC (as amended, the U.S. credit agreement) provides for up to $1.5 billion in revolving loans for working capital, acquisitions, capital expenditures, investments, and other general corporate purposes and provides up to an additional $75 million of letters of credit. The U.S. credit agreement provides for a maximum of $400 million of borrowings for foreign acquisitions and expires on September 30, 2028. The interest rate on outstanding borrowings is based on an adjusted Secured Overnight Financing Rate (""SOFR"") plus 1.50%, with uncollateralized borrowings in excess of a defined borrowing base bearing interest at adjusted SOFR plus a margin ranging from 1.50% to 2.00%, based on a ratio of consolidated non-vehicle debt to adjusted earnings before interest, taxes, depreciation, and amortization. The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by …

LongTermDebtTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, ""Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses."" This ASU requires public business entities to disclose in the notes to financial statements specific categories within relevant expense captions presented on the face of the income statement. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied on a prospective basis with retrospective application permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures."

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"Revenues Automotive and commercial truck dealerships generate the majority of our revenues. New and used vehicle revenues typically include sales to retail customers, to fleet customers, and to leasing companies providing consumer leasing. We generate finance and insurance revenues from sales of third-party extended service contracts, sales of third-party insurance policies, commissions relating to the sale of finance and lease contracts to third parties, and the sales of certain other products. Service and parts revenues include fees paid by customers for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories as well as warranty repairs that are reimbursed directly by various vehicle manufacturers. Revenues are recognized upon satisfaction of our performance obligations under contracts with our customers and are measured at the amount of consideration we expect to be entitled to in exchange for transferring goods or providing services. A discussion of revenue recognition by reportable segment is included below. Retail Automotive and Retail Commercial Truck Dealership Revenue Recognition Dealership Vehicle Sales. We record revenue for vehicle sales at a point in time when vehicles are delivered, which is when the transfer of title, risks and rewards of ownership, and control are considered passed to the customer. The amount of consideration we receive for vehicle sales, including any non-cash consideration representing …

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"Segment Information We have determined that we have four reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our retail automotive dealership operations; (ii) Retail Commercial Truck, consisting of our retail commercial truck dealership operations in the U.S. and Canada; (iii) Other, consisting of our commercial vehicle and power systems distribution operations; and (iv) Non-Automotive Investments, consisting of our equity method investments in non-automotive operations which includes our investment in PTS and other investments. The Retail Automotive reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and our retail automotive joint ventures. The individual dealership operations included in the Retail Automotive reportable segment represent two operating segments: United States Retail Automotive and International Retail Automotive. These operating segments have been aggregated into one reportable segment as their operations (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and/or used vehicles, service, parts, and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals), and (D) have similar distribution and marketing practices (all distribute products and services thr …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Equity A summary of shares repurchased under our securities repurchase program, and shares acquired, is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Shares repurchased (1) 496,273 170,000 750,679 Aggregate purchase price in millions $ $ 71.3 $ 26.3 $ 111.2 Average purchase price per share $ $ 143.70 $ 154.83 $ 148.19 Shares acquired (2) 94,711 133,771 95,104 134,593 Aggregate purchase price in millions $ 16.1 $ 22.0 $ 16.2 $ 22.1 Average purchase price per share $ 170.44 $ 164.18 $ 170.42 $ 164.16 ________________________ (1) Shares were repurchased under our securities repurchase program. We had $221.2 million in repurchase authorization remaining under the repurchase program as of June 30, 2026. (2) Shares were acquired from employees in connection with a net share settlement feature of employee equity awards. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Event On July 22, 2026, our Board of Directors received an unsolicited, preliminary and non-binding proposal (the Proposal) from Penske Corporation, on behalf of itself and its wholly-owned subsidiary Penske Automotive Holdings Corp. (collectively, PC), and Mitsui & Co., Ltd., on behalf of itself and its wholly-owned subsidiary Mitsui & Co. (U.S.A.), Inc. (collectively, Mitsui and together with PC, the PC-Mitsui Investors), to acquire all outstanding shares of our common stock not already owned by them for cash consideration of $210.00 per share. The PC-Mitsui Investors currently beneficially own collectively 72.6% of our outstanding common stock. In response to the Proposal, our Board established a special committee of disinterested and independent directors, authorized to retain its own legal and financial advisors, to evaluate the Proposal. There can be no assurance as to whether an agreement relating to the Proposal or any proposed transaction will be reached or consummated, or as to the terms thereof if an agreement is reached. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing