If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: The number of shares of common stock outstanding as of April ~~25, 2023~~24, 2024 was ~~21,534,085.~~20,172,237.

ASBURY AUTOMOTIVE GROUP, INC.

TABLE OF CONTENTS


		Page
PART I—Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023	4
	Condensed Consolidated Statements of Income for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023	5
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023	6
	Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3738
Item 4.	Controls and Procedures	3738

	PART II—Other Information

Item 1.	Legal Proceedings	3839
Item 1.A.	Risk Factors	3839
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3839
Item 5.	Other Information
Item 6.	Exhibits	40
	Signatures	41

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value and share data)

(Unaudited)
March 31, 2023 December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 296.8 $ 235.3
Short-term investments 5.5 5.4
Contracts-in-transit, net 156.3 220.8
Accounts receivable, net 166.6 171.9
Inventories, net 1,081.4 959.2
Assets held for sale 44.9 29.1
Other current assets 298.8 288.1
Total current assets 2,050.2 1,909.8
INVESTMENTS 280.8 235.0
PROPERTY AND EQUIPMENT, net 1,930.5 1,941.0
OPERATING LEASE RIGHT-OF-USE ASSETS 239.7 235.4
GOODWILL 1,783.4 1,783.4
INTANGIBLE FRANCHISE RIGHTS 1,800.1 1,800.1
OTHER LONG-TERM ASSETS 98.1 116.7
Total assets $ 8,182.8 $ 8,021.4
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Floor plan notes payable—trade, net $ 45.6 $ 51.0
Floor plan notes payable—non-trade, net — —
Current maturities of long-term debt 83.1 84.5
Current maturities of operating leases 22.6 23.6
Accounts payable and accrued liabilities 672.2 645.0
Deferred revenue—current 221.8 218.9
Liabilities associated with assets held for sale 23.1 10.5
Total current liabilities 1,068.3 1,033.4
LONG-TERM DEBT 3,194.8 3,216.8
LONG-TERM LEASE LIABILITY 224.2 218.4
DEFERRED REVENUE 491.9 495.0
DEFERRED INCOME TAXES 99.3 100.7
OTHER LONG-TERM LIABILITIES 55.1 53.5
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued
or outstanding
— —
Common stock, $.01 par value; 90,000,000 shares authorized; 43,549,857 and 43,593,809 shares issued, including shares held in treasury, respectively 0.4 0.4
Additional paid-in capital 1,288.0 1,281.4
Retained earnings 2,763.3 2,610.1
Treasury stock, at cost; 22,015,888 and 22,024,479 shares, respectively (1,064.3) (1,063.0)
Accumulated other comprehensive gain 61.8 74.4
Total shareholders' equity 3,049.2 2,903.5
Total liabilities and shareholders' equity $ 8,182.8 $ 8,021.4


	March 31, 2024		December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	29.0	$	45.7
Short-term investments	6.9		6.2
Contracts-in-transit, net	222.0		279.7
Accounts receivable, net	226.9		226.1
Inventories, net	1,862.9		1,768.3
Assets held for sale	242.7		342.2
Other current assets	332.0		388.9
Total current assets	2,922.4		3,057.1
INVESTMENTS	334.7		326.7
PROPERTY AND EQUIPMENT, net	2,408.4		2,315.7
OPERATING LEASE RIGHT-OF-USE ASSETS	230.1		241.8
GOODWILL	2,014.9		2,009.0
INTANGIBLE FRANCHISE RIGHTS	2,093.7		2,095.8


OTHER LONG-TERM ASSETS	127.4		113.3
Total assets	$	10,131.5	$	10,159.4
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Floor plan notes payable—trade, net	$	205.5	$	195.1
Floor plan notes payable—non-trade, net	1,484.9		1,590.6
Current maturities of long-term debt	84.4		84.9
Current maturities of operating leases	26.0		26.2
Accounts payable and accrued liabilities	723.6		748.1
Deferred revenue—current	230.9		228.6
Liabilities associated with assets held for sale	2.1		2.1
Total current liabilities	2,757.4		2,875.7
LONG-TERM DEBT	3,108.1		3,121.2
LONG-TERM LEASE LIABILITY	211.1		222.1
DEFERRED REVENUE	516.3		508.1
DEFERRED INCOME TAXES	138.2		136.4
OTHER LONG-TERM LIABILITIES	53.5		51.7
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding	—		—
Common stock, $.01 par value; 90,000,000 shares authorized; 42,236,056 and 42,352,001 shares issued, including shares held in treasury, respectively	0.4		0.4
Additional paid-in capital	1,296.1		1,288.4
Retained earnings	3,061.5		2,961.5
Treasury stock, at cost; 22,063,936 and 22,018,537 shares, respectively	(1,077.5)		(1,067.3)
Accumulated other comprehensive income	66.4		61.1
Total shareholders' equity	3,346.9		3,244.1
Total liabilities and shareholders' equity	$	10,131.5	$	10,159.4

See accompanying Notes to Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)




		For the Three Months Ended March 31,						For the Three Months Ended March 31,
			2023		2022					2024		2023
REVENUE:	REVENUE:
New vehicle
New vehicle
New vehicle	New vehicle		$	1,767.7	$	1,855.6
Used vehicle	Used vehicle		1,126.5		1,350.9
Parts and service	Parts and service		515.6		501.9
Finance and insurance, net	Finance and insurance, net		172.5		203.4
TOTAL REVENUE	TOTAL REVENUE		3,582.3		3,911.8
COST OF SALES:	COST OF SALES:
New vehicle
New vehicle
New vehicle	New vehicle		1,588.8		1,631.6
Used vehicle	Used vehicle		1,049.5		1,251.6
Parts and service	Parts and service		233.5		225.4
Finance and insurance	Finance and insurance		14.3		11.2
TOTAL COST OF SALES	TOTAL COST OF SALES		2,886.1		3,119.8
GROSS PROFIT	GROSS PROFIT		696.2		792.0
OPERATING EXPENSES:	OPERATING EXPENSES:
Selling, general, and administrative	Selling, general, and administrative		403.0		455.5
Selling, general, and administrative
Selling, general, and administrative
Depreciation and amortization	Depreciation and amortization		16.7		18.4

Other operating income, net			—		(2.7)

INCOME FROM OPERATIONS

INCOME FROM OPERATIONS

INCOME FROM OPERATIONS	INCOME FROM OPERATIONS		276.5		320.8
OTHER EXPENSES:	OTHER EXPENSES:
Floor plan interest expense
Floor plan interest expense
Floor plan interest expense	Floor plan interest expense		0.6		2.6
Other interest expense, net	Other interest expense, net		37.3		37.6

Gain on dealership divestitures, net			—		(33.1)

Total other expenses, net

Total other expenses, net

Total other expenses, net	Total other expenses, net		38.0		7.1
INCOME BEFORE INCOME TAXES	INCOME BEFORE INCOME TAXES		238.5		313.7
Income tax expense	Income tax expense		57.1		76.0

NET INCOME	NET INCOME		$	181.4	$	237.7

NET INCOME

NET INCOME
EARNINGS PER SHARE:	EARNINGS PER SHARE:
Basic—	Basic—
Basic—
Basic—

Net income

Net income

Net income	Net income		$	8.42	$	10.43
Diluted—	Diluted—

Net income	Net income		$	8.37	$	10.38

Net income

Net income
WEIGHTED AVERAGE SHARES OUTSTANDING:	WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
Basic
Basic	Basic		21.6		22.8				20.3		21.6

Performance share units	Performance share units		0.1		0.1

Performance share units

Performance share units										0.1		0.1
Diluted	Diluted		21.7		22.9		Diluted			20.4		21.7

See accompanying Notes to Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)




		For the Three Months Ended March 31,					For the Three Months Ended March 31,
			2023		2022			2024	2023
Net income	Net income		$	181.4	$	237.7
Other comprehensive income:	Other comprehensive income:
Change in fair value of cash flow swaps	Change in fair value of cash flow swaps		(19.4)		42.2
Income tax benefit (expense) associated with cash flow swaps			4.7		(10.4)
Gains (losses) on available-for-sale debt securities			2.5		(2.2)
Income tax (expense) benefit associated with available-for-sale debt securities			(0.5)		0.2
Change in fair value of cash flow swaps
Change in fair value of cash flow swaps
Income tax (expense) benefit associated with cash flow swaps
Unrealized (losses) gains on available-for-sale debt securities
Income tax benefit (expense) associated with available-for-sale debt securities
Comprehensive income	Comprehensive income		$	168.7	$	267.5

See accompanying Notes to Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in millions)

(Unaudited)

Common Stock Additional
Paid-in
Capital Retained
Earnings Treasury Stock Accumulated
Other
Comprehensive
Income (Loss) Total
Shares Amount Shares Amount
Balances, December 31, 2022 43,593,809 $ 0.4 $ 1,281.4 $ 2,610.1 22,024,479 $ (1,063.0) $ 74.4 $ 2,903.5
Comprehensive Income:
Net income — — — 181.4 — — — 181.4
Change in fair value of cash flow swaps, net of reclassification adjustment and $4.7 million tax benefit — — — — — — (14.6) (14.6)
Unrealized gain on changes in fair value of debt securities, net of reclassification adjustment and $0.5 million tax expense — — — — — — 2.0 2.0
Comprehensive income — — — 181.4 — — (12.6) 168.7
Share-based compensation — — 8.6 — — — — 8.6
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements 120,575 — — — — — —
Share repurchases — — — — 110,323 (20.7) — (20.7)
Repurchase of common stock associated with net share settlement of employee share-based awards — — — — 45,613 (10.9) — (10.9)
Retirement of common stock (164,527) — (2.0) (28.2) (164,527) 30.2 — —
Balances, March 31, 2023 43,549,857 $ 0.4 $ 1,288.0 $ 2,763.3 22,015,888 $ (1,064.3) $ 61.8 $ 3,049.2


	Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount						Shares	Amount
Balances, December 31, 2023	42,352,001	$	0.4	$	1,288.4	$	2,961.5	22,018,537	$	(1,067.3)	$	61.1	$	3,244.1
Comprehensive Income:
Net income	—	—		—		147.1		—	—		—		147.1
Change in fair value of cash flow swaps, net of reclassification adjustment and $2.5 million tax expense	—	—		—		—		—	—		7.5		7.5
Unrealized loss on changes in fair value of debt securities, net of reclassification adjustment and $0.6 million tax benefit	—	—		—		—		—	—		(2.2)		(2.2)
Comprehensive income	—	—		—		147.1		—	—		5.3		152.4
Share-based compensation	—	—		10.5		—		—	—		—		10.5
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements	123,845	—		—		—		—	—		—		—
Share repurchases	—	—		—		—		239,790	(50.4)		—		(50.4)
Repurchase of common stock associated with net share settlement of employee share-based awards	—	—		—		—		45,399	(9.8)		—		(9.8)
Retirement of common stock	(239,790)	—		(2.9)		(47.1)		(239,790)	50.0		—		—
Balances, March 31, 2024	42,236,056	$	0.4	$	1,296.1	$	3,061.5	22,063,936	$	(1,077.5)	$	66.4	$	3,346.9

Common Stock Additional
Paid-in
Capital Retained
Earnings Treasury Stock Accumulated
Other
Comprehensive
Income (Loss) Total
Shares Amount Shares Amount
Balances, December 31, 2021 45,052,293 $ 0.4 $ 1,278.6 $ 1,881.3 21,914,251 $ (1,044.1) $ (0.7) $ 2,115.5
Comprehensive Income:
Net income — — — 237.7 — — — 237.7
Change in fair value of cash flow swaps, net of reclassification adjustment and $10.4 million tax expense — — — — — — 31.8 31.8
Unrealized loss on changes in fair value of debt securities, net of reclassification adjustment and $0.2 million tax benefit — — — — — — (2.0) (2.0)
Comprehensive income — — — 237.7 — — 29.8 267.5
Share-based compensation — — 7.0 — — — — 7.0
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements 115,435 — — — — — — —
Share repurchases — — 1.4 — 1,069,203 (200.0) — (198.6)
Repurchase of common stock associated with net share settlements of employee share-based awards — — — — 53,810 (8.9) — (8.9)
Retirement of common stock (1,069,203) — (12.9) (187.1) (1,069,203) 200.0 $ — $ —
Balances, March 31, 2022 44,098,525 $ 0.4 $ 1,274.1 $ 1,931.9 21,968,061 $ (1,053.0) $ 29.1 $ 2,182.5


	Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount						Shares	Amount
Balances, December 31, 2022	43,593,809	$	0.4	$	1,281.4	$	2,610.1	22,024,479	$	(1,063.0)	$	74.4	$	2,903.5
Comprehensive Income:
Net income	—	—		—		181.4		—	—		—		181.4
Change in fair value of cash flow swaps, net of reclassification adjustment and $4.7 million tax benefit	—	—		—		—		—	—		(14.6)		(14.6)
Unrealized gain on changes in fair value of debt securities, net of reclassification adjustment and $0.5 million tax expense	—	—		—		—		—	—		2.0		2.0
Comprehensive income	—	—		—		181.4		—	—		(12.6)		168.7
Share-based compensation	—	—		8.6		—		—	—		—		8.6
Issuance of common stock, net of forfeitures, in connection with share-based payment arrangements	120,575	—		—		—		—	—		—		—
Share repurchases	—	—		—		—		110,323	(20.7)		—		(20.7)
Repurchase of common stock associated with net share settlement of employee share-based awards	—	—		—		—		45,613	(10.9)		—		(10.9)
Retirement of common stock	(164,527)	—		(2.0)		(28.2)		(164,527)	30.2		—		—
Balances, March 31, 2023	43,549,857	$	0.4	$	1,288.0	$	2,763.3	22,015,888	$	(1,064.3)	$	61.8	$	3,049.2

See accompanying Notes to Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


		For the Three Months Ended March 31,				For the Three Months Ended March 31,
		2023		2022		2024	2023
CASH FLOW FROM OPERATING ACTIVITIES:	CASH FLOW FROM OPERATING ACTIVITIES:
Net income	Net income	$	181.4	$	237.7
Net income
Net income
Adjustments to reconcile net income to net cash provided by operating activities—	Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	16.7		18.4
Share-based compensation	Share-based compensation	8.6		7.0
Deferred income taxes	Deferred income taxes	2.8		(0.4)

Unrealized (gains) losses on investments		(3.1)		3.3
Unrealized gains on investments
Unrealized gains on investments
Unrealized gains on investments

Loaner vehicle amortization	Loaner vehicle amortization	6.7		3.2
Gain on divestitures, net		—		(33.1)
Loaner vehicle amortization
Loaner vehicle amortization

Change in right-of-use assets
Change in right-of-use assets
Change in right-of-use assets	Change in right-of-use assets	6.3		7.3
Other adjustments, net	Other adjustments, net	0.8		0.4
Changes in operating assets and liabilities, net of acquisitions and divestitures—	Changes in operating assets and liabilities, net of acquisitions and divestitures—
Contracts-in-transit	Contracts-in-transit	64.5		(1.8)
Contracts-in-transit
Contracts-in-transit
Accounts receivable	Accounts receivable	5.2		35.7

Inventories
Inventories
Inventories	Inventories	(33.3)		70.3
Other current assets	Other current assets	(109.5)		(82.5)
Floor plan notes payable—trade, net	Floor plan notes payable—trade, net	(5.4)		(22.0)
Deferred revenue	Deferred revenue	(0.2)		15.5
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	33.8		163.0
Operating lease liabilities	Operating lease liabilities	(5.9)		(7.0)
Other long-term assets and liabilities, net	Other long-term assets and liabilities, net	2.3		(6.0)
Net cash provided by operating activities	Net cash provided by operating activities	171.7		409.0
CASH FLOW FROM INVESTING ACTIVITIES:	CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures—excluding real estate	Capital expenditures—excluding real estate	(15.2)		(20.8)
Capital expenditures—excluding real estate
Capital expenditures—excluding real estate
Capital expenditures—real estate

Purchases of previously leased real estate
Purchases of previously leased real estate
Purchases of previously leased real estate

Proceeds from dealership divestitures

Proceeds from dealership divestitures

Proceeds from dealership divestitures
Purchases of debt securities—available-for-sale

Divestitures		—		252.2
Purchases of debt securities—available-for-sale		(44.1)		(12.3)
Purchases of equity securities		—		(3.3)
Proceeds from the sale of debt securities—available-for-sale
Proceeds from the sale of debt securities—available-for-sale
Proceeds from the sale of debt securities—available-for-sale	Proceeds from the sale of debt securities—available-for-sale	3.5		12.2
Proceeds from the sale of equity securities	Proceeds from the sale of equity securities	0.6		3.3

Net cash (used in) provided by investing activities		(55.2)		231.3
Net cash used in investing activities
Net cash used in investing activities
Net cash used in investing activities
CASH FLOW FROM FINANCING ACTIVITIES:	CASH FLOW FROM FINANCING ACTIVITIES:
Floor plan borrowings—non-trade	Floor plan borrowings—non-trade	1,799.6		1,873.7
Floor plan borrowings—non-trade
Floor plan borrowings—non-trade

Floor plan repayments—non-trade
Floor plan repayments—non-trade
Floor plan repayments—non-trade	Floor plan repayments—non-trade	(1,798.2)		(2,004.1)
Floor plan repayments—divestitures	Floor plan repayments—divestitures	—		(19.9)

Repayments of borrowings	Repayments of borrowings	(15.3)		(7.7)
Repayments of borrowings
Repayments of borrowings
Proceeds from revolving credit facility	Proceeds from revolving credit facility	—		320.0
Repayments of revolving credit facility	Repayments of revolving credit facility	—		(489.0)

Proceeds from issuance of common stock		—		1.4
Payment of debt issuance costs		—		(0.4)

Purchases of treasury stock	Purchases of treasury stock	(30.2)		(200.0)
Repurchases of common stock, including amounts associated with net share settlements of employee share-based awards		(10.9)		(8.9)

Purchases of treasury stock

Purchases of treasury stock
Repurchases of common stock, associated with net share settlements of employee share-based awards

Net cash used in financing activities	Net cash used in financing activities	(55.0)		(534.9)
Net increase in cash and cash equivalents		61.5		105.4
Net cash used in financing activities
Net cash used in financing activities
Net (decrease) increase in cash and cash equivalents
CASH AND CASH EQUIVALENTS, beginning of period	CASH AND CASH EQUIVALENTS, beginning of period	235.3		178.9
CASH AND CASH EQUIVALENTS, end of period	CASH AND CASH EQUIVALENTS, end of period	$	296.8	$	284.3

See Note 11 "Supplemental Cash Flow Information" for further details

See accompanying Notes to Condensed Consolidated Financial Statements

ASBURY AUTOMOTIVE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

As of March 31, ~~2023,~~2024, we owned and operated ~~184~~206 new vehicle franchises ~~(139~~(157 dealership locations), representing 31 brands of automobiles, and 3237 collision centers in 1415 states. For the three months ended March 31, ~~2023,~~2024, our new vehicle revenue brand mix consisted of ~~34%~~29% luxury, ~~38%~~41% imports and ~~28%~~30% domestic brands. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services (collectively referred to as "parts and services" or "P&S"); and finance and insurance ("F&I") products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection ("GAP") debt cancellation and prepaid maintenance. The finance and insurance products are provided by independent third parties and Total Care Auto, Powered by Landcar ("TCA"). The Company reflects its operations in two reportable segments: Dealerships and TCA.

On December 11, 2023, the Company completed the acquisition of substantially all of the assets, including all real property and businesses of the Jim Koons Dealerships ("Koons") pursuant to a Purchase and Sale Agreement with various entities that comprise the Jim Koons automotive dealerships group (the "Koons acquisition") for an aggregate purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington. The acquisition was funded with borrowings under Asbury’s existing credit facility and cash on hand. The Koons acquisition comprised 20 new vehicle dealerships and six collision centers.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and reflect the consolidated accounts of Asbury Automotive Group, Inc. (the "Company") and our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. If necessary, reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements in order to conform to current presentation.

In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair statement of the condensed consolidated financial statements as of March 31, ~~2023,~~2024, and for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, have been included, unless otherwise indicated. Amounts presented in the condensed consolidated financial statements have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not ~~compute or tie to prior year financial statements due to rounding.~~compute.

The results of operations for the three months ended March 31, ~~2023~~2024 are not necessarily indicative of the results that may be expected for any other interim period, or any full year period. Our condensed consolidated financial statements should be read together with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Use of Estimates

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

Share Repurchases

Share repurchases may be made from time-to-time in open market transactions or through privately negotiated transactions under the authorization approved by the Board of Directors. Periodically, the Company may retire repurchased shares of common stock previously held by the Company as treasury stock. In accordance with our accounting policy, we allocate any

excess share repurchase price over par value between additional paid-in capital, which is limited to amounts initially recorded for the same issue, and retained earnings.

During the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the Company repurchased ~~110,323~~239,790 and ~~1,069,203~~110,323 shares and retired ~~164,527~~239,790 and ~~1,069,203~~164,527, shares, of our common stock under our share repurchase program, respectively. The cash paid for these share repurchases was ~~$20.7~~$50.0 million and ~~$200.0~~$20.7 million for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively. ~~From April 1,~~

On May 26, 2023, ~~through April 27, 2023,~~we announced that our Board of Directors approved a new authorization to repurchase up to $250 million of the Company's common stock (the "New Share Repurchase Authorization"), which replaces our previous share repurchase authorization. As of March 31, 2024, the Company ~~repurchased 149,765 shares for $28.7~~had $152.6 million ~~pursuant to a 10b5-1 agreement.~~

remaining on its share repurchase authorization.

Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average common shares and common share equivalents outstanding during the period. The Company excluded ~~4,005~~2,877 and ~~2,123~~4,005 restricted share units and ~~476~~14 and ~~533~~476 performance share units issued under the Asbury Automotive Group, Inc. 2019 Equity and Incentive Compensation Plan from its computation of diluted earnings per share for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively, because they were anti-dilutive. For all periods presented, there were no adjustments to the numerator necessary to compute diluted earnings per share.

Recent Accounting Pronouncements

~~In September 2022, the~~The Financial Accounting Standards Board ("FASB") issued final guidance in ASU 2023-09, Improvements to Income Tax Disclosures, in December 2023 which primarily expands the disclosures related to the effective tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 and should be applied prospectively with the option of retrospective application. We are evaluating the impact of this new guidance on our consolidated financial statements.

In November 2023, the FASB issued Accounting Standards Update ("ASU") ~~2022-04,~~2023-07, ~~Liabilities-Supplier Finance Programs.~~Segment Reporting: Improvements to Reportable Segment Disclosures ~~This standard serves to improve transparency about supplier finance programs.~~("ASU 2023-07"), which enhances the disclosures primarily around segment expenses. In addition, the amendments expand the scope of quarterly financial reporting by requiring disclosure of both existing annual segment reporting disclosures and the expanded disclosures outlined in ASU 2023-07. The ~~ASU requires certain disclosures around key terms of outstanding supply chain finance programs~~guidance should be applied retrospectively and changes in obligations during a reporting period related to vendors participating in these programs. The new disclosure requirements do not affect the recognition, measurement or financial statement presentation of any amounts due. The guidance is effective for fiscal years beginning after December 15, ~~2022, except~~2023, and for ~~rollforward information, which is effective in~~interim periods beginning after December 15, 2024. We are evaluating the ~~first quarter of 2024. Early adoption is permitted. The adoption~~impact of this new guidance on ~~January 1, 2023 did not have a material impact on~~ our ~~condensed~~ consolidated financial statements. ~~Refer to Note 8, "Floor Plan Notes Payable."~~

2. REVENUE RECOGNITION

Disaggregation of Revenue

Revenue from contracts with customers for the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 consists of the following:

For the Three Months Ended March 31,
2023 2022
(In millions)
Revenue:
   New vehicle $ 1,767.7 $ 1,855.6
   Used vehicle retail 1,021.6 1,217.0
   Used vehicle wholesale 104.9 134.0
New and used vehicle 2,894.2 3,206.5
  Sale of vehicle parts and accessories 126.0 130.2
  Vehicle repair and maintenance services 389.6 371.7
Parts and service 515.6 501.9
Finance and insurance, net 172.5 203.4
Total revenue $ 3,582.3 $ 3,911.8


	For the Three Months Ended March 31,
	2024		2023
	(In millions)
Revenue:
New vehicle	$	2,064.3	$	1,767.7
Used vehicle retail	1,191.4		1,021.6
Used vehicle wholesale	165.5		104.9
New and used vehicle	3,421.2		2,894.2
Sale of vehicle parts and accessories	133.7		126.0
Vehicle repair and maintenance services	456.6		389.6
Parts and service	590.4		515.6
Finance and insurance, net	189.7		172.5
Total revenue	$	4,201.2	$	3,582.3

Contract Assets

Changes in contract assets during the period are reflected in the table below. Contract assets related to vehicle repair and maintenance services are transferred to receivables when a repair order is completed and invoiced to the customer. Certain incremental sales commissions payable to obtain an F&I revenue contract with a customer have been capitalized and are amortized using the same pattern of recognition applicable to the associated F&I revenue contract.


		Vehicle Repair and Maintenance Services		Finance and Insurance, net		Deferred Sales Commissions		Total
		(In millions)
Balance as of January 1, 2023		$	14.7	$	14.7	$	37.2	$	66.6
	Vehicle Repair and Maintenance Services									Vehicle Repair and Maintenance Services	Finance and Insurance, net	Deferred Sales Commissions	Total
	(In millions)											(In millions)
Balance as of January 1, 2024
Transferred to receivables from contract assets recognized at the beginning of the period	Transferred to receivables from contract assets recognized at the beginning of the period	(14.7)		(3.0)		—		(17.7)
Amortization of costs to obtain a contract with a customer	Amortization of costs to obtain a contract with a customer	—		—		(2.0)		(2.0)
Costs incurred to obtain a contract with a customer	Costs incurred to obtain a contract with a customer	—		—		8.6		8.6
Increases related to revenue recognized, inclusive of adjustments to constraint, during the period	Increases related to revenue recognized, inclusive of adjustments to constraint, during the period	16.3		2.8		—		19.1
Balance as of March 31, 2023		$	16.3	$	14.5	$	43.8	$	74.6
Balance as of March 31, 2024

Contract Assets (current), March 31, 2023		16.3		14.5		12.9		43.7
Contract Assets (long-term), March 31, 2023		—		—		30.9		30.9
Contract Assets (current), March 31, 2024
Contract Assets (current), March 31, 2024
Contract Assets (current), March 31, 2024
Contract Assets (long-term), March 31, 2024

Deferred Revenue

The condensed consolidated balance sheets reflect ~~$713.7~~$747.2 million and ~~$713.9~~$736.7 million of deferred revenue as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively. Approximately ~~$62.4~~$66.7 million of deferred revenue at December 31, ~~2022~~2023 was recorded in finance and insurance, net revenue in the condensed consolidated statements of income during the three months ended March 31, ~~2023.~~2024.

3. ACQUISITIONS AND DIVESTITURES

Koons Acquisition

On December 11, 2023, we completed the acquisition of the Jim Koons Dealerships. The results of the Jim Koons Dealerships have been included in our consolidated financial statements since that date. The Koons acquisition diversifies Asbury's geographic mix, with expansion in the greater Washington-Baltimore region of the United States.

As a result of the Koons acquisition, we acquired 20 new vehicle dealerships, six collision centers and the real property related thereto, for a total purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington. The preliminary purchase price was paid in cash.

The sources of the preliminary purchase consideration are as follows:


			(In millions)
Cash	$	936.8
New vehicle floor plan facility	256.1
Used vehicle floor plan facility	307.1
Preliminary purchase price	$	1,500.0

Under the acquisition method of accounting, the tangible and intangible assets acquired and liabilities assumed are recorded at their estimated fair value based on information currently available. The following table summarizes the amounts recorded based on preliminary estimates of fair value:


Summary of Assets Acquired and Liabilities Assumed
	(In millions)
Assets
Inventories, net	$	309.0
Other current assets	10.3
Assets held for sale	100.9
Total current assets	420.2
Property and equipment, net	418.3
Goodwill	238.5
Intangible franchise rights	430.3
Operating lease right-of-use assets	11.2
Total assets acquired	$	1,518.5
Liabilities
Operating lease liabilities	$	11.2
Other liabilities	7.2
Total liabilities assumed	18.4
Net assets acquired	$	1,500.0

The preliminary acquisition accounting is based upon the Company’s estimates of fair value. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management, including the books and records of Koons. Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The areas of acquisition accounting that are not yet finalized primarily relate to the following significant items: (i) finalizing the review and valuation of inventory, land, land improvements, buildings and non-real property and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, and (ii) finalizing the review and valuation of manufacturer franchise rights (including key assumptions, inputs and estimates). As the initial acquisition accounting is based on our preliminary assessments, actual values may differ (possibly materially) when final information becomes available that differs from our current estimates. Additionally, the total consideration transferred is subject to certain post-close adjustments. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period. Measurement period adjustments recorded during the three months ended March 31, 2024 and their related effects on our consolidated statement of income were not material.

Approximately $430.3 million of the purchase price was assigned to the indefinite lived franchise rights intangible assets related to the dealer agreements applicable to each new vehicle dealership. In addition, goodwill of $238.5 million was recognized and is primarily attributable to the anticipated synergies that Asbury expects to derive from the Koons acquisition as well as the acquired assembled workforce of the Koons dealerships.

The Company's consolidated statement of income for the three months ended March 31, 2024 included revenue and net income attributable to the Jim Koons Dealerships of $681.4 million and $26.5 million, respectively.

Other Acquisitions and Divestitures

There were no acquisitions during the three months ended March 31, 2024 and 2023.

During the three months ended March 31, ~~2022,~~2024, we sold one franchise (one dealership location) in ~~St. Louis, Missouri, and three franchises (three dealership locations) in~~Wilmington, Delaware. The carrying value of assets, net of liabilities sold, approximated the Denver, Colorado market. The Company recorded a pre-tax gain totaling $33.1 million, for the three months ended March 31, 2022, which is presented in our accompanying condensed consolidated statements of income as gain on dealership divestitures, net.sales price. There were no divestitures during the three months ended March 31, 2023.

4. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


		As of				As of
		March 31, 2023		December 31, 2022		March 31, 2024	December 31, 2023
		(In millions)				(In millions)
Vehicle receivables	Vehicle receivables	$	48.1	$	50.4
Manufacturer receivables	Manufacturer receivables	42.1		43.3
Other receivables	Other receivables	78.6		80.5
Total accounts receivable	Total accounts receivable	168.9		174.1
Less—Allowance for credit losses	Less—Allowance for credit losses	(2.3)		(2.2)
Accounts receivable, net	Accounts receivable, net	$	166.6	$	171.9

5. INVENTORIES

Inventories consisted of the following:


		As of
	As of							As of
		March 31, 2023		December 31, 2022		March 31, 2024	December 31, 2023
		(In millions)				(In millions)
New vehicles	New vehicles	$	643.0	$	527.7
Used vehicles	Used vehicles	308.5		304.4
Parts and accessories	Parts and accessories	129.9		127.2
Total inventories, net (a)	Total inventories, net (a)	$	1,081.4	$	959.2

~~____________________________~~___________________________

(a) Inventories, net as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, excluded ~~$5.0~~$83.3 million and ~~$3.4~~$84.5 million classified as assets held for sale, respectively.

The lower of cost and net realizable value reserves reduced total inventories by ~~$9.5~~$8.7 million and ~~$10.7~~$8.8 million as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively. As of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, certain automobile manufacturer incentives reduced new vehicle inventory cost by ~~$4.0~~$9.0 million and ~~$2.7~~$8.3 million, respectively, and reduced new vehicle cost of sales for the three months ended March 31, 2024 and 2023 by $26.3 million and ~~2022 by~~ $22.3 million, ~~and $25.5 million,~~ respectively.

6. ASSETS AND LIABILITIES HELD FOR SALE

Assets and liabilities classified as held for sale include (i) assets and liabilities associated with pending dealership disposals, (ii) real estate not currently used in our operations that we are actively marketing to sell and (iii) the related mortgage notes payable, if applicable.

A summary of assets held for sale and liabilities associated with assets held for sale is as follows:


	As of						As of
	March 31, 2024					March 31, 2024		December 31, 2023
	(In millions)						(In millions)
Assets:

		As of
Inventory
		March 31, 2023		December 31, 2022
		(In millions)
Assets:
Inventory

Inventory	Inventory	$	5.0	$	3.4
Loaners, net	Loaners, net	0.9		0.9

Property and equipment, net	Property and equipment, net	36.0		24.0
Property and equipment, net
Property and equipment, net
Operating lease right-of-use assets	Operating lease right-of-use assets	2.1		—
Goodwill	Goodwill	0.9		0.9

Franchise rights
Total assets held for sale	Total assets held for sale	44.9		29.1
Liabilities:	Liabilities:
Current maturities of operating leases
Current maturities of operating leases
Current maturities of operating leases

Floor plan notes payable—non-trade		4.2		2.8
Loaners notes payable		1.0		0.8

Current maturities of long-term debt		1.0		0.6
Current maturities of operating leases		0.5		—
Long-term debt		14.8		6.2
Operating lease liabilities
Operating lease liabilities
Operating lease liabilities	Operating lease liabilities	1.6		—
Total liabilities associated with assets held for sale	Total liabilities associated with assets held for sale	23.1		10.5
Net assets held for sale	Net assets held for sale	$	21.8	$	18.7

As of March 31, ~~2023,~~2024, assets held for sale consisted of ~~one~~10 franchise ~~(one~~(10 dealership ~~location), real estate associated with five used vehicle stores, one collision center, and~~locations) in addition to one real estate property not currently used in our operations.

As of December 31, ~~2022,~~2023, assets held for sale consisted of ~~one~~11 franchise ~~(one~~(11 dealership ~~location)~~locations) in addition to one real estate property not currently used in our operations.

7. INVESTMENTS

Our investment portfolio is primarily funded by product premiums from the sale of our TCA F&I products. The amortized cost, gross unrealized gains and losses and estimated fair values of debt securities available-for-sale ~~equity securities, and other investments measured at net asset value~~ are as follows:


		As of March 31, 2023
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		(In millions)
		As of March 31, 2024
		As of March 31, 2024
		As of March 31, 2024
	Amortized Cost									Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In millions)										(In millions)
Short-term investments	Short-term investments	$	5.5	$	—	$	—	$	5.5
U.S. Treasury	U.S. Treasury	11.9		0.1		(0.1)		11.9
Municipal	Municipal	28.3		0.2		(0.2)		28.3
Corporate	Corporate	93.8		0.6		(1.4)		93.0
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	96.5		0.6		(1.1)		96.0
Total debt securities		236.0		1.5		(2.8)		234.6
Common stock		51.7		—		—		51.7

Total investments	Total investments	$	287.7	$	1.5	$	(2.8)	$	286.3

Total investments

Total investments

As of December 31, 2022
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
(In millions)
Short-term investments $ 5.4 $ — $ — $ 5.4
U.S. Treasury 11.8 — (0.2) 11.6
Municipal 22.8 — (0.4) 22.4
Corporate 81.8 0.2 (2.3) 79.7
Mortgage and other asset-backed securities 73.8 0.3 (1.4) 72.7
Total debt securities 195.5 0.5 (4.4) 191.7
Common stock 48.7 — — 48.7
Total investments $ 244.2 $ 0.5 $ (4.4) $ 240.4

~~The Company had an unrealized gain of $2.6 million and an unrealized loss of $0.4 million related to equity securities held as of March 31, 2023 and December 31, 2022, respectively.~~


	As of December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In millions)
Short-term investments	$	6.3	$	—	$	(0.1)	$	6.2
U.S. Treasury	13.6		0.1		(0.1)		13.5
Municipal	30.1		0.2		(0.2)		30.1
Corporate	131.5		1.6		(0.9)		132.2
Mortgage and other asset-backed securities	150.1		1.6		(0.9)		150.9




Total investments	$	331.6	$	3.5	$	(2.2)	$	332.9

As of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, the Company had ~~$1.5~~$2.4 million and ~~$1.3~~$2.5 million of accrued interest receivable, respectively, which is included in other current assets on the condensed consolidated balance sheets. The Company does not consider accrued interest receivable in the carrying amount of financial assets held at amortized cost basis or in the allowance for credit losses.

A summary of amortized costs and fair value of investments by time to maturity, is as follows:

As of March 31, 2023
Amortized Cost Fair Value
(In millions)
Due in 1 year or less $ 5.5 $ 5.5
Due in 1-5 years 87.7 87.0
Due in 6-10 years 44.0 43.9
Due after 10 years 2.3 2.3
Total by maturity 139.5 138.7
Mortgage and other asset-backed securities 96.5 96.0
Common stock 51.7 51.7
Total investment securities $ 287.7 $ 286.3


	As of March 31, 2024
	Amortized Cost		Fair Value
	(In millions)
Due in 1 year or less	$	6.9	$	6.9
Due in 1-5 years	119.2		118.3
Due in 6-10 years	63.3		63.1
Due after 10 years	4.5		4.6
Total by maturity	193.9		192.8
Mortgage and other asset-backed securities	149.1		148.7



Total investment securities	$	343.0	$	341.6

There were no gross losses and ~~$0.1~~$0.2 million gross gains realized related to the sale of available-for-sale debt securities carried at fair value for the three months ended March 31, ~~2023.~~ 2024.

There were no gross losses and $0.1 million gross gains ~~or losses~~ realized related to the sale of ~~equity~~available-for-sale debt securities carried at fair value for the three months ended March 31, 2023.

The following tables summarize the amount of unrealized losses, defined as the amount by which the amortized cost exceeds fair value, and the related fair value of investments with unrealized losses. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. The reference point for determining how long an investment was in an unrealized loss position was March 31, ~~2023.~~2024.

As of March 31, 2023
Less than 12 Months Greater than 12 Months Total
Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
(In millions)
Short-term investments $ 4.0 $ — $ — $ — $ 4.0 $ —
U.S. Treasury 7.4 (0.1) 0.1 — 7.5 (0.1)
Municipal 14.8 (0.1) 0.9 — 15.7 (0.2)
Corporate 52.4 (0.8) 9.5 (0.6) 61.9 (1.4)
Mortgage and other asset-backed securities 55.3 (0.9) 3.5 (0.3) 58.8 (1.1)
Total debt securities $ 133.9 $ (1.9) $ 13.9 $ (0.9) $ 147.8 $ (2.8)


		As of December 31, 2022
		Less than 12 Months				Greater than 12 Months				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In millions)

	As of March 31, 2024																			As of March 31, 2024
	Less than 12 Months														Less than 12 Months			Greater than 12 Months			Total
	Fair Value													Fair Value		Unrealized Losses	Fair Value		Unrealized Losses		Fair Value	Unrealized Losses
	(In millions)																			(In millions)
Short-term investments
U.S. Treasury	U.S. Treasury	$	9.2	$	(0.2)	$	—	$	—	$	9.2	$	(0.2)
Municipal	Municipal	19.0		(0.4)		—		—		19.0		(0.4)
Corporate	Corporate	66.2		(0.1)		5.2		(0.3)		71.4		(0.4)
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	51.4		(1.3)		1.5		(0.2)		52.9		(1.5)
Total debt securities	Total debt securities	$	145.7	$	(2.0)	$	6.8	$	(0.5)	$	152.6	$	(2.5)


	As of December 31, 2023
	Less than 12 Months				Greater than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In millions)
Short-term investments	$	—	$	—	$	6.0	$	(0.1)	$	6.0	$	(0.1)
U.S. Treasury	3.4		(0.1)		5.0		(0.1)		8.5		(0.1)
Municipal	6.4		(0.1)		10.4		(0.1)		16.8		(0.2)
Corporate	11.4		(0.1)		48.0		(0.8)		59.4		(0.9)
Mortgage and other asset-backed securities	29.8		(0.4)		33.1		(0.5)		62.9		(0.9)
Total debt securities	$	51.1	$	(0.7)	$	102.5	$	(1.6)	$	153.6	$	(2.2)

The Company reviews the investment securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors including changes in credit ratings. The decline in fair value identified in the tables above are a result of widening market spreads and not a result of credit quality. Additionally, the Company has

determined it has both the intent and ability to hold these investments until the market price recovers or until maturity and does not believe it will be required to sell the securities before maturity. Accordingly, no credit losses were recognized on these securities during the three months ended March 31, ~~2023.~~2024.

8. FLOOR PLAN NOTES PAYABLE

Floor plan notes payable consisted of the following:

As of
March 31, 2023 December 31, 2022
(In millions)
Floor plan notes payable—trade $ 59.9 $ 65.1
Floor plan notes payable offset account (14.3) (14.2)
Floor plan notes payable—trade, net $ 45.6 $ 51.0
Floor plan notes payable—new non-trade (a) $ 680.0 $ 613.6
Floor plan notes payable offset account (b) (680.0) (613.6)
Floor plan notes payable—non-trade, net $ — $ —
~~____________________________~~

(a) Floor plan notes payable—new non-trade as of March 31, 2023 and December 31, 2022, excluded $4.2 million and $2.8 million classified as liabilities associated with assets held for sale, respectively.

(b) In addition to the $680.0 million and $613.6 million shown above as of March 31, 2023 and December 31, 2022, respectively, we held $158.1 million and $164.0 million, in the floor plan notes payable offset account as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, $77.2 million of the $158.1 million was reflected within cash and cash equivalents and the remaining $80.9 million was shown as an offset to loaner vehicles notes payable. As of December 31, 2022, $100.8 million of the $164.0 million was reflected within cash and cash equivalents and the remaining $63.2 million was shown as an offset to loaner vehicles notes payable. Loaner vehicle notes payable is included in accounts payable and accrued liabilities within the condensed consolidated balance sheets.


	As of
	March 31, 2024		December 31, 2023
	(In millions)
Floor plan notes payable—trade	$	231.0	$	245.6
Floor plan notes payable offset account	(25.5)		(50.5)
Floor plan notes payable—trade, net	$	205.5	$	195.1

Floor plan notes payable—new non-trade	$	1,388.9	$	1,328.1
Floor plan notes payable—used non-trade	275.7		307.1
Floor plan notes payable offset account	(179.7)		(44.7)
Floor plan notes payable—non-trade, net	$	1,484.9	$	1,590.6

We have floor plan offset accounts that allow us to offset our floor plan notes payable balances outstanding with transfers of cash to reduce the amount of outstanding floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the offset account into our operating cash accounts within the same day.

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

On May 27, 2022, $389.0 million of our availability under the Revolving Credit Facility was re-designated to the New Vehicle Floor Plan Facility to take advantage of lower commitment fee rates. On March 31, 2023, we designated this $389.0 million back to the Revolving Credit Facility.

In addition to our new and used vehicle floor plan facilities, we have loaner vehicle floor plan facilities with ~~Ford Motor Credit Company (“Ford Credit”),~~ Bank of America and certain original equipment manufacturers (“OEMs”). Generally, the loaner vehicle programs with the OEMs provide for a short-term lease of the loaner vehicle pursuant to which we make monthly payments. During the term of the lease, the title and ownership of the loaner vehicles are retained by the OEM. We are obligated to purchase the loaner vehicle upon expiration of the lease. Under certain programs, we have the option to purchase the loaner vehicle prior to the expiration of the lease term. Loaner vehicles notes payable related to Ford Credit as of March 31, 2023 and December 31, 2022 were $13.7 million and $13.4 million, respectively. Loaner vehicles notes payable related to Bank of America as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 were ~~$0.0~~$128.1 million and ~~$10.8 million, net of offsets of $80.9 million and $63.2~~$127.2 million, respectively. Loaner vehicles notes payable related to OEMs as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 were ~~$75.1~~$99.9 million and ~~$70.4~~$111.9 million, respectively.

9. DEBT

Long-term debt consisted of the following:

As of
March 31, 2023 December 31, 2022
(In millions)
4.50% Senior Notes due 2028 $ 405.0 $ 405.0
4.625% Senior Notes due 2029 800.0 800.0
4.75% Senior Notes due 2030 445.0 445.0
5.00% Senior Notes due 2032 600.0 600.0
Mortgage notes payable bearing interest at fixed rates (a) 37.7 38.3
2021 Real Estate Facility (b) 642.9 660.6
2021 BofA Real Estate Facility 171.5 173.3
2018 Bank of America Facility (c) 53.5 54.5
2018 Wells Fargo Master Loan Facility 75.7 76.9
2013 BofA Real Estate Facility 24.3 24.9
2015 Wells Fargo Master Loan Facility 41.1 42.3
Finance lease liability 8.4 8.4
Total debt outstanding 3,304.9 3,329.2
Add—unamortized premium on 4.50% Senior Notes due 2028 0.8 0.8
Add—unamortized premium on 4.75% Senior Notes due 2030 1.5 1.6
Less—debt issuance costs (29.3) (30.4)
Long-term debt, including current portion 3,277.9 3,301.2
Less—current portion, net of current portion of debt issuance costs (83.1) (84.5)
Long-term debt $ 3,194.8 $ 3,216.8

~~____________________________~~

~~(a) Mortgage notes payable excluded $2.7 million that were classified as liabilities associated with assets held for sale as of both March 31, 2023 and December 31, 2022.~~

~~(b) Amounts reflected for the 2021 Real Estate Facility as of March 31, 2023 exclude $9.2 million classified as liabilities associated with assets held for sale.~~

(c) Amounts reflected for the 2018 Bank of America Facility as of March 31, 2023 and December 31, 2022, exclude $4.0 million and $4.1 million classified as liabilities associated with assets held for sale.


	As of
	March 31, 2024		December 31, 2023
	(In millions)
4.50% Senior Notes due 2028	$	405.0	$	405.0
4.625% Senior Notes due 2029	800.0		800.0
4.75% Senior Notes due 2030	445.0		445.0
5.00% Senior Notes due 2032	600.0		600.0
Mortgage notes payable bearing interest at fixed rates	31.4		31.9
2021 Real Estate Facility	605.8		614.4
2021 BofA Real Estate Facility	164.1		165.9
2018 Bank of America Facility	49.2		50.3
2018 Wells Fargo Master Loan Facility	70.7		72.0

2015 Wells Fargo Master Loan Facility	35.9		37.2
2023 Syndicated Revolving Credit Facility	—		—
Finance lease liability	8.4		8.4
Total debt outstanding	3,215.4		3,230.1
Add—unamortized premium on 4.50% Senior Notes due 2028	0.6		0.6
Add—unamortized premium on 4.75% Senior Notes due 2030	1.3		1.3
Less—debt issuance costs	(24.7)		(25.9)
Long-term debt, including current portion	3,192.6		3,206.2
Less—current portion, net of current portion of debt issuance costs	(84.4)		(84.9)
Long-term debt	$	3,108.1	$	3,121.2

10. FINANCIAL INSTRUMENTS AND FAIR VALUE

In determining fair value, we use various valuation approaches, including market and income approaches. Accounting standards establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the presumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.

Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include interest rate swap instruments, exchange-traded debt securities that are not actively traded or do not have a high trading volume, mortgage notes payable and certain real estate properties on a non-recurring basis.

Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating the fair value of certain non-financial assets and

Table of ~~March 31, 2023 and December 31, 2022, exclude $15.8 million and $6.8 million classified as liabilities associated with assets held for sale, respectively.~~ Contents

non-financial liabilities in purchase acquisitions and those used in the assessment of impairment for goodwill and manufacturer franchise rights.

The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required to determine fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

Fair value is a market-based exit price measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. We use inputs that are current as of the measurement date, including during periods of significant market fluctuations.

Financial instruments consist primarily of cash and cash equivalents, investments, contracts-in-transit, accounts receivable, cash surrender value of corporate-owned life insurance policies, accounts payable, floor plan notes payable, subordinated long-term debt, mortgage notes payable and interest rate swap instruments. The carrying values of our financial instruments, with the exception of subordinated long-term debt, ~~and certain mortgage notes payable,~~ approximate fair value due to (i) their short-term nature, (ii) recently completed market transactions or (iii) existence of variable interest rates, which approximate market rates. The fair value of our subordinated long-term debt is based on reported market prices in an inactive market that reflect Level 2 inputs. ~~We estimate the fair value of our mortgage notes payable using a present value technique based on current market interest rates for similar types of financial instruments that reflect Level 2 inputs.~~

A summary of the carrying values and fair values of our subordinated long-term debt ~~and our mortgage notes payable~~ is as follows:


		As of				As of
		March 31, 2023		December 31, 2022		March 31, 2024	December 31, 2023
		(In millions)				(In millions)
Carrying Value:	Carrying Value:
4.50% Senior Notes due 2028	4.50% Senior Notes due 2028	$	402.3	$	409.5
4.625% Senior Notes due 2029		789.4		789.1
4.75% Senior Notes due 2030		441.8		441.7
5.00% Senior Notes due 2032		591.7		591.5
Mortgage notes payable (a)		1,044.2		1,061.1
Total carrying value		$	3,269.5	$	3,292.9

Fair Value:
4.50% Senior Notes due 2028
4.50% Senior Notes due 2028	4.50% Senior Notes due 2028	$	367.5	$	354.4
4.625% Senior Notes due 2029	4.625% Senior Notes due 2029	708.0		672.0
4.75% Senior Notes due 2030	4.75% Senior Notes due 2030	393.8		372.7
5.00% Senior Notes due 2032	5.00% Senior Notes due 2032	523.5		492.0
Mortgage notes payable (a)		1,045.2		1,069.8

Total carrying value
Total carrying value
Total carrying value

Fair Value:
Fair Value:
Fair Value:
4.50% Senior Notes due 2028
4.50% Senior Notes due 2028
4.50% Senior Notes due 2028
4.625% Senior Notes due 2029
4.75% Senior Notes due 2030
5.00% Senior Notes due 2032

Total fair value	Total fair value	$	3,038.0	$	2,960.9
Total fair value
Total fair value

~~____________________________~~

~~(a) Mortgage notes payable as~~

Interest Rate Swap Agreements

We currently have ~~seven~~six interest rate swap agreements. ~~In January 2022, we entered into two new interest rate swap agreements with a combined notional principal amount of $550.0 million.~~ These swaps are designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the SOFR rate. All interest rate swap agreements with an inception date of 2021 and prior were amended on June 1, 2022 to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR as compared to the previous benchmark rate of one-month LIBOR. The revisions to the interest rate swap

~~agreements did not impact our hedge accounting because we applied the accounting expedients outlined in ASU 2020-04 and ASU 2021-01 of ASC Topic 848,~~ ~~Reference Rate Reform~~. The following table provides information on the attributes of each swap as of March 31, ~~2023:~~2024:


Inception Date	Inception Date		Notional Principal at Inception		Notional Value as of March 31, 2023		Notional Principal at Maturity		Maturity Date	Inception Date			Notional Principal at Inception						Notional Value as of March 31, 2024						Notional Principal at Maturity				Maturity Date
			(In millions)
		(In millions)
January 2022
January 2022
January 2022	January 2022		$	300.0	$	285.0	$	228.8	December 2026		$	300.0			$		$	270.0			$		$	228.8			December 2026		December 2026
January 2022	January 2022		$	250.0	$	250.0	$	250.0	December 2031	January 2022			$	250.0		$			$	250.0		$			$	250.0		December 2031		December 2031
May 2021	May 2021		$	184.4	$	171.5	$	110.6	May 2031	May 2021			$	184.4		$			$	164.1		$			$	110.6		May 2031		May 2031
July 2020	July 2020		$	93.5	$	80.1	$	50.6	December 2028	July 2020			$	93.5		$			$	74.9		$			$	50.6		December 2028		December 2028
July 2020	July 2020		$	85.5	$	72.1	$	57.3	November 2025	July 2020			$	85.5		$			$	66.7		$			$	57.3		November 2025		November 2025
June 2015	June 2015		$	100.0	$	62.7	$	53.1	February 2025	June 2015			$	100.0		$			$	57.5		$			$	53.1		February 2025		February 2025
November 2013			$	75.0	$	40.5	$	38.7	September 2023

The fair value of cash flow swaps is calculated as the present value of expected future cash flows, determined on the basis of forward interest rates and present value factors. Fair value estimates reflect a credit adjustment to the discount rate applied to all expected cash flows under the swaps. Other than this input, all other inputs used in the valuation of these swaps are designated to be Level 2 inputs. The fair value of our swaps was an ~~$83.0~~$89.8 million and ~~a $102.4~~$79.8 million ~~net~~ asset as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively.

The following table provides information regarding the fair value of our interest rate swap agreements and the impact on the condensed consolidated balance sheets:

As of

March 31, 2023

December 31, 2022

(In millions)

As of

March 31, 2024

December 31, 2023

(In millions)

Other current assets

27.9

29.6

Other long-term assets

55.1

72.8

Other long-term assets

Total fair value

83.0

102.4

Total fair value

Our interest rate swaps qualify for cash flow hedge accounting treatment. These interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. Information about the effect of our interest rate swap agreements in the accompanying condensed consolidated statements of income and condensed consolidated statements of comprehensive income, is as follows (in millions):


For the Three Months Ended March 31,	For the Three Months Ended March 31,	Results Recognized in Accumulated Other Comprehensive Income/(Loss)		Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings	Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings		For the Three Months Ended March 31,	Results Recognized in Accumulated Other Comprehensive Income/(Loss)	Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings	Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings
2024
2023	2023	$	(27.0)	Other interest expense, net	$	(7.7)
2022		$	45.4	Other interest expense, net	$	3.1

On the basis of yield curve conditions as of March 31, ~~2023~~2024 and including assumptions about future changes in fair value, we expect the amount to be reclassified out of ~~Accumulated Other Comprehensive Income~~accumulated other comprehensive income into earnings within the next 12 months will be gains of ~~$27.9~~$28.8 million.

Investments

The table below presents the Company’s investment securities that are measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy within which those measurements fall:


		As of March 31, 2023
	As of March 31, 2024												As of March 31, 2024
		Level 1		Level 2		Level 3		Total		Level 1	Level 2	Level 3		Total
		(In millions)								(In millions)
Cash equivalents	Cash equivalents	$	2.5	$	—	$	—	$	2.5
Short-term investments	Short-term investments	1.5		4.0		—		5.5
U.S. Treasury	U.S. Treasury	11.9		—		—		11.9
Municipal	Municipal	—		28.3		—		28.3
Corporate	Corporate	—		93.0		—		93.0
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	—		96.0		—		96.0
Total debt securities		13.4		221.3		—		234.6
Common stock		51.7		—		—		51.7

Total	Total	$	65.1	$	221.3	$	—	$	286.3

Total

Total


		As of December 31, 2022
	As of December 31, 2023												As of December 31, 2023
		Level 1		Level 2		Level 3		Total		Level 1	Level 2	Level 3		Total
		(In millions)								(In millions)
Cash equivalents	Cash equivalents	$	6.6	$	—	$	—	$	6.6
Short-term investments	Short-term investments	0.6		4.8		—		5.4
U.S. Treasury	U.S. Treasury	11.6		—		—		11.6
Municipal	Municipal	—		22.4		—		22.4
Corporate	Corporate	—		79.7		—		79.7
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	—		72.6		—		72.6
Total debt securities		12.2		179.5		—		191.7
Common stock		48.7		—		—		48.7

Total	Total	$	60.9	$	179.5	$	—	$	240.4

Total

Total

We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain investments. Such reclassifications are reported as transfers in and out of Level 3, or between other levels, at the beginning fair value for the reporting period in which the changes occur.

Available-for-sale debt securities are recorded at fair value and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to finance and insurance, net revenue in the period or periods during which the debt securities are sold and the gains or losses are realized. Information about the effect of our available-for-sale debt securities in the accompanying condensed consolidated statements of income and condensed consolidated statements of comprehensive income, is as follows (in millions):


For the Three Months Ended March 31,	For the Three Months Ended March 31,	Results Recognized in Accumulated Other Comprehensive Income/(Loss)		Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings	Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings		For the Three Months Ended March 31,	Results Recognized in Accumulated Other Comprehensive Income/(Loss)	Location of Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings	Amount Reclassified from Accumulated Other Comprehensive Income/(Loss) to Earnings
2024
2023	2023	$	2.6	Revenue-Finance and Insurance, net	$	0.1
2022		$	(2.5)	Revenue-Finance and Insurance, net	$	(0.3)

11. SUPPLEMENTAL CASH FLOW INFORMATION

During the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, we made interest payments, including amounts capitalized, totaling $57.7 million and $28.4 million, ~~and $31.6 million,~~ respectively. Included in these interest payments is net interest received of $0.2 million during the three months ended March 31, 2023 due to cash held in our floor plan offset accounts, and $2.6 million of floor plan interest payments during the three months ended March 31, 2022.

During the three months ended March 31, 2024, we did not make any income tax payments and received refunds payments of $1.0 million. During the three months ended March 31, 2023, we did not make or receive any income tax refunds payments or refunds.

During the three months ended March 31, 2024 and ~~2022,~~2023, we transferred ~~$90.4~~$124.0 million and ~~$57.5~~$90.4 million, respectively, of loaner vehicles from other current assets to inventories on our condensed consolidated balance sheets.

12. SEGMENT INFORMATION

As of March 31, ~~2023,~~2024, the Company had two reportable segments: (1) Dealerships and (2) TCA. Our dealership operations are organized by management into geographic market-based groups within the Dealerships segment. The operations of our F&I product provider isare reflected within our TCA segment. Our Chief Operating Decision Maker is our Chief Executive Officer who manages the business, regularly reviews financial information and allocates resources at the geographic market level for our dealerships and at the TCA segment level for our F&I product provider's operations. The geographic dealership group operating segments have been aggregated into one reportable segment as their operations (i) have similar economic characteristics (our markets all have similar long-term average gross margins), (ii) offer similar products and services (all of our markets offer new and used vehicles, parts and service, and finance and insurance products), (iii) have similar customers, (iv) have similar distribution and marketing practices (all of our markets distribute products and services through dealership facilities that market to customers in similar ways), and (v) operate under similar regulatory environments.

TCA's vehicle protection products are sold through affiliated dealerships and the revenue from the related commissions is included in finance and insurance, net revenue in the Dealerships segment before consolidation. The corresponding claims expense incurred and the amortization of deferred acquisition costs is recorded as a cost of sales in the TCA segment. The Dealerships segment also provides vehicle repair and maintenance services to TCA customers in connection with claims related to TCA's vehicle protection products. Upon consolidation, the associated service revenue and costs recorded by the Dealerships segment are eliminated against claims expense recorded by the TCA segment.

Reportable segment financial information for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, are as follows:

Three Months Ended March 31, 2023
Dealerships TCA Eliminations Total Company
(In millions)
Revenue $ 3,556.3 $ 70.7 $ (44.7) $ 3,582.3
Gross profit $ 679.6 $ 21.1 $ (4.5) $ 696.2


	Three Months Ended March 31, 2024
	Dealerships		TCA		Eliminations		Total Company
	(In millions)
Revenue	$	4,179.0	$	74.1	$	(51.9)	$	4,201.2
Gross profit	$	731.8	$	21.1	$	(2.9)	$	750.0

Three Months Ended March 31, 2022
Dealerships TCA Eliminations Total Company
(In millions)
Revenue $ 3,894.2 $ 57.3 $ (39.7) $ 3,911.8
Gross profit $ 781.4 $ 12.4 $ (1.9) $ 792.0


	Three Months Ended March 31, 2023
	Dealerships		TCA		Eliminations		Total Company
	(In millions)
Revenue	$	3,556.3	$	70.7	$	(44.7)	$	3,582.3
Gross profit	$	679.6	$	21.1	$	(4.5)	$	696.2

Total assets by segment as of March 31, ~~2023~~2024 and ~~as of~~ December 31, ~~2022~~2023 are as follows:

As of March 31, 2023
Dealerships TCA Eliminations Total Company
(In millions)
Total assets $ 7,348.7 $ 840.5 $ (6.4) $ 8,182.8


	As of March 31, 2024
	Dealerships		TCA		Eliminations		Total Company
	(In millions)
Total assets	$	9,207.1	$	982.0	$	(57.6)	$	10,131.5

As of December 31, 2022
Dealerships TCA Eliminations Total Company
(In millions)
Total assets $ 7,170.8 $ 869.2 $ (18.6) $ 8,021.4


	As of December 31, 2023
	Dealerships		TCA		Eliminations		Total Company
	(In millions)
Total assets	$	9,199.4	$	913.9	$	46.1	$	10,159.4

13. COMMITMENTS AND CONTINGENCIES

On August 3, 2022, we received a Civil Investigative Demand (“CID”) from the FTC requesting information and documents concerning the Company’s corporate structure and operation of six of its dealerships. We responded to the CID by producing information and documents for the period August 1, 2019 to April 24, 2023. On February 8, 2024, the FTC staff counsel sent to us a proposed consent order and draft complaint, alleging that the Company and three of our dealerships had violated Section 5 of the Federal Trade Commission Act (“FTC Act”) and certain provisions of the Equal Credit Opportunity Act (“ECOA”) in connection with the sale of add-on products (e.g., vehicle service contracts, maintenance plans, etc.), and advising that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims. The

Company disputes the FTC’s allegations that it violated the FTC Act and the ECOA, and is currently involved in discussions with the FTC staff regarding the matter. There can be no assurance that negotiations between us and the FTC for a favorable settlement will be successful, or that we will succeed in any litigation as a result of the investigation. At this time, we are unable to reasonably predict the possible outcome of this matter, or provide a reasonably possible range of loss, if any, as a result of the investigation. If the FTC files a suit against us based on these allegations, whether meritorious or not, it may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs and other expenses.

Our dealerships are party to dealer and framework agreements with applicable vehicle manufacturers. In accordance with these agreements, each dealership has certain rights and is subject to restrictions typical in the industry. The ability of these

manufacturers to influence the operations of the dealerships or the loss of any of these agreements could have a materially negative impact on our operating results.

In some instances, manufacturers may have the right, and may direct us, to implement costly capital improvements to dealerships as a condition to entering into, renewing, or extending franchise agreements with them. Manufacturers also typically require that their franchises meet specific standards of appearance. These factors, either alone or in combination, could cause us to use our financial resources on capital projects for which we might not have planned or otherwise determined to undertake.

From time-to-time, we and our dealerships are or may become involved in various claims relating to, and arising out of, our business and our operations. These claims may involve, but not be limited to, financial and other audits by vehicle manufacturers or lenders and certain federal, state, and local government authorities, which have historically related primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants, and (iii) payments made to government authorities relating to federal, state, and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings, and other dispute resolution processes. Such claims, including class actions, could relate to, but may not be limited to, the practice of charging administrative fees and other fees and commissions, employment-related matters, truth-in-lending and other dealer assisted financing obligations, contractual disputes, actions brought by governmental authorities, and other matters.

We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. Based on our review of the various types of claims currently known to us, there is no indication of material reasonably possible losses in excess of amounts accrued in the aggregate. We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity, or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity, or results of operations.

A significant portion of our business involves the sale of vehicles, parts, or vehicles composed of parts that are manufactured outside the United States. As a result, our operations are subject to customary risks of importing merchandise, including fluctuations in the relative values of currencies, import duties, exchange controls, trade restrictions, work stoppages, and general political and socio-economic conditions in foreign countries. The United States or the countries from which our products are imported may, from time-to-time, impose new quotas, duties, tariffs, or other restrictions, or adjust presently prevailing quotas, duties, or tariffs, which may affect our operations, and our ability to purchase imported vehicles and/or parts at reasonable prices.

Substantially all of our facilities are subject to federal, state and local provisions regarding the discharge of materials into the environment. Compliance with these provisions has not had, nor do we expect such compliance to have, any material effect upon our capital expenditures, net earnings, financial condition, liquidity or competitive position. We believe that our current practices and procedures for the control and disposition of such materials comply with applicable federal, state, and local requirements. No assurances can be provided, however, that future laws or regulations, or changes in existing laws or regulations, would not require us to expend significant resources in order to comply therewith.

We had ~~$12.5~~$14.0 million of letters of credit outstanding as of March 31, ~~2023,~~2024, which are required by certain of our insurance providers. In addition, as of March 31, ~~2023,~~2024, we maintained a ~~$17.4~~$21.5 million surety bond line in the ordinary course of our business. Our letters of credit and surety bond line are considered to be off balance sheet arrangements.

2122

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

Certain of the discussions and information included or incorporated by reference in this report may constitute "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are statements that are not historical in nature and may include statements relating to our goals, plans and projections regarding industry and general economic trends, our expected financial position, results of operations or market position and our business strategy. Such statements can generally be identified by words such as "may," "target," "could," "would," "will," "should," "believe," "expect," "anticipate," "plan," "intend," "foresee," and other similar words or phrases. Forward-looking statements may also relate to our expectations and assumptions with respect to, among other things:

•the seasonally adjusted annual rate of new vehicle sales in the United States;

•general economic conditions and its expected impact on our revenue and expenses;

•our expected parts and service revenue due to, among other things, improvements in vehicle technology;

•our ability to limit our exposure to regional economic downturns due to our geographic diversity and brand mix;

•manufacturers' continued use of incentive programs to drive demand for their product offerings;

•our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;

•our revenue growth strategy;

•the growth of the brands that comprise our portfolio over the long-term;

•disruptions in the production and supply of vehicles and parts from our vehicle and parts manufacturers and other suppliers, ~~due to any ongoing impact of supply issues, including the global semiconductor chip shortage,~~ which can disrupt our operations; and

•our estimated future capital expenditures, which can be impacted by increasing prices and labor shortages and acquisitions and divestitures.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual future results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to:

•the ability to acquire and successfully integrate acquired businesses into our existing operations and realize expected benefits and synergies from such acquisitions;

•the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to our acquisitions or divestitures;

•changes in general economic and business conditions, including the current inflationary environment, the current ~~rising~~ interest rate environment, changes in employment levels, consumer confidence levels, consumer demand and preferences, the availability and cost of credit, fuel prices and levels of discretionary personal income;

•our ability to generate sufficient cash flows, maintain our liquidity and obtain any necessary additional funds for working capital, capital expenditures, acquisitions, stock repurchases, debt maturity payments and other corporate purposes, if necessary or desirable;

•significant disruptions in the production and delivery of vehicles and parts for any reason, including supply shortages, ~~(including semiconductor chips), the ongoing conflict in Russia and Ukraine, including any government sanctions imposed in connection therewith,~~ natural disasters, severe weather, civil unrest, product recalls, work stoppages or other occurrences that are outside of our control;

•our ability to execute our automotive retailing and service business strategy while operating under restrictions and best practices imposed or encouraged by governmental and other regulatory authorities;

•our ability to successfully attract and retain skilled employees;

•our ability to successfully operate, including our ability to maintain, and obtain future necessary regulatory approvals, for Total Care Auto, Powered by Landcar ("TCA"), our finance and insurance ("F~~&I")~~&I ") product provider;

•adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver and market their vehicles successfully;

•changes in the mix and total number of vehicles we are able to sell;

•our outstanding indebtedness and our continued ability to comply with applicable covenants in our various financing and lease agreements, or to obtain waivers of these covenants as necessary;

•high levels of competition in our industry, which may create pricing and margin pressures on our products and services;

•our relationships with manufacturers of the vehicles we sell and our ability to renew, and enter into new framework and dealer agreements with vehicle manufacturers whose brands we sell, on terms acceptable to us;

•the availability of manufacturer incentive programs and our ability to earn these incentives;

•failure of our, or those of our third-party service providers, management information systems;

•any data security breaches occurring, including with regard to personally identifiable information ("PII");

•changes in laws and regulations governing the operation of automobile franchises, including trade restrictions, consumer protections, accounting standards, taxation requirements and environmental laws;

•changes in, or the imposition of, new tariffs or trade restrictions on imported vehicles or parts;

•adverse results from litigation, regulatory investigations or other similar proceedings involving ~~us;~~us, including costs, expenses, settlements and judgments related thereto;

•our ability to consummate planned or pending mergers, acquisitions and dispositions;

•any disruptions in the financial markets, which may impact our ability to access capital;

•our relationships with, and the financial stability of, our lenders and lessors;

•our ability to execute our initiatives and other strategies; and

•our ability to leverage scale and cost structure to improve operating efficiencies across our dealership portfolio.

Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. Forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation to update any forward-looking statement contained herein.

OVERVIEW

We are one of the largest automotive retailers in the United States. As of March 31, ~~2023,~~2024, through our Dealerships segment, we owned and operated ~~184~~206 new vehicle franchises ~~(139~~(157 dealership locations), representing 31 brands of automobiles, and 3237 collision centers within 1415 states. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services; and finance and insurance products. The finance and insurance products are provided by both independent third parties and TCA. The F&I products offered by TCA are sold through affiliated dealerships. For the three months ended March 31, ~~2023,~~2024, our new vehicle revenue brand mix consisted of ~~34%~~29% luxury, ~~38%~~41% imports and ~~28%~~30% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA. Amounts presented have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute.

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

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

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

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

Our continued organic growth is dependent upon the execution of our balanced automotive retailing and service business strategy, the continued strength of our brand mix and the production and allocation of desirable vehicles from the automobile manufacturers whose brands we sell. Our vehicle sales have historically fluctuated with product availability as well as local and national economic conditions, including consumer confidence, availability of consumer credit, fuel prices and employment levels.

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

~~We are strategically operating within~~Jim Koons Acquisition

On December 11, 2023, the ~~changing environment and we continue to prioritize profitability. Over~~Company completed the ~~last couple~~acquisition of years, pre-owned vehicle inventory has been depleted due to fleet levels and lack of leasing. Overall, with this limited availability of pre-owned inventory and unbalanced new inventory by brand, we are focused on maximizing our gross profit streams.

~~Clicklane~~

As part of our omni-channel strategy, we implemented Clicklane, the automotive retail industry’s first, end-to-end, 100% online vehicle retail tool, which offers our customers a convenient, seamless and transparent approach to purchase and sell vehicles completely online. Our Clicklane platform provides our customers with the ability to (i) select a new or used vehicle, (ii) arrange for and obtain financing from a variety of lenders, (iii) obtain an offer on their trade-in vehicle, (iv) obtain an exact pay-off amount on any existing loan on a trade-in vehicle, (v) select and purchase F&I products designed for the customer’s vehicle and then (vi) complete the vehicle purchase and financing by signing the transaction documents and scheduling in-store pickup or home delivery, with each step performed entirely online. We have implemented Clicklane acrosssubstantially all of ~~our stores.~~the assets, including all real property and businesses of the Jim Koons Dealerships ("Koons") pursuant to a Purchase and Sale Agreement with various entities that comprise the Jim Koons automotive dealerships group (the "Koons acquisition") for an aggregate purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington. The acquisition was funded with borrowings under Asbury’s existing credit facility and cash on hand. The Koons acquisition comprised 20 new vehicle dealerships and six collision centers.

Financial Highlights

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

•Consolidated revenue for the three months ended March 31, ~~2023~~2024 was ~~$3.6~~$4.20 billion, compared to ~~$3.9~~$3.58 billion for the prior year.

•Consolidated gross profit for the three months ended March 31, ~~2023~~2024 was ~~$696.2~~$750.0 million, compared to ~~$792.0~~$696.2 million for the prior year.

•The ~~decrease~~increase in consolidated revenue and gross profit is primarily due to the effects of ~~dealership divestitures. During 2022, we completed sixteen divestitures that contributed $683 million in revenue~~the Koons acquisition. Refer to Note 3, "Acquisitions and Divestitures" for ~~the year ended December 31, 2022. Four of the divestitures closed in the first quarter, three in the second quarter, and nine in the fourth quarter of 2022.~~further details.

•Our capital allocation priorities were supported by the repurchase of ~~0.1 million~~239,790 shares for ~~$21~~$50.0 million during the three months ended March 31, ~~2023.~~2024.

2425

CONSOLIDATED RESULTS OF OPERATIONS

The Company's operating results for the three months ended March 31, 2024 include the results of the Koons dealerships acquired in the fourth quarter of 2023. Accordingly, the increases in revenue, gross profit and income from operations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 are largely a result of this acquisition.

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

Three Months Ended March 31, ~~2023~~2024 Compared to the Three Months Ended March 31, ~~2022~~2023


												For the Three Months Ended March 31,											Increase (Decrease)							% Change

		For the Three Months Ended March 31,				Increase (Decrease)		% Change
		2023		2022
		(Dollars in millions, except per share data)								(Dollars in millions, except per share data)
REVENUE:	REVENUE:
New vehicle
New vehicle
New vehicle	New vehicle	$	1,767.7	$	1,855.6	$	(87.9)	(5)	%	$	2,064.3			$		$	1,767.7			$				$	296.6			17			17		%
Used vehicle	Used vehicle	1,126.5		1,350.9		(224.4)		(17)	%	Used vehicle		1,356.9			1,126.5				1,126.5			230.4						230.4		20					20	%
Parts and service	Parts and service	515.6		501.9		13.7		3	%	Parts and service		590.4			515.6				515.6			74.8						74.8		15					15	%
Finance and insurance, net	Finance and insurance, net	172.5		203.4		(30.9)		(15)	%	Finance and insurance, net		189.7			172.5				172.5			17.2						17.2		10					10	%
TOTAL REVENUE	TOTAL REVENUE	3,582.3		3,911.8		(329.5)		(8)	%	TOTAL REVENUE		4,201.2			3,582.3				3,582.3			618.9						618.9		17					17	%
GROSS PROFIT:	GROSS PROFIT:
New vehicle	New vehicle	178.9		224.0		(45.1)		(20)	%
New vehicle
New vehicle												162.8						178.9								(16.0)						(9)		%
Used vehicle	Used vehicle	77.0		99.3		(22.3)		(22)	%	Used vehicle		71.9			77.0				77.0			(5.1)						(5.1)		(7)					(7)	%
Parts and service	Parts and service	282.1		276.4		5.7		2	%	Parts and service		334.1			282.1				282.1			52.0						52.0		18					18	%
Finance and insurance, net	Finance and insurance, net	158.2		192.3		(34.1)		(18)	%	Finance and insurance, net		181.1			158.2				158.2			22.9						22.9		14					14	%
TOTAL GROSS PROFIT	TOTAL GROSS PROFIT	696.2		792.0		(95.8)		(12)	%	TOTAL GROSS PROFIT		750.0			696.2				696.2			53.8						53.8		8					8	%
OPERATING EXPENSES:	OPERATING EXPENSES:
Selling, general, and administrative	Selling, general, and administrative	403.0		455.5		(52.5)		(12)	%
Selling, general, and administrative
Selling, general, and administrative												468.6						403.0								65.6						16		%
Depreciation and amortization	Depreciation and amortization	16.7		18.4		(1.7)		(9)	%	Depreciation and amortization		18.7			16.7				16.7			1.9						1.9		12					12	%

Other operating income, net		—		(2.7)		2.7		NM

INCOME FROM OPERATIONS

INCOME FROM OPERATIONS

INCOME FROM OPERATIONS	INCOME FROM OPERATIONS	276.5		320.8		(44.3)		(14)	%	262.8				276.5			276.5				(13.7)					(13.7)			(5)				(5)		%
OTHER EXPENSES:	OTHER EXPENSES:
Floor plan interest expense
Floor plan interest expense
Floor plan interest expense	Floor plan interest expense	0.6		2.6		(2.0)		(75)	%	22.8				0.6			0.6				22.2					22.2			NM					NM
Other interest expense, net	Other interest expense, net	37.3		37.6		(0.2)		(1)	%	Other interest expense, net		44.1			37.3				37.3			6.7						6.7		18					18	%

Gain on dealership divestitures, net		—		(33.1)		33.1		NM

Total other expenses, net

Total other expenses, net

Total other expenses, net	Total other expenses, net	38.0		7.1		30.9		NM		66.9				38.0			38.0				28.9					28.9			76				76		%
INCOME BEFORE INCOME TAXES	INCOME BEFORE INCOME TAXES	238.5		313.7		(75.2)		(24)	%	INCOME BEFORE INCOME TAXES		195.8			238.5				238.5			(42.7)						(42.7)		(18)					(18)	%
Income tax expense	Income tax expense	57.1		76.0		(18.9)		(25)	%	Income tax expense		48.8			57.1				57.1			(8.4)						(8.4)		(15)					(15)	%

NET INCOME	NET INCOME	$	181.4	$	237.7	$	(56.3)	(24)	%

NET INCOME

NET INCOME												$	147.1					$	181.4							$	(34.3)					(19)		%

Net income per share—Diluted	Net income per share—Diluted	$	8.37	$	10.38	$	(2.01)	(19)	%
Net income per share—Diluted
Net income per share—Diluted												$	7.21					$	8.37							$	(1.16)					(14)		%

______________________________

NM—Not Meaningful

2526


		For the Three Months Ended March 31,					For the Three Months Ended March 31,
		2023		2022			2024			2023
REVENUE MIX PERCENTAGES:	REVENUE MIX PERCENTAGES:
New vehicle
New vehicle
New vehicle	New vehicle	49.3	%	47.4	%	49.1	%		49.3	%
Used vehicle retail	Used vehicle retail	28.5	%	31.1	%	Used vehicle retail	28.4	%		28.5	%
Used vehicle wholesale	Used vehicle wholesale	2.9	%	3.4	%	Used vehicle wholesale	3.9	%		2.9	%
Parts and service	Parts and service	14.4	%	12.8	%	Parts and service	14.1	%		14.4	%
Finance and insurance, net	Finance and insurance, net	4.8	%	5.2	%	Finance and insurance, net	4.5	%		4.8	%
Total revenue	Total revenue	100.0	%	100.0	%	Total revenue	100.0	%		100.0	%
GROSS PROFIT MIX PERCENTAGES:	GROSS PROFIT MIX PERCENTAGES:
New vehicle	New vehicle	25.7	%	28.3	%
New vehicle
New vehicle							21.7	%		25.7	%
Used vehicle retail	Used vehicle retail	10.1	%	12.1	%	Used vehicle retail	8.7	%		10.1	%
Used vehicle wholesale	Used vehicle wholesale	0.9	%	0.4	%	Used vehicle wholesale	0.9	%		0.9	%
Parts and service	Parts and service	40.5	%	34.9	%	Parts and service	44.6	%		40.5	%
Finance and insurance, net	Finance and insurance, net	22.7	%	24.3	%	Finance and insurance, net	24.2	%		22.7	%
Total gross profit	Total gross profit	100.0	%	100.0	%	Total gross profit	100.0	%		100.0	%
GROSS PROFIT MARGIN	GROSS PROFIT MARGIN	19.4	%	20.2	%	GROSS PROFIT MARGIN	17.9	%		19.4	%
SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT	SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT	57.9	%	57.5	%	SG&A EXPENSE AS A PERCENTAGE OF GROSS PROFIT	62.5	%		57.9	%

Total revenue for the three months ended March 31, ~~2023 decreased~~2024 increased by ~~$329.5~~$618.9 million ~~(8%~~(17%) compared to the three months ended March 31, ~~2022,~~2023, due to a ~~$87.9~~$296.6 million ~~(5%~~(17%) ~~decrease~~increase in new vehicle revenue, a ~~$224.4~~$230.4 million ~~(17%~~(20%) ~~decrease~~increase in used vehicle revenue, a ~~$30.9~~$74.8 million (15%~~) decrease in F&I, net revenue, offset by a $13.7 million (3%~~) increase in parts and service revenue and a $17.2 million (10%) increase in F&I, net revenue. The ~~$95.8~~$53.8 million ~~(12%~~(8%) ~~decrease~~increase in gross profit during the three months ended March 31, ~~2023~~2024 was driven by a ~~$45.1~~$52.0 million ~~(20%~~(18%) increase in parts and service gross profit and a $22.9 million (14%) increase in F&I, net gross profit, partially offset by a $16.0 million (9%) decrease in new vehicle gross profit ~~a $34.1 million (18%) decrease in F&I, net gross profit~~ and a ~~$22.3~~$5.1 million ~~(22%~~(7%) decrease in used vehicle ~~gross profit, offset by a $5.7 million (2%) increase in parts and service~~ gross profit.

Income from operations during the three months ended March 31, ~~2023~~2024 decreased by ~~$44.3~~$13.7 million ~~(14%~~(5%), compared to the three months ended March 31, ~~2022,~~2023, primarily due to ~~the $95.8~~a $65.6 million ~~(12%~~(16%) ~~decrease in gross profit and a $2.7 million decrease in other operating income, net, partially offset by a $52.5 million (12%) decrease~~increase in SG&A expense and a ~~$1.7~~$1.9 million ~~(9%~~(12%) ~~decrease~~increase in depreciation and amortization ~~expense.~~expense, partially offset by a $53.8 million (8%) increase in gross profit.

Total other expenses, net increased by ~~$30.9~~$28.9 million (76%), primarily as a result of a ~~$33.1~~$22.2 million ~~gain on dealership divestitures,~~increase in floor plan interest expense and an increase of $6.7 million (18%) in other interest expense, net recorded during the three months ended March 31, 2022 whereas the current year period did not reflect any divestitures. This increase in other expenses, net was partially offset by a $2.0 million (75%) decrease in floor plan interest expense, and a $0.2 million (1%) decrease in other interest expense, net during the three months ended March 31, 20232024 when compared to the same period of the prior ~~year period.~~year. Income before income taxes decreased ~~$75.2~~$42.7 million (18%) to ~~$238.5~~$195.8 million for the three months ended March 31, ~~2023.~~2024. Overall, net income decreased by ~~$56.3~~$34.3 million ~~(24%~~(19%) during the three months ended March 31, ~~2023~~2024 as compared to the three months ended March 31, ~~2022.~~2023.

2627

New Vehicle—


												For the Three Months Ended March 31,												Increase (Decrease)							% Change

		For the Three Months Ended March 31,				Increase (Decrease)		% Change
		2023		2022
		(Dollars in millions, except for per vehicle data)								(Dollars in millions, except for per vehicle data)
As Reported:	As Reported:
Revenue:	Revenue:
Revenue:
Revenue:
Luxury
Luxury
Luxury	Luxury	$	607.4	$	543.3	$	64.1	12	%	$	608.4			$		$	607.4			$					$	1.1			—			—		%
Import	Import	666.9		765.9		(99.0)		(13)	%	Import		843.9			666.9				666.9				177.0						177.0		27					27	%
Domestic	Domestic	493.4		546.4		(53.0)		(10)	%	Domestic		611.9			493.4				493.4				118.6						118.6		24					24	%
Total new vehicle revenue	Total new vehicle revenue	$	1,767.7	$	1,855.6	$	(87.9)	(5)	%	Total new vehicle revenue		$	2,064.3		$			$	1,767.7			$					$	296.6		17				17		%
Gross profit:	Gross profit:
Luxury	Luxury	$	72.4	$	70.8	$	1.5	2	%
Luxury
Luxury												$	61.9					$	72.4								$	(10.5)					(15)		%
Import	Import	64.0		95.4		(31.4)		(33)	%	Import		60.7			64.0				64.0				(3.3)						(3.3)		(5)					(5)	%
Domestic	Domestic	42.5		57.7		(15.2)		(26)	%	Domestic		40.2			42.5				42.5				(2.3)						(2.3)		(5)					(5)	%
Total new vehicle gross profit	Total new vehicle gross profit	$	178.9	$	224.0	$	(45.1)	(20)	%	Total new vehicle gross profit		$	162.8		$			$	178.9			$					$	(16.0)		(9)				(9)		%
New vehicle units:	New vehicle units:
Luxury
Luxury
Luxury	Luxury	8,429		8,257		172		2	%	8,578				8,429			8,429				149						149			2				2		%
Import	Import	17,389		20,678		(3,289)		(16)	%	Import		21,487			17,389				17,389				4,098						4,098		24					24	%
Domestic	Domestic	8,688		10,239		(1,551)		(15)	%	Domestic		10,612			8,688				8,688				1,924						1,924		22					22	%
Total new vehicle units	Total new vehicle units	34,506		39,174		(4,668)		(12)	%	Total new vehicle units		40,677			34,506				34,506				6,171						6,171		18					18	%

Same Store:	Same Store:
Same Store:
Same Store:
Revenue:	Revenue:
Revenue:
Revenue:
Luxury
Luxury
Luxury	Luxury	$	607.4	$	513.0	$	94.3	18	%	$	583.4			$		$	600.8			$					$	(17.4)			(3)			(3)		%
Import	Import	666.9		668.4		(1.5)		—	%	Import		711.2			666.9				666.9				44.2						44.2		7					7	%
Domestic	Domestic	493.4		527.9		(34.6)		(7)	%	Domestic		455.5			493.4				493.4				(37.9)						(37.9)		(8)					(8)	%
Total new vehicle revenue	Total new vehicle revenue	$	1,767.7	$	1,709.4	$	58.3	3	%	Total new vehicle revenue		$	1,750.1		$			$	1,761.1			$					$	(11.0)		(1)				(1)		%
Gross profit:	Gross profit:
Luxury	Luxury	$	72.4	$	67.6	$	4.8	7	%
Luxury
Luxury												$	59.7					$	71.5								$	(11.8)					(17)		%
Import	Import	64.0		84.0		(20.0)		(24)	%	Import		46.8			64.0				64.0				(17.2)						(17.2)		(27)					(27)	%
Domestic	Domestic	42.5		55.9		(13.4)		(24)	%	Domestic		30.6			42.5				42.5				(11.9)						(11.9)		(28)					(28)	%
Total new vehicle gross profit	Total new vehicle gross profit	$	178.9	$	207.5	$	(28.6)	(14)	%	Total new vehicle gross profit		$	137.1		$			$	178.0			$					$	(40.9)		(23)				(23)		%
New vehicle units:	New vehicle units:
Luxury	Luxury	8,429		7,741		688		9	%
Luxury
Luxury												8,209						8,311									(102)						(1)		%
Import	Import	17,389		18,169		(780)		(4)	%	Import		18,304			17,389				17,389				915						915		5					5	%
Domestic	Domestic	8,688		9,868		(1,180)		(12)	%	Domestic		7,870			8,688				8,688				(818)						(818)		(9)					(9)	%
Total new vehicle units	Total new vehicle units	34,506		35,778		(1,272)		(4)	%	Total new vehicle units		34,383			34,388				34,388				(5)						(5)		—					—	%

2728

New Vehicle Metrics—


		For the Three Months Ended March 31,						Increase (Decrease)			% Change				For the Three Months Ended March 31,						Increase (Decrease)					% Change
		2023			2022
As Reported:	As Reported:
As Reported:
As Reported:
Revenue per new vehicle sold
Revenue per new vehicle sold
Revenue per new vehicle sold	Revenue per new vehicle sold	$	51,228		$	47,367		$	3,861		8	%	$	50,747			$	51,228				$	(480)				(1)	%
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	5,184		$	5,717		$	(533)		(9)	%	Gross profit per new vehicle sold		$	4,003			$	5,184				$	(1,181)			(23)	%
New vehicle gross margin	New vehicle gross margin	10.1		%	12.1		%	(2.0)		%

Luxury:	Luxury:

Luxury:

Luxury:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	8,588		$	8,580		$	7		—	%	$	7,215			$	8,588				$	(1,373)				(16)	%
New vehicle gross margin	New vehicle gross margin	11.9		%	13.0		%	(1.1)		%
Import:	Import:
Import:
Import:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	3,682		$	4,614		$	(932)		(20)	%	$	2,826			$	3,682				$	(855)				(23)	%
New vehicle gross margin	New vehicle gross margin	9.6		%	12.5		%	(2.9)		%
Domestic:	Domestic:
Domestic:
Domestic:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	4,888		$	5,637		$	(749)		(13)	%	$	3,789			$	4,888				$	(1,099)				(22)	%
New vehicle gross margin	New vehicle gross margin	8.6		%	10.6		%	(2.0)		%

Same Store:	Same Store:

Same Store:

Same Store:
Revenue per new vehicle sold
Revenue per new vehicle sold
Revenue per new vehicle sold	Revenue per new vehicle sold	$	51,228		$	47,777		$	3,451		7	%	$	50,900			$	51,214				$	(314)				(1)	%
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	5,184		$	5,800		$	(616)		(11)	%	Gross profit per new vehicle sold		$	3,988			$	5,177				$	(1,189)			(23)	%
New vehicle gross margin	New vehicle gross margin	10.1		%	12.1		%	(2.0)		%

Luxury:	Luxury:

Luxury:

Luxury:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	8,588		$	8,731		$	(143)		(2)	%	$	7,271			$	8,604				$	(1,333)				(15)	%
New vehicle gross margin	New vehicle gross margin	11.9		%	13.2		%	(1.3)		%
Import:	Import:
Import:
Import:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	3,682		$	4,626		$	(943)		(20)	%	$	2,559			$	3,683				$	(1,124)				(31)	%
New vehicle gross margin	New vehicle gross margin	9.6		%	12.6		%	(3.0)		%
Domestic:	Domestic:
Domestic:
Domestic:
Gross profit per new vehicle sold
Gross profit per new vehicle sold
Gross profit per new vehicle sold	Gross profit per new vehicle sold	$	4,888		$	5,664		$	(776)		(14)	%	$	3,888			$	4,889				$	(1,001)				(20)	%
New vehicle gross margin	New vehicle gross margin	8.6		%	10.6		%	(2.0)		%

For the three months ended March 31, ~~2023,~~2024, new vehicle revenue ~~decreased~~increased by ~~$87.9~~$296.6 million ~~(5%~~(17%) as a result of ~~a 12% decrease~~an 18% increase in new vehicle units sold, partially offset by ~~an 8% increase~~a 1% decrease in revenue per new vehicle sold. Same store new vehicle revenue ~~increased~~decreased by ~~$58.3~~$11.0 million ~~(3%~~(1%) as the result of ~~a 7% increase~~an 1% decrease in revenue per new vehicle ~~sold offset by~~sold. New vehicle unit sales on a ~~4% decrease in new vehicle units sold.~~same store basis remained flat during the three months ended March 31, 2024, as compared to the same period of the prior year.

For the three months ended ~~March��~~March 31, ~~2023,~~2024, new vehicle gross profit and same store new vehicle gross profit decreased by ~~$45.1~~$16.0 million ~~(20%~~(9%) and ~~$28.6~~$40.9 million ~~(14%~~(23%), respectively. Same store new vehicle gross margin for the three months ended March 31, ~~2023 decrease 202~~2024 decreased 227 basis points to ~~10.1%~~7.8% driven by the slight easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended March 31, ~~2023~~2024 was approximately ~~15.2~~15.4 million which increased as compared to approximately ~~14.1~~15.2 million during the three months ended March 31, 2022. The decrease in new vehicle sales revenue for the three months ended March 31, 2023 over the same period in the prior year is primarily attributable to the Company's dealership divestitures during the year ended December 31, 2022.2023. The increase in SAAR period over period reflects ~~the increase in new vehicle~~higher inventory supply coupled with continued consumer demand for new vehicles. However, we continue to be ~~negatively~~ impacted by the ~~continued scarcity of~~significant variation in new vehicle ~~inventory as a result of manufacturer production challenges arising from the semiconductor chips, parts~~days supply among brands and ~~other key components shortage.~~models.

2829

Used Vehicle—


												For the Three Months Ended March 31,											Increase (Decrease)							% Change

		For the Three Months Ended March 31,				Increase (Decrease)		% Change
		2023		2022
		(Dollars in millions, except for per vehicle data)								(Dollars in millions, except for per vehicle data)
As Reported:	As Reported:
Revenue:	Revenue:
Revenue:
Revenue:
Used vehicle retail revenue
Used vehicle retail revenue
Used vehicle retail revenue	Used vehicle retail revenue	$	1,021.6	$	1,217.0	$	(195.3)	(16)	%	$	1,191.4			$		$	1,021.6			$				$	169.7			17			17		%
Used vehicle wholesale revenue	Used vehicle wholesale revenue	104.9		134.0		(29.1)		(22)	%	Used vehicle wholesale revenue		165.5			104.9				104.9			60.6						60.6		58					58	%
Used vehicle revenue	Used vehicle revenue	$	1,126.5	$	1,350.9	$	(224.4)	(17)	%	Used vehicle revenue		$	1,356.9		$			$	1,126.5		$					$	230.4		20				20		%
Gross profit:	Gross profit:
Used vehicle retail gross profit	Used vehicle retail gross profit	$	70.6	$	95.8	$	(25.2)	(26)	%
Used vehicle retail gross profit
Used vehicle retail gross profit												$	65.0					$	70.6							$	(5.7)					(8)		%
Used vehicle wholesale gross profit	Used vehicle wholesale gross profit	6.4		3.5		2.9		84	%	Used vehicle wholesale gross profit		6.9			6.4				6.4			0.6						0.6		9					9	%
Used vehicle gross profit	Used vehicle gross profit	$	77.0	$	99.3	$	(22.3)	(22)	%	Used vehicle gross profit		$	71.9		$			$	77.0		$					$	(5.1)		(7)				(7)		%
Used vehicle retail units:	Used vehicle retail units:
Used vehicle retail units	Used vehicle retail units	32,989		38,306		(5,317)		(14)	%
Used vehicle retail units
Used vehicle retail units												39,489						32,989								6,500						20		%

Same Store:	Same Store:
Same Store:
Same Store:
Revenue:	Revenue:
Revenue:
Revenue:
Used vehicle retail revenue
Used vehicle retail revenue
Used vehicle retail revenue	Used vehicle retail revenue	$	1,020.3	$	1,122.0	$	(101.7)	(9)	%	$	965.3			$		$	1,009.7			$				$	(44.4)			(4)			(4)		%
Used vehicle wholesale revenue	Used vehicle wholesale revenue	104.7		124.8		(20.2)		(16)	%	Used vehicle wholesale revenue		129.2			104.3				104.3			24.9						24.9		24					24	%
Used vehicle revenue	Used vehicle revenue	$	1,125.0	$	1,246.8	$	(121.8)	(10)	%	Used vehicle revenue		$	1,094.5		$			$	1,114.0		$					$	(19.5)		(2)				(2)		%
Gross profit:	Gross profit:
Used vehicle retail gross profit	Used vehicle retail gross profit	$	70.7	$	88.6	$	(17.9)	(20)	%
Used vehicle retail gross profit
Used vehicle retail gross profit												$	52.5					$	70.0							$	(17.5)					(25)		%
Used vehicle wholesale gross profit	Used vehicle wholesale gross profit	6.5		3.3		3.2		96	%	Used vehicle wholesale gross profit		4.3			6.5				6.5			(2.1)						(2.1)		(33)					(33)	%
Used vehicle gross profit	Used vehicle gross profit	$	77.1	$	91.9	$	(14.7)	(16)	%	Used vehicle gross profit		$	56.8		$			$	76.4		$					$	(19.6)		(26)				(26)		%
Used vehicle retail units:	Used vehicle retail units:
Used vehicle retail units	Used vehicle retail units	32,928		34,991		(2,063)		(6)	%
Used vehicle retail units
Used vehicle retail units												31,875						32,466								(591)						(2)		%

Used Vehicle Metrics—


		For the Three Months Ended March 31,						Increase (Decrease)			% Change				For the Three Months Ended March 31,						Increase (Decrease)							% Change
		2023			2022
As Reported:	As Reported:
As Reported:
As Reported:
Revenue per used vehicle retailed
Revenue per used vehicle retailed
Revenue per used vehicle retailed	Revenue per used vehicle retailed	$	30,969		$	31,770		$	(801)		(3)	%	$	30,169			$	30,969				$	(799)			(3)			(3)	%
Gross profit per used vehicle retailed	Gross profit per used vehicle retailed	$	2,141		$	2,502		$	(360)		(14)	%	Gross profit per used vehicle retailed		$	1,646			$	2,141				$	(496)		(23)			(23)	%
Used vehicle retail gross margin	Used vehicle retail gross margin	6.9		%	7.9		%	(1.0)		%

Same Store:	Same Store:

Same Store:

Same Store:
Revenue per used vehicle retailed
Revenue per used vehicle retailed
Revenue per used vehicle retailed	Revenue per used vehicle retailed	$	30,987		$	32,065		$	(1,078)		(3)	%	$	30,285			$	31,101				$	(817)			(3)			(3)	%
Gross profit per used vehicle retailed	Gross profit per used vehicle retailed	$	2,146		$	2,531		$	(385)		(15)	%	Gross profit per used vehicle retailed		$	1,647			$	2,155				$	(508)		(24)			(24)	%
Used vehicle retail gross margin	Used vehicle retail gross margin	6.9		%	7.9		%	(1.0)		%

Used vehicle revenue ~~decreased~~increased by ~~$224.4~~$230.4 million ~~(17%~~(20%) due to a ~~$195.3~~$169.7 million ~~(16%~~(17%) ~~decrease~~increase in used vehicle retail revenue and a ~~$29.1~~$60.6 million ~~(22%~~(58%) ~~decrease~~increase in used vehicle wholesale revenue. Same store used vehicle revenue decreased by ~~$121.8~~$19.5 million ~~(10%~~(2%) due to a ~~$101.7~~$44.4 million ~~(9%~~(4%) decrease in used vehicle retail revenue, ~~and~~partially offset by a ~~$20.2~~$24.9 million ~~(16%~~(24%) ~~decrease~~increase in used vehicle wholesale revenue.

Total used vehicle retail unit sales increased by 20% due to the Koons acquisition while same store used vehicle retail unit sales decreased by 2% during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Used vehicle revenue and unit volume have continued to contract as seen in the first quarter of 2024, along with margins on both an all store and same store basis. Used vehicle revenue and unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. For the three months ended

2930

March 31, 2024, total Company and same store used vehicle retail gross profit margins decreased by 146 basis points and 149 basis points, respectively, as compared to the three months ended March 31, 2023. Decreases in used vehicle gross margins, on both a total Company and same store basis, was largely driven by a tighter market for used vehicles during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

For the three months ended March 31, ~~2023,~~2024, used vehicle retail gross profit margins decreased from ~~7.9%~~6.9% to 5.5% and 6.9% to 5.4%, respectively, for all stores and on a same store ~~basis.~~basis when compared to the same period of the prior year. Used vehicle retail gross profit decreased ~~$25.2~~$5.7 million ~~(26%~~(8%) for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 and decreased ~~$17.9~~$17.5 million ~~(20%~~(25%) on a same store ~~basis.~~basis for the same period. On a total company basis, our gross profit per used vehicle retailed decreased $496 (23%), and on a same store basis, our gross profit per used vehicle retailed decreased ~~$385 (15%~~$508 (24%) when compared to the prior year period which was primarily driven by decreases in used vehicle market prices. ~~Rising costs of living, including higher interest rates, and persistent inflation have resulted in affordability headwinds, which in turn, have put pressure on used vehicle prices.~~

Parts and Service—


															For the Three Months Ended March 31,						Increase (Decrease)							% Change

		For the Three Months Ended March 31,						Increase (Decrease)			% Change
		2023			2022
		(Dollars in millions)											(Dollars in millions)
As Reported:	As Reported:
Parts and service revenue	Parts and service revenue	$	515.6		$	501.9		$	13.7		3	%
Parts and service revenue
Parts and service revenue															$	590.4			$	515.6				$	74.8					15		%
Parts and service gross profit:	Parts and service gross profit:
Customer pay
Customer pay
Customer pay	Customer pay	$	175.2		$	168.6		$	6.5		4	%	$	206.5			$	175.2				$	31.3			18			18		%
Warranty	Warranty	36.0			33.6			2.4			7	%	Warranty		43.8				36.0					7.8			22				22		%
Wholesale parts	Wholesale parts	20.1			20.4			(0.4)			(2)	%	Wholesale parts		20.3				20.1					0.2			1				1		%
Parts and service gross profit, excluding reconditioning and preparation	Parts and service gross profit, excluding reconditioning and preparation	$	231.3		$	222.7		$	8.6		4	%	Parts and service gross profit, excluding reconditioning and preparation		$	270.7			$	231.3				$	39.4		17				17		%
Parts and service gross margin, excluding reconditioning and preparation	Parts and service gross margin, excluding reconditioning and preparation	44.9		%	44.4		%	0.5		%
Reconditioning and preparation *	Reconditioning and preparation *	$	50.8		$	53.8		$	(2.9)		(5)	%
Reconditioning and preparation *
Reconditioning and preparation *															$	63.5			$	50.8				$	12.7					25		%
Total parts and service gross profit	Total parts and service gross profit	$	282.1		$	276.4		$	5.7		2	%	Total parts and service gross profit		$	334.1			$	282.1				$	52.0		18				18		%
Total parts and service gross margin	Total parts and service gross margin	54.7		%	55.1		%	(0.4)		%

Same Store:	Same Store:

Same Store:

Same Store:
Parts and service revenue
Parts and service revenue
Parts and service revenue	Parts and service revenue	$	515.5		$	461.4		$	54.1		12	%	$	522.0			$	513.3				$	8.7			2			2		%
Parts and service gross profit:	Parts and service gross profit:
Customer pay
Customer pay
Customer pay	Customer pay	$	175.1		$	154.4		$	20.7		13	%	$	180.3			$	174.3				$	6.0			3			3		%
Warranty	Warranty	36.0			31.5			4.5			14	%	Warranty		39.5				36.0					3.5			10				10		%
Wholesale parts	Wholesale parts	20.1			18.8			1.2			7	%	Wholesale parts		19.8				20.0					(0.2)			(1)				(1)		%
Parts and service gross profit, excluding reconditioning and preparation	Parts and service gross profit, excluding reconditioning and preparation	$	231.2		$	204.8		$	26.4		13	%	Parts and service gross profit, excluding reconditioning and preparation		$	239.6			$	230.3				$	9.4		4				4		%
Parts and service gross margin, excluding reconditioning and preparation	Parts and service gross margin, excluding reconditioning and preparation	44.9		%	44.4		%	0.5		%
Reconditioning and preparation *	Reconditioning and preparation *	$	50.8		$	49.3		$	1.5		3	%
Reconditioning and preparation *
Reconditioning and preparation *															$	57.1			$	50.6				$	6.5					13		%
Total parts and service gross profit	Total parts and service gross profit	$	282.0		$	254.1		$	27.9		11	%	Total parts and service gross profit		$	296.8			$	280.9				$	15.9		6				6		%
Total parts and service gross margin	Total parts and service gross margin	54.7		%	55.1		%	(0.4)		%

* Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed is included as a reduction of Parts and Service Cost of Sales in the accompanying Condensed Consolidated Statements of Income upon the sale of the vehicle.

The ~~$13.7~~$74.8 million ~~(3%~~(15%) increase in parts and service revenue was primarily due to a ~~$12.6~~$53.2 million ~~(4%~~(16%) increase in customer pay revenue, ~~and~~ a ~~$4.4~~$14.6 million ~~(7%~~(22%) increase in warranty revenue ~~offset by~~and a ~~$3.3~~$6.9 million ~~(3%~~(6%) ~~decrease~~increase in wholesale parts revenue. Same store parts and service revenue increased by ~~$54.1~~$8.7 million ~~(12%~~(2%) from ~~$461.4~~$513.3 million for the three months ended March 31, ~~2022~~2023 to ~~$515.5~~$522.0 million for the three months ended March 31, ~~2023.~~2024. The increase in same store parts and service revenue was due to a ~~$39.9~~$5.7 million ~~(14%~~(2%) increase in customer pay revenue, ~~an $8.1~~a $6.0 million ~~(14%~~(9%) increase in warranty revenue, ~~and~~partially offset by a ~~$6.1~~$3.0 million ~~(6%~~(3%) ~~increase~~decrease in wholesale parts revenue. The trend of increased aging of vehicles, which are at historically high levels, is leading to increased customer pay ~~while increased miles driven are contributing to growth in wholesale~~and warranty revenues. Consumers are owning a vehicle for longer

periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive ~~industry.~~industry in recent years.

~~Parts~~For the three months ended March 31, 2024, total parts and service gross profit ~~excluding reconditioning and preparation,~~ increased by ~~$8.6~~$52.0 million ~~(4%~~(18%) to ~~$231.3~~$334.1 million, and same store total parts and service gross profit ~~excluding~~increased by $15.9 million (6%) to $296.8 million when compared to the same period of prior year. The all store increase is primarily due to the Koons acquisition and reconditioning and preparation, ~~increased by $26.4 million (13%) to $231.2 million. The~~

while the same store ~~increase as compared to the as reported~~ increase is primarily a result of ~~dealership divestitures during~~reconditioning and preparation, and increased customer pay and warranty volume, which is in line with the ~~year ended December 31, 2022.~~increasing trend of aged vehicles.

Finance and Insurance, net—


												For the Three Months Ended March 31,										Increase (Decrease)							% Change

		For the Three Months Ended March 31,				Increase (Decrease)		% Change
		2023		2022
		(Dollars in millions, except for per vehicle data)								(Dollars in millions, except for per vehicle data)
As Reported:	As Reported:
Finance and insurance, net revenue	Finance and insurance, net revenue	$	172.5	$	203.4	$	(30.9)	(15)	%
Finance and insurance, net revenue
Finance and insurance, net revenue												$	189.7					$	172.5						$	17.2					10		%
Finance and insurance, net gross profit	Finance and insurance, net gross profit	$	158.2	$	192.3	$	(34.1)	(18)	%	Finance and insurance, net gross profit		$	181.1		$			$	158.2		$				$	22.9		14				14		%
Finance and insurance, net per vehicle sold	Finance and insurance, net per vehicle sold	$	2,344	$	2,482	$	(137)	(6)	%	Finance and insurance, net per vehicle sold		$	2,259		$			$	2,344		$				$	(85)		(4)				(4)		%

Same Store:	Same Store:
Same Store:
Same Store:
Finance and insurance, net revenue
Finance and insurance, net revenue
Finance and insurance, net revenue	Finance and insurance, net revenue	$	172.9	$	192.1	$	(19.2)	(10)	%	$	155.5			$		$	172.1			$			$	(16.5)			(10)			(10)		%
Finance and insurance, net gross profit	Finance and insurance, net gross profit	$	158.6	$	180.0	$	(21.4)	(12)	%	Finance and insurance, net gross profit		$	146.9		$			$	157.8		$				$	(10.8)		(7)				(7)		%
Finance and insurance, net per vehicle sold	Finance and insurance, net per vehicle sold	$	2,352	$	2,544	$	(192)	(8)	%	Finance and insurance, net per vehicle sold		$	2,218		$			$	2,360		$				$	(142)		(6)				(6)		%

F&I revenue, net ~~decreased $30.9~~increased $17.2 million ~~(15%~~(10%) during the three months ended March 31, ~~2023~~2024 when compared to the three months ended March 31, ~~2022,~~2023, as a result of a ~~13%~~19% increase in new and used retail unit sales, partially offset by a 4% decrease in F&I per vehicle retailed.

On a same store basis, F&I revenue, net decreased by $16.5 million (10%) during the three months ended March 31, 2024 when compared to the three months ended March 31, 2023, as a result of a 1% decrease in new and used retail unit sales and a 6% decrease in F&I per vehicle retailed.

~~On a same store basis,~~ We are seeing slightly lower penetration rates in our F&I products as customers look for ways to manage lower monthly payments in a rising interest rate environment.

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


	For the Three Months Ended March 31,				Increase (Decrease)		% Change
	2024		2023
	(Dollars in millions)
Finance and insurance, revenue	$	30.7	$	35.0	$	(4.3)	(12)	%
Finance and insurance, cost of sales	$	8.6	$	14.3	$	(5.7)	(40)	%
Finance and insurance, gross profit	$	22.1	$	20.7	$	1.4	7	%

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

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue ~~net decreased by $19.2 million (10%) during~~is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the three months ended March 31, ~~2023 when compared to~~2024, TCA generated $30.7 million of revenue, consisting primarily of earned premium and $4.2 million from the investment portfolio.

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the three months ended March 31, ~~2022,~~2024, TCA recorded $8.6 million of cost of sales consisting primarily of claims expense, after the elimination of claims paid to affiliated dealerships. Commissions expense paid by TCA to our affiliated dealerships and reflected as ~~a result of a 5% decrease in new and used retail unit sales and an 8% decrease in F&I per vehicle retailed.~~

~~TCA's~~ F&I revenue ~~after dealership intercompany eliminations, was $35.0 million~~in our Dealerships segment is eliminated in the TCA segment upon consolidation.

As we continue to integrate TCA, we expect a rollout of TCA products to our remaining stores by the end of 2024. With the ownership of TCA, while the combined profitability of the transaction is higher, the timing of revenue and ~~$25.6 million for~~cost recognition is deferred and amortized over the ~~three months ended March 31, 2023~~life of the contract. We expect that this rollout will result in lower F&I revenue and ~~2022, respectively. TCA's F&I~~ gross profit ~~after dealership intercompany eliminations, was $20.7 million and $14.4 million for~~over the next two to three ~~months ended March 31, 2023 and 2022, respectively.~~

years due to the change in how these contracts are earned.

Selling, General, and Administrative Expense—


																For the Three Months Ended March 31,													Increase (Decrease)			% of Gross Profit Increase (Decrease)

		For the Three Months Ended March 31,								Increase (Decrease)		% of Gross Profit Increase (Decrease)
		2023		% of Gross Profit		2022		% of Gross Profit
		(Dollars in millions)												(Dollars in millions)
As Reported:	As Reported:
Personnel costs
Personnel costs
Personnel costs	Personnel costs	$	278.8	40.0	%	$	328.0	41.4	%	$	(49.3)	(1.4)	%	$	311.3			41.5		41.5	%		$	278.8			40.0		40.0	%		$	32.6			1.5		1.5	%
Rent and related expenses	Rent and related expenses	28.4		4.1	%	33.8		4.3	%	(5.4)		(0.2)	%	Rent and related expenses		29.8			4.0		4.0	%			28.4			4.1		4.1	%			1.4			(0.1)		(0.1)	%
Advertising	Advertising	9.7		1.4	%	14.3		1.8	%	(4.6)		(0.4)	%	Advertising		16.4			2.2		2.2	%			9.7			1.4		1.4	%			6.7			0.8		0.8	%
Other	Other	86.2		12.4	%	79.4		10.0	%	6.8		2.4	%	Other		111.0			14.8		14.8	%			86.2			12.4		12.4	%			24.9			2.4		2.4	%
Selling, general, and administrative expense	Selling, general, and administrative expense	$	403.0	57.9	%	$	455.5	57.5	%	$	(52.5)	0.4	%	Selling, general, and administrative expense		$	468.6		62.5		62.5	%			$	403.0		57.9		57.9	%			$	65.6		4.6		4.6	%
Gross profit	Gross profit	$	696.2			$	792.0

Same Store:	Same Store:

Same Store:

Same Store:
Personnel costs
Personnel costs
Personnel costs	Personnel costs	$	278.6	40.0	%	$	304.2	41.5	%	$	(25.6)	(1.5)	%	$	260.3			40.8		40.8	%		$	276.9			39.9		39.9	%		$	(16.5)			0.9		0.9	%
Rent and related expenses	Rent and related expenses	28.4		4.1	%	32.0		4.4	%	(3.7)		(0.3)	%	Rent and related expenses		27.8			4.4		4.4	%			28.2			4.1		4.1	%			(0.4)			0.3		0.3	%
Advertising	Advertising	9.7		1.4	%	12.3		1.7	%	(2.6)		(0.3)	%	Advertising		11.9			1.9		1.9	%			9.5			1.4		1.4	%			2.4			0.5		0.5	%
Other	Other	85.7		12.3	%	74.3		10.1	%	11.4		2.2	%	Other		96.9			15.2		15.2	%			85.1			12.3		12.3	%			11.8			2.9		2.9	%
Selling, general, and administrative expense	Selling, general, and administrative expense	$	402.4	57.8	%	$	422.8	57.6	%	$	(20.4)	0.1	%	Selling, general, and administrative expense		$	397.0		62.3		62.3	%			$	399.7		57.7		57.7	%			$	(2.7)		4.6		4.6	%
Gross profit	Gross profit	$	696.7			$	733.5

SG&A expense as a percentage of gross profit increased 37459 basis points from ~~57.5% for the three months ended March 31, 2022 to~~ 57.9% for the three months ended March 31, 2023 to 62.5% for the three months ended March 31, 2024, while same store SG&A expense as a percentage of gross profit

increased 12459 basis points to ~~57.8%~~62.3% over the same period. The ~~slight~~ increase in SG&A as a percentage of gross profit on a total company basis during the three months ended March 31, ~~2023~~2024 is primarily the result of higher cost in personnel and other categories in SG&A expense partially offset by higher gross profits for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase in SG&A as a percentage of gross profit on the same store basis during the three months ended March 31, 2024 is primarily the result of lower gross profits for the three months ended March 31, ~~2023~~2024 as compared to the three months ended March 31, ~~2022.~~2023. On a total company basis, SG&A expense ~~decreased~~increased by ~~$52.5~~$65.6 million for the three months ended March 31, ~~2023~~2024 as compared to the three months ended March 31, ~~2022~~2023 primarily due to the ~~effects of sixteen dealership divestitures during 2022, as well as lower profitability. On a same store basis, we have continued to achieve cost efficiencies.~~Koons acquisition in December 2023.

Floor Plan Interest Expense—

Floor plan interest expense ~~decreased~~increased by ~~$2.0~~$22.2 million ~~(75%)~~to $22.8 million during the three months ended March 31, 2024 compared to $0.6 million during the three months ended March 31, 2023 ~~compared to $2.6 million during the three months ended March 31, 2022~~ due to higher levels of new inventory and the ~~increase in our~~lower floor plan offset account balances held during the three months ended March 31, ~~2023~~2024 as compared to ~~three months ended March 31, 2022.~~

~~Other Interest Expense —~~

Other interest expense decreased $0.2 million (1%) during the three months ended March 31, 2023 from $37.6 million during the three months ended March 31, 2022 to $37.3 million during the three months ended March 31, 2023.

~~Gain on Dealership Divestitures, net—~~

During the three months ended March 31, 2022, we sold one franchise (one dealership location) in St. Louis, Missouri and three franchises (three dealership locations) in the Denver, Colorado market and recorded a gain on dealership divestitures of $33.1 million. There were no divestitures during the three months ended March 31, 2023.

Income Tax Expense—

The ~~$18.9~~$8.4 million (15%) decrease in income tax expense was primarily the result of a ~~$75.2~~$42.7 million (18%) decrease in income before income taxes. F~~For~~or the three months ended March 31, 2024 and 2023, ~~and 2022,~~ou ~~our~~r effective income tax rate was ~~23.9%~~24.9% and ~~24.2%~~23.9%, respectively,, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation, a discrete item, and unfavorable effects of various permanent tax adjustments such as executive compensation.We currently estimate our effective tax rate for the year ended December 31, 2024 at approximately 25.0%.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, ~~2023,~~2024, we had total available liquidity of ~~$1.72 billion,~~$712.3 million, which consisted of cash and cash equivalents of ~~$275.5~~$19.8 million (excluding ~~$21.3~~$9.2 million held by TCA), available funds in our floor plan offset accounts of ~~$775.2~~$205.2 million ~~which $694.3 million is offset against new vehicle floor plan notes payable~~ and ~~$80.9 million is netted against loaner vehicle notes payable, $437.5~~$486.0 million of availability under our revolving credit facility and ~~$234.8~~$1.4 million of availability under our used vehicle floor plan facility. The borrowing capacities under our revolving credit facility and our used vehicle floor plan facility are limited by borrowing base calculations and, from time-to-time, may be further limited by our required compliance with certain financial covenants. As of March 31, ~~2023,~~2024, these financial covenants did not further limit our availability under our other credit facilities.

We continually evaluate our liquidity and capital resources based upon (i) our cash and cash equivalents on hand, (ii) the funds that we expect to generate through future operations, (iii) current and expected borrowing availability under our ~~2019~~2023 Senior Credit Facility, (iv) amounts in our new vehicle floor plan notes payable offset accounts, and (v) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, financings, acquisitions, dispositions, equity and/or debt repurchases, dividends, or other capital expenditures. We believe we will have sufficient liquidity to meet our debt service and working capital requirements; commitments and contingencies; debt repayment, maturity and repurchase obligations; acquisitions; capital expenditures; and any operating requirements for at least the next twelve ~~months.~~months and the foreseeable future.

Covenants

We are subject to a number of customary operating and other restrictive covenants in our various debt and lease agreements. We were in compliance with all of our covenants as of March 31, ~~2023.~~2024.

Share Repurchases and Dividend Restrictions

Our ability to repurchase shares or pay dividends on our common stock is subject to our compliance with the covenants and restrictions in our various debt and lease agreements.

On January 26, 2023, the Board of Directors increased the Company’s share repurchase authorization under our Repurchase Program by $108.0 million to $200.0 million. The extent that the Company repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, legal requirements and other corporate considerations. The Repurchase Program may be modified, suspended or terminated at any time without prior notice.

During the three months ended March 31, ~~2023,~~2024, we repurchased ~~110,323~~239,790 shares of our common stock under our repurchase program for a total of ~~$20.7~~$50.0 million. On May 26, 2023, we announced that our Board of Directors authorized a new $250.0 million share repurchase authorization (the "New Share Repurchase Authorization"), which replaced our previous share repurchase authorization. As of March 31, ~~2023,~~2024, we had ~~$190.1~~$152.6 million remaining onunder our ~~share repurchase authorization.~~New Share Repurchase Authorization.

During the three months ended March 31, ~~2023,~~2024, we repurchased ~~45,613~~45,399 shares of our common stock for ~~$10.9~~$9.8 million, from employees in connection with a net share settlement feature of employee equity-based awards.

~~From April 1, 2023 through April 27, 2023, the Company repurchased 149,765 shares for $28.7 million pursuant to a 10b5-1 agreement.~~

Cash Flows

Classification of Cash Flows Associated with Floor Plan Notes Payable

Borrowings and repayments of floor plan notes payable through our ~~2019~~2023 Senior Credit Facility ("Non-Trade"), and all floor plan notes payable relating to used vehicles (together referred to as "floor plan notes payable—non-trade"), are classified as financing activities on the accompanying condensed consolidated statements of cash flows, with borrowings reflected separately from repayments. The net change in floor plan notes payable to a lender affiliated with the manufacturer from which we purchase a particular new vehicle (collectively referred to as "floor plan notes payable—trade") is classified as an operating activity on the accompanying condensed consolidated statements of cash flows. Borrowings of floor plan notes payable associated with inventory acquired in connection with all acquisitions and repayments made in connection with all divestitures are classified as a financing activity in the accompanying condensed consolidated statement of cash flows. Cash flows related to floor plan notes payable included in operating activities differ from cash flows related to floor plan notes payable included in financing activities only to the extent that the former are payable to a lender affiliated with the manufacturer from which we purchased the related inventory, while the latter are payable to our ~~2019~~2023 Senior Credit Facility that includes lenders affiliated with the manufacturers and lenders not affiliated with the manufacturers from which we purchased the related inventory. The majority of our floor plan notes are payable to our ~~2019~~2023 Senior Credit Facility, with the exception of floor plan notes payable relating to the financing of new Ford and Lincoln vehicles and certain loaner vehicle programs.

Floor plan borrowings are required by all vehicle manufacturers for the purchase of new vehicles, and all floor plan lenders require amounts borrowed for the purchase of a vehicle to be repaid within a short time period after the related vehicle is sold. As a result, we believe that it is important to understand the relationship between the cash flows of all of our floor plan notes payable and new vehicle inventory in order to understand our working capital and operating cash flow and to be able to compare our operating cash flow to that of our competitors (i.e., if our competitors have a different mix of trade and non-trade floor plan financing as compared to us). In addition, we include all floor plan borrowings and repayments in our internal

operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts. We believe that splitting the cash flows of floor plan notes payable between operating activities and financing activities, while all new vehicle inventory activity is included in operating activities, results in significantly different operating cash flows than if all the cash flows of floor plan notes payable were classified together in operating activities.

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

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

For the Three Months Ended March 31,

2023

2022

(In millions)

Reconciliation of cash provided by operating activities to cash provided by operating activities, as adjusted

Cash provided by operating activities, as reported

171.7

409.0

Change in Floor Plan Notes Payable—Non-Trade, net

1.4

63.6

Change in Floor Plan Notes Payable—Non-Trade, net

Change in Floor Plan Notes Payable—Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures

70.7

(69.6)

Change in Floor Plan Notes Payable—Trade associated with floor plan offset, adjusted for acquisition and divestitures

0.1

2.5

Change in Floor Plan Notes Payable—Trade associated with floor plan offset, adjusted for acquisition and divestitures

Adjusted cash flow provided by operating activities

243.9

405.5

Operating Activities—

Net cash provided by operating activities totaled ~~$171.7~~$177.1 million and ~~$409.0~~$171.7 million, for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively. Adjusted cash flow provided by operating activities totaled ~~$243.9~~$208.7 million and ~~$405.5~~$243.9 million, for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively. Adjusted cash flow provided by operating activities includes net income, adjustments to reconcile net income to net cash provided by operating activities, changes in working capital, changes in used vehicle borrowing base, changes in floor plan notes payable—non-trade and trade, excluding the impact of offsets, and excluding operating cash flows associated with acquisitions and divestitures related to loaner vehicles and new vehicle inventories financed through floor plan notes payable—trade.

The ~~$161.6~~$35.2 million decrease in adjusted cash flow provided by operating activities for the three months ended March 31, ~~2023~~2024 compared to the three months ended March 31, ~~2022,~~2023, was primarily the result of the following:

•~~$131.6 million related to a~~ decrease in ~~accounts payable and accrued liabilities;~~

•~~decrease in $23.6~~$19.8 million net income and non-cash adjustments to net income;

•$~~27.0~~89.9 million related to ~~the change~~a decrease in ~~other current assets, net;~~

•~~$7.4 million increase in other long term assets~~accounts payable and ~~liabilities, net;~~accrued liabilities; and

•$~~8.9~~13.1 million related to asales volume and the timing of collection of accounts receivable and contracts-in-transit during 2024 as compared to 2023.

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

•$49.1 million related to an increase in inventory, net of floor plan notes payable, including both trade and non-trade, excluding offset and including used vehicle borrowing base changes adjusted for acquisitions and ~~divestitures.~~divestitures;

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

•$~~35.8~~34.1 million related to ~~sales volume~~the increase in other current assets, net; and ~~the timing of collection of accounts receivable~~

•$5.3 million increase in other long term assets and ~~contracts-in-transit during 2023 as compared to 2022.~~liabilities, net.

Investing Activities—

Net cash used in investing activities totaled $13.6 million and $55.2 million for the three months ended March 31, 2024 and 2023, ~~compared to net cash provided by investing activities of $231.3 million for the three months ended March 31, 2022.~~respectively. Capital expenditures, excluding the purchase of real estate, were ~~$15.2~~$25.7 million and ~~$20.8~~$15.2 million for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024, we acquired real estate properties for $67.4 million and ~~2022,~~also purchased previously leased real estate properties for $11.9 million.

During the three months ended March 31, 2024, we sold one franchise (one dealership location) in Wilmington, Delaware for an aggregate purchase price of $102.0 million.

We purchased $20.1 million and $44.1 million of debt securities during the three months ended March 31, 2024 and 2023, respectively.

We received proceeds of $9.5 million and $3.5 million from the sale of debt securities during the three months ended March 31, 2024 and 2023, respectively. We also received proceeds of $0.6 million from the sale of equity securities during the three months ended March 31, 2023.

We expect that capital expenditures during ~~2023~~2024 will total approximately $200.0 - $225.0 million to upgrade or replace our existing facilities, construct new facilities, expand our service capacity, and invest in technology and equipment. In addition, as part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations. No assurances can be provided that we will have or be able to access capital at times or on terms in amounts deemed necessary to execute this strategy.

During the three months ended March 31, 2022, we sold one franchise (one dealership location) in St. Louis, Missouri and three franchises (three dealership locations) in Denver, Colorado for an aggregate purchase price of $252.2 million.

We purchased $44.1 million and $12.3 million of debt securities during the three months ended March 31, 2023 and 2022, respectively. We did not purchase equity securities during the three months ended March 31, 2023, and we purchased $3.3 million of equity securities during the three months ended March 31, 2022.

We also received proceeds of $3.5 million and $12.2 million from the sale of debt securities and $0.6 million and $3.3 million from equity securities, respectively, during the three months ended March 31, 2023 and 2022, respectively.

As part of our capital allocation strategy, we continually evaluate opportunities to purchase properties currently under lease and acquire properties in connection with future dealership relocations. No assurances can be provided that we will have or be able to access capital at times or on terms in amounts deemed necessary to execute this strategy.

Financing Activities—

Net cash used in financing activities totaled ~~$55.0~~$180.2 million and ~~$534.9~~$55.0 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

During the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, we had non-trade floor plan borrowings, excluding floor plan borrowings associated with acquisitions, of ~~$1.80~~$2.53 billion and ~~$1.87~~$1.80 billion, respectively, and non-trade floor plan repayments, excluding floor plan repayments associated with divestitures, of ~~$1.80~~$2.63 billion and ~~$2.00~~$1.80 billion, respectively.

During the three months ended March 31, ~~2023,~~2024, we had ~~no non-trade floor plan repayments associated with divestitures. During the three months ended March 31, 2022, we had $19.9~~$6.9 million non-trade floor plan repayments associated with divestitures.

Repayments of borrowings totaled ~~$15.3~~$14.7 million and ~~$7.7~~$15.3 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

There were no$582.8 million borrowings orand repayments under our Revolving Credit Facility during the three months ended March 31, ~~2023. Proceeds of $320.0 million were received in connection with borrowings under our Revolving Credit Facility during~~2024.

During the three months ended March 31, ~~2022, and $489.0~~2024, we repurchased 239,790 shares of our common stock under our Repurchase Program for a total of $50.0 million. In addition, we repurchased 45,399 shares of our common stock for $9.8 million ~~was repaid during the same period.~~

from employees in connection with a net share settlement feature of employee equity-based awards. During the three months ended March 31, 2023, we repurchased 110,323 shares of our common stock under our Repurchase Program for a total of $20.7 million and repurchased 45,613 shares of our common stock for $10.9 million from employees in connection with a net share settlement feature of employee equity-based awards.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements during any of the periods presented other than those disclosed in Note 13 "Commitments and Contingencies" within the accompanying condensed consolidated financial statements.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. Our critical accounting policies and estimates have not changed materially during the three months ended March 31, ~~2023.~~2024.

Guarantor Financial Information

As of March 31, ~~2023,~~2024, the Company had outstanding $405.0 million of 4.500% Senior Notes due 2028 and $445.0 million of 4.750% Senior Notes due 2030. The Senior Notes have been fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by each existing and future restricted subsidiary of the Company (the “Guarantor Subsidiaries”), with the exception of Landcar Administration Company, Landcar Agency, Inc. and Landcar Casualty Company and their respective subsidiaries (collectively, the “TCA Non-Guarantor ~~Subsidiaries)~~Subsidiaries"). The 2028 Notes and the 2030 Notes were required to be registered under the Securities Act of 1933 within 270 days of the closing date for the offering of each respective series. The Company completed the registration of the 2028 Notes and 2030 Notes in October 2020.

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

Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries:
As of
March 31, 2023 December 31, 2022
(In millions)
Current assets $ 1,987.7 $ 1,790.1
Current assets - affiliates $ — $ —
Non-current assets $ 5,518.5 $ 5,380.7
Current liabilities $ 816.0 $ 819.1
Current liabilities - affiliates $ 11.9 $ 10.0
Non-current liabilities $ 3,548.2 $ 3,566.3


Summarized Balance Sheet Data of Asbury and Guarantor Subsidiaries:
	As of
	March 31, 2024		December 31, 2023
	(In millions)
Current assets	$	2,881.5	$	2,969.8
Current assets - affiliates	$	4.8	$	4.8
Non-current assets	$	6,598.4	$	6,382.4

Current liabilities	$	2,414.5	$	2,470.6
Current liabilities - affiliates	$	20.4	$	13.0
Non-current liabilities	$	3,577.9	$	3,595.6

Summarized Statement of Operations Data for Asbury and Guarantor Subsidiaries:


	For the Three Months Ended March 31,
	~~2023~~2024
	(In millions)
Net sales	$	~~3,556.3~~4,179.0
Gross profit	$	~~679.6~~731.8
Income from operations	$	~~256.1~~243.3
Net income	$	~~165.3~~131.9

3637

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to risk from changes in interest rates on a portion of our outstanding indebtedness. Based on ~~$81.7 million~~$1.70 billion of total variable interest rate debt outstanding as of March 31, 2024 which includes our floor plan notes payable, amounts drawn on our used vehicle floor plan, and certain mortgage liabilities, ~~outstanding as~~net of ~~March 31, 2023,~~interest rate swaps, a 100 basis point change in interest rates could result in a change of as much as ~~$0.8~~$17.0 million to our total annual interest expense in our condensed consolidated statements of income.

We periodically receive floor plan assistance from certain automobile manufacturers, which is accounted for primarily as a reduction in our new vehicle inventory cost. Floor plan assistance reduced our cost of sales for the three months ended March 31, 2024 and 2023 ~~and 2022~~ by ~~$20.8~~$23.0 million and ~~$23.0~~$20.8 million, respectively. We cannot provide assurance as to the future amount of floor plan assistance and these amounts may be negatively impacted due to future changes in interest rates.

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

We currently have ~~seven~~six interest rate swap agreements. ~~In January 2022, we entered into two new interest rate swap agreements with a combined notional principal amount~~Each of ~~$550.0 million. These~~these swaps ~~are~~were designed to provide a hedge against changes in variable rate cash flows regarding fluctuations in the SOFR rate. All interest rate swap agreements with an inception date of 2021 and prior were amended on June 1, 2022 to provide a hedge against changes in variable rate cash flows regarding fluctuations in SOFR as compared to the previous benchmark rate of one-month LIBOR. The revisions to the interest rate swap agreements did not impact our hedge accounting. The following table provides information on the attributes of each swap as of March 31, ~~2023:~~

Inception Date Notional Principal at Inception Notional Value Notional Principal at Maturity Maturity Date
(In millions) (In millions) (In millions)
January 2022 $ 300.0 $ 285.0 $ 228.8 December 2026
January 2022 $ 250.0 $ 250.0 $ 250.0 December 2031
May 2021 $ 184.4 $ 171.5 $ 110.6 May 2031
July 2020 $ 93.5 $ 80.1 $ 50.6 December 2028
July 2020 $ 85.5 $ 72.1 $ 57.3 November 2025
June 2015 $ 100.0 $ 62.7 $ 53.1 February 2025
November 2013 $ 75.0 $ 40.5 $ 38.7 September 2023
2024:


Inception Date	Notional Principal at Inception		Notional Value		Notional Principal at Maturity		Maturity Date
	(In millions)		(In millions)		(In millions)
January 2022	$	300.0	$	270.0	$	228.8	December 2026
January 2022	$	250.0	$	250.0	$	250.0	December 2031
May 2021	$	184.4	$	164.1	$	110.6	May 2031
July 2020	$	93.5	$	74.9	$	50.6	December 2028
July 2020	$	85.5	$	66.7	$	57.3	November 2025
June 2015	$	100.0	$	57.5	$	53.1	February 2025

For additional information about the effect of our derivative instruments, see Note 10 "Financial Instruments and Fair Value" within the accompanying condensed consolidated financial statements.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation, our principal executive officer and principal financial officer concluded that ~~as of the end of such period such~~our disclosure controls and procedures were ~~not~~ effective ~~solely as a result of a previously reported material weakness.~~

Notwithstanding the foregoing, there were no changes to previously issued financial statements and management did not identify any misstatements in our financial statements as a result of this material weakness. Our principal executive officer and principal financial officer believe that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows as of ~~and for the periods presented in accordance with United States Generally Accepted Accounting Principles ("US GAAP").~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented

or detected on a timely basis. Specifically, the material weakness is due to control deficiencies in the design of the user access reviews for segregation of duties ("SOD") configurations and appropriate administrative access for certain key applications at the Larry H. Miller Dealerships (“LHM”) and Total Care Auto, Powered by Landcar (“TCA”), businesses that we acquired in December 2021. Refer to Item 9A in our Annual Report on Form 10-K for the fiscal year ended DecemberMarch 31, ~~2022 for more information.~~

As previously described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, management is in the process of implementing its remediation plan. Our remediation efforts include the evaluation of the design of user access controls and SOD configurations for key applications at LHM and TCA. Where needed, access rights and assigned job responsibilities are being changed to resolve instances of inappropriate or excessive user access capabilities, and SOD conflicts. Additionally, key applications at LHM and TCA are beginning to adhere to the same standards of the Company’s legacy ITGC environment. We expect that the material weakness will be fully remediated in 2023, once the remediated controls have operated for a sufficient period for management to conclude, through testing, that the controls are designed and operating effectively.2024.

Changes in Internal Control Over Financial Reporting

~~Other than~~During the ~~ongoing remediation~~quarter ended March 31, 2024, as part of our integration activities following the acquisition of the Jim Koons Dealerships (“Koons”) in December 2023, we are evaluating and have begun to implement changes related to Koons’ business process controls, IT general controls and IT infrastructure to more closely align with the standards of the Company’s controls environment. In accordance with our integration efforts, ~~described above, there~~we plan to incorporate Koons’ operations into our internal control over financial reporting program within the time provided by the applicable rules and regulations of the U.S. Securities and Exchange Commission.

We also implemented a new cloud-based human resource information system during the quarter ended March 31, 2024. We implemented new or modified procedures and controls where appropriate and will continue to evaluate the design and operating effectiveness of internal control over financial reporting in subsequent periods.

There were no other changes in our internal control over financial reporting during the quarter ended March 31, ~~2023~~2024 that ~~have~~ materially affected, or are reasonably likely to materially affect, ~~the Company's~~our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~From time to time, we and our dealerships may become involved~~

As of the date of this filing, there have been no additional material legal proceedings or material developments in ~~various claims relating to, and arising out~~the legal proceedings disclosed in Part 1, Item 3, of our ~~business~~Annual Report on Form 10-K for the year ended December 31, 2023. For more information, see Note 13 "Commitments and ~~our operations. These claims may involve, but are not limited to,~~Contingencies" within the accompanying condensed consolidated financial and other audits by vehicle manufacturers or lenders, and certain federal, state, and local government authorities that relate primarily to (i) incentive and warranty payments received from vehicle manufacturers, or allegations of violations of manufacturer agreements or policies, (ii) compliance with lender rules and covenants and (iii) payments made to government authorities relating to federal, state, and local taxes, as well as compliance with other government regulations. Claims may also arise through litigation, government proceedings, and other dispute resolution processes. Such claims, including class actions, can relate to, but are not limited to, the practice of charging administrative fees, employment-related matters, truth-in-lending practices, contractual disputes, actions brought by governmental authorities and other matters. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable.

We currently do not anticipate that any known claim will materially adversely affect our financial condition, liquidity or results of operations. However, the outcome of any matter cannot be predicted with certainty, and an unfavorable resolution of one or more matters presently known or arising in the future could have a material adverse effect on our financial condition, liquidity or results of operations.statements..

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that affect our business and financial results that are discussed in Part I, Item 1A, of our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2022.~~2023. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. There have been no material changes to such risk factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share repurchases are implemented through purchases made from time to time in either the open market or private transactions. The share repurchases could include purchases pursuant to a written trading plan in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which allows companies to repurchase shares of stock at times when they might otherwise be prevented from doing so by securities laws or under self-imposed trading blackout periods. The extent that the Company repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, legal requirements and other corporate considerations. The repurchase program may be modified, suspended or terminated at any time without prior notice.

Information about the shares of our common stock that we repurchased during the quarter ended March 31, ~~2023~~2024 is set forth below:

Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (In millions)
01/01/2023 - 01/31/2023 60,658 $ 178.06 60,323 $ 200.0
02/01/2023 - 02/28/2023 38,102 $ 239.20 — $ 200.0
03/01/2023 - 03/31/2023 57,176 $ 203.54 50,000 $ 190.1
Total 155,936 110,323


Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (In millions)
01/01/2024 - 01/31/2024	5	$	209.06	—	$	202.6
02/01/2024 - 02/29/2024	40,995	$	217.47	—	$	202.6
03/01/2024 - 03/31/2024	244,189	$	208.56	239,790	$	152.6
Total	285,189			239,790

On ~~January~~May 26, 2023, our Board of Directors ~~increased the Company's common stock~~announced that it authorized a new $250.0 million share repurchase authorization ~~by $108.0 million, to $200.0 million~~(the "New Share Repurchase Authorization"), for the repurchase of our common stock in open market transactions or privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements.

Item 5. Other Information

None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended March 31, 2024.

Item 6. Exhibits


Exhibit Number						Description of Documents
31.1						Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted in iXBRL Exhibit 101)