PENSKE AUTOMOTIVE GROUP, INC. (PAG)

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

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, and Part II, Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q, and those in our other periodic reports filed with the Securities and Exchange Commission, and "Forward-Looking Statements." We have acquired, disposed, and initiated a number of businesses during the periods presented and addressed in this Management's Discussion and Analysis of Financial Condition and Results of Operations. Our financial statements include the results of operations of those businesses from the date acquired or when they commenced operations. Our period-to-period results of operations may vary depending on the dates of acquisitions or disposals.

Overview

We are a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. We operate dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia, and we are one of the largest retailers of commercial trucks in North America for Freightliner. We also distribute and retail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. We employ over 28,800 people worldwide. Additionally, we own 28.9% of Penske Transportation Solutions, a business that employs nearly 41,000 people worldwide, manages one of the largest, most comprehensive and modern trucking fleets in North America with over 387,500 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts, and provides innovative transportation, supply chain, and technology solutions to its customers.

Business Overview

During the three months ended March 31, 2026, our business generated $7.9 billion in total revenue, which is comprised of approximately $7.0 billion from retail automotive dealerships, $694.6 million from retail commercial truck dealerships, and $201.9 million from commercial vehicle distribution and other operations. We generated $1.3 billion in gross profit, which is comprised of $1.1 billion from retail automotive dealerships, $128.2 million from retail commercial truck dealerships, and $46.2 million from commercial vehicle distribution and other operations.

Retail Automotive. We are one of the largest global automotive retailers as measured by the $27.5 billion in total retail automotive dealership revenue we generated in 2025. We are diversified geographically with 56% of our total retail automotive dealership revenues in the three months ended March 31, 2026, generated in the U.S. and Puerto Rico and 44% generated outside of the U.S. We offer over 40 vehicle brands with 72% of our retail automotive franchised dealership revenue generated from premium brands, such as Audi, BMW, Land Rover, Lexus, Mercedes-Benz, and Porsche, and 22% of revenue generated from volume non-U.S. brands such as Toyota and Honda in the three months ended March 31, 2026. As of March 31, 2026, we operated 368 retail automotive franchised dealerships, of which 149 are located in the U.S. and 219 are located outside of the U.S., principally in the U.K. As of March 31, 2026, we also operated 15 used vehicle dealerships, with six dealerships in the U.S. operating under the brand name CarShop, eight dealerships in the U.K. operating under the brand name Sytner Select, and one dealership in Australia operating under the brand name Penske Select. We retailed and wholesaled, including agency units, more than 147,000 vehicles in the three months ended March 31, 2026.

In addition to selling new and used vehicles, we generate higher-margin revenue at each of our dealerships through maintenance and repair services, the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, replacement and aftermarket automotive products, and at certain of our locations, collision repair services. We operate our franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. Some of our dealerships in the U.K. and Europe operate under an agency model where we receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model are counted as new agency units sold instead of new retail units sold by us, and only the fee we receive from the manufacturer, not the price of the vehicle, is reported as new revenue with no corresponding cost of sale.

During the three months ended March 31, 2026, we acquired two retail automotive franchises and sold one retail automotive franchise in the U.S., opened one retail automotive franchise in the U.K., and opened one retail automotive franchise in Germany. Retail automotive dealerships represented 88.6% of our total revenues and 86.6% of our total gross profit in the three months ended March 31, 2026.

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Retail Commercial Truck Dealership. We operate Premier Truck Group ("PTG"), a heavy- and medium-duty retail truck dealership group offering primarily Freightliner and Western Star trucks (both Daimler brands), with locations across 10 U.S. states and the Canadian provinces of Ontario and Manitoba. As of March 31, 2026, PTG operated 45 locations selling new and/or used trucks, performing service and parts operations, or offering collision repair services. We retailed and wholesaled 3,668 new and used trucks in the three months ended March 31, 2026. This business represented 8.8% of our total revenues and 9.9% of our total gross profit in the three months ended March 31, 2026.

Penske Australia. Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific. In most of these same markets, we are also a leading distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, energy solutions, defense, marine, rail, and construction sectors and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region. These businesses represented 2.6% of our total revenues and 3.5% of our total gross profit in the three months ended March 31, 2026. We also own and operate three Porsche dealerships in Melbourne, Australia, which results are included within our retail automotive segment described above.

Penske Transportation Solutions. We hold a 28.9% ownership interest in Penske Truck Leasing Co., L.P. ("PTL"). PTL is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. ("Mitsui"). We account for our investment in PTL under the equity method, and we therefore record our share of PTL's earnings on our statements of income under the caption "Equity in earnings of affiliates," which also includes the results of our other equity method investments. Penske Transportation Solutions ("PTS") is the universal brand name for PTL's various businesses, which articulates the breadth of their services. PTS is capable of meeting customers' needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistics services, such as dedicated contract carriage, distribution center management, supply chain management, and dry van truckload carrier services. We recorded $41.1 million and $33.2 million in equity earnings from this investment for the three months ended March 31, 2026 and 2025, respectively.

Outlook/Recent Developments

Tariffs. During 2025 and continuing into 2026, the U.S. enacted various tariffs on automobiles, automobile parts, and medium- and heavy-duty trucks and related parts which have impacted certain of our automotive and commercial vehicle suppliers, as well as our and PTS' operations. In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized under that statute, although the ruling did not disturb other previously enacted tariffs. Developments regarding U.S. trade policy and the applicability and impact of tariffs on the vehicles, trucks and parts we sell remain fluid, and we continue to monitor the potential impact of tariffs on our business and results of operations.

Macroeconomic and Geopolitical Conditions. During 2026, higher fuel and energy prices, inflation, and broader geopolitical uncertainty may result in a more challenging operating environment, weaker consumer sentiment, and cost pressures in our markets. For additional discussion, see Item 1A. Risk Factors, "Macro-economic and geo-political conditions" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Electric Vehicle ("EV") and Emissions Regulation. Federal and state governments and regulators in our markets have placed various restrictions on new retail automotive and commercial vehicles, in many cases requiring vehicle manufacturers to achieve progressively higher penetration of EVs or lower emissions of new internal combustion engine vehicle sales. The U.K. government requires in 2026 that 33% of new cars sold shall be electric vehicles (with limited allowances) and that manufacturers pay significant penalties if such amount is not achieved and has confirmed a ban on the sale of internal combustion engines in new cars and new vans beginning in 2030, while allowing hybrid vehicles to be sold until 2035 with limited exceptions. These U.K. regulations increase now through 2035 and continue to affect the profitability and mix of vehicles sold by our U.K. dealerships. In the U.S. commercial vehicle market, the EPA’s 2027 heavy-duty engine emissions standards establish more stringent requirements for model year 2027 and later heavy-duty engines, and we believe the recent clarity regarding those standards has contributed to increased order activity in recent months, with related sales expected to occur primarily in the second half of 2026 as discussed further below. For an additional discussion of certain risks associated with our business related to the EV and emissions, see Item 1A. Risk Factors, "Vehicle Emissions and Other Environmental Regulations" in our Annual Report on Form 10-K for the year ended December 31, 2025.

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Retail Automotive. During the three months ended March 31, 2026, U.S. industry new light vehicle sales decreased 6.2%, to 3.7 million units, including a 7.2% decrease in retail sales, partially offset by a 5.5% increase in fleet sales, as compared to the same period last year. In the U.S., we believe our comparative new vehicle sales overall were negatively impacted by weather-related disruptions during January and February, the benefit in the prior period from tariff-related pull-forward of retail sales, and a 61.3% decrease in our new EV sales in the U.S., driven by reduced EV and emissions regulations in the U.S. and the elimination of certain tax incentives for the purchase of vehicles, including the previous

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those discussed in "Item 1A. Risk Factors" and "Forward-Looking Statements." We have acquired, disposed, and initiated a number of businesses during the periods presented and addressed in this Management's Discussion and Analysis of Financial Condition and Results of Operations. Our financial statements include the results of operations of those businesses from the date acquired or when they commenced operations. Our period-to-period results of operations may vary depending on the dates of acquisitions or disposals.

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Overview

We are a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. We operate dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia, and we are one of the largest retailers of commercial trucks in North America for Freightliner. We also distribute and retail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. We employ over 27,700 people worldwide. Additionally, we own 28.9% of Penske Transportation Solutions, a business that employs over 42,000 people worldwide, manages one of the largest, most comprehensive and modern trucking fleets in North America with over 396,600 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts, and provides innovative transportation, supply chain, and technology solutions to its customers.

Business Overview

In 2025, our business generated $31.8 billion in total revenue, which is comprised of approximately $27.5 billion from retail automotive dealerships, $3.4 billion from retail commercial truck dealerships, and $922.6 million from commercial vehicle distribution and other operations. We generated $5.2 billion in gross profit, which is comprised of $4.5 billion from retail automotive dealerships, $542.3 million from retail commercial truck dealerships, and $192.3 million from commercial vehicle distribution and other operations.

Retail Automotive. We are one of the largest global automotive retailers as measured by the $27.5 billion in total retail automotive dealership revenue we generated in 2025. We are diversified geographically with 61% of our total retail automotive dealership revenues in 2025 generated in the U.S. and Puerto Rico and 39% generated outside of the U.S. We offer over 40 vehicle brands with 71% of our retail automotive franchised dealership revenue generated from premium brands, such as Audi, BMW, Land Rover, Lexus, Mercedes-Benz, and Porsche, and 23% of revenue generated from volume non-U.S. brands such as Toyota and Honda in 2025. As of December 31, 2025, we operated 365 retail automotive franchised dealerships, of which 148 are located in the U.S. and 217 are located outside of the U.S., principally in the U.K. As of December 31, 2025, we also operated 15 used vehicle dealerships, with six dealerships in the U.S. operating under the brand name CarShop, eight dealerships in the U.K. operating under the brand name Sytner Select, and one dealership in Australia operating under the brand name Penske Select. We retailed and wholesaled, including agency units, more than 583,000 vehicles in 2025.

In addition to selling new and used vehicles, we generate higher-margin revenue at each of our dealerships through maintenance and repair services, the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, replacement and aftermarket automotive products, and at certain of our locations, collision repair services. We operate our franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. Some of our dealerships in the U.K. and Europe operate under an agency model where we receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model are counted as new agency units sold instead of new retail units sold by us, and only the fee we receive from the manufacturer, not the price of the vehicle, is reported as new revenue with no corresponding cost of sale.

During 2025, in the U.S. we sold four retail automotive franchises, closed one retail automotive franchise, and opened one retail automotive franchise. In addition, on November 19, 2025, we acquired all of the membership interests of Penske Motor Group, LLC ("PMG"), representing two Lexus brand locations and one Toyota brand location in California and one Toyota brand location in Texas, including Longo Toyota, the largest Toyota brand dealership in the U.S. This acquisition was accounted for as a transaction between entities under common control. Please refer to Part II, Item 8, Note 1 and Note 12 for further details. In the U.K., we sold one used vehicle dealership and opened eight retail automotive franchises at existing Sytner Select locations, representing the Geely and Chery brands, and opened two Skoda points at existing VW brand dealerships. We also acquired a Ferrari brand dealership in Modena, Italy, and opened a BYD franchise in Germany. During 2025, in aggregate we acquired or opened dealerships representing approximately $1.6 billion in expected annualized revenue, of which $1.5 billion is related to our acquisition of PMG, and disposed of dealerships representing approximately $408.5 million of expected annualized revenue. In February 2026, we acquired Lexus of Orlando and Lexus of Winter Park, both located in the Orlando metropolitan area of Central Florida.

Retail Commercial Truck Dealership. We operate Premier Truck Group ("PTG"), a heavy- and medium-duty retail truck dealership group offering primarily Freightliner and Western Star trucks (both Daimler brands), with locations across 10 U.S. states and the Canadian provinces of Ontario and Manitoba. As of December 31, 2025, PTG operated 45 locations

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selling new and/or used trucks, performing service and parts operations, or offering collision repair services. We retailed and wholesaled 19,239 new and used trucks in 2025.

Penske Australia. Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific. In most of these same markets, we are also a leading distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, energy solutions, defense, marine, rail, and construction sectors and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region. We also own and operate three Porsche dealerships in Melbourne, Australia which results are included within our retail automotive segment described above.

Penske Transportation Solutions. We hold a 28.9% ownership interest in Penske Truck Leasing Co., L.P. ("PTL"). PTL is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. ("Mitsui"). We account for our investment in PTL under the equity method, and we therefore record our share of PTL's earnings on our statements of income under the caption "Equity in earnings of affiliates," which also includes the results of our other equity method investments. Penske Transportation Solutions ("PTS") is the universal brand name for PTL's various businesses, which articulates the breadth of their services. PTS is capable of meeting customers' needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistics services, such as dedicated contract carriage, distribution center management, supply chain management, and dry van truckload carrier services. We recorded $192.8 million and $198.0 million in equity earnings from this investment in 2025 and 2024, respectively.

Outlook/Recent Developments

Please see “Outlook” in Part I, Item 1 for a discussion of our outlook in our markets.

Operating Overview

Automotive and commercial truck dealerships represent 97.1% of our revenue and 80.9% of our earnings before taxes during 2025. Income from our PTS investment represents 15.3% of our earnings before taxes during 2025. New and used vehicle revenues typically include sales to retail customers, agency customers, fleet customers, and leasing companies providing consumer leasing. We generate finance and insurance revenues from sales of third-party extended service contracts, sales of third-party insurance policies, commissions relating to the sale of finance and lease contracts to third parties, and the sales of certain other products. Service and parts revenues include fees paid by customers for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories as well as warranty repairs that are reimbursed directly by vehicle manufacturers.

Our gross profit tends to vary with the mix of revenues we derive from the sale of new vehicles, used vehicles, finance and insurance products, and service and parts transactions. Our gross profit varies across product lines with vehicle sales usually resulting in lower gross profit margins and our other revenues resulting in higher gross profit margins. Factors such as inventory and vehicle availability, customer demand, consumer confidence, unemployment, general economic conditions, seasonality, weather, credit availability, the impact of tariffs and non-tariff trade barriers, fuel prices, and manufacturers' advertising and incentives also impact the mix of our revenues and therefore, influence our gross profit margin. The results of our commercial vehicle distribution and other business in Australia and New Zealand are principally driven by the number and types of products and vehicles ordered by our customers.

As exchange rates fluctuate, our revenue and results of operations as reported in U.S. Dollars fluctuate. For example, if the British Pound were to weaken against the U.S. Dollar, our U.K. results of operations would translate into less U.S. Dollar reported results. Foreign currency average rate fluctuations increased revenue and gross profit by $302.3 million and $43.1 million, respectively, in 2025. Foreign currency average rate fluctuations increased earnings per share by approximately $0.04 per share in 2025. Excluding the impact of foreign currency average rate fluctuations, aggregate revenue and gross profit decreased 1.1% and 0.8%, respectively, in 2025.

Our selling expenses consist of advertising and compensation for sales personnel, including commissions and related bonuses. General and administrative expenses include compensation, finance, legal and management personnel costs, rent, insurance, information technology expenses, service vehicle loaner expenses, vehicle delivery and preparation expenses, utilities, and other expenses. As the majority of our selling expenses are variable and a significant portion of our general

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and administrative expenses are subject to our control, we believe our expenses can be adjusted over time to reflect economic trends.

Equity in earnings of affiliates principally represents our share of the earnings from PTS, along with our investments in other joint ventures and other non-consolidated investments.

Floor plan interest expense relates to financing incurred in connection with the acquisition of new and used vehicle inventories that are secured by those vehicles. Other interest expense consists of interest charges on all of our interest-bearing debt, other than interest relating to floor plan financing. The cost of our variable rate indebtedness is based on the prevailing benchmark interest rates in our various markets.

The future success of our business is dependent upon, among other things, macro-economic, geo-political, and industry conditions and events, including their impact on sales of new and used vehicles, service and parts, and repair and maintenance services, the availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, demand for trucks to move freight with respect to PTS and PTG and other freight metrics such as spot rates or miles driven, personal discretionary spending levels, interest rates, foreign currency exchange rates, and unemployment rates; our ability to obtain vehicles and parts from our manufacturers, especially in light of supply chain disruptions due to natural disasters, tariffs and non-tariff trade barriers, any shortages of vehicle components, international conflicts, challenges in sourcing labor or labor strikes or work stoppages, or other disruptions; the control our manufacturer partners can exert over our operations and our reliance on them for various aspects of our business; risks to our reputation and those of our manufacturer partners; changes in the retail model from direct sales by manufacturers, a transition to an agency model of sales, sales by online competitors, or from the expansion of EVs; disruptions to the security and availability of our information technology systems and those of our third party providers, which systems are increasingly threatened by ransomware and other cyber attacks; the effects of a pandemic on the global economy, including our ability to react effectively to changing business conditions in light of any pandemic; the impact of tariffs targeting imported vehicles and parts, as well as changes or increases in tariffs, trade restrictions, trade disputes, or non-tariff trade barriers; the rate of inflation, including its impact on vehicle affordability; changes in interest rates and foreign currency exchange rates; our ability to consummate, integrate, and realize returns on our acquisitions; with respect to PTS, changes in the financial health of its customers, labor strikes or work stoppages by its employees, a reduction in PTS' asset utilization rates, the cost of acquiring and the continued availability from truck manufacturers and suppliers of vehicles and parts for its fleet, including with respect to the effect of various regulations concerning its vehicle fleet, changes in values of used trucks which affects PTS' profitability on truck sales and regulatory risks and related compliance costs; our ability to realize returns on our significant capital investments in new and upgraded dealership facilities; our ability to navigate a rapidly changing automotive and truck landscape; our ability to respond to new or enhanced regulations in both our domestic and international markets relating to dealerships and vehicles sales, including those related to the sales process, emissions standards or electrification; the success of our distribution of commercial vehicles, engines, and power systems; natural disasters; recall initiatives or other disruptions that interrupt the supply of vehicles or parts to us; the outcome of legal and administrative matters, and other factors over which management has limited control. See Part I, Item 1A. Risk Factors above and "Forward-Looking Statements" below.

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the application of accounting policies that often involve making estimates and employing judgments. Such judgments influence the assets, liabilities, revenues, and expenses recognized in our financial statements. Management, on an ongoing basis, reviews these estimates and assumptions. Management may determine that modifications in assumptions and estimates are required, which may result in a material change in our results of operations or financial position.

The following discussion addresses the accounting policy applied in the preparation of our financial statements that management believes is the most dependent upon the use of estimates and assumptions. Refer to Part II, Item 8, Note 1 of our Consolidated Financial Statements for a description of our significant accounting policies.

Impairment Testing

Other indefinite-lived intangible assets are assessed for impairment annually on October 1 and upon the occurrence of an indicator of impairment through a comparison of its fair value to its carrying value. These indefinite-lived intangible assets relate to franchise agreements with manufacturers and distributors, which represent the estimated value of franchises acquired in business combinations; trade names, which represents the estimated value of trade names acquired in business combinations; and distribution agreements with commercial vehicle manufacturers and other manufacturers, which

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represent the estimated value for distribution rights acquired in business combinations. An indicator of impairment exists if the carrying value exceeds its estimated fair value, and an impairment loss may be recognized up to that excess. The fair value is determined using an income approach, which includes assumptions about revenue growth, terminal growth rates, and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and the selection of the weighted average cost of capital. Changes in these assumptions could have a significant effect on the fair value of these intangible assets and the amount of any impairment charge. Each of the significant assumptions to the fair value model are considered level 3 inputs within the fair value hierarchy. We also evaluate in connection with the annual impairment testing whether events and circumstances continue to support our assessment that the other indefinite-lived intangible assets continue to have an indefinite life.

Goodwill impairment is assessed at the reporting unit level annually on October 1 and upon the occurrence of an indicator of impairment. Our operations are organized by management into operating segments by line of business and geography. We have determined that we have four reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our retail automotive dealership operations; (ii) Retail Commercial Truck, consisting of our retail commercial truck dealership operations in the U.S. and Canada; (iii) Other, consisting of our commercial vehicle and power systems distribution operations; and (iv) Non-Automotive Investments, consisting of our equity method investments in non-automotive operations which includes our investment in PTS and other investments. We have determined that the dealerships in each of our operating segments within the Retail Automotive reportable segment are components that were aggregated into two reporting units for the purpose of goodwill impairment testing as of October 1, 2025, as they (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and/or used vehicles, service, parts, and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals), and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). The reporting units are United States Retail Automotive and International Retail Automotive. Our Retail Commercial Truck reportable segment has been determined to represent one operating segment and reporting unit. The goodwill included in our Other reportable segment relates primarily to our commercial vehicle distribution operating segment. There is no goodwill recorded in our Non-Automotive Investments reportable segment.

For reporting units within our Retail Automotive, Retail Commercial Truck, and Other reportable segments, we prepared a quantitative assessment of the carrying value of goodwill. We estimated the fair value of our reporting units using an income approach. The income approach measures fair value by discounting expected future cash flows at a weighted average cost of capital. We also validate the fair value for each reporting unit using the income approach by calculating a cash earnings multiple and determining whether the multiple was reasonable compared to recent market transactions completed by the Company or in the industry. As part of that assessment, we also reconcile the estimated aggregate fair values of our reporting units to our market capitalization as of the assessment date. We believe this reconciliation process is consistent with a market participant perspective. This consideration would also include a control premium that represents the estimated amount an investor would pay for our equity securities to obtain a controlling interest and other significant assumptions, including revenue growth, terminal growth rates, EBITDA margin, and the weighted average cost of capital.

Based on our assessment as of October 1, 2025, and in conjunction with our fourth quarter annual forecasting process for 2026 which impacts key assumptions used in our goodwill impairment assessment, we concluded that for each of our reporting units that the fair values were more likely than not greater than their carrying values. As a result, we had no goodwill impairment charges in 2025. We also had no goodwill impairment charges in 2024.

For our other indefinite-lived intangible assets, we prepared a quantitative assessment as of October 1, 2025, by comparing the fair value to its carrying value. We estimated the fair value using an income approach, applying similar methodology as discussed above. In conjunction with the sale of a franchised dealership in the U.S. during 2025, we had $3.4 million of impairment charges relating to our other indefinite-lived intangible assets. We also had $1.8 million of impairment charges relating to our other indefinite-lived intangible assets during 2024.

Tax Developments

Global Minimum Tax

The Organization for Economic Co-operation and Development (“OECD”), an international association of thirty-eight countries including the United States, has proposed reform of international taxation known as Pillar Two, which imposes a global minimum corporate income tax rate of 15% on multinational companies. In December 2022, the European Union (“EU”) Member States formally adopted a directive that implements the OECD Pillar Two framework, which is expected

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to be enacted into the national laws of the EU member states. Certain countries in which we operate have enacted legislation to adopt the Pillar Two framework effective for the Company for the calendar year 2024. Several other countries are also considering changes to their local tax laws to implement this framework in the future. We expect the enacted Pillar Two legislation to increase tax compliance obligations; however, we do not anticipate any monetary impact from any Pillar Two legislation as all of the jurisdictions in which we operate currently have and are expected to have an effective tax rate greater than the minimum threshold of 15%. We will continue to monitor new guidance in this area including proposed and enacted legislative changes as further information becomes available.

One Big Beautiful Bill Act

On July 4, 2025, H.R. 1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was signed into law. The OBBBA reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025. This provision allows for immediate expensing for income tax purposes of the full cost of eligible tangible assets, including certain machinery, equipment and building improvements, which will benefit the tax treatment of PTS vehicle purchases. The bill also provides certain consumers with a tax deduction for the interest on loans for certain U.S.-assembled vehicles and eliminated federal EV tax credits for vehicles purchased or leased after September 30, 2025. Further, the OBBBA has effectively eliminated fines for automotive manufacturers who fail to meet federal fuel efficiency standards for vehicles dating back to model year 2022, which is expected to result in significant savings for vehicle manufacturers. The expiration of the EV tax credit noted above at the end of September 2025 positively impacted sales of EVs in third quarter, while negatively impacting sales of EVs in the fourth quarter. While we expect lower new U.S. EV sales as a result of the elimination of the EV tax credits, we continue to evaluate additional impact of the OBBBA on our consolidated financial statements and any cash flow implications.

Results of Operations

The following tables present comparative financial data relating to our operating performance in the aggregate and on a "same-store" basis. Dealership results are included in same-store comparisons when we have consolidated the acquired entity during the entirety of both periods being compared. As an example, if a dealership were acquired on January 15, 2023, the results of the acquired entity would be included in annual same-store comparisons beginning with the year ended December 31, 2025, and in quarterly same-store comparisons beginning with the quarter ended June 30, 2024.

Some of our dealerships in the U.K. and Europe operate under an agency model where we receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model are counted as new agency units sold instead of new retail units sold by us, and only the fee we receive from the manufacturer, not the price of the vehicle, is reported as new revenue with no corresponding cost of sale. We have presented below units sold under this agency model as "Agency units". Moreover, our retail automotive revenue per unit retailed and related gross profit per unit retailed for new vehicles excludes agency unit sales and associated revenue.

On November 19, 2025, we acquired PMG from a commonly controlled affiliate, which was accounted for as a transaction between entities under common control. Accordingly, our consolidated financial statements and related notes have been retrospectively recast for all historical comparative periods presented to include the operations of PMG as if the entities had been combined since the beginning of the earliest period presented. Furthermore, the assets and liabilities of PMG were recognized at the historical carrying amounts, and the difference between the consideration transferred and the carrying value of the net assets received was recorded to equity within retained earnings.

This change in reporting particularly impacts our reporting of income tax. Historically, PMG was treated as a pass-through partnership for income tax purposes and therefore did not record income tax expense in its stand-alone financial statements. Because we have retrospectively recast prior periods to include PMG as if it had always been part of our consolidated reporting, those historical periods do not reflect federal and state income taxes that would have been incurred had PMG been included in our taxable consolidated group. Beginning on the acquisition date, the results of PMG are included in our consolidated federal and state income tax filings and therefore are subject to income tax. As a result, period-over-period comparisons of net income and earnings per share may not be directly comparable due to the change in tax status of PMG.

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Our results for 2025 include a gain of $52.3 million from the sale of a retail automotive franchise in the U.S., resulting in an after-tax gain of $38.9 million, or $0.58 per share. This gain was partially offset by impairments and other charges in 2025 of $32.5 million (none of which was individually material), resulting in an after-tax expense of $26.3 million, or $0.39 per share. This resulted in a net after-tax gain of $12.6 million, or $0.19 per share. Our results for 2023 include a goodwill impairment charge of $40.7 million (before and after tax), or $0.60 per share, relating to our former Used Vehicle Dealerships International reporting unit.

Retail Automotive Dealership New Vehicle Data

(In millions, except unit and per unit amounts)

Units

Retail unit deliveries of new vehicles decreased from 2024 to 2025 due to a 4,579 unit decrease from net dealership dispositions, coupled with an 823 unit, or 0.3%, decrease in same-store new retail unit deliveries. Same-store retail units delivered increased 2.2% in the U.S. and decreased 3.9% internationally. Overall, new retail unit deliveries increased 1.4% in the U.S. and decreased 7.0% internationally. We believe the increase in same-store retail unit sales in the U.S. is primarily due to continued strong consumer demand throughout the year, increased EV sales in the U.S. due to the expiration of certain tax credits during the third quarter, and an improved economic environment, including lower interest rates. We believe the decrease in same-store retail unit deliveries internationally is primarily due to a comparative decrease in the sale of premium-branded vehicles across the U.K. driven by macroeconomic pressures from inflation, as well as higher business and consumer-related taxes and fees, including increased emissions-based charges on higher-emission vehicles, increased market share of Chinese manufacturers which represent a small portion of our overall U.K. sales, and lower availability of certain products from select manufacturers.

Retail unit deliveries of new vehicles increased from 2023 to 2024 due to a 12,274 unit increase from net dealership acquisitions, coupled with a 2,487 unit, or 1.0%, increase in same-store new retail unit deliveries. Same-store retail units delivered increased 2.3% in the U.S. and decreased 1.0% internationally. Overall, new retail unit deliveries increased 4.2% in the U.S. and increased 8.4% internationally. We believe the increase in same-store retail unit sales in the U.S. is primarily due to continued consumer demand for new vehicles and increasing new vehicle availability, coupled with the

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pent-up demand resulting from lower vehicle availability in prior years. We believe the decrease in same-store unit sales internationally is primarily due to a decline in sales of certain premium brand sales in the U.K. driven in part by a decline in retail and private registrations in lieu of fleet sales.

Revenues

New vehicle sales revenue decreased from 2024 to 2025 due to a $53.5 million decrease from net dealership dispositions, coupled with a $51.7 million, or 0.4%, decrease in same-store revenues. Excluding $121.6 million of favorable foreign currency fluctuations, same-store new revenue decreased 1.4%. Same-store revenue (excluding agency) decreased due to the decrease in same-store new retail unit sales, which decreased revenue by $398.0 million, partially offset by a $1,582 per unit increase in same-store comparative average retail selling price (including a $571 per retail unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $326.4 million. We believe the increase in same-store comparative average retail selling price (excluding agency) is primarily due to the increased costs of acquiring vehicles from the manufacturer due to the impact from tariffs and a change in mix of products sold, including the sale of more hybrids and electric vehicles, coupled with the transition to the agency model for MINI brand in the U.K., which increased average retail selling price.

New vehicle sales revenue increased from 2023 to 2024 due to a $597.7 million increase from net dealership acquisitions, coupled with a $176.3 million, or 1.5%, increase in same-store revenues. Excluding $75.3 million of favorable foreign currency fluctuations, same-store new revenue increased 0.8%. Same-store revenue (excluding agency) increased due to a $1,430 per unit increase in same-store comparative average retail selling price (including a $347 per retail unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $302.8 million, partially offset by the decrease in same-store new retail unit sales (excluding agency), which decreased revenue by $145.4 million. We believe the increase in same-store comparative average retail selling price (excluding agency) is primarily due to changes in the mix of higher-priced units sold and the increased costs of acquiring vehicles from the manufacturer.

Gross Profit

Retail gross profit from new vehicle sales decreased from 2024 to 2025 due to a $68.0 million, or 5.8%, decrease in same-store gross profit, coupled with a $2.8 million decrease from net dealership dispositions. Excluding $13.2 million of favorable foreign currency fluctuations, same-store gross profit decreased 6.9%. Same-store gross profit (excluding agency) decreased due to a $237 per unit decrease in same-store comparative average gross profit (despite a $48 per retail unit increase attributable to favorable foreign currency fluctuations), which decreased gross profit by $48.9 million, coupled with the decrease in same-store new retail sales, which decreased retail gross profit by $35.4 million. We believe the decrease in same-store comparative average retail gross profit per unit (excluding agency) is primarily due to a change in the brand mix of units sold, coupled with increased EV sales in the U.S. due to the expiration of certain tax credits during the third quarter, and vehicle affordability considerations.

Retail gross profit from new vehicle sales decreased from 2023 to 2024 due to a $164.2 million, or 12.5%, decrease in same-store gross profit, partially offset by a $61.6 million increase from net dealership acquisitions. Excluding $7.2 million of favorable foreign currency fluctuations, same-store gross profit decreased 13.0%. Same-store gross profit (excluding agency) decreased due to a $785 per unit decrease in same-store comparative average gross profit (despite a $25 per retail unit increase attributable to favorable foreign currency fluctuations), which decreased gross profit by $166.2 million, coupled with the decrease in same-store new retail sales (excluding agency), which decreased retail gross profit by $15.3 million. We believe the decrease in same-store comparative average retail gross profit per unit (excluding agency) is primarily due to an improved supply of many of the new vehicles we sell and the mix of sales. We believe the resulting compression on gross margin is due to higher gross profit realized in the prior year as vehicle supply was constrained, coupled with affordability challenges and a more competitive environment due to higher supply of vehicles as our days' supply increased to 49 from 39 as of December 31, 2024, and 2023, respectively.

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Retail Automotive Dealership Used Vehicle Data

(In millions, except unit and per unit amounts)

Units

Retail unit sales of used vehicles decreased from 2024 to 2025 due to a 19,700 unit, or 8.3%, decrease in same-store used retail unit sales, coupled with a 9,227 unit decrease from net dealership acquisitions/dispositions. Our same-store units decreased 1.7% in the U.S. and decreased 14.6% internationally. Overall, our used units decreased 2.2% in the U.S. and decreased 19.7% internationally. Same-store unit sales were impacted by the transition of our U.K. CarShop locations to Sytner Select dealerships during the third quarter 2024 which sell fewer units. Excluding the decrease of 14,001 units across the U.K. Sytner Select dealerships, same-store used retail unit sales of used vehicles decreased by 5,699 units. Excluding the U.K. Sytner Select dealerships from both periods, used vehicles retailed decreased 5.1% internationally and decreased 3.5% overall and same-store used units decreased 4.1% internationally and decreased 2.7% overall. We also believe the decrease in same-store retail sales of used units was impacted by affordability concerns, limited availability of lower mileage, higher quality used vehicles, and comparatively fewer lease returns primarily in the U.S.

Retail unit sales of used vehicles decreased from 2023 to 2024 due to a 10,957 unit, or 4.5%, decrease in same-store used retail unit sales, partially offset by a 1,280 unit increase from net dealership acquisitions. Excluding the decrease of 11,758 units across the U.K. Sytner Select dealerships, same-store used retail unit sales of used vehicles increased by 801 units. Our same-store units increased 1.5% in the U.S. and decreased 10.1% internationally. Overall, our used units increased 2.2% in the U.S. and decreased 8.5% internationally. Same-store unit sales are being impacted by the transition of our U.K. CarShop locations to Sytner Select dealerships as well as a lower supply of lower mileage, higher quality used vehicles due to the fewer number of new vehicles sold in recent years and lower lease returns particularly in the U.S. Excluding the U.K. Sytner Select dealerships from both periods, used vehicles retailed increased 7.4% internationally and increased 4.4% overall and same-store used units decreased 1.2% internationally and increased 0.4% overall.

Revenues

Used vehicle retail sales revenue decreased from 2024 to 2025 due to a $140.9 million decrease from net dealership acquisitions/dispositions, partially offset by a $42.0 million, or 0.5%, increase in same-store revenues. Excluding $138.4 million of favorable foreign currency fluctuations, same-store used retail revenue decreased 1.1%. The increase in same-store revenue is due to a $3,422 per unit increase in same-store comparative average selling price (including a $633 per unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $748.4 million,

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partially offset by the decrease in same-store used retail unit sales, which decreased revenue by $706.4 million. We believe the increase in same-store comparative average selling price is primarily due to the transition of our former U.K. CarShop locations to Sytner Select dealerships, coupled with lower availability of used vehicles which contributed to higher used vehicle pricing.

Used vehicle retail sales revenue decreased from 2023 to 2024 due to a $368.4 million, or 4.2%, decrease in same-store revenues, partially offset by a $240.6 million increase from net dealership acquisitions. Excluding $105.5 million of favorable foreign currency fluctuations, same-store used retail revenue decreased 5.5%. The decrease in same-store revenue is due to the decrease in same-store used retail unit sales, which decreased revenue by $389.2 million, partially offset by an $89 per unit increase in same-store comparative average selling price (including a $452 per unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $20.8 million. We believe the decrease in same-store comparative average selling price, excluding favorable foreign currency, is primarily due to a decrease in used vehicle acquisition costs.

Gross Profit

Retail gross profit from used vehicle sales increased from 2024 to 2025 due to a $2.0 million increase from net dealership acquisitions/dispositions, coupled with a $1.8 million, or 0.4%, increase in same-store gross profit. Excluding $7.0 million of favorable foreign currency fluctuations, same-store gross profit decreased 1.2%. The increase in same-store gross profit is due to a $177 per unit increase in same-store comparative average gross profit (including a $32 per unit increase attributable to favorable foreign currency fluctuations), which increased gross profit by $38.7 million, partially offset by the decrease in same-store used retail unit sales, which decreased gross profit by $36.9 million. We believe the increase in same-store comparative average gross profit per unit is primarily due to a change in inventory management strategy internationally and the transition of our U.K. CarShop locations to Sytner Select dealerships.

Retail gross profit from used vehicle sales increased from 2023 to 2024 due to a $21.7 million increase from net dealership acquisitions, coupled with a $1.2 million, or 0.3%, increase in same-store gross profit. Excluding $4.8 million of favorable foreign currency fluctuations, same-store gross profit decreased 0.8%. The increase in same-store gross profit is due to an $89 per unit increase in same-store comparative average gross profit (including a $21 per unit increase attributable to favorable foreign currency fluctuations), which increased gross profit by $20.8 million, partially offset by the decrease in same-store used retail unit sales, which decreased gross profit by $19.6 million. We believe the increase in same-store comparative average gross profit per unit is primarily due to the transition of our U.K. CarShop locations to Sytner Select dealerships which improved our selection of more profitable vehicles.

Retail Automotive Dealership Finance and Insurance Data

(In millions, except unit and per unit amounts)

Finance and insurance revenue decreased from 2024 to 2025 due to a $17.7 million decrease from net dealership dispositions, coupled with a $6.8 million, or 0.8%, decrease in same-store revenue. Excluding $8.0 million of favorable

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foreign currency fluctuations, same-store finance and insurance revenue decreased 1.8%. Same-store revenue (excluding agency) decreased due to the decrease in combined same-store new and used retail unit sales, which decreased revenue by $47.1 million, partially offset by a $90 per unit increase in same-store comparative average finance and insurance retail revenue (including an $18 per retail unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $38.3 million. Same-store finance and insurance revenue per unit (excluding agency) increased 1.2% in the U.S. and increased 10.9% in the U.K. We believe the increase in same-store finance and insurance revenue per unit (excluding agency) is primarily due to the increase in average selling price of both new and used vehicles, as well as improved finance and insurance product offerings and availability internationally.

Finance and insurance revenue decreased from 2023 to 2024 due to a $36.8 million, or 4.4%, decrease in same-store revenue, partially offset by a $7.9 million increase from net dealership acquisitions. Excluding $6.9 million of favorable foreign currency fluctuations, same-store finance and insurance revenue decreased 5.2%. Same-store revenue (excluding agency) decreased due to the decrease in combined same-store new and used retail unit sales, which decreased revenue by $24.8 million, coupled with a $35 per unit decrease in same-store comparative average finance and insurance retail revenue (despite a $15 per retail unit increase attributable to favorable foreign currency fluctuations), which decreased revenue by $15.6 million. Same-store finance and insurance revenue per unit (excluding agency) decreased 0.6% in the U.S. and decreased 6.6% in the U.K. We believe the decrease in same-store finance and insurance revenue per unit (excluding agency) is primarily due to high interest rates impacting overall customer affordability, coupled with an increase in lease penetration in the U.S. and the increase in fleet transactions in the U.K. which limits our finance and insurance product sale opportunities.

Retail Automotive Dealership Service and Parts Data

(In millions)

Revenues

Service and parts revenue increased from 2024 to 2025, with an increase of 6.1% in the U.S. and an increase of 6.1% internationally. The increase in service and parts revenue is due to a $164.5 million, or 5.3%, increase in same-store revenues, coupled with a $30.6 million increase from net dealership acquisitions. Excluding $37.1 million of favorable foreign currency fluctuations, same-store revenue increased 4.1%. The increase in same-store revenue is due to a $100.9 million, or 4.6%, increase in customer pay revenue, a $62.5 million, or 9.4%, increase in warranty revenue, and a $1.1 million, or 0.5%, increase in vehicle preparation and body shop revenue. We believe the increase in same-store revenue is primarily due to vehicles remaining on the road longer due to affordability considerations and increasing vehicle complexity, as well as increases in effective labor rates, the retail cost of parts due to inflation, and additional warranty opportunities due to manufacturer recalls.

Service and parts revenue increased from 2023 to 2024, with an increase of 7.4% in the U.S. and an increase of 18.4% internationally. The increase in service and parts revenue is due to a $172.3 million, or 6.1%, increase in same-store revenues, coupled with a $147.3 million increase from net dealership acquisitions. Excluding $19.3 million of favorable foreign currency fluctuations, same-store revenue increased 5.2%. The increase in same-store revenue is due to an $88.2 million, or 15.8%, increase in warranty revenue, a $76.1 million, or 3.7%, increase in customer pay revenue, and an $8.0 million, or 3.9%, increase in vehicle preparation and body shop revenue. We believe the increase in same-store revenue is primarily due to vehicles remaining on the road longer due to affordability considerations and increasing vehicle

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complexity, as well as increases in effective labor rates, repair orders, the retail cost of parts due to inflation, and additional warranty opportunities due to manufacturer recalls.

Gross Profit

Service and parts gross profit increased from 2024 to 2025 due to a $120.4 million, or 6.7%, increase in same-store gross profit, coupled with a $5.9 million increase from net dealership acquisitions. Excluding $20.0 million of favorable foreign currency fluctuations, same-store gross profit increased 5.6%. The increase in same-store gross profit is due to the increase in same-store revenues, which increased gross profit by $96.6 million, coupled with a 0.7% increase in same-store gross margin from 58.0% to 58.7%, which increased gross profit by $23.8 million. The increase in same-store gross profit is due to a $60.0 million, or 5.8%, increase in customer pay gross profit, a $38.2 million, or 10.7%, increase in warranty gross profit, and a $22.2 million, or 5.7%, increase in vehicle preparation and body shop gross profit. We believe the increase in gross margin is primarily due to a change in the mix of warranty and customer pay, coupled with an increase in the effective labor rate.

Service and parts gross profit increased from 2023 to 2024 due to a $99.3 million, or 6.0%, increase in same-store gross profit, coupled with a $68.9 million increase from net dealership acquisitions. Excluding $11.6 million of favorable foreign currency fluctuations, same-store gross profit increased 5.3%. The increase in same-store gross profit is primarily due to the increase in same-store revenues, which increased gross profit by $100.8 million, partially offset by a 0.1% decrease in same-store gross margin, which decreased gross profit by $1.5 million. The increase in same-store gross profit is due to a $47.6 million, or 15.8%, increase in warranty gross profit, a $38.6 million, or 3.9%, increase in customer pay gross profit, and a $13.1 million, or 3.5%, increase in vehicle preparation and body shop gross profit. However, we believe the decrease in gross margin is primarily due to a shift in sales mix in the U.K. from customer pay to warranty, which typically has a lower gross margin, coupled with an increase in the effective labor rate.

Retail Commercial Truck Dealership Data

(In millions, except unit and per unit amounts)

Units

Retail unit sales of new trucks decreased from 2024 to 2025 due to a 1,782 unit, or 10.9%, decrease in same-store new retail unit sales, partially offset by a 568 unit increase from net dealership acquisitions. We believe the decrease in same-store unit sales is due to lower demand for commercial trucks related to the prolonged recessionary freight rate

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environment, coupled with manufacturer price increases and delayed consumer purchase decisions in light of emissions regulatory uncertainty.

Retail unit sales of new trucks decreased from 2023 to 2024 due to a 2,020 unit, or 11.3%, decrease in same-store new retail unit sales, partially offset by a 701 unit increase from net dealership acquisitions. We believe the decrease in same-store unit sales is primarily due to the unusually high number of deliveries in 2023 resulting from production timing and delivery delays throughout 2022 caused by manufacturer supply chain challenges and the prolonged recessionary freight rate environment, partially offset by replacement demand for medium- and heavy-duty trucks.

Revenues

New commercial truck retail sales revenue decreased from 2024 to 2025 due to a $199.9 million, or 8.8%, decrease in same-store revenues, partially offset by a $92.9 million increase from net dealership acquisitions. The decrease in same-store revenue is due to the decrease in same-store new retail unit sales, which decreased revenue by $247.5 million, partially offset by a $3,263 per unit increase in same-store comparative average selling price, which increased revenue by $47.6 million. We believe the increase in same-store comparative average selling price is primarily due to manufacturer price increases, in part due to tariffs.

New commercial truck retail sales revenue decreased from 2023 to 2024 due to a $227.4 million, or 9.4%, decrease in same-store revenues, partially offset by a $106.7 million increase from net dealership acquisitions. The decrease in same-store revenue is due to the decrease in same-store new retail unit sales, which decreased revenue by $273.9 million, partially offset by a $2,934 per unit increase in same-store comparative average selling price, which increased revenue by $46.5 million. We believe the increase in same-store comparative average selling price is primarily due to higher prices driven by replacement demand and the mix of higher-priced units sold due to an increase in units sold to smaller fleets and retail customers.

Gross Profit

New commercial truck retail gross profit decreased from 2024 to 2025 due to a $30.8 million, or 20.7%, decrease in same-store gross profit, partially offset by a $4.6 million increase from net dealership acquisitions. The decrease in same-store gross profit is due to the decrease in same-store new retail unit sales, which decreased gross profit by $16.2 million, coupled with a $1,004 per unit decrease in same-store comparative average gross profit, which decreased gross profit by $14.6 million. We believe the decrease in same-store comparative average gross profit per unit is primarily due to a shift in the sales mix toward sales to larger fleets, coupled with the prolonged recessionary freight rate environment.

New commercial truck retail gross profit increased from 2023 to 2024 due to an $8.1 million increase from net dealership acquisitions, partially offset by a $0.4 million, or 0.3%, decrease in same-store gross profit. The decrease in same-store gross profit is due to the decrease in same-store new retail unit sales, which decreased gross profit by $16.1 million, partially offset by a $989 per unit increase in same-store comparative average gross profit, which increased gross profit by $15.7 million. We believe the increase in same-store comparative average gross profit per unit is primarily due to a change in sales mix when compared to last year.

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Units

Retail unit sales of used trucks decreased from 2024 to 2025 due to a 445 unit, or 12.4%, decrease in same-store retail unit sales, partially offset by a 58 unit increase from net dealership acquisitions. We believe the decrease in same-store unit sales is primarily due to challenges in sourcing lower mileage, higher quality used trucks for sale, coupled with lower demand due to the prolonged recessionary freight rate environment.

Retail unit sales of used trucks increased from 2023 to 2024 due to a 389 unit, or 12.5%, increase in same-store retail unit sales, coupled with a 101 unit increase from net dealership acquisitions/dispositions. We believe the increase in same-store unit sales is primarily due to the increase in availability and affordability of used trucks when compared with the prior year period.

Revenues

Used commercial truck retail sales revenue increased from 2024 to 2025 due to a $3.6 million increase from net dealership acquisitions, partially offset by a $1.9 million, or 0.8%, decrease in same-store revenues. The decrease in same-store revenue is due to the decrease in same-store used retail unit sales, which decreased revenue by $27.8 million, partially offset by an $8,241 per unit increase in same-store comparative average selling price, which increased revenue by $25.9 million. We believe the increase in same-store comparative average selling price is primarily due to the limited availability of lower mileage, higher quality used trucks available for sale.

Used commercial truck retail sales revenue decreased from 2023 to 2024 due to a $10.5 million, or 4.6%, decrease in same-store revenues, partially offset by a $7.6 million increase from net dealership acquisitions/dispositions. The decrease in same-store revenue is due to an $11,151 per unit decrease in same-store comparative average selling price, which decreased revenue by $34.7 million, partially offset by the increase in same-store used retail unit sales, which increased revenue by $24.2 million. We believe the decrease in same-store comparative average selling price is primarily due to the declining value of used trucks, as a result of the prolonged recessionary freight rate environment and improved availability of new trucks when compared to the prior year period.

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Gross Profit

Used commercial truck retail gross profit decreased from 2024 to 2025 primarily due to a $0.5 million, or 3.0%, decrease in same-store gross profit, partially offset by a $0.4 million increase from net dealership acquisitions. The decrease in same-store gross profit is due to the decrease in same-store used retail unit sales, which decreased gross profit by $2.1 million, partially offset by a $502 per unit increase in same-store comparative average gross profit, which increased gross profit by $1.6 million. We believe the increase in same-store comparative average gross profit per unit is primarily due to the limited availability of lower mileage, higher quality used trucks available for sale and the mix of higher priced used units sold.

Used commercial truck retail gross profit decreased from 2023 to 2024 primarily due to a $2.6 million, or 13.2%, decrease in same-store gross profit, coupled with a $0.3 million decrease from net dealership acquisitions/dispositions. The decrease in same-store gross profit is due to a $1,446 per unit decrease in same-store comparative average gross profit, which decreased gross profit by $4.5 million, partially offset by the increase in same-store used retail unit sales, which increased gross profit by $1.9 million. We believe the decrease in same-store comparative average gross profit per unit is primarily due to the decreased value of used trucks over the prior year, as a result of the prolonged recessionary freight rate environment when compared to the prior year period.

Revenues

Service and parts revenue increased from 2024 to 2025 due to an $11.1 million increase from net dealership acquisitions, partially offset by a $5.0 million, or 0.6%, decrease in same-store revenues. Customer pay work represented 78.8%, warranty represented 18.1%, and collision repair represented 3.1% of PTG's service and parts revenue. The decrease in same-store revenue is due to a $7.0 million, or 4.3%, decrease in warranty revenue, partially offset by a $1.9 million, or 0.3%, increase in customer pay revenue and a $0.1 million, or 0.1%, increase in body shop revenue. We believe the decrease in same-store service and parts revenue is primarily due to the prolonged recessionary freight rate environment.

Service and parts revenue decreased from 2023 to 2024 due to a $55.2 million, or 6.3%, decrease in same-store revenues, partially offset by a $34.2 million increase from net dealership acquisitions. Customer pay work represented approximately 78.0% of PTG's service and parts revenue, largely due to the significant amount of retail sales of parts and accessories. The decrease in same-store revenue is due to a $57.4 million, or 8.1%, decrease in customer pay revenue and a $4.1 million, or 13.4%, decrease in body shop revenue, partially offset by a $6.3 million, or 4.3%, increase in warranty revenue. We believe the decrease in same-store service and parts revenue is primarily due to customers delaying maintenance costs due to the prolonged recessionary freight rate environment.

Gross Profit

Service and parts gross profit decreased from 2024 to 2025 due to a $15.6 million, or 4.2%, decrease in same-store gross profit, partially offset by a $4.3 million increase from net dealership acquisitions. The decrease in same-store gross profit is due to a 1.6% decrease in same-store gross margin, which decreased gross profit by $13.5 million, coupled with the decrease in same-store revenues, which decreased gross profit by $2.1 million. The decrease in same-store gross profit is due to a $10.4 million, or 4.1%, decrease in customer pay gross profit, a $2.7 million, or 3.0%, decrease in warranty gross profit, and a $2.5 million, or 8.4%, decrease in body shop gross profit.

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Service and parts gross profit decreased from 2023 to 2024 due to a $17.9 million, or 4.8%, decrease in same-store gross profit, partially offset by a $14.6 million increase from net dealership acquisitions. The decrease in same-store gross profit is due to the decrease in same-store revenues, which decreased gross profit by $23.7 million, partially offset by a 0.7% increase in same-store gross margin, which increased gross profit by $5.8 million. The decrease in same-store gross profit is due to a $20.8 million, or 7.9%, decrease in customer pay gross profit and a $1.8 million, or 5.8%, decrease in body shop gross profit, partially offset by a $4.7 million, or 5.9%, increase in warranty gross profit.

Commercial Vehicle Distribution and Other Data

(In millions, except unit amounts)

Penske Australia primarily distributes and services commercial vehicles, engines, and power systems. This business generated $922.6 million of revenue during 2025 compared to $777.9 million of revenue during 2024, an increase of 18.6%. This business also generated $192.3 million of gross profit during 2025 compared to $178.2 million of gross profit during 2024, an increase of 7.9%. Excluding $17.0 million of unfavorable foreign currency fluctuations, revenue increased 20.8% primarily due to an increase in higher value power generation units sold, including increases in defense and energy solutions, partially offset by a decrease in commercial vehicle units sold related to the decline in the Australian and New Zealand heavy-duty truck market. Excluding $4.1 million of unfavorable foreign currency fluctuations, gross profit increased 10.3% primarily due to an increase in higher value power generation units sold, including increases in defense and energy solutions, partially offset by a decrease in commercial vehicle units sold related to the decline in the Australian and New Zealand heavy-duty truck market.

This business generated $777.9 million of revenue during 2024 compared to $634.0 million of revenue during 2023, an increase of 22.7%. This business also generated $178.2 million of gross profit during 2024 compared to $165.2 million of gross profit during 2023, an increase of 7.9%. Excluding $5.8 million of unfavorable foreign currency fluctuations, revenue increased 23.6% primarily due to an increase in service and parts sales revenue and an increase in higher value power generation units sold. Excluding $1.3 million of unfavorable foreign currency fluctuations, gross profit increased 8.5% primarily due to an increase in higher value power generation units sold and higher margin service and parts sales.

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Selling, General, and Administrative Data

(In millions)

Selling, general, and administrative expenses ("SG&A") increased from 2024 to 2025 due to an $86.0 million, or 2.4%, increase in same-store SG&A, partially offset by a $7.7 million decrease from net dealership dispositions. Excluding $35.9 million of unfavorable foreign currency fluctuations, same-store SG&A increased 1.4%. We believe the increase in SG&A expenses as a percentage of gross profit is primarily due to increases in personnel expenses, impairments and other charges (none of which was individually material), other general overhead expenses, as well as the prolonged recessionary freight rate environment on PTG's earnings.

Selling, general, and administrative expenses ("SG&A") increased from 2023 to 2024 due to a $139.5 million increase from net dealership acquisitions, partially offset by a $7.5 million, or 0.2%, decrease in same-store SG&A. Excluding $21.6 million of unfavorable foreign currency fluctuations, same-store SG&A decreased 0.8%. We believe the increase in SG&A as a percentage of gross profit is primarily due to increases in personnel expenses, rent expenses, customer service vehicle loaner expenses, and information technology expenses, relative to gross profit, in part due to inflation.

SG&A expenses as a percentage of total revenue were 11.8%, 11.6%, and 11.5% in 2025, 2024, and 2023, respectively, and as a percentage of gross profit were 72.1%, 70.6%, and 69.0%, in 2025, 2024, and 2023, respectively.

Depreciation

(In millions)

Depreciation increased from 2024 to 2025 due to a $10.5 million, or 6.7%, increase in same-store depreciation due to capital expenditures, coupled with a $0.5 million increase from net dealership acquisitions.

Depreciation increased from 2023 to 2024 due to a $12.4 million, or 8.9%, increase in same-store depreciation due to capital expenditures, coupled with a $5.2 million increase from net dealership acquisitions.

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Floor Plan Interest Expense

(In millions)

Floor plan interest expense decreased from 2024 to 2025 due to a $24.9 million, or 13.7%, decrease in same-store floor plan interest expense, partially offset by a $2.4 million increase from net dealership acquisitions. The overall decrease is due to decreases in applicable rates, partially offset by increases in average amounts outstanding under floor plan arrangements due to increased levels of inventory.

Floor plan interest expense increased from 2023 to 2024 due to a $46.8 million, or 35.2%, increase in same-store floor plan interest expense, coupled with an $11.0 million increase from net acquisitions. The overall increase is due to increases in average amounts outstanding under floor plan arrangements due to increasing levels of inventory, coupled with increases in applicable rates throughout much of the year.

Other Interest Expense

(In millions)

Other interest expense increased from 2024 to 2025 due to increases in average revolver borrowing amounts outstanding under our credit agreements primarily due to our repayment in full at scheduled maturity of our $550 million of 3.50% senior subordinated notes due September 1, 2025, partially offset by decreases in applicable rates.

Other interest expense decreased from 2023 to 2024 due to decreases in average revolver borrowing amounts outstanding under our credit agreements, partially offset by increases in applicable rates throughout much of the year.

Equity in Earnings of Affiliates

(In millions)

Equity in earnings of affiliates decreased from 2024 to 2025 due to a $5.2 million, or 2.6%, decrease in earnings from our investment in PTS, coupled with the decrease in earnings from our joint ventures primarily due to the sale of our 50% interest in certain German dealerships in the fourth quarter of 2024 and the sale of our 50% interest in our joint venture in Spain during the second quarter of 2025. We believe the decrease in our PTS equity earnings is primarily due to the prolonged recessionary freight rate environment, which negatively impacted demand for its transactional products. PTS has also been impacted by lower used vehicle pricing, resulting in lower gains from the sale of revenue earnings vehicles, partially offset by fleet reductions and cost reductions which improved operating profit.

Equity in earnings of affiliates decreased from 2023 to 2024 due to a $91.5 million, or 31.6%, decrease in earnings from our investment in PTS, coupled with the decrease in earnings from our other joint ventures. We believe the decrease in our PTS equity earnings is primarily due to lower commercial and consumer rental revenue as a result of the prolonged decline in freight rates, higher interest rates on fixed rate long term debt, higher average debt balances, higher maintenance expenses on full service leasing, and lower gains from the sale of revenue earning vehicles, partially offset by improved operating results in full-service leasing and logistics.

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Income Taxes

(In millions)

Income taxes increased from 2024 to 2025 despite a $26.2 million decrease in our pre-tax income compared to the prior year. Our effective tax rate was 25.78% during 2025 compared to 24.54% during 2024 primarily due to the annual refinement of U.S. and state tax provisional estimates and fluctuations in our geographic pre-tax income mix.

Income taxes decreased from 2023 to 2024 primarily due to a $185.2 million decrease in our pre-tax income compared to the prior year. Our effective tax rate was 24.54% during 2024 compared to 24.47% during 2023 primarily due to fluctuations in our geographic pre-tax income mix, coupled with an increase to the U.K. corporate tax rate in April 2023.

Liquidity and Capital Resources

Our cash requirements are primarily for working capital, inventory financing, the acquisition of new businesses, the improvement and expansion of existing facilities, the purchase or construction of new facilities, debt service and repayments, dividends, and potential repurchases of our outstanding securities under the program discussed below. Historically, these cash requirements have been met through cash flow from operations, borrowings under our credit agreements and floor plan arrangements, the issuance of debt securities, sale-leaseback transactions, real estate financings, and dividends and distributions from joint venture investments.

We have historically expanded our operations through organic growth and the acquisition of dealerships and other businesses. We believe that cash flow from operations, dividends and distributions from PTS and our joint venture investments, and our existing capital resources, including the liquidity provided by our credit agreements and floor plan financing arrangements, will be sufficient to fund our existing operations and current commitments for at least the next twelve months, including the purchase of Lexus of Orlando and Lexus of Winter Park noted above. In the event that economic conditions are more severely impacted than we expect due to geo-political conditions, the impact of tariffs and non-tariff trade barriers, any pandemic or vehicle shortages resulting from supply chain difficulties, we pursue significant acquisitions or other expansion opportunities, pursue significant repurchases of our outstanding securities, or refinance or repay existing debt, we may need to raise additional capital either through the public or private issuance of equity or debt securities or through additional borrowings, which sources of funds may not necessarily be available on terms acceptable to us, if at all. In addition, our liquidity could be negatively impacted in the event we fail to comply with the covenants under our various financing and operating agreements or in the event our floor plan financing is withdrawn. Future events, including acquisitions, divestitures, new or revised operating lease agreements, borrowings or repayments under our credit agreements and our floor plan arrangements, raising capital, and purchases or refinancing of our securities, may also impact our liquidity.

In October 2025, we filed an automatic shelf registration statement with the SEC that enables us to offer for sale, from time to time and as the capital markets permit, an unspecified amount of common stock, preferred stock, debt securities, warrants, subscription rights, depositary shares, stock purchase contracts, and units.

We expect that scheduled payments of our debt instruments will be funded through cash flows from operations or borrowings under our credit agreements. In the case of payments upon the maturity or termination dates of our debt instruments, we currently expect to be able to repay or refinance such instruments from cash flows from operations or borrowings under our credit agreements. Refer to the disclosures provided in Part II, Item 8, Note 10 of the Notes to our Consolidated Financial Statements set forth below for a detailed description of our long-term debt obligations and scheduled interest payments.

Floor plan notes payable are revolving inventory-secured financing arrangements. Refer to the disclosures provided in Part II, Item 8, Note 9 of the Notes to our Consolidated Financial Statements for a detailed description of financing for the vehicles we purchase, including discussion of our floor plan and other revolving arrangements.

Refer to the disclosures provided in Part II, Item 8, Note 11 of the Notes to our Consolidated Financial Statements for a description of our off-balance sheet arrangements which includes a repurchase commitment related to our floor plan credit agreement with Daimler Truck Financial Services Australia and Daimler Financial Services New Zealand.

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As of December 31, 2025, we had $64.7 million of cash available to fund our operations and capital commitments. In addition, we had an aggregate of approximately $1.5 billion available for borrowing under our U.S. credit agreement, U.K. credit agreement, the revolving mortgage facility through Toyota Motor Credit Corporation in the U.S., and other various credit facilities.

Securities Repurchases

From time to time, our Board of Directors has authorized securities repurchase programs pursuant to which we may, as market conditions warrant, purchase our outstanding common stock or debt on the open market, in privately negotiated transactions, via a tender offer, through a pre-arranged trading plan, pursuant to the terms of an accelerated share repurchase program, or by other means. We have historically implemented pre-arranged trading plans as part of our securities repurchase programs. These plans authorize share repurchases based on parameters outlined in the specific plan during periods when we otherwise would not trade in our securities, such as the period approaching the end of a quarter through our public announcement of earnings. We have historically funded any such repurchases using cash flow from operations, borrowings under our U.S. credit agreement, and borrowings under our U.S. floor plan arrangements. The decision to make repurchases will be based on factors such as general economic and industry conditions, the market price of the relevant security versus our view of its intrinsic value, the potential impact of such repurchases on our capital structure, and our consideration of any alternative uses of our capital, such as for acquisitions, dividends, the repayment of our existing indebtedness, and strategic investments in our current businesses, in addition to any then-existing limits imposed by our finance agreements and securities trading policy. As of December 31, 2025, $247.5 million remained outstanding and available for repurchases under our securities repurchase program. This authority has no expiration. Refer to the disclosures provided in Part II, Item 8, Note 14 of the Notes to our Consolidated Financial Statements for a summary of shares repurchased during 2025.

Dividends

We paid the following cash dividends on our common stock in 2024 and 2025:

Per Share Dividends

We also announced a cash dividend of $1.40 per share, payable on March 5, 2026, to stockholders of record on February 25, 2026. While future quarterly or other cash dividends will depend upon a variety of factors considered relevant by our Board of Directors, which may include our expectations regarding vehicle availability, the impact of recently announced tariffs, the rate of inflation, earnings, cash flow, capital requirements, restrictions relating to any then-existing indebtedness, financial condition, alternative uses of capital, and other factors, we currently expect to continue to pay comparable dividends in the future.

Vehicle Financing

Refer to the disclosures provided in Part II, Item 8, Note 9 of the Notes to our Consolidated Financial Statements for a detailed description of financing for the vehicles we purchase, including discussion of our floor plan and other revolving arrangements.

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Long-Term Debt Obligations

As of December 31, 2025, we had the following long-term debt obligations outstanding:

During 2025, we repaid in full at scheduled maturity our $550 million of 3.50% senior subordinated notes due September 1, 2025. As of December 31, 2025, we were in compliance with all financial covenants under our credit agreements, and we believe we will remain in compliance with such covenants for the next twelve months. Refer to the disclosures provided in Part II, Item 8, Note 10 of the Notes to our Consolidated Financial Statements set forth below for a detailed description of our long-term debt obligations.

Short-Term Borrowings

As of December 31, 2025, we had five principal sources of short-term borrowings: our U.S. credit agreement (with $1.5 billion of total capacity), U.K. credit agreement, other local country credit agreements, the revolving mortgage facility through Toyota Motor Credit Corporation, and the floor plan agreements that we utilize to finance our vehicle inventories. We are also able to access availability under the floor plan agreements to fund our cash needs. Our borrowings vary over time based on our cash flows, capital requirements and investment activities. The amounts outstanding under our floor plan agreements varied based on the timing of the receipt and expenditure of cash in our operations, driven principally by the levels of our vehicle inventories. Approximately $1.5 billion was available for borrowing under our various credit facilities as of December 31, 2025. During 2025, our outstanding revolving commitments under the U.S. credit agreement varied between $0.0 million and $748.0 million.

PTS Dividends

We hold a 28.9% ownership interest in PTS as noted above. Their partnership agreement requires PTS, subject to applicable law and the terms of its credit agreements, to make quarterly distributions to the partners with respect to each fiscal year by no later than 45 days after the end of each of the first three quarters of the year and by April 15 of the following year. PTS' partnership agreement and certain of its debt agreements allow partner distributions only as long as it is not in default under those agreements and the amount it pays does not exceed 50% of its consolidated net income, unless its debt-to-equity ratio is less than 3.0 to 1.0, in which case its distributions may not exceed 80% of its consolidated net income. We receive pro rata cash distributions relating to this investment, typically in April, May, August, and November of each year. During 2025, 2024, and 2023, we received $98.7 million, $98.4 million, and $168.8 million, respectively, of pro rata cash distributions relating to this investment. We currently expect to continue to receive future distributions from PTS quarterly, subject to its financial performance.

Investments

We account for each of our investments under the equity method, pursuant to which we record our proportionate share of the investee's income each period. The net book value of our investments was $1,923.7 million and $1,827.0 million as of December 31, 2025, and 2024, respectively, including $1,920.6 million and $1,803.9 million relating to PTS as of December 31, 2025, and 2024, respectively.

Operating Leases

We estimate the total rent obligations under our operating leases, including any extension periods that we are reasonably certain to exercise at our discretion and assuming constant consumer price indices, to be $5.5 billion. As of December 31, 2025, we were in compliance with all financial covenants under these leases consisting principally of leases

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for dealerships and other properties, and we believe we will remain in compliance with such covenants for the next twelve months. Refer to the disclosures provided in Part II, Item 8, Note 3 and Note 11 of the Notes to our Consolidated Financial Statements for a description of our operating leases.

Supplemental Guarantor Financial Information

The following is a description of the terms and conditions of the guarantees with respect to senior subordinated notes of Penske Automotive Group, Inc. ("PAG") as the issuer of the 3.75% Notes (the "Senior Subordinated Notes").

The Senior Subordinated Notes are unsecured, senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries ("Guarantor subsidiaries"). The Senior Subordinated Notes also contains customary negative covenants and events of default. If we experience certain "change of control" events specified in the indenture, holders of the Senior Subordinated Notes will have the option to require us to purchase for cash all or a portion of their Senior Subordinated Notes at a price equal to 101% of the principal amount of the Senior Subordinated Notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the Senior Subordinated Notes at a price equal to 100% of the principal amount of the Senior Subordinated Notes, plus accrued and unpaid interest.

Guarantor subsidiaries are directly or indirectly 100% owned by PAG, and the guarantees are full and unconditional and joint and several. The guarantees may be released under certain circumstances upon resale or transfer by us of the stock of the related guarantor or all or substantially all of the assets of the guarantor to a non-affiliate. Non-wholly owned and foreign subsidiaries of PAG do not guarantee the Senior Subordinated Notes ("Non-Guarantor subsidiaries"). The following tables present summarized financial information for PAG and the Guarantor subsidiaries on a combined basis. The financial information of PAG and Guarantor subsidiaries is presented on a combined basis; intercompany balances and transactions between PAG and Guarantor subsidiaries have been eliminated; PAG's or Guarantor subsidiaries' amounts due from, amounts due to, and transactions with non-issuer and Non-Guarantor subsidiaries and related parties are disclosed separately. Because our consolidated financial statements have been retrospectively recast to reflect the acquisition of PMG as a transaction between entities under common control, the summarized combined financial information of PAG and the Guarantor subsidiaries includes PMG for all periods presented.

Condensed income statement information:

Condensed balance sheet information:

_______________

(1)Includes $27.3 million and $140.0 million as of December 31, 2025, and 2024, respectively, due from Non-Guarantor subsidiaries.

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During the years ended December 31, 2025, and 2024, PAG received $189.8 million and $110.3 million, respectively, from Non-Guarantor subsidiaries.

Cash Flows

The following table summarizes the changes in our cash provided by (used in) operating, investing, and financing activities. The major components of these changes are discussed below.

Cash Flows from Operating Activities

Cash flows from operating activities include net income, as adjusted for non-cash items and the effects of changes in working capital.

We had net cash provided by operating activities of $975.1 million, $1,230.6 million, and $1,145.2 million during 2025, 2024, and 2023, respectively. The decrease of $255.5 million from 2024 to 2025 was primarily due to the timing of working capital related payments, including accounts receivable, inventory, and floor plan notes payable. Excluding non-cash items, these impacts were offset by an increase in earnings as discussed above under "Results of Operations."

We finance substantially all of the commercial vehicles we purchase for distribution, new vehicles for retail sale (however, see Item 1A. Risk Factors for a discussion of the agency model of distribution), and a portion of our used vehicle inventories for retail sale under floor plan and other revolving arrangements with various lenders, including the captive finance companies associated with automotive manufacturers. We retain the right to select which, if any, financing source to utilize in connection with the procurement of vehicle inventories. Many vehicle manufacturers provide vehicle financing for the dealers representing their brands; however, it is not a requirement that we utilize this financing. Historically, our floor plan finance source has been based on aggregate pricing considerations.

In accordance with generally accepted accounting principles relating to the statement of cash flows, we report all cash flows arising in connection with floor plan notes payable with the manufacturer of a particular new vehicle as an operating activity in our statement of cash flows, and we report all cash flows arising in connection with floor plan notes payable to a party other than the manufacturer of a particular new vehicle and all floor plan notes payable relating to pre-owned vehicles as a financing activity in our statement of cash flows. Currently, the majority of our non-trade vehicle financing is with other manufacturer captive lenders. To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us with vehicle financing.

We believe that changes in aggregate floor plan liabilities are typically linked to changes in vehicle inventory and therefore, are an integral part of understanding changes in our working capital and operating cash flow. As a result, we have prepared the following reconciliation to highlight our operating cash flows with all changes in vehicle floor plan being classified as an operating activity for informational purposes:

Cash Flows from Investing Activities

Cash flows from investing activities consist primarily of cash used for capital expenditures, proceeds from the sale of dealerships, proceeds from the sale of property and equipment, proceeds from the sale of an equity method investment, and

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cash used for net expenditures for acquisitions. Capital expenditures were $324.6 million, $377.8 million, and $386.0 million during 2025, 2024, and 2023, respectively. Capital expenditures relate primarily to improvements to our existing dealership facilities, the construction of new facilities, the acquisition of the property or buildings associated with existing leased facilities, and the acquisition of land for future development. We currently expect to finance our capital expenditures with operating cash flows or borrowings under our credit agreements. Proceeds from the sale of dealerships were $119.9 million and $82.1 million during 2025 and 2024, respectively, compared to no proceeds during 2023. Proceeds from the sale of property and equipment were $27.5 million, $26.2 million, and $30.7 million during 2025, 2024, and 2023, respectively. Proceeds from the sale of an equity method investment were $16.0 million and $20.7 million during 2025 and 2024, respectively, compared to no proceeds during 2023. Cash used in acquisitions, net of cash acquired, was $21.5 million, $786.2 million, and $214.9 million during 2025, 2024, and 2023, respectively, and included no cash used to repay sellers' floor plan liabilities in such business acquisitions as compared to $212.5 million and $24.3 million, respectively.

Cash Flows from Financing Activities

Cash flows from financing activities include net borrowings or repayments of debt, net repayments or borrowings of floor plan notes payable non-trade, repurchases of common stock, dividends, distributions to partners from Penske Motor Group, cash used in a common control transaction, purchases of subsidiary shares from non-controlling interest, and payments for debt issuance costs.

We repaid in full at scheduled maturity our $550 million of 3.50% senior subordinated notes due September 1, 2025. We had net borrowings of other debt of $671.6 million and $232.0 million during 2025 and 2024, respectively, and net repayments of $4.3 million during 2023. We had net repayments of floor plan notes payable non-trade of $4.7 million and $15.7 million during 2025 and 2024, respectively, and net borrowings of $59.9 million during 2023. In 2025, 2024, and 2023, we repurchased 1.0 million, 0.4 million, and 2.6 million shares of common stock under our securities repurchase program for $159.1 million, $58.7 million, and $358.7 million, respectively. In 2025, 2024, and 2023, we acquired 0.14 million, 0.12 million, and 0.17 million shares from employees in connection with a net share settlement feature of employee equity awards for $22.9 million, $18.8 million, and $23.5 million, respectively. We also paid $343.8 million, $274.4 million, and $189.1 million of cash dividends to our stockholders during 2025, 2024, and 2023, respectively. Penske Motor Group paid $52.5 million, $36.6 million, and $54.7 million for distribution to partners during 2025, 2024, and 2023, respectively. Cash used in a common control transaction was $363.6 million during 2025 compared to no cash used during 2024, and 2023, respectively. We had no purchases of subsidiary shares from non-controlling interest during 2025 and 2023, respectively, compared to $16.7 million during 2024. We made payments of $0.5 million, $1.0 million, and $2.1 million for debt issuance costs during 2025, 2024, and 2023, respectively.

Related Party Transactions

Stockholders Agreement

Several of our directors and officers are affiliated with Penske Corporation or related entities. Roger Penske, our Chair of the Board and Chief Executive Officer, is also Chair of the Board and Chief Executive Officer of Penske Corporation and through entities affiliated with Penske Corporation is our largest stockholder owning approximately 52% of our outstanding common stock. Mitsui & Co., Ltd. and Mitsui & Co. (USA), Inc. (collectively, "Mitsui") own approximately 20% of our outstanding common stock. Mitsui, Penske Corporation and Penske Automotive Holdings Corp. (together with Penske Corporation, the "Penske companies") are parties to a stockholders agreement which expires March 26, 2030 (the "Stockholders Agreement"). Pursuant to the Stockholders Agreement, in connection with any shareholder election of directors, the Penske companies agreed to vote their shares for two directors who are representatives of Mitsui as long as Mitsui owns in excess of 20% of our outstanding common stock, and for one director as long as Mitsui owns in excess of 10% of our outstanding common stock. Mitsui agreed to vote its shares for up to fourteen directors voted for by the Penske companies.

Voting Agreement

Penske Corporation (“PC”) and the Company entered into a voting agreement (the “Voting Agreement”) pursuant to which PC agreed, on each matter brought to a vote at any annual or special meeting of our stockholders and in connection with any action proposed to be taken by consent of our stockholders in lieu of a meeting, to vote all shares of Voting Common Stock, or other voting or equity securities of ours which could be issued (together with the Voting Common Stock, the “Voting Securities”) beneficially owned by PC, that, together with the Voting Securities held by Roger S. Penske, our Chair and Chief Executive Officer, and any entity that Roger S. Penske controls, exceed 43.57% of the outstanding Voting Securities (the “Excess Voting Securities”), in the same proportion as all votes cast by stockholders

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other than PC, Roger S. Penske or any entity that Roger S. Penske controls (except as otherwise required by the existing Stockholders Agreement). Any Voting Securities that are not Excess Voting Securities may be voted at the discretion of PC. The Voting Agreement will terminate per its terms at the time that PC ceases to beneficially own 30% or more of the Voting Securities then outstanding. Notwithstanding the foregoing, the Voting Agreement does not impact the provisions of the Stockholders Agreement noted above as currently in effect.

Other Related Party Interests and Transactions

Robert Kurnick, Jr., our President and a director, is also the Vice Chair and a director of Penske Corporation and an Advisory Board member of PTS. Bud Denker, our Executive Vice President, Human Resources, is also the President of Penske Corporation. Greg Penske, the Vice Chair of our Board of Directors, is the son of our Chair and is also a director of Penske Corporation. Michael Eisenson, one of our directors, is also a director of Penske Corporation. Yosuke Kawakami, one of our directors, is also an employee of Mitsui & Co.

We sometimes pay to and/or receive fees from Penske Corporation, its subsidiaries, and its affiliates for services rendered in the ordinary course of business or to reimburse payments made to third parties on each other's behalf. These transactions are reviewed periodically by our Audit Committee and reflect the provider's cost or an amount mutually agreed upon by both parties.

We own a 28.9% interest in PTS. PTS, discussed previously, is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui. The PTS partnership agreement, among other things, provides us with specified partner distribution and governance rights and restricts our ability to transfer our interest. The partnership has an eleven-member Advisory Board. We have the right to appoint one Advisory Board member and appointed Robert H. Kurnick, Jr., our President. Lisa Davis and Michael Eisenson, our directors, are also members of the Advisory Board. We have the right to pro rata quarterly distributions equal to at least 50% of PTS' consolidated net income, as well as specified minority rights which require our and/or Mitsui's consent for certain actions taken by PTS as specified in the PTS partnership agreement. We have also entered into other joint ventures with certain related parties as more fully discussed in Part II, Item 8, Note 12 of the Notes to our Consolidated Financial Statements.

Cyclicality

Unit sales of motor vehicles, particularly new vehicles, have been cyclical historically, fluctuating with general economic cycles. During economic downturns, the automotive and truck retailing industries tend to experience periods of decline and recession similar to those experienced by the general economy. We believe that these industries are influenced by general economic conditions and particularly, by consumer confidence, the level of personal discretionary spending, the rate of inflation, including its impact on vehicle affordability, freight conditions, fuel prices, utility prices, interest rates, and credit availability.

U.S. light vehicle sales have ranged from a low of 10.4 million units in 2009 to a high of 17.5 million units in 2016. Unit sales of new commercial vehicles have historically been subject to substantial cyclical variation based on these general economic conditions. According to data published by ACT Research, in recent years, total U.S. retail sales of new Class 8 commercial vehicles have ranged from a low of approximately 97,000 in 2009 to a high of approximately 334,000 in 2019. Through geographic diversification, concentration on higher margin regular service and parts revenues, and diversification of our customer base, we have attempted to reduce the negative impact of adverse general economic conditions or cyclical trends affecting any one industry or geographic area on our earnings.

Seasonality

Our business is modestly seasonal overall. Our U.S. operations generally experience higher volumes of vehicle sales in the second and third quarters of each year due in part to consumer buying trends and the introduction of new vehicle models. Also, vehicle demand, and to a lesser extent demand for service and parts, is generally lower during the winter months than in other seasons, particularly in regions of the U.S. where dealerships may be subject to severe winters. Our U.K. operations generally experience higher volumes of new vehicle sales in the first and third quarters of each year, due primarily to new vehicle registration practices in the U.K. PTS' rental operations are seasonal. For commercial rental, the lowest revenue is typically generated in the first quarter of the year, with the highest revenue typically generated during the third quarter. For PTS consumer rentals, the peak season runs from Memorial Day through Labor Day.

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Inflation

Many of the markets in which we operate have recently experienced higher rates of inflation when compared to historical norms. Inflation, which may include inflationary effects caused by tariffs and non-tariff trade barriers, affects the price of vehicles, the price of parts, the rate of pay of our employees, consumer credit availability, and consumer demand. Higher rates of inflation may adversely affect consumer demand and increase our costs, which may materially and adversely affect us.

Forward-Looking Statements

Certain statements and information set forth herein, as well as other written or oral statements made from time to time by us or by our authorized officers on our behalf, constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "goal," "plan," "seek," "project," "continue," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement in order to comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date of this report or when made, and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements include, without limitation, statements with respect to:

•the impact of macro-economic and geo-political conditions and events, including their impact on new and used vehicle sales, availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, the rate of inflation, personal discretionary spending levels, consumer credit availability, interest rates, and unemployment rates;

•the impact of recently announced tariffs, as well as trade restrictions, trade disputes, non-tariff trade barriers and other foreign trade risks, on our acquisition costs, consumer demand, vehicle affordability, the supply of vehicles and parts, and our gross profit with respect to affected vehicles and parts;

•our future financial and operating performance;

•future dealership openings, acquisitions, and dispositions;

•future potential capital expenditures and securities repurchases;

•our ability to realize cost savings and synergies;

•our ability to respond to economic cycles;

•our expectations regarding new vehicle availability and the renewal of our existing franchise agreements and arrangements;

•trends and sales levels in the automotive retail industry, commercial vehicles industries, and in the general economy in the various countries in which we operate;

•the rate of adoption of EVs and their effect on our business;

•our liquidity and ability to access the remaining availability under our credit agreements;

•the performance of our joint ventures, including PTS;

•future foreign currency exchange rates;

•the outcome of various regulatory matters and legal proceedings;

•results of self-insurance plans or other insured matters;

•trends affecting the automotive or trucking industries generally, such as changes to an agency model of distribution, and our future financial condition or results of operations; and

•our business strategy.

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Forward-looking statements involve known and unknown risks and uncertainties and are not assurances of future performance. Actual results may differ materially from anticipated results due to a variety of factors, including the factors identified under Part I, Item 1A. Risk Factors. Important factors that could also cause actual results to differ materially from our expectations include those mentioned in Part I, Item 1A. Risk Factors and the following:

•our business and the automotive retail and commercial vehicles industries in general are susceptible to adverse macro-economic and geo-political conditions, including their impact on new and used vehicle sales, the availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, demand for trucks to move freight with respect to PTS and PTG, personal discretionary spending levels, interest rates, foreign currency exchange rates, customer confidence, the rate of inflation, including its impact on vehicle affordability, fuel and utility prices and unemployment rates;

•many of the vehicles and parts we sell are subject to recently announced tariffs, which tariffs and related trade restrictions, trade disputes, non-tariff trade barriers and other foreign trade risks may increase the cost of vehicles and parts to us and consumers, limit the supply of certain vehicles and parts we sell, reduce consumer demand due to affordability challenges, and negatively impact our gross profit with respect to affected vehicles and parts;

•we depend on the success, popularity and availability of the brands we sell, and adverse conditions affecting one or more of these vehicle manufacturers, including the adverse impact on the vehicle and parts supply chain due to natural disasters, the shortage of vehicle components, international conflicts, challenges in sourcing labor, labor strikes, or work stoppages, the impact of tariffs or non-tariff trade barriers, or other disruptions that interrupt the supply of vehicles and parts to us may negatively impact our revenues and profitability;

•the number of new and used vehicles sold in our markets, which impacts our ability to generate new and used vehicle gross profit and future service and parts operations;

•the effect on our businesses of the changing retail environment due to certain manufacturers selling direct to consumers outside the franchise system, changes to an agency model of distribution, and the growing number of EVs;

•the effect on our businesses of the growing market share of underrepresented vehicle brands in our dealership portfolio, including Chinese brands, and mobility technologies, such as Uber and Lyft, and the development and availability of driverless vehicles;

•vehicle manufacturers exercise significant control over our operations, and we depend on them and the continuation of our franchise and distribution agreements in order to operate our business;

•we are subject to the risk that a substantial number of our new or used inventory may be unavailable due to inventory shortages, recalls, or other reasons;

•the success of our commercial vehicle distribution operations and engine and power systems distribution operations depends upon continued availability of the vehicles, engines, power systems, and other parts we distribute, demand for those items and general economic conditions in those markets;

•a restructuring of any significant vehicle manufacturer or supplier;

•our operations may be affected by severe weather or other periodic business interruptions;

•with respect to PTS, changes in the financial health of its customers, compliance costs, labor strikes or work stoppages with respect to its employees, a reduction in PTS' asset utilization rates, the cost of acquiring and the continued availability from truck manufacturers and suppliers of vehicles and parts for its fleet, including with respect to the effect of various regulations concerning its vehicle fleet, potential decreases in the resale value of used vehicles which may affect PTS' ability to sell its used vehicles after the expiration of its customers' leases or at the end of its holding period for rental vehicles, which may affect PTS' profitability, compliance costs in regard to its trucking fleet and truck drivers, its ability to retain qualified drivers and technicians, risks associated with its participation in multi-employer pension plans, conditions in the capital markets to assure PTS' continued availability of capital to purchase trucks, the effect of changes in lease accounting rules on PTS customers' purchase/lease decisions, industry competition, new or enhanced regulatory requirements, emissions standards, vehicle mandates, changes in consumer sentiment regarding the transportation industry, and vulnerabilities with respect to its centralized information systems, each of which could impact equity earnings and distributions to us;

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•we have substantial risk of loss not covered by insurance;

•we may not be able to satisfy our capital requirements for acquisitions, facility renovation projects, financing the purchase of our inventory, or refinancing of our debt when it becomes due;

•our level of indebtedness and cash required for lease obligations may limit our ability to obtain financing generally and may require that a significant portion of our cash flow be used for debt service;

•non-compliance with the financial ratios and other covenants under our credit agreements and operating leases may cause adverse financial consequences, including the termination of such agreements and acceleration of the amounts owed thereunder;

•higher interest rates may significantly increase our variable rate interest costs and because many customers finance their vehicle purchases, adversely impact vehicle affordability, and decrease vehicle sales;

•our operations outside of the U.S. subject our profitability to fluctuations relating to changes in foreign currency values;

•we are dependent on the continued security and availability of our information technology systems and those of certain third-party providers to avoid significant business interruptions, which systems are increasingly threatened by ransomware and other cyber-attacks;

•we may be subject to significant litigation, fines, penalties, and other costs under applicable privacy laws and regulations if we do not maintain our confidential customer and employee information properly;

•if we lose key personnel, especially our Chief Executive Officer, or are unable to attract additional qualified personnel;

•new or enhanced regulations in both our domestic and international markets relating to automobile dealerships and vehicle sales, including those enacted in certain European countries and various U.S. states banning or taking actions to ban the sale of new vehicles with gasoline engines;

•new or enhanced regulations, including those related to emissions standards, or changes in consumer sentiment relating to commercial truck sales that may hinder our or PTS' ability to maintain, acquire, sell, or operate trucks;

•changes in tax, financial or regulatory rules, or requirements, including new regulations proposed by the governments and agencies that regulate retail automotive transactions may lead to additional transaction times for the sale of vehicles, complicate the transaction process, decrease customer satisfaction, and increase compliance costs and risk, among other effects;

•we could be subject to legal, administrative, or regulatory proceedings which, if the outcomes are adverse to us, could have a material adverse effect on our business, including the result of a proposed compensation redress scheme by the U.K. Financial Conduct Authority in connection with their review of vehicle financing commission disclosures, which provides for compensation from lenders (not dealers) to certain customers whose financing arrangements are deemed unfair to consumers;

•if state dealer laws in the U.S. are repealed or weakened or new manufacturers such as those selling EVs are able to conduct significant vehicle sales outside of the franchised automotive system, our automotive dealerships may be subject to increased competition and may be more susceptible to termination, non-renewal, or renegotiation of their franchise agreements;

•we are subject to a wide range of environmental laws and regulations governing the use, generation, and disposal of materials used in our ordinary course of operations, and we face potentially significant costs relating to claims, penalties, and remediation efforts in the event of non-compliance with existing and future laws and regulations which may become more stringent in the face of climate change;

•some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests; and

•shares of our common stock eligible for future sale may cause the market price of our common stock to drop significantly, even if our business is doing well.

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We urge you to carefully consider these risk factors and further information under Part I, Item 1A. Risk Factors in evaluating all forward-looking statements regarding our business. Readers of this report are cautioned not to place undue reliance on the forward-looking statements contained in this report. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. Except to the extent required by the federal securities laws and the Securities and Exchange Commission's rules and regulations, we have no intention or obligation to update publicly any forward-looking statements whether as a result of new information, future events, or otherwise.

Additional Information

Investors and others should note that we may announce material financial information using our company website (www.penskeautomotive.com), our investor relations website (investors.penskeautomotive.com), SEC filings, press releases, public conference calls, and webcasts. Information about the Company, its business, and its results of operations may also be announced by posts on the following social media channels:

•Penske Automotive Group's X feed (www.x.com/penskecars)

•Penske Automotive Group's Facebook page (www.facebook.com/penskecars)

•Penske Automotive Group's Instagram page (www.instagram.com/penskecars)

•Penske Automotive Group's Social website (www.penskesocial.com)

The information that we post on these social media channels could be deemed to be material information. As a result, we encourage investors, the media, and others interested in Penske Automotive Group to review the information that we post on these social media channels. These channels may be updated from time to time on Penske Automotive Group's investor relations website. The information on or accessible through our websites and social media channels is not incorporated by reference in this Annual Report on Form 10-K, and our references to such content are intended to be inactive textual or oral references only.