# LITHIA MOTORS INC (LAD) Informational only - not investment advice. CIK: 0001023128 SIC: 5500 Retail-Auto Dealers & Gasoline Stations SIC breadcrumb: [Retail Trade](/division/G/) > [SIC Major Group 55](/major-group/55/) > [SIC 5500 Retail-Auto Dealers & Gasoline Stations](/industry/5500/) Latest 10-K filed: 2026-02-25 SEC page: https://www.sec.gov/edgar/browse/?CIK=1023128 Filing source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 37634900000 | USD | 2025 | 2026-02-25 | | Net income | 819600000 | USD | 2025 | 2026-02-25 | | Assets | 25107200000 | USD | 2025 | 2026-02-25 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001023128.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 10,086,500,000 | 11,821,400,000 | 12,672,700,000 | 13,126,500,000 | 22,831,700,000 | 28,187,800,000 | 31,042,300,000 | 36,188,200,000 | 37,634,900,000 | | Net income | 197,100,000 | 245,200,000 | 265,700,000 | 271,500,000 | 470,300,000 | 1,060,100,000 | 1,251,000,000 | 1,000,800,000 | 796,700,000 | 819,600,000 | | Operating income | 338,400,000 | 409,000,000 | 447,000,000 | 495,000,000 | 692,700,000 | 1,662,500,000 | 1,941,100,000 | 1,692,400,000 | 1,568,600,000 | 1,594,700,000 | | Gross profit | 1,301,300,000 | 1,516,100,000 | 1,777,000,000 | 1,953,800,000 | 2,224,300,000 | 4,259,000,000 | 5,152,400,000 | 5,228,900,000 | 5,561,000,000 | 5,733,000,000 | | Diluted EPS | 7.72 | 9.75 | 10.86 | 11.60 | 19.53 | 36.54 | 44.17 | 36.29 | 29.45 | 32.32 | | Assets | 3,844,150,000 | 4,683,100,000 | 5,384,000,000 | 6,083,900,000 | 7,902,100,000 | 11,146,900,000 | 15,006,600,000 | 19,632,500,000 | 23,122,600,000 | 25,107,200,000 | | Liabilities | 2,933,374,000 | 3,599,900,000 | 4,186,800,000 | 4,616,200,000 | 5,240,600,000 | 6,483,700,000 | 9,755,500,000 | 13,349,600,000 | 16,448,500,000 | 18,478,800,000 | | Stockholders' equity | 910,800,000 | 1,083,200,000 | 1,197,200,000 | 1,467,700,000 | 2,661,500,000 | 4,626,400,000 | 5,206,200,000 | 6,213,900,000 | 6,650,200,000 | 6,603,200,000 | | Net margin | | 2.43% | 2.25% | 2.14% | 3.58% | 4.64% | 4.44% | 3.22% | 2.20% | 2.18% | | Operating margin | | 4.05% | 3.78% | 3.91% | 5.28% | 7.28% | 6.89% | 5.45% | 4.33% | 4.24% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001023128.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 11.60 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 11.92 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 8.30 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 8,111,500,000 | 297,200,000 | 10.78 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 8,277,000,000 | 261,500,000 | 9.46 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 7,674,300,000 | 213,500,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 8,561,800,000 | 162,600,000 | 5.89 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 9,231,800,000 | 214,200,000 | 7.87 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 9,221,000,000 | 209,100,000 | 7.80 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 9,173,500,000 | 216,200,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 9,178,300,000 | 209,500,000 | 7.94 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 9,583,000,000 | 256,100,000 | 9.87 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 9,675,800,000 | 217,100,000 | 8.61 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 9,197,800,000 | 136,900,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 9,271,400,000 | 100,400,000 | 4.28 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000036/lad-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-29 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements and Risk Factors Certain statements under the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors” and elsewhere in this Form 10-Q constitute forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as “project,” “outlook,” “target,” “may,” “will,” “would,” “should,” “seek,” “expect,” “plan,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “likely,” “ensure,” “goal,” “strategy,” “future,” “maintain,” and “continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this Form 10-Q include, among others, statements we make regarding: •The profitability of our strategy and growth •Future market conditions, including anticipated vehicle and other sales, gross profit and inventory supply •Our business strategy and plans, including our achieving our long-term financial targets •The growth, expansion, make-up and success of our network, including our finding accretive acquisitions that meet our target valuations and acquiring additional stores •Annualized revenues from acquired stores or achieving target returns •The growth and performance of our Driveway e-commerce home solution and DFC, their synergies and other impacts on our business and our ability to meet Driveway and DFC-related targets •The impact of sustainable vehicles and other market and regulatory changes on our business, including evolving vehicle distribution models •Our capital allocations and uses and levels of capital expenditures in the future •Expected operating results, such as improved store performance, continued improvement of SG&A as a percentage of gross profit and any projections •Our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facilities, unfinanced real estate and other financing sources •Our continuing to purchase shares under our share repurchase program •Our compliance with financial and restrictive covenants in our credit facilities and other debt agreements •Our programs and initiatives for team member recruitment, training, and retention •Our strategies and targets for customer retention, growth, market position, operations, financial results and risk management The forward-looking statements contained in this Form 10-Q involve known and unknown risks, uncertainties, and situations that may cause our actual results to materially differ from the results expressed or implied by these statements. Certain important factors that could cause actual results to differ from our expectations are discussed in the Risk Factors section of our 2025 Annual Report on Form 10-K, as supplemented and amended from time to time in Quarterly Reports on Form 10-Q and our other filings with the SEC. By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. You should not place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statement. Overview Lithia and Driveway (NYSE: LAD) is the largest global automotive retailer providing an array of products and services throughout the vehicle ownership lifecycle. Simple, convenient and transparent experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies. We have delivered consistent profitable growth in a massive and unconsolidated industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever and however consumers desire. As of March 31, 2026, we operated 465 locations representing 57 brands in the United States, the United Kingdom, and Canada. We offer a wide array of products and services fulfilling the entire vehicle ownership lifecycle including new and used vehicles, financing and insurance products, and aftersales automotive repair and maintenance services. We MANAGEMENT’S DISCUSSION AND ANALYSIS 22 Table of Contents strive for diversification in our products, services, brands, and geographic locations to reduce dependence on any one manufacturer, reduce susceptibility to changing consumer preferences, manage market risk and maintain profitability. Our diversification, along with our operating structure, provides a resilient and nimble business model. We seek to provide customers with a seamless, blended online and physical retail experience, broad selection, and access to specialized expertise and knowledge. Our comprehensive network provides convenient touch points for customers and provides services throughout the vehicle life cycle. We seek to increase market share and optimize profitability by focusing on the consumer experience and applying proprietary performance measurement systems fueled by data science. Our Driveway and GreenCars brands and online customer portal complement our in-store experiences in the United States and provide convenient, simple, and transparent platforms that serve as our e- commerce home solutions and allow us to deliver differentiated, proprietary digital experiences. Enhancing our business, our captive auto financing division allows us to provide financing solutions for customers and diversify our business model with adjacent products. Our long-term strategy to create value for our customers, team members and shareholders includes the following elements: Driving operational excellence, innovation and diversification LAD builds magnetic customer loyalty across our 465 stores, our Driveway and GreenCars e-commerce platforms, and our entire omnichannel ecosystem by focusing on convenient and transparent experiences supported by proprietary data science. Our entrepreneurial model that emphasizes personal accountability for our team powers efficient operations and allows dynamic responsiveness to each of our local markets. Our best-in-class performance management reporting provides the foundation to enable high-performing teams to drive our platform’s full potential. Investments across our ecosystem built a framework that is responsive to evolving consumer preferences, providing a foundation that supports our current business and our ongoing expansion. These investments, particularly in our digital strategies, connect our experienced, knowledgeable team members with our expansive inventory and physical network of stores to ensure we are agile and adaptable. Additionally, we systematically explore and invest in transformative adjacencies that are synergistic and complementary to our existing business, such as our captive auto finance and fleet management offerings. These investments support the foundational elements of our strategy. We seek to create durable customer loyalty in our stores and our digital platforms, such as our My Driveway customer portal. These experiences and offerings, backed by our extensive physical network, broad geographic reach, and customized digital offerings, empower our people to provide transparent, flexible, and simple retail experiences. Our performance-based culture is geared toward an incentive-based compensation structure for a majority of our personnel. We develop pay plans that measure factors such as customer satisfaction, profitability, and individual performance metrics. These plans reward team members for creating customer loyalty, achieving store potential, developing high-performing talent, meeting and exceeding manufacturer requirements, and living our core values. We centralize many administrative functions to drive efficiencies and streamline store-level operations. These efficiencies allow our local managers to focus on serving customers to increase revenues and gross profit. Our operations are supported by regional and corporate management, as well as dedicated training and personnel development programs which allow us to share best practices across our network and develop talent. Growth through acquisition and network optimization Our acquisition growth strategy has diversified our business and been financially and culturally successful. Our disciplined approach focuses on acquiring new vehicle franchises, which operate in markets ranging from mid-sized regional markets to metropolitan markets. Acquisition of these businesses increases our proximity to consumers throughout North America and the United Kingdom. While we target annual after tax return of more than 15% for our acquisitions, we have averaged over a 25% return by the third year of ownership due to a disciplined approach focusing on accretive, cash flow positive targets at reasonable valuations. In addition to being financially accretive, acquisitions aim to drive network growth that improves our ability to serve customers through vast selection, greater density, easy access, and the ability to leverage national branding and advertising. As we focus on expanding our physical network of stores, one of the criteria we evaluate is a valuation multiple between 3x to 6x of investment in intangibles to estimated annualized adjusted EBITDA, with various factors MANAGEMENT’S DISCUSSION AND ANALYSIS 23 Table of Contents including location, ability to expand our network and talent considered in determining value. We also target an investment in intangibles as a percentage of annualized revenues in the range of 15% to 30%. We regularly optimize and balance our network through strategic divestitures to ensure continued high performance. We believe our disciplined approach provides us with attractive acquisition opportunities and expanded coast-to- coast coverage. Thoughtful capital allocation We manage our liquidity and available cash to support our long-term plan focused on growth through acquisitions and investments in our existing business, technology and adjacencies that expand and diversify our business model. In the current market of elevated acquisition pricing, we have adjusted our free cash flow deployment strategy. Under current conditions, including recent trends in our stock price, we may consider repurchases as a more attractive use of funds than acquisitions. Our current free cash flow deployment strategy includes a target allocation of 25% to 35% investment in acquisitions, 25% investment in capital expenditures, innovation, and diversification and 40% to 50% in shareholder return in the form of dividends and share repurchases based on current valuation trends in acquisitions relative to stock price performance. During the first three months of 2026, we utilized $97.1 million for capital expenditures investing in our existing business and $145.3 million expanding our network through acquisitions. We also provided shareholder return in the form of $12.8 million in dividends and $297.0 million in share repurchases. As of March 31, 2026, we had available liquidity of approximately $1.4 billion, which was comprised of $160.8 million in unrestricted cash, $55.9 million in marketable securities, and $1.2 billion availability on our credit facilities. Financial Performance We experienced growth of revenue in 2026 compared to 2025, primarily driven by increases in used vehicle and aftersales volume related to acquisitions. Total gross profit grew in 2026 compared to 2025, primarily driven by acquisition g [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion in conjunction with Item 1. Business, Item 1A. Risk Factors, and our Consolidated Financial Statements and Notes thereto. Overview We are a global automotive retailer ranked #124 on the Fortune 500 in 2025. As of February 25, 2026, we offered 54 brands of new vehicles and all brands of used vehicles in 458 stores in the United States, the United Kingdom, and Canada and online at over 400 websites. We offer a wide range of products and services including new and used vehicles, F&I products, and vehicle repair and maintenance aftersales. Financial Performance We experienced revenue growth across all major business lines in 2025 compared to 2024, driven by same store growth and complemented by acquisitions. Improvements in same store aftersales and third-party finance and insurance gross profit contributed to total company gross profit growth, partially offset by decreases in new and used vehicle gross profit. On a same store basis, new and used vehicle retail gross profit declined due to lower gross profit per unit as margins continued to normalize toward pre-pandemic levels. The decline in net income was driven by this margin normalization, higher SG&A as a percentage of gross profit, and a higher effective income tax rate, partially offset by lower interest expense. Segments We operate in two reportable segments: Vehicle Operations and Financing Operations. Our Vehicle Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by our Financing Operations segment. Our Financing Operations segment provides financing options to customers 25 buying and leasing retail vehicles from our Vehicle Operations segment, as well as leasing vehicles from our fleet management division. Vehicle Operations Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions, except per vehicle data) 2025 2024 Change % 2023 Change % Revenues New vehicle $ 18,703.0  $ 18,322.8  $ 380.2  2.1  % $ 15,601.2  $ 2,721.6  17.4  % Used vehicle 13,371.5  12,628.8  742.7  5.9  10,897.3  1,731.5  15.9  Finance and insurance 1,473.6  1,417.7  55.9  3.9  1,337.0  80.7  6.0  Aftersales 4,086.8  3,818.9  267.9  7.0  3,206.8  612.1  19.1  Total revenues 37,634.9  36,188.2  1,446.7  4.0  31,042.3  5,145.9  16.6  Gross profit New vehicle $ 1,169.2  $ 1,285.5  $ (116.3) (9.0) % $ 1,428.0  $ (142.5) (10.0) % Used vehicle 733.2  723.7  9.5  1.3  704.8  18.9  2.7  Finance and insurance 1,473.6  1,417.7  55.9  3.9  1,337.0  80.7  6.0  Aftersales 2,357.0  2,134.1  222.9  10.4  1,759.1  375.0  21.3  Total gross profit 5,733.0  5,561.0  172.0  3.1  5,228.9  332.1  6.4  Gross profit margins New vehicle 6.3  % 7.0  % -70 bps 9.2  % -220 bps Used vehicle 5.5  5.7  -20 bps 6.5  -80 bps Finance and insurance 100.0  100.0  — bps 100.0  — bps Aftersales 57.7  55.9  180 bps 54.9  100 bps Total gross profit margin 15.2  15.4  -20 bps 16.8  -140 bps Units sold New vehicle 402,575  406,286  (3,711) (0.9) % 331,950  74,336  22.4  % Used vehicle retail 425,381  411,925  13,456  3.3  325,764  86,161  26.4  Average selling price per unit (excluding agency) New vehicle $ 47,426  $ 46,259  $ 1,167  2.5  % $ 47,610  $ (1,351) (2.8) % Used vehicle retail 28,118  27,356  762  2.8  29,378  (2,022) (6.9) Average gross profit per unit New vehicle $ 2,904  $ 3,164  $ (260) (8.2) % $ 4,302  $ (1,138) (26.5) % Used vehicle retail 1,756  1,769  (13) (0.7) 2,215  (446) (20.1) Finance and insurance 1,844  1,813  31  1.7  2,090  (277) (13.3) Total vehicle (1) 4,077  4,188  (111) (2.7) 5,276  (1,088) (20.6) (1)Includes the sales and gross profit related to new, used, and F&I and unit sales for new and used retail 26 Same Store Operating Data We believe that same store comparisons are an important indicator of our financial performance. Same store measures demonstrate our ability to grow operations in our existing locations. Therefore, we have integrated same store measures into the discussion below. Same store measures reflect results for stores that were operating in each comparison period, and only include the months when operations occurred in both periods. For example, a store acquired in November 2024 would be included in same store operating data beginning in December 2025, after its first complete comparable month of operations. The fourth quarter operating results for the same store comparisons would include results for that store in only the period of December for both comparable periods. Year Ended December 31, ($ in millions, except per vehicle data) 2025 vs. 2024 2024 vs. 2023 2025 2024 Change % 2024 2023 Change % Revenues New vehicle $ 17,912.0  $ 17,681.6  $ 230.4  1.3  % $ 15,176.8  $ 15,068.0  $ 108.8  0.7  % Used vehicle 12,658.5  11,969.4  689.1  5.8  9,500.9  10,443.9  (943.0) (9.0) Finance and insurance 1,419.3  1,376.8  42.5  3.1  1,234.9  1,294.6  (59.7) (4.6) Aftersales 3,892.0  3,661.6  230.4  6.3  3,163.5  3,079.9  83.6  2.7  Total revenues 35,881.8  34,689.4  1,192.4  3.4  29,076.1  29,886.4  (810.3) (2.7) Gross profit New vehicle $ 1,120.0  $ 1,239.3  $ (119.3) (9.6) % $ 1,035.1  $ 1,377.3  $ (342.2) (24.8) % Used vehicle 705.6  713.2  (7.6) (1.1) 612.8  681.1  (68.3) (10.0) Finance and insurance 1,419.3  1,376.8  42.5  3.1  1,234.9  1,294.6  (59.7) (4.6) Aftersales 2,252.5  2,058.3  194.2  9.4  1,773.5  1,696.5  77.0  4.5  Total gross profit 5,497.4  5,387.6  109.8  2.0  4,656.3  5,049.5  (393.2) (7.8) Gross profit margins New vehicle 6.3  % 7.0  % -70 bps 6.8  % 9.1  % -230 bps Used vehicle 5.6  6.0  -40 bps 6.4  6.5  -10 bps Finance and insurance 100.0  100.0  — bps 100.0  100.0  — bps Aftersales 57.9  56.2  170 bps 56.1  55.1  100 bps Total gross profit margin 15.3  15.5  -20 bps 16.0  16.9  -90 bps Units Sold New vehicle 385,991  390,779  (4,788) (1.2) % 326,374  321,964  4,410  1.4  % Used vehicle retail 403,137  389,081  14,056  3.6  300,896  313,731  (12,835) (4.1) Average selling price per unit (excluding agency) New vehicle $ 47,382  $ 46,434  $ 948  2.0  % $ 47,387  $ 47,430  $ (43) (0.1) % Used vehicle retail 28,078  27,417  661  2.4  28,015  29,219  (1,204) (4.1) Average gross profit per unit New vehicle $ 2,902  $ 3,171  $ (269) (8.5) % $ 3,172  $ 4,278  $ (1,106) (25.9) % Used vehicle retail 1,784  1,842  (58) (3.1) 2,085  2,222  (137) (6.2) Finance and insurance 1,863  1,842  21  1.1  2,017  2,094  (77) (3.7) Total vehicle (1) 4,112  4,269  (157) (3.7) 4,596  5,275  (679) (12.9) (1)Includes the sales and gross profit related to new, used, and F&I and unit sales for new and used retail 27 New Vehicles Under our business strategy, we believe that our new vehicle sales create incremental profit opportunities through certain manufacturer incentive programs, providing used vehicle inventory through trade-ins, arranging of third-party financing, vehicle service and insurance contracts, future resale of used vehicles acquired through trade-in, and parts and service aftersales. 2025 vs. 2024 New vehicle revenue increased 2.1%, resulting from an increase in average selling prices of 2.5%, offset by a decrease in unit sales of 0.9%. Same store new vehicle revenue was primarily impacted by an increase in average selling prices of 2.0%, offset by a decrease in unit sales of 1.2%. New vehicle gross profit decreased 9.0%, due to a decrease in average gross profit per unit of 8.2% and a decrease in unit sales of 0.9%. On a same store basis, gross profit per new vehicle decreased 8.5%, continuing to normalize to pre-pandemic levels. 2024 vs. 2023 New vehicle revenue increased 17.4%, resulting from an increase in unit sales of 22.4%, offset by a decrease in average selling prices of 2.8%. Same store new vehicle revenue was primarily impacted by a 1.4% increase in unit sales, offset by a decrease in average selling prices of 0.1%. New vehicle gross profit decreased 10.0%, primarily due to a decrease in average gross profit per unit of 26.5%, partially offset by an increase in unit sales of 22.4%. On a same store basis, gross profit per new vehicle decreased 25.9%. Used Vehicles Used vehicle retail sales are a strategic focus for organic growth. We offer three categories of used vehicles: CPO vehicles; core vehicles, which are late-model vehicles with lower mileage; and value autos, which are vehicles with over 80,000 miles. We continue to focus on procuring vehicles across the full spectrum of the addressable used vehicle market to provide customers with a wide selection meeting all levels of affordability, driving increased used vehicle unit volumes. Our used vehicle operations provide an opportunity to generate sales to customers unable or unwilling to purchase a new vehicle, sell brands other than the store’s new vehicle franchise(s), access additional used vehicle inventory through trade-ins, and increase sales from F&I products and aftersales. 28 2025 vs. 2024 Used vehicle revenues increased 5.9%, resulting from an increase in retail unit sales of 3.3% and an increase in average selling price per retail unit of 2.8%. On a same store basis, used vehicle revenues increased 5.8%, due to an increase in retail unit sales of 3.6% and an increase in average selling price per retail unit of 2.4%. The same store revenue increase was primarily driven by an increase in our CPO vehicle category of 10.2% and an increase in our value auto category of 25.3%. The increase in our CPO vehicle category includes an increase in unit sales of 6.7% and an increase in average selling price per vehicle of 3.2%. The increase in our value auto category includes an increase in unit sales of 29.2%, partially offset by a decrease in average selling price per vehicle of 3.0%. Used vehicle gross profits increased 1.3%, due to an increase in retail unit sales of 3.3%, partially offset by a decrease in average gross profit per retail unit of 0.7%. On a same store basis, used vehicle gross profit decreased 1.1%, due to a decrease in average gross profit per retail unit of 3.1%, partially offset by an increase in retail unit sales of 3.6%. The same store gross profit decrease was primarily driven by a decrease in core, wholesale, and certified vehicle categories, partially offset by an increase in our value auto category of 28.3% The increase in our value auto category includes an increase in unit sales of 29.2%, partially offset by a decrease in average gross profit per vehicle of 0.7%. 2024 vs. 2023 Used vehicle revenues increased 15.9%, resulting from an increase in retail unit sales of 26.4%, offset by a decrease in average selling price per retail unit of 6.9%. On a same store basis, used vehicle revenues decreased 9.0%, due to a decrease in retail unit sales of 4.1% and a decrease in average selling price per retail unit of 4.1%. Used vehicle gross profits increased 2.7%, due to an increase in retail unit sales of 26.4%, offset by a decrease in average gross profit per retail unit of 20.1%. On a same store basis, used vehicle gross profit decreased 10.0%, led by a decrease in average gross profit per retail unit of 6.2%. Third-Party Finance and Insurance We believe that arranging timely vehicle financing is an important part of providing personal transportation solutions, and we attempt to arrange financing for every vehicle we sell. We also offer related products such as extended warranties, insurance contracts, and vehicle and theft protection. Third-party extended warranty and insurance contracts yield higher profit margins than vehicle sales and contribute significantly to our profitability. 2025 vs. 2024 F&I revenue increased 3.9%, primarily due to increased unit sales related to acquisitions. On a same store basis, F&I revenue increased 3.1%, to $1,863 per unit. This increase was driven by higher finance reserve paid per unit from third-party lenders. 2024 vs. 2023 F&I revenue increased 6.0%, primarily due to increased unit sales related to acquisitions. On a same store basis, F&I revenue decreased 4.6%, to $2,017 per unit. Aftersales We provide automotive repair and maintenance services for customers for the new vehicle brands sold by our stores, as well as service and repairs for most other makes and models. Our aftersales operations are an integral part of our customer retention and the largest contributor to our overall profitability. Earnings from aftersales have historically been more resilient during economic downturns, when owners have tended to repair their existing vehicles rather than buy new vehicles. With more late-model units in operation, continued increase of vehicles in operation, and a plateauing new vehicle market, we believe the increased number of units in operation will continue to benefit our aftersales revenue in the coming years as more late-model vehicles age, necessitating repairs and maintenance. We focus on retaining customers by offering competitively-priced routine maintenance and through our marketing efforts. 29 2025 vs. 2024 Aftersales revenue increased 7.0%, primarily driven by increases in customer pay and warranty service work. On a same store basis, aftersales revenue increased 6.3%, primarily driven by an increase in warranty revenue of 13.9% and customer pay of 7.1%. Aftersales gross profit increased 10.4%, primarily driven by increases in customer pay and warranty service work volume as well as increased gross margins. Same store aftersales gross profit increased 9.4%, driven by an increase in customer pay margins of 120 basis points and an increase in warranty margins of 110 basis points. 2024 vs. 2023 Aftersales revenue increased 19.1%, experiencing growth in all areas, primarily due to acquisition growth. On a same store basis, aftersales revenue and gross profit increased 2.7% and 4.5%, respectively. Financing Operations In the United States, Financing Operations is a captive lender, originating loans only from our stores and Driveway. In Canada, Financing Operations originates loans and leases from both our Canadian stores and third-party dealerships. In the United Kingdom, Financing Operations is related to our fleet funding and management division. These product offerings add diversity to the business model and provide an opportunity to capture additional profits, cash flows, and sales while managing our reliance on third-party finance sources. Management regularly analyzes Financing Operations’ results by assessing profitability, the performance of the finance receivables, including trends in credit losses and delinquencies, and expenses directly related to Financing Operations. This information is used to assess Financing Operations performance and make operating decisions, including resource allocation. Our proprietary credit model performs a return on investment (ROI) calculation for each application, ensuring that the return obtained is appropriately balanced with the consumer’s credit risk. On a fully discounted basis, we target earnings at least three times the net finance income earned from third party lenders (finance reserve less commissions paid) over the life of the finance receivable. Actual return of the finance receivables may differ based on the changing risk profile of originations, economic conditions, and rates of recovery for charged off vehicles. Actions taken during 2022 to adjust ROI targets in the context of the uncertain macroeconomic environment, along with the acquisition of dealerships whose brands attract relatively more credit-worthy consumers, resulted in finance receivables originated subsequently having higher weighted average credit scores and lower weighted average contract rate and front-end loan-to-values (FE LTV) than prior periods. We typically use securitizations, warehouse facilities, third-party asset funding, and internal capital to fund finance receivables originated by our Financing Operations. Financing Operations income reflects the interest, fee, and lease income generated by the portfolio of finance receivables less the interest expense associated with the debt utilized to fund the lending, including internal capital, a provision for estimated losses, depreciation on vehicles leased via operating leases, and directly-related expenses. Total interest margin reflects the spread between interest and fee charges to consumers and our funding costs. Changes in consumer rates on new originations affect Financing Operations income over time. Increases or decreases in interest rates, which affect Financing Operations’ funding costs, or other competitive pressures on consumer rates, could result in compression or expansion in the interest margin. Changes in the provision for losses as a percentage of ending managed receivables reflect the effect of changes in loss experience, economic factors, and asset-specific risks on our outlook for net losses expected to occur over the remaining contractual life of the finance receivables. Financing Operations income does not include any allocation of corporate overhead costs. Although Financing Operations benefits from certain overhead expenditures, we have not allocated corporate overhead costs to Financing Operations to avoid making subjective allocation decisions. Examples of corporate overhead costs not allocated to Financing Operations include general corporate and data processing expenses. See Note 19 – Segments of Notes to Consolidated Financial Statements for additional information on Financing Operations income and Note 5 – Finance Receivables of Notes to Consolidated Financial Statements for information on finance receivables, including credit quality. 30 Selected Financing Operations Financial Information Year Ended December 31, ($ in millions) 2025 % (1) 2024 % (1) 2023 % (1) Interest and fee income $ 407.4  9.2  % $ 340.8  9.3  % $ 249.4  8.9  % Interest expense (202.1) (4.6) (195.1) (5.3) (170.5) (6.1) Total interest margin 205.3  4.6  145.7  4.0  78.9  2.8  Lease income 91.6  74.6  19.1  Lease costs (73.5) (60.3) (8.4) Lease income, net 18.1  14.3  10.7  Provision expense (97.3) (2.2) (106.7) (2.9) (98.8) (3.5) Other financing operations expenses (51.5) (44.9) (36.7) Financing operations income (loss) $ 74.6  $ 8.4  $ (45.9) Total average managed finance receivables $ 4,421.9  $ 3,659.9  $ 2,802.8  (1)Percent of total average managed finance receivables. DFC Portfolio Information(1) Year Ended December 31, ($ in millions) 2025 2024 2023 Loan origination information Net loans originated $ 2,804.1  $ 2,073.3  $ 2,118.5  Vehicle units financed 90,977  70,647  70,154  Total penetration rate (2) 14.5  % 11.6  % 11.0  % Weighted average contract rate 8.6  % 9.8  % 9.6  % Weighted average credit score (3) 747  738  732  Weighted average FE LTV (4) 94.7  % 95.4  % 95.5  % Weighted average term (in months) 72  73  73  Loan performance information Allowance for credit losses as a percentage of ending managed receivables 3.0  % 3.2  % 3.2  % Net credit losses on managed receivables 74.8  88.0  62.0  Net credit losses as a percentage of total average managed receivables 1.8  % 2.5  % 2.3  % Past due accounts as a percentage of ending managed receivables (5) 4.2  % 4.8  % 4.6  % Average recovery rate (6) 45.8  % 44.3  % 49.6  % (1)Excludes Canadian and U.K. portfolios. (2)Units financed as a percentage of total U.S. new and used vehicle retail units sold. (3)The credit scores represent FICO scores and reflect only receivables with obligors that have a FICO score at the time of application. For receivables with co-borrowers, the FICO score is the primary borrower’s. FICO scores are not a significant factor in our proprietary credit model, which relies on information from credit bureaus and other application information as discussed in Note 5 – Finance Receivables of Notes to Consolidated Financial Statements. (4)Front-end loan-to-value represents the ratio of the amount financed to the total collateral value, which is measured as the vehicle selling price plus applicable taxes, title and fees. (5)Past due is defined as loans that have been on the books greater than or equal to 3 months and are 30 or more days delinquent. (6)The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at wholesale auctions. Financing operations recorded higher income in 2025 compared to 2024, primarily due to increased interest income resulting from the growth of the portfolio and a decreased cost of funds, resulting in an increased interest margin from 4.0% in 2024 to 4.6% in 2025. The weighted average contract rate on loans originated in 2025 decreased to 8.6%, compared with 9.8% in 2024 as we decreased rates to maintain competitiveness following Federal Reserve rate cuts. Cost of funds decreased due to Federal Reserve rate cuts along with improved execution on ABS transactions and amendments to warehouse facilities. The decrease in provision expense as a percentage of receivables compared to the prior year reflected the increased credit quality of the portfolio as well as a decrease in the percentage of ending managed receivables constituted by the allowance for loan losses. Other financing operations expenses as a percentage of average managed receivables decreased from 2024 despite significant portfolio growth, reflecting improved operational performance and economies of scale. 31 The decrease in net credit losses reflects the increasing impact of originations under our tightened credit policy, which are becoming a larger portion of the managed portfolio. Operating Expenses Selling, General, and Administrative SG&A includes salaries and related personnel expenses, advertising (net of manufacturer cooperative advertising credits), rent, facility costs, and other general corporate expenses. Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Personnel $ 2,480.2  $ 2,394.3  $ 85.9  3.6  % $ 2,163.1  $ 231.2  10.7  % Rent and facility costs 407.6  371.1  36.5  9.8  273.2  97.9  35.8  Advertising 257.0  250.7  6.3  2.5  248.2  2.5  1.0  Other 799.9  739.1  60.8  8.2  610.3  128.8  21.1  Total SG&A $ 3,944.7  $ 3,755.2  $ 189.5  5.0  % $ 3,294.8  $ 460.4  14.0  % Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 As a % of gross profit 2025 2024 Change 2023 Change Personnel 43.3  % 43.1  % 20   bps 41.4  % 170   bps Rent and facility costs 7.1  6.7  40  5.2  150  Advertising 4.5  4.5  —  4.7  (20) Other 13.9  13.2  70  11.7  150  Total SG&A 68.8  % 67.5  % 130   bps 63.0  % 450   bps 2025 vs. 2024 SG&A increased 5.0%, or $189.5 million, primarily due to increased personnel and other costs resulting from our growth through acquisitions. Other expenses in 2025 included acquisition expenses of $17.0 million and $6.7 million of storm related insurance charges. We also recognized a net gain on the disposal of stores of $20.3 million. On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 68.1% from 66.3% in the prior year. 2024 vs. 2023 SG&A increased 14.0%, or $460.4 million, primarily due to increased personnel costs and other costs which resulted from our growth through acquisitions. Other expenses in 2024 included acquisition expenses of $10.0 million, and $6.1 million of storm related insurance charges, offset by a net gain on the disposal of stores of $8.2 million. On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 66.1% from 62.3% in the prior year. SG&A adjusted for non-core charges was as follows: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Personnel $ 2,480.2  $ 2,394.3  $ 85.9  3.6  % $ 2,163.1  $ 231.2  10.7  % Rent and facility costs 407.6  371.1  36.5  9.8  273.1  98.0  35.9  Advertising 257.0  250.7  6.3  2.5  248.2  2.5  1.0  Adjusted other (1) 796.5  731.2  65.3  8.9  594.7  136.5  23.0  Total adjusted SG&A (1) $ 3,941.3  $ 3,747.3  $ 194.0  5.2  % $ 3,279.1  $ 468.2  14.3  % 32 Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 As a % of gross profit 2025 2024 Change 2023 Change Personnel 43.3  % 43.1  % 20   bps 41.4  % 170   bps Rent and facility costs 7.1  6.7  40  5.2  150  Advertising 4.5  4.5  —  4.7  (20) Adjusted other (1) 13.8  13.1  70  11.4  170  Total adjusted SG&A (1) 68.7  % 67.4  % 130   bps 62.7  % 470   bps (1)See “Non-GAAP Reconciliations” for more details. Floor Plan Interest Expense and Floor Plan Assistance We have floor plan agreements with both manufacturer-affiliated finance companies and as part of our syndicated credit facilities for certain new and used vehicles. The interest rates on these floor plan notes payable commitments vary by lender and are variable rates. 2025 vs. 2024 Floor plan interest expense decreased $50.6 million, primarily due to lower interest rates and decreases in average vehicle inventory levels throughout the year. Floor plan interest expense decreased 16.8% due to lower interest rates and 1.3% due to decreases in inventory at our stores. 2024 vs. 2023 Floor plan interest expense increased $127.9 million, primarily due to higher interest rates and increases in vehicle inventory levels from acquisitions as well as at existing locations. Floor plan assistance is provided by manufacturers to support store financing of vehicle inventory. Under accounting standards, floor plan assistance is recorded as a component of vehicle gross profit when the specific vehicle is sold. However, because manufacturers provide this assistance to offset inventory carrying costs, we believe a comparison of floor plan interest expense to floor plan assistance is a useful measure of the efficiency of our vehicle sales relative to stocking levels. The following table details the carrying costs for vehicle inventory and include vehicle floor plan interest net of floor plan assistance earned: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Floor plan interest expense $ 228.2  $ 278.8  $ (50.6) (18.1) % $ 150.9  $ 127.9  84.8  % Floor plan assistance (included as an offset to cost of sales) (168.5) (170.3) 1.8  1.1  (160.8) (9.5) (5.9) Net vehicle carrying costs (benefit) $ 59.7  $ 108.5  $ (48.8) (45.0) % $ (9.9) $ 118.4  1,196.0  % Depreciation and Amortization Depreciation and amortization is comprised of depreciation expense related to buildings, significant remodels or improvements, furniture, tools, equipment and signage and amortization related to non-compete agreements. Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Depreciation and amortization $ 262.4  $ 245.6  $ 16.8  6.8  % $ 195.8  $ 49.8  25.4  % Acquisition activity contributed to the increases in depreciation and amortization in 2025 compared to 2024 and in 2024 compared to 2023. We acquired approximately $121.8 million and $409.5 million of depreciable property as part of our 2025 and 2024 acquisitions, respectively. Capital expenditures totaled $350.9 million and $351.4 million, respectively, in 2025 and 2024. These investments increased the amount of depreciable assets. See the discussion under “Liquidity and Capital Resources” for additional information. 33 Operating Income Operating income as a percentage of revenue, or operating margin, was as follows: Year Ended December 31, 2025 2024 2023 Operating margin 4.2  % 4.3  % 5.5  % Operating margin adjusted for non-core charges (1) 4.3  4.4  5.5  (1)See “Non-GAAP Reconciliations” for additional information 2025 vs. 2024 Our operating margin decreased 10 basis points compared to the prior year, driven by a decline in gross profit per new and used unit sold. Adjusting for non-core charges, including acquisition expenses and storm related insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 10 basis points. 2024 vs. 2023 Our operating margin decreased 120 basis points compared to the prior year, driven by an increase in SG&A as a percentage of gross profit. Adjusting for non-core charges, including acquisition expenses, one-time contract buyouts, and storm insurance charges, offset by a net disposal gain on disposal of stores, our operating margin decreased 110 basis points. Non-Operating Expenses Asset Impairments Asset impairments recorded as a component of operations consist of the following: Year Ended December 31, ($ in millions) 2025 2024 2023 Franchise value $ 5.8  $ —  $ —  Goodwill —  —  —  Long-lived assets —  —  —  Total asset impairments $ 5.8  $ —  $ —  Goodwill and franchise value are tested for impairment annually as of October 1 or more frequently when events or changes in circumstances indicate that impairment may have occurred. We elected to perform qualitative franchise value and goodwill impairment tests as of October 1 each year. These non-cash impairment charges are included in the “Corporate and Other” category of our segment information. In 2025, we recorded asset impairments of $5.8 million related to franchise value (See Note 6 – Goodwill and Franchise Value). No impairment charges were recorded in 2024 or 2023. See Note 1 – Summary of Significant Accounting Policies, Note 4 – Property and Equipment, Note 6 – Goodwill and Franchise Value, and Note 15 – Fair Value Measurements of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Financial Data of this Annual Report. Other Interest Expense Other interest expense includes interest on debt incurred related to issued senior notes, real estate mortgages, our used and service loaner vehicle inventory financing commitments, and our revolving lines of credit. Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Senior notes $ 86.7  $ 76.1  $ 10.6  13.9  % $ 76.1  $ 0.0  —  % Mortgages 60.6  50.8  9.8  19.3  35.8  15.0  41.9  Credit facilities and other 136.7  136.3  0.4  0.3  91.9  44.4  48.3  Capitalized interest (8.5) (5.4) (3.1) (57.4) (2.6) (2.8) (107.7) Total other interest expense $ 275.5  $ 257.8  $ 17.7  6.9  % $ 201.2  $ 56.6  28.1  % 2025 vs. 2024 The increase in other interest expense was due to the issuance of $600 million in aggregate principal amount of 5.500% senior notes due 2030 issued in September 2025, as well as new mortgages on owned real estate. See 34 also Note 10 – Credit Facilities and Long-Term Debt of Notes to Consolidated Financial Statements for additional information. 2024 vs. 2023 The increase in other interest expense was due to higher interest rates and increased borrowings on our credit facilities. Other Income, Net Other income, net primarily includes other income associated with investment income and other non-recurring transactions. Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change % 2023 Change % Equity method investment $ (15.1) $ 32.8  $ (47.9) NM $ 1.7  $ 31.1  1,829.4% Foreign currency remeasurement 5.7  (17.6) 23.3  NM 5.1  (22.7) NM Net pension benefit 9.4  2.6  6.8  261.5% 2.6  —  —% Miscellaneous 17.4  21.5  (4.1) (19.1)% 12.6  8.9  70.6% Other income, net $ 17.4  $ 39.3  $ (21.9) (55.7)% $ 22.0  $ 17.3  78.6% 2025 vs. 2024 Other income, net decreased $21.9 million in 2025 compared to 2024, primarily as a result of a decrease in equity method investment income, partially offset by foreign currency translation gains. 2024 vs. 2023 Other income, net increased $17.3 million in 2024 compared to 2023, primarily as a result of an increase in equity method investment income, offset by foreign currency translation losses. Income Tax Provision Our effective income tax rate was as follows: Year Ended December 31, 2025 2024 2023 Effective income tax rate 25.5  % 23.8  % 25.7  % Effective income tax rate excluding non-core items (1) 25.1  24.6  25.5  (1)See “Non-GAAP Reconciliations” for more details Our effective income tax rate was 25.5% for 2025 compared to 23.8% for 2024. Our effective income tax rate was negatively affected by a decrease in general business credits and tax basis differences on divested assets, offset by a reduction in valuation allowance. Adjusting for non-deductible acquisition costs, tax basis differences on divested assets, and the benefit of transferable federal tax credits during 2025, our effective income tax rate excluding non-core items was 25.1%, an increase of 50 basis points compared to the effective income tax rate excluding non-core items for 2024. Our effective income tax rate in 2024 was positively affected by an increase in general business credits and a reduction in valuation allowance. Canada and the U.K. have enacted legislation implementing the OECD’s Pillar Two global minimum tax framework, effective beginning January 1, 2024. Based on the Company’s analysis of Pillar Two provisions, these tax law changes did not have a material effect on our overall effective tax rate. Non-GAAP Reconciliations Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We believe each of the non-GAAP financial measures below improves the transparency of our disclosures, provides a meaningful presentation of our results from the core business 35 operations because they exclude items not related to our ongoing core business operations and other non-cash items, and improves the period-to-period comparability of our results from the core business operations. We use these measures in conjunction with GAAP financial measures to assess our business, including our compliance with covenants in our credit facilities and in communications with our Board concerning financial performance. These measures should not be considered an alternative to GAAP measures. The following tables reconcile certain reported non-GAAP measures to the most comparable GAAP measure from our Consolidated Statements of Operations: Year Ended December 31, 2025 ($ in millions, except per share amounts) As reported Net gain on disposal of stores Asset impairment Investment loss Insurance reserves Acquisition expenses Tax attribute Adjusted Asset impairment $ 5.8  $ —  $ (5.8) $ —  $ —  $ —  $ —  $ —  Selling, general and administrative 3,944.7  20.3  —  —  (6.7) (17.0) —  3,941.3  Operating income (loss) 1,594.7  (20.3) 5.8  —  6.7  17.0  —  1,603.9  Other income, net 17.4  —  —  23.8  —  —  —  41.2  Income (loss) before income taxes $ 1,108.4  $ (20.3) $ 5.8  $ 23.8  $ 6.7  $ 17.0  $ —  $ 1,141.4  Income tax (provision) benefit (282.5) 11.9  (1.5) (6.0) (1.7) (0.8) (6.1) (286.7) Net income (loss) 825.9  (8.4) 4.3  17.8  5.0  16.2  (6.1) 854.7  Net income attributable to non-controlling interest (6.3) —  —  —  —  —  —  (6.3) Net income (loss) attributable to Lithia Motors, Inc. $ 819.6  $ (8.4) $ 4.3  $ 17.8  $ 5.0  $ 16.2  $ (6.1) $ 848.4  Diluted earnings (loss) per share attributable to Lithia Motors, Inc. $ 32.32  $ (0.33) $ 0.17  $ 0.70  $ 0.20  $ 0.64  $ (0.24) $ 33.46  Diluted share count 25.4  36 Year Ended December 31, 2024 ($ in millions, except per share amounts) As reported Net gain on disposal of stores Investment gain Insurance reserves Acquisition expenses Premium on redeemable NCI buyout Tax attribute Adjusted Selling, general and administrative $ 3,755.2  $ 8.2  $ —  $ (6.1) $ (10.0) $ —  $ —  $ 3,747.3  Operating income (loss) 1,568.6  (8.2) —  6.1  10.0  —  —  1,576.5  Other income (expense), net 39.3  —  (30.2) —  —  —  —  9.1  Income (loss) before income taxes $ 1,071.3  $ (8.2) $ (30.2) $ 6.1  $ 10.0  $ —  $ —  $ 1,049.0  Income tax (provision) benefit (255.0) 4.1  7.5  (1.6) (0.5) —  (13.1) (258.6) Net income (loss) 816.3  $ (4.1) (22.7) 4.5  9.5  —  (13.1) 790.4  Net income attributable to non-controlling interest (4.8) —  —  —  —  —  —  (4.8) Net income attributable to redeemable non-controlling interest (14.8) —  —  —  —  11.6  —  (3.2) Net income (loss) attributable to Lithia Motors, Inc. $ 796.7  $ (4.1) $ (22.7) $ 4.5  $ 9.5  $ 11.6  $ (13.1) $ 782.4  Diluted earnings (loss) per share attributable to Lithia Motors, Inc. $ 29.45  $ (0.15) $ (0.84) $ 0.17  $ 0.35  $ 0.43  $ (0.49) $ 28.92  Diluted share count 27.1  Year Ended December 31, 2023 ($ in millions, except per share amounts) As reported Net gain on disposal of stores Investment loss Insurance reserves Acquisition expenses Contract buyouts Adjusted Selling, general and administrative $ 3,294.8  $ 31.2  $ —  $ (5.4) $ (27.2) $ (14.3) $ 3,279.1  Operating income (loss) 1,692.4  (31.2) —  5.4  27.2  14.3  1,708.1  Other income, net 22.0  —  1.7  —  —  —  23.7  Income (loss) before income taxes $ 1,362.3  $ (31.2) $ 1.7  $ 5.4  $ 27.2  $ 14.3  $ 1,379.7  Income tax (provision) benefit (350.6) 8.2  (4.0) (1.4) (1.0) (3.8) (352.6) Net income (loss) 1,011.7  (23.0) (2.3) 4.0  26.2  10.5  1,027.1  Net income attributable to non-controlling interest (6.5) —  —  —  —  —  (6.5) Net income attributable to redeemable non-controlling interest (4.4) —  —  —  —  —  (4.4) Net income (loss) attributable to Lithia Motors, Inc. $ 1,000.8  $ (23.0) $ (2.3) $ 4.0  $ 26.2  $ 10.5  $ 1,016.2  Diluted earnings per share attributable to Lithia Motors, Inc. $ 36.29  $ (0.83) $ (0.08) $ 0.15  $ 0.95  $ 0.38  $ 36.86  Diluted share count 27.6  Liquidity and Capital Resources We manage our liquidity and capital resources in the context of our overall business strategy, continually forecasting and managing our cash, working capital balances, and capital structure to meet the short-term and long-term obligations of our business while maintaining liquidity and financial flexibility. Our free cash flow deployment strategy targets an allocation of 25% to 35% investment in acquisitions, 25% investment in capital expenditures, innovation, 37 and diversification, and 40% to 50% in shareholder return in the form of dividends and share repurchases based on current valuation trends in acquisitions relative to stock price performance. We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. Cash flows from operations and borrowings under our credit facilities are our main sources for liquidity. In addition to the above sources of liquidity, potential sources to fund our business strategy include financing of real estate and proceeds from debt or equity offerings. We evaluate all of these options and may select one or more of them depending on overall capital needs and the availability and cost of capital, although no assurances can be provided that these capital sources will be available in sufficient amounts or with terms acceptable to us. Available Sources Below is a summary of our immediately available funds: As of December 31, ($ in millions) 2025 2024 Change % Change Cash and cash equivalents $ 109.2  $ 225.1  $ (115.9) (51.5) % Marketable securities 56.4  53.4  3.0  5.6  % Available credit on the credit facilities 1,359.2  1,075.3  283.9  26.4  % Total current available funds $ 1,524.8  $ 1,353.8  $ 171.0  12.6  % Information about our cash flows, by category, is presented in our Consolidated Statements of Cash Flows. The following table summarizes our cash flows: Year Ended December 31, ($ in millions) 2025 2024 2023 Net cash provided by (used in) operating activities $ 356.7  $ 425.1  $ (472.4) Net cash used in investing activities (1,027.9) (1,854.4) (1,270.3) Net cash provided by financing activities 612.1  907.6  2,409.8  Operating Activities Cash provided by operating activities decreased $68.4 million in 2025 compared to 2024, primarily as a result of changes in floor plan notes payable, finance receivables, and other assets, partially offset by changes in inventories, trade receivables, and other long-term liabilities and deferred revenue. Borrowings from and repayments to our syndicated credit facilities related to our new vehicle inventory floor plan financing are presented as financing activities. To better understand the impact of changes in inventory, other assets, and the associated financing, we also consider our adjusted net cash provided by operating activities to include borrowings or repayments associated with our new vehicle floor plan commitment and exclude the impact of our financing receivables activity. To better understand the impact of these items, adjusted net cash provided by operating activities, a non-GAAP measure, is presented below: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change 2023 Change Net cash provided by (used in) operating activities – as reported $ 356.7  $ 425.1  $ (68.4) $ (472.4) $ 897.5  Add: Net borrowings on floor plan notes payable: non-trade 191.7  304.8  (113.1) 878.7  (573.9) Less: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory (135.4) (105.5) (29.9) (109.2) 3.7  Adjust: Financing receivables activity 878.3  622.4  255.9  1,052.0  (429.6) Net cash provided by operating activities – adjusted $ 1,291.3  $ 1,246.8  $ 44.5  $ 1,349.1  $ (102.3) Inventories are one of the most significant components of our cash flow from operations. As of December 31, 2025, our new vehicle days’ supply was 54 days, or five days lower than our days’ supply as of December 31, 2024. Our days’ supply of used vehicles was 48 days, which was five days lower than our days’ supply as of December 31, 2024. We calculate days’ supply of inventory on-ground inventory unit levels and a 30-day total units sales volume, 38 both at the end of each reporting period. We have continued to focus on managing our unit mix and maintaining an appropriate level of new and used vehicle inventory. Investing Activities Net cash used in investing activities totaled $1.0 billion and $1.9 billion, respectively, for 2025 and 2024. Cash flows from investing activities relate primarily to capital expenditures, acquisition and divestiture activity and sales of property and equipment. Below are highlights of significant activity related to our cash flows from investing activities: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change 2023 Change Capital expenditures $ (350.9) $ (351.4) $ 0.5  $ (230.2) $ (121.2) Cash paid for acquisitions, net of cash acquired (886.4) (1,248.5) 362.1  (1,185.1) (63.4) Cash paid for other investments (15.3) (354.7) 339.4  (11.1) (343.6) Proceeds from sales of stores 194.0  85.7  108.3  142.9  (57.2) Capital Expenditures Below is a summary of our capital expenditure activities: Many manufacturers provide assistance in the form of additional incentives or assistance if facilities meet manufacturer image standards and requirements. We expect that certain facility upgrades and remodels will generate additional manufacturer incentive payments. Also, tax laws allowing accelerated deductions for capital expenditures reduce the overall investment needed and encourage accelerated project timelines. We expect to use a portion of our future capital expenditures to upgrade facilities that we recently acquired. This additional capital investment is contemplated in our initial evaluation of the investment return metrics applied to each acquisition and is usually associated with manufacturer image standards and requirements. If we undertake a significant capital commitment in the future, we expect to pay for the commitment out of existing cash balances, construction financing and borrowings on our credit facilities. Upon completion of the projects, we believe we would have the ability to secure long-term financing and general borrowings from third party lenders for 70% to 90% of the amounts expended, although no assurances can be provided that these financings will be available to us in sufficient amounts or on terms acceptable to us. Acquisitions Growth through acquisitions is a key component of our long-term strategy that enables us to increase our network of locations, support maintaining a diverse franchise and geographic mix and improve our ability to serve customers through wider selection and improved proximity. Our disciplined approach focuses on acquiring new vehicle franchises that are accretive and cash flow positive at reasonable valuations. 39 We are able to subsequently floor new vehicle inventory acquired as part of an acquisition; however, the cash generated by these transactions are recorded as borrowings on floor plan notes payable, non-trade. Adjusted net cash paid for acquisitions, a non-GAAP measure, as well as certain other acquisition-related information is presented below: Year Ended December 31, ($ in millions) 2025 2024 2023 Number of stores acquired 17  146  56  Number of stores opened 7  1  —  Cash paid for acquisitions, net of cash acquired $ (886.4) $ (1,248.5) $ (1,185.1) Add: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory 135.4  105.5  109.2  Cash paid for acquisitions, net of cash acquired – adjusted $ (751.0) $ (1,143.0) $ (1,075.9) We evaluate potential capital investments primarily based on targeted rates of return on assets and return on our net equity investment. Financing Activities Adjusted net cash provided by financing activities, a non-GAAP measure, which is adjusted for borrowings and repayments on floor plan facilities: non-trade and borrowings and repayments associated with our Financing Operations segment was as follows: Year Ended December 31, ($ in millions) 2025 2024 2023 Cash provided by financing activities, as reported $ 612.1  907.6  $ 2,409.8  Less: Net borrowings on floor plan notes payable: non-trade (191.7) (304.8) (878.7) Less: Net borrowings on non-recourse notes payable (364.5) (403.7) (1,283.4) Cash provided by financing activities, as adjusted $ 55.9  $ 199.1  $ 247.7  Below are highlights of significant activity related to our cash flows from financing activities, excluding borrowings and repayments on floor plan notes payable: non-trade and non-recourse notes payable, which are discussed above: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 ($ in millions) 2025 2024 Change 2023 Change Net borrowings on lines of credit $ 408.6  $ 346.8  $ 61.8  $ 324.3  $ 22.5  Proceeds from the issuance of long-term debt 786.8  408.2  378.6  79.8  328.4  Repurchases of common stock (960.9) (365.9) (595.0) (48.9) (317.0) Borrowing and Repayment Activity During 2025, we raised net proceeds of $786.8 million through the issuance of debt, and had net borrowings of $408.6 million on our lines of credit. These funds were primarily used for acquisitions, share repurchases and capital expenditures. Our debt to total capital ratio, excluding floor plan notes payable and non-recourse notes payable, was 52.5% at December 31, 2025 compared to 48.4% at December 31, 2024. 40 Equity Transactions During 2025, we repurchased 3,019,951 shares at a weighted average price of $313.73 under our current share repurchase authorization, with $621.6 million remaining for future repurchases. During 2025, we paid dividends on our common stock as follows: Dividend paid: Dividend amount per share Total amount of dividends paid ($ in millions) March 2025 $ 0.53  $ 13.9  May 2025 0.55  14.3  August 2025 0.55  13.9  November 2025 0.55  13.2  We evaluate performance and make a recommendation to the Board on dividend payments on a quarterly basis. Summary of Outstanding Balances on Credit Facilities and Long-Term Debt Below is a summary of our outstanding balances on credit facilities and long-term debt: ($ in millions) Outstanding of December 31, 2025 Remaining available as of December 31, 2025 Floor plan notes payable: non-trade $ 3,016.3  $ —  (1) Floor plan notes payable 1,992.6  —  Used and service loaner vehicle inventory financing commitments 1,043.0  15.4  (2) Revolving lines of credit 1,570.8  1,316.7  (2),(3) Warehouse facilities 1,251.0  27.1  (2) Non-recourse notes payable 2,473.9  —  4.625% Senior notes due 2027 400.0  —  3.875% Senior notes due 2029 800.0  —  5.500% Senior notes due 2030 600.0  4.375% Senior notes due 2031 550.0  —  Real estate mortgages, finance lease obligations, and other debt 1,152.1  —  Unamortized debt issuance costs (27.8) —  (4) Total debt $ 14,821.9  $ 1,359.2  Less: Inventory related debt (6,051.9) Less: Financing operations related debt (3,724.9) Less: Unrestricted cash and cash equivalents (109.2) Less: Marketable securities (56.4) Less: Availability on used and service loaner financing facilities (15.4) Net debt(5) $ 4,864.1  (1)As of December 31, 2025, we had a $3.0 billion new vehicle floor plan commitment as part of our USB credit facility, and a $1.1 billion CAD wholesale floorplan commitment as part of our BNS credit facility. (2)The amounts available on the credit facilities are limited based on borrowing base calculations and fluctuate monthly. (3)Available credit is based on the borrowing base amount effective as of November 30, 2025. This amount is reduced by $6.4 million for outstanding letters of credit. (4)Debt issuance costs are presented on the balance sheet as a reduction from the carrying amount of the related debt liability. See Note 10 – Credit Facilities and Long-Term Debt of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. (5)Non-GAAP financial measure. Contractual Obligations Our cash requirements greater than twelve months from contractual obligations and commitments include: Debt Obligations and Interest Payments Refer to Note 10 – Credit Facilities and Long-Term Debt of the Notes to the Consolidated Financial Statements for further information of our obligations and the timing of expected payments. Contract Obligations Refer to Note 9 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements for further information of our obligations and the timing of expected payments. 41 Operating and Finance Leases Refer to Note 9 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements for further information of our obligations and the timing of expected payments. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and reported amounts of revenues and expenses at the date of the financial statements. Certain accounting policies require us to make difficult and subjective judgments on matters that are inherently uncertain. The following accounting policies involve critical accounting estimates because they are particularly dependent on assumptions made by management. While we have made our best estimates based on facts and circumstances available to us at the time, different estimates could have been used in the current period. Changes in the accounting estimates we used are reasonably likely to occur from period to period, which may have a material impact on the presentation of our financial condition and results of operations. Our most critical accounting estimates include those related to goodwill and franchise value, and acquisitions. We also have other key accounting policies for valuation of finance receivables and expense accruals. However, these policies either do not meet the definition of critical accounting estimates described above or the policies are not currently material items in our financial statements. We review our estimates, judgments, and assumptions periodically and reflect the effects of revisions in the period that they are deemed to be necessary. We believe that these estimates are reasonable. However, actual results could differ materially from these estimates. Goodwill and Franchise Value We are required to test our goodwill and franchise value for impairment at least annually on October 1, or more frequently if conditions indicate that an impairment may have occurred. Our reporting units for goodwill impairment testing are North America Vehicle Operations, U.K. Vehicle Operations, and U.S. and Canada Financing Operations. We have the option to qualitatively or quantitatively assess goodwill for impairment and, in 2025, we evaluated our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment. As of December 31, 2025, we had $2.5 billion of goodwill on our balance sheet associated with our reporting units. The annual goodwill impairment analysis resulted in no indications of impairment in 2025, 2024, or 2023. We have determined the appropriate unit of accounting for testing franchise rights for impairment is on an individual legal entity basis. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. In 2025, we evaluated our indefinite-lived intangible assets using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the individual entity’s franchise value exceeds the carrying amount, the franchise value is not impaired, and the second step is not necessary. If the qualitative assessment determines it is more likely than not that the fair value is less than the carrying amount, then a quantitative valuation of our franchise value is performed. An impairment charge is recorded to the extent the fair value is less than the carrying value. As of December 31, 2025, we had $2.8 billion of franchise value on our balance sheet. No individual entity accounted for more than 2% of our total franchise value as of December 31, 2025. The annual franchise value impairment analysis, which we perform as of October 1 each year, resulted in indications of impairment at an individual entity. We tested the franchise value for this location, which resulted in an impairment charge of $5.8 million. There were no indications of impairment in 2024 or 2023. We are subject to financial statement risk to the extent that our goodwill or franchise rights become impaired due to decreases in the fair value. A future decline in performance, decreases in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position and results of operations. Furthermore, if a manufacturer becomes insolvent, we may be required to record a partial or total impairment on the franchise value and/or goodwill related to that manufacturer. No individual manufacturer accounted for more than 17% of our total franchise value as of December 31, 2025. 42 See Note 1 – Summary of Significant Accounting Policies and Note 6 – Goodwill and Franchise Value of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Financial Data of this Annual Report. Acquisitions We account for business combinations using the acquisition method of accounting which requires recognition of assets acquired and liabilities assumed at fair value as of the date of the acquisition. Determination of the estimated fair value assigned to each asset acquired or liability assumed can materially impact the net income in subsequent periods through depreciation and amortization and potential impairment charges. The most significant items we generally acquire in a transaction are inventory, long-lived assets, intangible franchise rights and goodwill. The fair value of acquired inventory is based on manufacturer invoice cost and market data. We estimate the fair value of property and equipment based on a market valuation approach. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. We apply an income approach for the fair value of intangible franchise rights which discounts the projected future net cash flow using an appropriate discount rate that reflects the risks associated with such projected future cash flow. See Note 1 – Summary of Significant Accounting Policies and Note 17 – Acquisitions of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Financial Data of this Annual Report.