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What changed in GROUP 1 AUTOMOTIVE INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GROUP 1 AUTOMOTIVE INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+331 added−305 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in GROUP 1 AUTOMOTIVE INC's 2025 10-K

331 paragraphs added · 305 removed · 220 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

41 edited+29 added−41 removed44 unchanged
Biggest changeAs of December 31, 2024, we had 20,413 employees (full-time, part-time and temporary), of which 13,398 were employed in the U.S. and 7,015 in the U.K. Employee Engagement E mployee engagement is key to driving long-term business success and supporting our way towards becoming a truly customer-centric organization, which drives value for our investors.
Biggest changeEmployee Engagement Employee engagement is key to driving long-term business success and supporting our way towards becoming a truly customer-centric organization, which drives value for our investors. The annual Group 1 “Your Voice Matters” Engagement Survey has become our primary employee listening platform for gathering feedback and promoting a performance-based culture.
GDPR”) and, the California Consumer Privacy Act, as amended and enhanced effective January 1, 2023 by the California Privacy Rights Act (as so amended, the “CCPA”), and the Federal Trade Commission (“FTC”) Safeguards Rule.
GDPR”), the California Consumer Privacy Act, as amended and enhanced effective January 1, 2023 by the California Privacy Rights Act (as so amended, the “CCPA”), and the Federal Trade Commission (“FTC”) Safeguards Rule.
Additionally, certain environmental laws may result in imposition of joint and several strict liability, which could cause us to become liable as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties.
Additionally, certain environmental laws may result in imposition of strict joint and several liability, which could cause us to become liable as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties.
These statutes can impose strict and joint and several liability for cleanup costs on those that are considered to have contributed to the release of a hazardous substance, including for historic spills that occurred prior to our ownership of our properties even if we did not know of, or did not cause the release of such hazardous substances.
These statutes can impose strict joint and several liability for cleanup costs on those that are considered to have contributed to the release of a hazardous substance, including for historic spills that occurred prior to our ownership of our properties even if we did not know of, or did not cause the release of such hazardous substances.
We make the following information available free of charge on our website: • Annual Report on Form 10-K; • Quarterly Reports on Form 10-Q; • Current Reports on Form 8-K; • Amendments to the reports filed or furnished electronically with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; • Our Corporate Governance Guidelines; • The charters for our Audit, Compensation & Human Resources, Finance/Risk Management and Governance & Corporate Responsibility Committees; • Our Code of Conduct for Directors, Officers and Employees (“Code of Conduct”); • Our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller (“Code of Ethics”); and • Our Sustainability Report.
We make the following information available free of charge on our website: • Annual Report on Form 10-K; • Quarterly Reports on Form 10-Q; • Current Reports on Form 8-K; • Amendments to the reports filed or furnished electronically with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; • Our Corporate Governance Guidelines; • The charters for our Audit, Compensation & Human Resources, Finance/Risk Management and Governance & Corporate Responsibility Committees; • Our Code of Conduct for Directors, Officers and Employees (“Code of Conduct”); • Our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller (“Code of Ethics”); and • Our Corporate Responsibility Report.
The full impact of these actions is uncertain at this time, though these international agreements have the potential to result in increased pressure from financial institutions and other stakeholders to eliminate or reduce fossil fuel use and GHG emissions related to the same. Gas and diesel-powered automobiles are a source of GHG emissions and in the recent past, the U.S.
The full impact of these actions is uncertain at this time, though these international agreements have the potential to result in increased pressure from financial institutions and other stakeholders to eliminate or reduce fossil fuel use and GHG emissions related to the same. 9 Gas and diesel-powered automobiles are a source of GHG emissions and in the recent past, the U.S.
Several companies are currently manufacturing EVs for sale primarily through the internet, under a direct-to-consumer model, without using the traditional dealer-network or are considering such a strategy, including some of our OEM partners. Certain of our vehicle manufacturers in the U.K. recently transitioned to an agency model for selling new vehicles.
Several companies are currently manufacturing EVs for sale primarily through the internet, under a direct-to-consumer model, without using the traditional dealer-network or are considering such a strategy, including some of our OEM partners. Certain of our vehicle manufacturers in the U.K. transitioned to an agency model for selling new vehicles.
Our collision centers compete with other large, multi-location companies, as well as local, independent, collision service operations. F&I We believe the principal competitive factors in the F&I business are convenience, interest rates, product availability and affordability, product knowledge, flexibility in contract length and ease of consumer understanding.
Our collision centers compete with other large, multi-location companies, as well as local, independent, collision service operations. F&I We believe the principal competitive factors in the F&I business are interest rates, product availability and affordability, product knowledge, flexibility in contract length and ease of consumer understanding.
New Vehicles Sales In the new vehicle market, our dealerships compete with other franchised dealerships in their market areas, as well as auto brokers, leasing companies and internet companies that provide referrals to, or broker vehicle sales with other dealerships or customers.
New Vehicle Sales In the new vehicle market, our dealerships compete with other franchised dealerships in their market areas, as well as auto brokers, leasing companies and internet companies that provide referrals to, or broker vehicle sales with other dealerships or customers.
In certain cases, our customers in the normal course of business can cancel previously purchased F&I products resulting in the charge back to us by the product provider of a portion of the profit earned on the sale of those products. 7 Manufacturers’ Relationships and Agreements Each of our U.S. dealerships operates under one or more franchise agreements with vehicle manufacturers or authorized distributors.
In certain cases, our customers in the normal course of business can cancel previously purchased F&I products resulting in the charge back to us by the product provider of a portion of the profit earned on the sale of those products. 6 Manufacturers’ Relationships and Agreements Each of our U.S. dealerships operates under one or more franchise agreements with vehicle manufacturers or authorized distributors.
Court of Appeal issued a judgment in the three joint appeals for Johnson v Firstrand Bank Ltd, Wrench v Firstrand Bank Ltd and Hopcraft v Close Brothers Ltd (collectively, the “COA litigation”), finding that the claimants in those cases are entitled to be paid a sum equivalent to the undisclosed commission paid by their lenders to the dealerships from which they acquired their cars, plus interest.
Court of Appeal issued a judgment in the three joint appeals for Johnson v Firstrand Bank Ltd, Wrench v Firstrand Bank Ltd and Hopcraft v Close Brothers Ltd (collectively, the “COA litigation”), finding that the claimants in those cases were entitled to be paid a sum equivalent to the undisclosed commission paid by their lenders to the dealerships from which they acquired their cars, plus interest.
Other factors unrelated to seasonality, such as changes in economic conditions, manufacturer incentive programs, supply issues, seasonal weather events and/or changes in foreign currency exchange rates may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income. 11 Internet Website and Availability of Public Filings Our internet address is www.group1auto.com .
Other factors unrelated to seasonality, such as changes in economic conditions, manufacturer incentive programs, supply issues, seasonal weather events and/or changes in foreign currency exchange rates may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income. Internet Website and Availability of Public Filings Our internet address is www.group1corp.com .
We sell replacement parts and provide both warranty and non-warranty maintenance and repair services at each of our franchised dealerships, as well as provide collision repair services at the 39 collision centers that we operate. We also sell parts to wholesale customers.
We sell replacement parts and provide both warranty and non-warranty maintenance and repair services at each of our franchised dealerships, as well as provide collision repair services at the 32 collision centers that we operate. We also sell parts to wholesale customers.
Court of Appeal held where there is a failure to disclose, lenders and dealerships who acted as brokers are jointly and severally liable for the repayment of the commission. After the U.K.
Court of Appeal held where there is a failure to disclose, lenders and dealerships who act as brokers are jointly and severally liable for the repayment of the commission. After the U.K.
The following charts present total revenues and gross profit contribution from our operations by new vehicles, used vehicles, parts and service and F&I for the year ended December 31, 2024 (“Current Year”): 3 The following chart presents our diversity of new vehicle unit sales by manufacturer for the Current Year: The following table shows our new vehicle unit sales geographic mix for the Current Year and our franchise count as of December 31, 2024: New vehicle unit sales geographic mix (%) Franchises Region Geographic Market U.S.
The following charts present total revenues and gross profit contribution from our operations by new vehicles, used vehicles, parts and service and F&I for the year ended December 31, 2025 (“Current Year”): 3 The following chart presents our diversity of new vehicle unit sales by manufacturer for the Current Year: The following table shows our new vehicle unit sales geographic mix for the Current Year and our franchise count as of December 31, 2025: New vehicle unit sales geographic mix (%) Franchises Segment Geographic Market U.S.
As a result, numerous proposals have been made at the international, national and state levels of government, in locations affecting our business, to monitor and limit existing emissions of greenhouse gas (“GHG”), as well as to restrict or eliminate such future emissions.
As a result, numerous proposals have been made at the international, national and state levels of government, in locations affecting our business, to monitor and limit existing emissions of GHGs, as well as to restrict or eliminate such future emissions.
In January 2024, the FCA announced that it planned to undertake a formal review into the historic use of discretionary commission arrangements (“DCA”s) amid concerns that the practice of linking brokers’ commissions to the interest rate charged to customers may have been unfair to customers, resulting in customers paying too much for their car loans. 8 Additionally in the U.K., on October 25, 2024, the U.K.
In January 2024, the FCA announced that it planned to undertake a formal review into the historic use of discretionary commission arrangements (“DCAs”) amid concerns that the practice of linking brokers’ commissions to the interest rate charged to customers may have been unfair to customers, resulting in customers paying too much for their car loans.
Subsequent conferences have sought to build on the Paris Agreement, a United Nations-sponsored, non-binding agreement for nations to limit their GHG emissions through individually determined reduction goals every five years after 2020, by calling for various countries to phase out fossil fuels and subsidies related to the same, though none have been legally binding.
At the international level, the United Nations-sponsored Paris Agreement is a non-binding agreement for nations to limit their GHG emissions through individually determined reduction goals every five years after 2020, by calling for various countries to phase out fossil fuels and subsidies related to the same, though none have been legally binding.
Insurance and Bonding Our operations expose us to the risk of various liabilities, including: • claims by employees, customers or other third parties for personal injury or property damage; • natural disasters, such as hail, flood, tornadoes, hurricanes and wildfires; and • potential fines and civil and criminal penalties resulting from alleged violations of federal and state laws, regulatory requirements and other local laws in the jurisdictions in which we operate.
Insurance and Bonding Our operations expose us to the risk of various liabilities, including: • claims by employees, customers or other third parties for personal injury, property damage or other matters; • natural disasters, such as hail, flood, tornadoes, hurricanes and wildfires; • cybersecurity incidents or information technology system failures resulting in business interruption, data loss, or other adverse impacts; and • potential fines and civil and criminal penalties resulting from alleged violations of federal and state laws, regulatory requirements and other local laws in the jurisdictions in which we operate.
Texas 33.5 % 70 Massachusetts 7.8 % 20 California 7.2 % 7 Oklahoma 5.0 % 19 Georgia 3.5 % 9 Maryland 3.5 % 7 Florida 2.7 % 5 New Mexico 2.4 % 7 New Hampshire 2.3 % 5 South Carolina 2.1 % 6 New Jersey 2.0 % 8 Maine 1.5 % 6 Louisiana 1.3 % 6 Kansas 1.0 % 3 New York 0.8 % 2 Mississippi 0.4 % 1 Alabama 0.2 % 1 77.4 % 182 U.K.
Texas 31.6 % 65 Massachusetts 7.0 % 20 California 6.8 % 7 Oklahoma 4.6 % 19 Georgia 3.7 % 10 Maryland 3.1 % 7 Florida 3.1 % 7 South Carolina 2.4 % 6 New Mexico 2.3 % 7 New Hampshire 2.1 % 5 New Jersey 1.5 % 3 Maine 1.4 % 6 Louisiana 1.1 % 6 Kansas 1.0 % 3 Mississippi 0.4 % 1 New York 0.2 % 1 Alabama 0.2 % 1 72.4 % 174 U.K.
We have operations in geographically diverse markets that extend across 17 states in the U.S. and 72 towns and cities in the U.K. As of December 31, 2024, our retail network consists of 145 dealerships and 27 collision centers in the U.S. and 114 dealerships and 12 collision centers in the U.K.
We have operations in geographically diverse markets that extend across 17 states in the U.S. and 62 towns and cities in the U.K. As of December 31, 2025, our retail network consists of 145 dealerships and 21 collision centers in the U.S. and 109 dealerships and 11 collision centers in the U.K.
Competition The automotive retail industry is highly competitive across all our service lines. Consumers have a number of choices when deciding where and how to (i) purchase and/or lease a new or used vehicle as well as select related vehicle financing and insurance products; (ii) purchase related parts and accessories; and (iii) procure vehicle maintenance and repair services.
Consumers have a number of choices when deciding where and how to (i) purchase and/or lease a new or used vehicle as well as select related vehicle financing and insurance products; (ii) purchase related parts and accessories; and (iii) procure vehicle maintenance and repair services.
Seasonality Our operating results are generally subject to seasonal variations, as well as changes in the economic environment. In the U.S., we generally experience higher volumes of vehicle sales and service in the second and third calendar quarters of each year. In addition, in some regions of the U.S., vehicle purchases decline during the winter months due to inclement weather.
In the U.S., we generally experience higher volumes of vehicle sales and service in the second and third calendar quarters of each year. In addition, in some regions of the U.S., vehicle purchases decline during the winter months due to inclement weather.
Unless otherwise specified, disclosures in this Form 10-K reflect continuing operations only. Dealership Operations Our new vehicle revenues include new vehicle sales and lease transactions, completed at our dealerships or via our digital platform, AcceleRide®. We sell retail used vehicles directly to our customers at our dealerships and via AcceleRide® and wholesale our used vehicles at third-party auctions.
Dealership Operations Our new vehicle revenues include new vehicle sales and lease transactions, completed at our dealerships or via our digital platform. We sell retail used vehicles directly to our customers at our dealerships and via our digital platform and wholesale our used vehicles at third-party auctions.
Court of Appeal denied an initial application for permission to appeal, the motor finance dealers involved requested, and were granted permission, to appeal the decision directly to the Supreme Court of the United Kingdom. The Supreme Court of the United Kingdom is scheduled to hear the appeal on April 1 – 3, 2025.
Court of Appeal denied an initial application for permission to appeal, the motor finance dealers involved requested, and were granted permission, to appeal the decision directly to the Supreme Court of the United Kingdom. On August 1, 2025, the Supreme Court of the United Kingdom issued its judgment in the COA litigation.
Environmental and Occupational Health and Safety Laws and Regulations Our business activities in the U.S. and the U.K. are subject to stringent federal, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
The FTC Safeguards Rule contains procedural, technical and personnel requirements that financial institutions, including dealers, must satisfy to meet their information security obligations. 8 Environmental and Occupational Health and Safety Laws and Regulations Our business activities in the U.S. and the U.K. are subject to stringent federal, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
For instance, an accidental release from one of our storage tanks could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations. 9 Properties that we now or have in the past owned or leased in the U.S. are subject to the federal Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes.
For instance, an accidental release from one of our oil or fuel storage tanks could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations.
Motor Vehicle Block Exemption Order 2023 (applicable until May 31, 2029) certain restrictions on dealerships are permissible in franchise agreements provided certain conditions are met. In the U.K., the Financial Conduct Authority (the “FCA”) regulates financial services firms and financial markets, including our activities in acting as broker for the financing of vehicle sales.
Motor Vehicle Block Exemption Order 2023 (applicable until May 31, 2029), certain restrictions on dealerships are permissible in franchise agreements provided the agreements satisfy applicable conditions under U.K. competition law and do not contain prohibited restrictions, including, for example, restrictions relating to resale pricing, territorial or customer sales limitations, or access to the automotive aftermarket. 7 In the U.K., the FCA regulates financial services firms and financial markets, including our activities in acting as broker for the financing of vehicle sales.
References to the Company’s website in this Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Form 10-K. 12
The SEC also maintains a website at https://www.sec.gov that contains reports, proxy and information statements and other information regarding our company that we file and furnish electronically with the SEC. 11 References to the Company’s website in this Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Form 10-K.
For additional information, see Item 1A. Risk Factors. On March 20, 2024, the EPA finalized new emissions standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond.
In March 2024, the EPA finalized standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond. The final rule sets new, strict standards intended to reduce air pollutant emissions, including GHG emissions.
We make our filings with the SEC available on our website as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. The SEC also maintains a website at http://sec.gov that contains reports, proxy and information statements, and other information regarding our company that we file and furnish electronically with the SEC.
We make our filings with the SEC available on our website as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.
The U.K. is committed to the Paris Agreement, and announced that it plans to ban sales of new gasoline and diesel-powered vehicles after 2035. Similar planned bans have been announced in California, New Mexico, Massachusetts and New York. Additional regulation of GHG emissions could increase the cost of the vehicles sold to us.
However, proposals have since been made to rescind or dramatically scale back the U.K. ban. Similar planned bans have been announced in states such as California, New Mexico, Massachusetts and New York. Additional regulation of GHG emissions could increase the cost of the vehicles sold to us.
We are also subject to potential premium cost fluctuations and changes in loss retention limits with the annual renewal of these programs. For further discussion, refer to Item 1A. Risk Factors. Human Capital Management Our human capital strategy is focused on attracting, developing, motivating and retaining top talent that will drive our success, enabling us to deliver market-leading business results.
We are also subject to potential premium cost fluctuations and changes in loss retention limits with the annual renewal of these programs. For further discussion, refer to Item 1A.
Comparable laws and regulations have been enacted in the U.K, including updated standards for cars, vans and heavy-duty trucks for upcoming model years.
This action was subsequently challenged by California and ten other states, and the legal challenges remain ongoing. We cannot predict whether such efforts will ultimately be successful. Comparable laws and regulations have been enacted in the U.K., including updated standards for cars, vans and heavy-duty trucks for upcoming model years.
The results of the annual engagement survey and employee discussions inform our overall human capital management methods and other growth strategies. In addition to providing career growth pathways for employees, our Board of Directors annually reviews management’s succession planning for key positions throughout the organization.
In addition to providing career growth pathways for employees, annually our Board of Directors reviews management’s succession planning for key positions throughout the organization. Seasonality Our operating results are generally subject to seasonal variations, as well as changes in the economic environment.
We strive to solidify Group 1 as the preferred employer of choice in automotive retail. We also believe that our workforce should be representative of the communities we serve. We foster a workplace culture around our core values of integrity, transparency, professionalism, teamwork and respect.
We also believe that our workforce should be representative of the communities we serve. We foster a workplace culture around our core values of integrity, transparency, professionalism, teamwork and respect. As of December 31, 2025, we had 20,452 employees (full-time, part-time and temporary), of which 13,563 were employed in the U.S. and 6,889 in the U.K.
These agencies have finalized more stringent standards for both heavy-duty and light-duty vehicles and for increased fuel economy for vehicles in upcoming model years. California and other states have indicated they would pursue more stringent CAFE and GHG standards than required by current EPA and NHTSA standards.
California and other states have indicated they would pursue more stringent CAFE and GHG standards than required by current EPA and NHTSA standards. For example, in 2022, California issued its Advanced Clean Car II regulations, which set stricter emissions standards for light duty vehicles and mandated a transition to EVs by model year 2035.
The annual Group 1 “Your Voice Matters” Engagement Survey has become our primary employee listening platform for gathering feedback and promoting a performance-based culture. That feedback provides us with valuable insight into employees’ perception of workplace culture and progress on our corporate mission. The results inform our overall human capital management methods and other growth strategies.
That feedback provides us with valuable insight into employees’ perception of workplace culture and progress on our corporate mission. The results inform our overall human capital management methods and other growth strategies. We maintain programs that offer safety and health and wellness initiatives. We provide competitive pay and employee benefits, routinely benchmarking ourselves against peers and the broader industry.
Employees have opportunities for various certification levels based on training completed and tenure. We have also developed a management training program and a technician training program to attract talent to the automotive industry. In addition to providing career growth pathways for employees, annually our Board of Directors reviews management’s succession planning for key positions throughout the organization.
Training and Development We routinely create and offer department or job-specific training, professional development opportunities and leadership development training to meet employees’ needs. Employees have opportunities for various certification levels based on training completed and tenure. We have also developed a management training program and a technician training program to attract talent to the automotive industry.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.
We cannot predict whether or not these regulatory repeals will ultimately be successful or if future administrations may seek to restore such regulations. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and regulatory changes.
The EPA projects the final rule will accelerate the transition to, and availability of, clean vehicle technologies, including hybrid EVs and plug-in hybrid EVs. 10 President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders impacting environmental regulations. Refer to Item 7.
For additional information, see Item 1A. Risk Factors. President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders impacting environmental regulations. Further, the Trump Administration has taken steps to repeal or otherwise modify certain existing environmental regulations.
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Discontinued Operations Discontinued operations within the Consolidated Statements of Operations consists of activity associated with our Brazil operations, which were disposed of during the year ended December 31, 2022. Refer to Note 4. Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements for additional information regarding business dispositions.
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United Kingdom 27.6 % 141 100.0 % 315 4 Business Strategy Our integrated strategy driven by four pillars — combining local market focus, operational excellence, differentiated parts and service business and disciplined capital allocation — positions Group 1 to deliver sustainable revenue growth, robust free cash flow and meaningful long-term value for our stockholders.
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United Kingdom 22.6 % 153 100.0 % 335 4 Business Strategy Our business strategy is built on our commitment to maximize the return on investment for our stockholders. We intend to execute our business strategy through three interrelated pillars: • Growth; • Local Scale; and • Full Rooftop Potential.
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Local Focus We believe automotive retailing is fundamentally local, and that success is earned market by market through strong customer relationships, brand representation and service capabilities.
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Growth Allocating our shareholders’ capital in support of maximizing our return on investment is our highest priority. When evaluating an acquisition, we run disciplined valuation models, with expectations based on our experience, incorporating growth and investment.
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Our strategy emphasizes a local-market focus to maximize lifetime customer value across new and used vehicle sales, parts, service and collision operations, which we may not fully realize when vehicles are sold outside our markets.
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We then compare the projected acquisition return to the expected return of repurchasing shares of our common stock, repaying debt, or using the capital for other uses. In 2024, we completed the acquisition of Inchcape Retail automotive operations (“Inchcape Retail”) in the U.K., consisting of 54 dealership locations, certain real estate and three collision centers (the “Inchcape Acquisition”).
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While we operate at scale across the U.S. and U.K., our strategy is centered on building density within defined markets, allowing us to better serve customers, improve retention and increase share of garage across the vehicle ownership lifecycle.
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The Inchcape Acquisition approximately doubled our portfolio across the U.K. Consistent with our acquisition activity completed in 2022 through 2024, we intend to pursue opportunities in growth-positioned markets that are economically accretive to our existing markets. Our focus is on brand, geographic fit, and large dealership operations and/or dealership clusters that will provide attractive returns to our portfolio.
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Our clustered market approach enables us to offer customers multiple brands and service options within a local area, reducing reliance on any single manufacturer while capturing evolving consumer preferences, and the changing vehicle needs for families. Local scale also enhances marketing efficiency, inventory management and customer loyalty, while supporting a consistent customer experience across our stores.
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Acquisitions completed within our existing markets or large dealership groups allow us to capitalize on economies of scale and provide for cost saving opportunities in key expense areas such as used vehicle sourcing, advertising, purchasing, data processing and personnel utilization.
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By leveraging centralized processes where appropriate and maintaining local accountability at the dealership level, we believe our local focus improves throughput, reduces costs and strengthens long-term customer trust. Operational Excellence Operational excellence is foundational to our strategy and underpins our ability to deliver strong financial performance in varying market conditions.
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In addition to cost savings opportunities, scale enables us to make the EV, facility, compliance, real estate, personnel development and training, and technology investments necessary to thrive in today’s retail automotive industry. Acquisition success depends upon our relationship with our OEM partners.
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We focus on optimizing operations at each dealership to achieve full rooftop potential through standardization of key processes, sharing of best practices and disciplined execution. We continue to invest in technology, data and process improvements that enhance both customer and employee efficiency, including centralized customer experience enhancements from digital retailing tools such as AI-enabled appointment setting and virtual F&I solutions.
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We work closely with our OEMs and regularly communicate with them regarding material sourcing, marketing, recalls, safety and other factors that influence our business relationship and the customer experience. We seek to perform well in the markets in which we operate, generally meeting or exceeding OEM metrics on market share and customer retention.
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These investments allow us to scale best practices quickly, structurally lower costs and improve consistency across our operations. Our size and market density amplify the benefits of operational excellence by enabling in-market efficiencies related to used vehicle purchasing and transfers, reconditioning, marketing investment, procurement and staffing.
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Each OEM has acquisition eligibility criteria and our ability to meet these criteria across multiple brands provides an advantage to executing a growth strategy. We believe we can buy nearly any brand, so we can be selective with our acquisition target criteria.
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We believe our variable cost structure and focus on productivity provide flexibility to respond to changes in the macroeconomic environment while protecting margins. Differentiated Parts and Service Business Our parts and service business is a critical driver of profitability, stability and long-term customer relationships.
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We believe we have access to a broader selection of assets and asset groups, some of which require the significant capital investment our scale allows, given our ability to operate successfully across multiple brand partners.
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Aftersales represents the core of our differentiated business model, providing a resilient and counter-cyclical complement to vehicle retailing. We focus on increasing service retention across the ownership lifecycle by delivering high-quality, fair-priced, and timely service supported by factory-trained technicians, strong customer engagement and consistent execution.
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In addition to expanding our portfolio through acquisitions, from time to time, we make decisions to optimize our portfolio by disposing of certain assets or operations. In some instances, we dispose of underperforming dealerships which do not meet our return objectives. We may also dispose of certain dealerships in order to complete strategic acquisition opportunities.
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Our scale enables us to invest in technician recruitment and retention, training academies, scheduling flexibility and facility enhancements that support productivity and customer satisfaction. Technology and process standardization further strengthen our parts and service operations by improving appointment access, billing accuracy, workflow management and service-to-sales integration.
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Specifically, we may dispose of a less significant dealership to allow us to acquire a more substantial dealership within the same or another geographic area based on the ownership limitations imposed in our franchise agreements. Refer to Note 3. Acquisitions and Note 4.
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We believe our differentiated aftersales capabilities provide a compelling competitive advantage and a durable source of cash flow. Disciplined Capital Planning and Allocation Disciplined capital allocation is central to our strategy and reflects our commitment to deploying stockholder capital toward the highest return opportunities.
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Discontinued Operations and Other Divestitures within the Notes to Consolidated Financial Statements, for additional information regarding our acquisitions and dispositions. Local Scale We believe capturing opportunities from building local scale will provide us a competitive advantage and leverage through greater market representation and facilitate an improved customer experience.
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We evaluate all capital uses — including acquisitions, capital expenditures, share repurchases, dividends, debt reduction, real estate investments and organic growth — through a consistent return-based framework. Our acquisition strategy focuses on high-quality dealerships and brands in growth markets that complement our existing portfolio and benefit from our scale and operational capabilities.
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With our expansive portfolio of brands and service capabilities across significant geographical areas, we believe we can service the needs of our customers’ full families and friends. Using local scale, we will leverage our marketing prowess to drive business within our dealership clusters, while providing our customers a unique value proposition.
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We prioritize transactions that are economically accretive, offer strong brand and geographic fit and enable additional efficiencies through market density and strong execution. 5 In parallel, we actively optimize our portfolio through selective dispositions of underperforming or non-strategic assets, allowing us to recycle capital into higher-return opportunities.
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We are growing and developing our retail talent internally by creating retail training academies within cluster markets. Our training is focused on creating consistent customer experiences across our rooftops. In addition to the enhancement of customer experience, local scale also allows us to reimagine how we handle our used vehicle inventory, including reconditioning and vehicle positioning.
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Our strong balance sheet and low rent-adjusted leverage provide flexibility to pursue acquisitions while continuing to return capital to stockholders through share repurchases and dividends. Competition The automotive retail industry is highly competitive across all our service lines.
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We are focused on reducing the cost and increasing throughput efficiency of our vehicle reconditioning operations, by establishing a more consistent approach to reconditioning. Lower costs drive higher shareholder returns and faster reconditioning gives our staff back a valuable resource, time, which can be spent improving customer retention through more customer interaction.
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Additionally in the U.K., on October 25, 2024, the U.K.
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Our business relies upon maximizing positive customer interactions to drive repeat and referral sales and service business.
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The Supreme Court of the United Kingdom ruled that dealers do not generally owe fiduciary duties but confirmed that, in some cases, commission arrangements that were not properly disclosed to customers could be treated as creating an unfair relationship under the Consumer Credit Act.
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Disciplined inventory positioning, using our dealership clusters to best position used vehicles, allows us to drive the highest value. 5 Full Rooftop Potential We seek to optimize our operations at each of our rooftops including leveraging our dealership’s full potential and local scale advantage to improve operational efficiency.
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On August 3, 2025, the FCA announced it will consult in October 2025 on a possible industry-wide redress scheme for affected consumers. On October 7, 2025, following the Supreme Court’s judgment, the FCA published Consultation Paper CP25/27 proposing an industry-wide redress scheme for motor finance customers who may have been treated unfairly due to inadequate disclosure of commission arrangements.
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This includes focusing on operational excellence at each dealership and other facilities, including, but not limited to, standardization of key common processes and taking advantage of shareable business resources. We believe our operations optimization efforts will provide a strategic advantage by structurally lowering our operating costs.
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Under the FCA’s proposed redress scheme, lenders would bear primary responsibility for delivering the proposed scheme including, identifying affected customers, assessing potential liability and administering and paying redress. The FCA has indicated that brokers will be required to support lenders by providing relevant documentation and information necessary for lenders to implement the scheme.
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As innovative tools become available, we seek to quickly adopt those that provide a mutual benefit to our customers and Group 1. We want to replicate and grow our best practices across rooftops.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding the EV mandate. Existing and potential new trade policies, such as tariffs, could adversely affect our operations, costs and business. President Donald Trump has issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs.
We have implemented security measures that are designed to detect and protect against cyberattacks, as well as policies governing the deletion of PII, to limit the information exposed to a potential cyberattack.
We have implemented security measures that are designed to detect and protect against cyberattacks, as well as policies governing the deletion of PII, to limit the information exposed to a potential cyberattack.
In addition, security breaches and other security incidents could expose us to a risk of loss or exposure of this information, which could result in potential liability, investigations, regulatory fines, penalties for violation of applicable laws or regulations, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, administrative, civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition.
In addition, security breaches and other security incidents could expose us to a risk of loss or exposure of this information, which could result in potential liability, investigations, regulatory fines, penalties for violation of applicable laws or regulations, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, administrative, civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition.
In addition, acquisitions involve a number of particular risks, including, among other things: • incurring significantly higher capital expenditures and operating expenses; • failing to obtain manufacturers’ consents to acquisitions of additional franchises; • failing to integrate the operations and personnel of the acquired dealerships; • entering new markets with which we are not familiar; • incurring undiscovered liabilities at acquired dealerships, generally, in the case of stock acquisitions; • disrupting our ongoing business; • failing to retain key personnel of the acquired dealerships; • failing to implement or improve controls and policies and information systems; • impairing relationships with employees, manufacturers and customers; and • incorrectly valuing acquired entities.
In addition, acquisitions involve a number of particular risks, including, among other things: • incurring significantly higher capital expenditures and operating expenses; • failing to obtain manufacturers’ consents to acquisitions of additional franchises; • failing to integrate the operations and personnel of the acquired dealerships; • entering new markets with which we are not familiar; • incurring undiscovered liabilities at acquired dealerships, generally, in the case of stock acquisitions; • disrupting our ongoing business; • failing to retain key personnel of the acquired dealerships; • failing to implement or improve controls and policies and information systems (“IT”); • impairing relationships with employees, manufacturers and customers; and • incorrectly valuing acquired entities.
For example, in June 2024, CDK Global LLC (“CDK”) experienced a cybersecurity event, which resulted in service outages on CDK’s dealers’ systems including our CDK DMS. If any of our vendors or suppliers fail to deliver their products or services for any reason, our business and results of operations and financial condition could be adversely impacted.
For example, in June 2024, CDK Global LLC (“CDK”) experienced a cybersecurity event, which resulted in service outages on CDK’s dealers’ systems including our CDK DMS. If any of our vendors or suppliers fail to deliver their products or services for any reason, our business and results of operations and financial condition could be materially and adversely impacted.
The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-relate disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.
The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-related disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.
Our compliance with these regulations may expose us to significant costs and liabilities. With a potential increase in demand by consumers for EVs, we will incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.
Our compliance with these regulations may expose us to significant costs and liabilities. With a potential increase in demand by consumers for EVs, we may incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.
The outcome of such changes could include litigation or regulatory actions which could adversely affect our financial condition and results of operations. Our internal controls and procedures may fail or be circumvented. Management has designed and implemented, and periodically reviews and updates, our internal controls, disclosure controls and procedures, and corporate governance policies and procedures.
The outcome of such changes could include litigation or regulatory actions which could adversely affect our financial condition and results of operations. 22 Our internal controls and procedures may fail or be circumvented. Management has designed and implemented, and periodically reviews and updates, our internal controls, disclosure controls and procedures, and corporate governance policies and procedures.
The location of new dealerships near our existing dealerships could have a material and adverse effect on our operations and reduce the profitability of our existing dealerships. Increased competition can adversely impact our sales volumes and margins as well as our ability to acquire dealerships. 15 Please see Item 1.
The location of new dealerships near our existing dealerships could have a material and adverse effect on our operations and reduce the profitability of our existing dealerships. Increased competition can adversely impact our sales volumes and margins as well as our ability to acquire dealerships. Please see Item 1.
Likewise, our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party information systems, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time or (ii) our relationship with our DMS providers or any other third-party provider deteriorates. 17 Despite ongoing efforts to improve our ability to protect data from compromise, we may not be able to protect all of our data across our diverse systems and third-party vendors.
Likewise, our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party IT, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time or (ii) our relationship with our DMS providers or any other third-party provider deteriorates. 17 Despite ongoing efforts to improve our ability to protect data from compromise, we may not be able to protect all of our data across our diverse systems and third-party vendors.
A discontinuation or change in our manufacturers’ warranty and incentive programs could adversely affect our business. Manufacturers also provide product warranties and, in some cases, service contracts to customers. Our dealerships perform warranty and service contract work for vehicles under manufacturer product warranties and service contracts and we bill the manufacturer directly, as opposed to invoicing the customer.
Additionally, a discontinuation or material change in our manufacturers’ warranty and incentive programs could adversely affect our business. Manufacturers also provide product warranties and, in some cases, service contracts to customers. Our dealerships perform warranty and service contract work for vehicles under manufacturer product warranties and service contracts, and we bill the manufacturer directly, as opposed to invoicing the customer.
We have operations in the U.K. and as a result, we face political and economic risks and uncertainties with respect to our international operations.
We have operations in the U.K. and as a result, we may face political and economic risks and uncertainties with respect to our international operations.
If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain run-rate revenue and expense synergies expected to result from acquisitions, might not be met.
If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain revenue and expense synergies expected to result from acquisitions, might not be met.
All of our dealerships currently operate on two DMSs, one DMS for the U.S. and one DMS for the U.K. Additionally, in the ordinary course of business, we receive significant PII about our customers and our employees. PII is primarily collected at our dealerships and through our AcceleRide® platform via an online DMS.
All of our dealerships currently operate on two DMSs, one DMS for the U.S. and one DMS for the U.K. Additionally, in the ordinary course of business, we receive significant PII about our customers and our employees. PII is primarily collected at our dealerships and through our digital platform via an online DMS.
Risk Factors, which could have a material adverse impact on our cash flows. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge could have an adverse effect on our results of operations. Refer to Note 13.
Risk Factors, which could have a material adverse impact on our cash flows. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge could have an adverse effect on our results of operations. Refer to Note 12.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders. 13 The U.K. government has established mandated targets for the sale of new zero emissions vehicles with increasing targets in future years.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA. The U.K. government has established mandated targets for the sale of new zero emissions vehicles with increasing targets in future years.
A failure of any of our information systems or those of our third-party service providers or a cybersecurity incident, including loss or unauthorized access of confidential information or PII about our customers or employees, could negatively affect our business, operations and financial condition.
A failure of any of our IT or those of our third-party service providers or a cybersecurity incident, including loss or unauthorized access of confidential information or PII about our customers or employees, could negatively affect our business, operations and financial condition.
The other impacts to our U.K. and the U.S. regions and consolidated results of operations remain uncertain until such time as the other vehicle manufacturers provide additional details regarding their specific agency model plans.
The other impacts to our U.K. and the U.S. segments and consolidated results of operations remain uncertain until such time as vehicle manufacturers provide additional details regarding their specific agency model plans.
CDK provides clients in the automotive industry, including our dealerships in the U.S., with a software as a service platform (“SaaS platform”) used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations.
CDK provides clients in the automotive industry, including our dealerships in the U.S., with a software as a service platform used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations.
The automotive retail industry, and especially vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, supply conditions, consumer transportation preferences, unemployment rates and credit availability.
The automotive retail industry, and especially vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, new OEM entrants, supply conditions, consumer transportation preferences, unemployment rates and credit availability.
Although many companies across many industries are affected by malicious efforts to obtain access to PII, the automotive dealership industry has been a particular target of identity thieves. The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time.
Although many companies across many industries are affected by malicious efforts to obtain access to PII, the automotive dealership industry and overall retail industry have been a particular target of identity thieves. The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time.
We depend on the efficient operation of our information systems and those of our third-party service providers and rely on information systems at our dealerships in all aspects of our sales and service efforts, as well as in the preparation of our consolidated financial and operating data.
We depend on the efficient operation of our IT and those of our third-party service providers and rely on IT at our dealerships in all aspects of our sales and service efforts, as well as in the preparation of our consolidated financial and operating data.
The global economy experienced elevated levels of inflation beginning in 2022. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (“the Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms.
The global economy has experienced elevated levels of inflation in recent years. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (“the Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms.
If we are unable to effectively use the internet to attract customers to our own online channels, such as our AcceleRide® platform, and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.
If we are unable to effectively use the internet to attract customers to our own online channels and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.
Bribery Act and other anti-corruption compliance laws and issues; • inability to obtain or preserve franchise rights in the foreign countries in which we operate; • fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility; and • infrastructure readiness for the U.K.’s transition to EVs.
Bribery Act and other anti-corruption compliance laws and issues; • inability to obtain or preserve franchise rights in the foreign countries in which we operate; • fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility; and • infrastructure challenges associated with the U.K.’s transition to EVs.
In the Current Year, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s.
Since 2024, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s.
Vehicle manufacturers may be adversely impacted by economic downturns or recessions, significant declines in the sales of their new vehicles, increases in interest rates, adverse fluctuations in currency exchange rates, declines in their credit ratings, reductions in access to capital or credit, labor strikes or similar disruptions (including within their major suppliers), supply shortages, rising raw material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products, including due to bankruptcy, product defects, litigation, ability to keep up with technology and business model changes, poor product mix or unappealing vehicle design, governmental laws and regulations, natural disasters or other adverse events.
Vehicle manufacturers may be adversely impacted by economic downturns or recessions, significant declines in the sales of their new vehicles, increases in interest rates, adverse fluctuations in currency exchange rates, declines in their credit ratings, reductions in access to capital or credit, labor strikes or similar disruptions (including within their major suppliers), supply shortages, rising raw material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products, including due to bankruptcy, product defects, litigation, ability to keep up with technology and business model changes, poor product mix or unappealing vehicle design, governmental laws and regulations, natural disasters, including fires such as that at a major U.S. aluminum production facility in 2025, cybersecurity incidents or other adverse events.
Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those contracted by Mercedes Benz. The agency model, if adopted by other manufacturers, would reduce revenues with only the facilitation fee recorded as revenue.
Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those currently in effect. The agency model, if adopted by additional manufacturers, would reduce revenues with only the facilitation fee recorded as revenue.
The CCDAA requires both public and private U.S. companies that are “doing business in California” and that have a total annual revenue of $1 billion to publicly disclose and verify, on an annual basis, Scope 1, 2 and 3 GHG emissions.
The CCDAA requires both public and private U.S. companies that are “doing business in California” and that have a total annual revenue of $1 billion to publicly disclose and verify, on an annual basis, Scope 1, 2 and 3 GHG emissions, with reporting required on or before August 10, 2026.
Any failure to comply with these laws and regulations may result in administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the limitations on certain aspects of our operations. Refer to Item 1. Business — Governmental Regulations for further discussion of automotive and other laws and regulations impacting our business.
Any failure to comply with these laws and regulations may result in administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the limitations on certain aspects of our operations. Refer to Item 1.
Operational risks associated with environmental laws and regulations may expose us to significant costs and liabilities. Our business activities in the U.S. and U.K. are subject to stringent federal, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
Our business activities in the U.S. and U.K. are subject to stringent federal, state and local laws, regulations and other controls governing specific health and safety criteria to address worker protection, the release of materials into the environment or otherwise relating to environmental protection.
Business — Competition for further discussion of competition in our industry. If we are unable to acquire and successfully integrate new dealerships into our business, the growth of our revenues and earnings could be adversely affected. Growth in our revenues and earnings partially depends on our ability to acquire new dealerships and successfully integrate those dealerships into our existing operations.
Business — Competition for further discussion of competition in our industry. 15 If we are unable to acquire and successfully integrate new dealerships into our business, the growth of our revenues and earnings could be adversely affected.
We did not experience a material negative or positive impact to the U.K. region gross margin and consolidated results of operations as a result of the change to the Mercedes Benz agency model.
We have not experienced a material negative or positive impact to the U.K. gross margin and consolidated results of operations as a result of the change to the agency model.
Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, increase the risk of an impairment charge, which could have a material adverse impact on ou r results of operations. No goodwill impairments were recorded during the years ended December 31, 2024 , 2023 and 2022 .
Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, increase the risk of an impairment charge, which could have a material adverse impact on ou r results of operations. During the year ended December 31, 2025, we recorded $93.0 million of goodwill impairments.
The agency model, as adopted by Mercedes Benz, resulted in reduced revenues, as we act as an agent of Mercedes Benz, receiving a commission for each sale and other expense fee support.
Agency models adopted by vehicle manufacturers have resulted in reduced revenues, as we act as an agent of the vehicle manufacturer, receiving a commission for each sale and other expense fee support.
These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition. 14 During the Current Year, the majority of our manufacturers’ production increased, driving an improvement in vehicles days’ supply.
These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition.
If our manufacturers’ production remains at current reduced levels or in some cases continues to decline, diminishing our ability to meet the immediate needs of our customers, the production shortage could have a material adverse impact on our financial and operating results.
It is impossible to predict with certainty when normalized production will resume at these manufacturers. If our manufacturers’ production remains at current reduced levels or in some cases continues to decline, diminishing our ability to meet the immediate needs of our customers, the production shortage could have a material adverse impact on our financial and operating results.
For example, in the U.K., the Volkswagen Group has disclosed a five-year plan to reduce the number of partners in its dealer network. That plan may require us to dispose of, or close, up to thirteen of our Volkswagen and up to three Audi dealerships. Correspondingly, the plan may require us to purchase dealerships adjacent to our territories.
For example, in 2023, in the U.K., an OEM disclosed a five-year plan to reduce the number of partners in its dealer network. That plan may require us to dispose of, or close, up to 16 of our dealerships. Correspondingly, the plan may require us to purchase dealerships adjacent to our territories.
While the proposed rule has been vacated, if similar regulations were implemented, our failure to adhere to new policies could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.
Our failure to adhere to these new rules or similar future regulations could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.
In addition, local economic, competitive and other conditions affect the performance of our dealerships. Our results of operations depend substantially on general economic conditions and spending habits in those regions of the U.S. and U.K. where we maintain our operations.
In addition, local economic, competitive and other conditions affect the performance of our dealerships. Our results of operations depend substantially on general economic conditions and spending habits in those regions of the U.S. and U.K. where we maintain our operations. 12 While EV sales grew in prior years, EV demand began to stabilize in 2025 in the U.S.
During the years ended December 31, 2024, 2023 and 2022, we recognized $28.2 million , $25.1 million and $1.3 million , respectively, of intangible franchise rights impairment.
No goodwill impairments were recorded during the years ended December 31, 2024 and 2023 . During the years ended December 31, 2025, 2024 and 2023, we recognized $91.1 million , $28.2 million and $25.1 million , respectively, of intangible franchise rights impairment.
Any future impact of these regulations on our operations cannot be predicted with certainty. With a potential increase in demand by consumers for EVs, and the former Biden administration’s support for such actions, certain manufacturers announced plans to increase production of fuel-efficient vehicles and EVs.
With a potential increase in demand by consumers for EVs, and the former Biden administration’s support for such actions, certain manufacturers announced plans to increase production of fuel-efficient vehicles and EVs.
We rely on the positive cash flow we generate from our operations and our access to the credit and capital markets to fund our operations, growth strategy, and return of cash to our shareholders through share repurchases and dividends.
Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition. We rely on the positive cash flow we generate from our operations and our access to the credit and capital markets to fund our operations, growth strategy and return of cash to our shareholders through share repurchases and dividends.
We cannot guarantee that we will be able to identify and acquire dealerships in the future. In addition, we cannot guarantee that any acquisitions will be successful or on terms and conditions consistent with past acquisitions.
Growth in our revenues and earnings partially depends on our ability to acquire new dealerships and successfully integrate those dealerships into our existing operations. We cannot guarantee that we will be able to identify and acquire dealerships in the future. In addition, we cannot guarantee that any acquisitions will be successful or on terms and conditions consistent with past acquisitions.
We can make no assurances that our ability to obtain additional financing through the debt markets will not be adversely affected by economic conditions or that we will be able to maintain or improve our current credit ratings.
We can make no assurances that our ability to obtain additional financing through the debt markets will not be adversely affected by economic conditions or that we will be able to maintain or improve our current credit ratings. 13 Our floorplan notes payable, mortgages and other debt are benchmarked to SOFR, which can be highly volatile as a result of changing economic conditions.
As a result, during the Current Year, the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment. The impact of the lowering of interest rates on the levels of inflation and unemployment in the U.S., U.K. and Europe is uncertain.
As a result, during the year ended December 31, 2024 (“Prior Year”), the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, and during the Current Year, further lowered their interest rates by 75 and 100 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment.
We assess goodwill and other indefinite-lived intangibles for impairment on an annual basis, or more frequently when events or circumstances indicate that an impairment may have occurred.
Risks Related to Accounting Matters The impairment of our goodwill and/or indefinite-lived intangibles could have a material adverse effect on our results of operations. We assess goodwill and other indefinite-lived intangibles for impairment on an annual basis, or more frequently when events or circumstances indicate that an impairment may have occurred.
Vehicle manufacturers may alter their distribution models. In 2023, Mercedes Benz transitioned to an agency model for distribution of vehicles in the U.K. after collaborating with various automotive retailers and conducting pilot programs.
Vehicle manufacturers may alter their distribution models. Certain vehicle manufacturers have adopted an agency model for distribution of vehicles in the U.K. after collaborating with various automotive retailers and conducting pilot programs. In addition, other vehicle manufacturers serving the U.K. and U.S. markets have announced plans to explore an agency model for selling new vehicles.
Additionally, the tariffs and other market developments could potentially cause our current OEM’s to lose market share to emerging EV-only OEM’s. Market share losses could not only impair our sales and profits but lead to potential impairments.
Additionally, the tariffs and other market developments could potentially cause our current OEMs to lose market share to emerging EV-only OEMs.
If we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired. We are dependent on our relationships with manufacturers, which exercise a great degree of influence over our operations through the franchise and similar agreements.
These factors could have a material adverse effect on our business, results of operations and financial condition. If we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired.
Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA. Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.
In Europe, rising energy costs as a result of supply disruptions and increased winter demand for heating could place strain on our suppliers’ ability to maintain current production levels of vehicles and vehicle parts. Across the European Union, these energy constraints could result in nations or region s enacting emergency energy related policies, limiting energy availability for manufacturers.
The impact of the lowering of interest rates on the levels of inflation and unemployment in the U.S., U.K. and Europe is uncertain. In Europe, rising energy costs as a result of supply disruptions and increased winter demand for heating could place strain on our suppliers’ ability to maintain current production levels of vehicles and vehicle parts.
However, absent clarification or revisions to the law, finalization and implementation may result in additional costs to comply with these disclosure requirements, as well as increased costs of and restrictions on access to capital for us or our customers.
Although the outcome of the legal challenges are uncertain at this time, finalization and implementation may result in additional costs to comply with these disclosure requirements, as well as increased costs of and restrictions on access to capital for us or our customers. Increased attention to sustainability matters may adversely impact our business, reputation and access to capital.
Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders. Inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles and services.
Inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles, parts and services.
Our new vehicle days’ supply of inventory was approximately 44 days as of December 31, 2024, as compared to 37 days and 24 days for the years ended December 31, 2023 and 2022, respectively. It is impossible to predict with certainty when normalized production will resume at these manufacturers.
Since 2024, the majority of our manufacturers’ production increased, driving an improvement in vehicles days’ supply. Our new vehicle days’ supply of inventory was approximately 46 days as of December 31, 2025, as compared to 44 days and 37 days for the years ended December 31, 2024 and 2023, respectively.
In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders eliminating the EV mandate and impacting environmental regulations. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.
Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders, including those related to tariffs.
Additionally, vehicle manufacturers in the U.S. and U.K. are subject to varying guidelines, laws and regulations adopted by their applicable governmental and administrative agencies, which include GHG emissions and CAFE standards in the U.S. Such standards may affect our manufacturers’ ability to produce cost effective vehicles, which may have a material adverse effect on our sales. Refer to Item 1.
Such standards may affect our manufacturers’ ability to produce cost effective vehicles, which may have a material adverse effect on our sales. Refer to Item 1. Business — Governmental Regulations for further discussion of environmental regulations impacting our business.
Should EV demand decline at the same time as more OEMs transiti on to EV models, this could have a material adverse effect on our business and results of operations. In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate. Refer to Item 7.
However, incentives for EVs have recently been subject to significant change and uncertainty. President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate and the OBBBA eliminates multiple credits previously made available for new and used EVs. Refer to Item 7.
Representatives of the U.K. government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2035. These and similar proposals may have a significant impact on the future mix of vehicles provided by our manufacturers.
These and similar proposals may have a significant impact on the future mix of vehicles provided by our manufacturers. Any future impact of these regulations on our operations cannot be predicted with certainty.
These EV mandates could impact our vehicle manufacturers’ production mix and volumes, which in turn may impact our new vehicle sales and results of operations. Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition.
The government targets established for 2026 are higher than those previously required in 2025 and are expected to further challenge new vehicle sales in 2026 and beyond. These EV mandates could impact our vehicle manufacturers’ production mix and volumes, which in turn may impact our new vehicle sales and results of operations. Refer to Item 7.
As a result, the ultimate impact of the SEC rule, or any similar climate-related disclosure requirements imposed in the future, on our business is uncertain and may result in increased compliance costs and increased costs of and restrictions on access to capital. 20 Changes to laws and regulations could adversely impact our operations and financial condition.
As a result, we may face increased litigation risks from private parties and governmental authorities related to our sustainability efforts. Such sustainability-related matters may also impact our customers or suppliers, which may adversely impact our business, financial condition, or results of operations. Changes to laws and regulations could adversely impact our operations and financial condition.
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The impact of these macroeconomic developments on our operations cannot be predicted with certainty. On January 29, 2025, the Federal Reserve held rates unchanged. On February 6, 2025, the Bank of England lowered interest rates by 25 basis points. Additionally, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs.
Added
Across the European Union, these energy constraints could result in nations or region s enacting emergency energy related policies, limiting energy availability for manufacturers. The impact of these macroeconomic developments on our operations cannot be predicted with certainty.
Removed
While EV sales continued to increase in the U.S. in 2024, challenges with EV technologies, including the development of the necessary charging infrastructure, continue to make headlines within the U.S. media market, raising concerns around consumer demand and interest in the products.
Added
Consumers continue to express concerns with respect to access to charging infrastructure, affordability and battery range, which may limit broader adoption of EVs. If EV demand remains uncertain while OEMs continue to shift product strategies and production plans, there could be a material adverse effect on our business and results of operations.
Removed
The overall U.K. market fell short of those mandated targets in 2024, with consumer preferences skewed towards traditional internal combustion engine vehicles. The government targets established for 2025 are higher than those previously required in 2024, and are expected to further challenge new vehicle sales in 2025 and beyond.
Added
In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate and the OBBBA, which was signed into law in July 2025, eliminates multiple credits previously made available for new and used EVs.
Removed
Our floorplan notes payable, mortgages and other debt are benchmarked to SOFR, which can be highly volatile as a result of changing economic conditions.
Added
Significant shifts to increase or decrease EV demand could have material impacts on the operations of our OEM partners, which could lead to a material adverse effect on our dealership business and our results of operations. Refer to Item 7.
Removed
Additionally, the Company doubled its footprint in the U.K. during the Current Year through its acquisition of Inchcape Retail. Failure to effectively integrate the Inchcape Acquisition into the legacy U.K. operations could negatively impact our operating results in the U.K.
Added
While the possibility exists for delays, reductions or exemptions of the automotive and reciprocal tariffs, the potential impacts of the tariffs described above remain uncertain and may cause a significant impact on the affordability of our products as well as the future mix of and demand for vehicles provided by our manufacturers, as well as alter the mix of supply and demand for used vehicles.
Removed
In addition to the transition by Mercedes Benz in the U.K., certain of our other vehicle manufacturers serving the U.K. and U.S. markets have announced plans to explore an agency model for selling new vehicles.
Added
To the extent any such tariffs remain in place for a sustained period of time, or in the event a global or domestic recession results therefrom, the disposable income of our customers could be significantly reduced, which may result in our customers deciding to delay new or used vehicle purchases or vehicle maintenance and repairs, or forego them entirely, each of which could adversely affect our results of operations and financial condition.
Removed
For example, on March 20, 2024, the EPA finalized new emissions standards establishing more stringent air emissions limits for light and medium-duty vehicles, which include passenger cars, vans, pickups, sedans and SUVs for model years 2027 through 2032.
Added
Additionally, reciprocal tariffs, tariffs on steel, aluminum, copper and other materials and the elevated tariffs against China could negatively impact business or consumer sentiment, demand for our products, our manufacturers’ global supply chains and the U.S. or global economy generally.
Removed
In September 2024, the Governor of California signed into law the Climate Corporate Accountability: Climate-Related Financial Risk Act, which amends certain climate disclosure requirements in CCDAA.
Added
Manufacturers’ supply chain dependencies and production facility locations vary (and planned facility locations may, in response to threatened tariffs and trade barriers, be changed), and as a result, certain manufacturers could be impacted more significantly by the imposition of tariffs than others.
Removed
Reporting under both laws would begin in 2026. Currently, we are assessing the impact of these laws on our business and there are legal challenges to be filed with respect to the scope of the law.
Added
Additional actions taken by the U.S. that restrict or could impact the economics of trade — including additional tariffs, trade barriers and other similar measures — could have the potential to further disrupt existing supply chains and trigger retaliatory efforts by other countries, including the imposition of tariffs, raising taxation, setting foreign exchange or capital controls, or establishing embargoes, sanctions, or other import/export restrictions, thereby negatively impacting our business, both directly and indirectly.
Removed
Further, the SEC released its final rule on climate-related disclosures on March 6, 2024, requiring the disclosure of certain climate-related risks and financial impacts, as well as GHG emissions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement’s Role in Assessing and Managing Cybersecurity Threats Our IT and Security team, which is headed by our CIO, is responsible for our efforts to comply with cybersecurity standards, establish industry-recognized protocols and protect the integrity, confidentiality and availability of our IT infrastructure.
Biggest changeThe Audit Committee oversees compliance with cybersecurity policies with guidance from members of management, including the Vice President of Internal Audit, who informs the Audit Committee on the audit results of cybersecurity controls. 24 Management’s Role in Assessing and Managing Cybersecurity Threats Our CIO is responsible for assessing and managing the Company’s material risks from cybersecurity threats, including our efforts to comply with cybersecurity standards, establish industry-recognized protocols and protect the integrity, confidentiality and availability of our IT infrastructure.
Our processes and procedures align with the National Institute of Standards and Technology Cybersecurity Framework. In particular, we seek to assess, identify and manage cybersecurity risks through the processes described below: Risk Assessment A multi-layered system designed to protect and monitor data and cybersecurity risk has been implemented.
We endeavor to align our processes and procedures with the National Institute of Standards and Technology Cybersecurity Framework. In particular, we seek to assess, identify and manage cybersecurity risks through the processes described below: Risk Assessment A multi-layered system designed to protect and monitor data and cybersecurity risk has been implemented.
Employees are required to use multi-factor authentication and regularly update their passwords. Encryption and Data Protection Encryption methods are used to protect sensitive data in transit and at rest. This includes the encryption of customer data, financial information and other confidential data.
Employees are required to use multi-factor authentication and regularly update their passwords. 23 Encryption and Data Protection Encryption methods are used to protect sensitive data in transit and at rest. This includes the encryption of customer data, financial information and other confidential data.
Item 1C. Cybersecurity Description of Processes for Assessing, Identifying and Managing Cybersecurity Risks In the ordinary course of business, our information systems on which we run our business operations and store confidential or proprietary data, such as PII about our customers and our employees, are subject to potential cyber-attack.
Item 1C. Cybersecurity Description of Processes for Assessing, Identifying and Managing Cybersecurity Risks In the ordinary course of business, our IT on which we run our business operations and store confidential or proprietary data, such as PII about our customers and our employees, are subject to potential cyber-attack.
The Board of Directors delegates oversight of our operations risk, including quarterly reviews of cybersecurity and data protection, to the Finance/Risk Management Committee, and delegates compliance with cybersecurity policies to the Audit Committee. Both the Finance/Risk Management Committee and the Audit Committee report to the full Board of Directors on cybersecurity matters.
The Board of Directors delegates oversight of our enterprises’ operational risks, including quarterly reviews of cybersecurity and data protection, to the Finance/Risk Management Committee, and delegates compliance with cybersecurity policies to the Audit Committee. Both the Finance/Risk Management Committee and the Audit Committee report to the full Board of Directors on cybersecurity matters.
Further, our employees that handle PII are required to undergo training, including phishing exercises and awareness programs on the appropriate management, use and protection of that information. Access Controls We have endeavored to implement physical access controls to prevent access to endpoints that may leave Company data vulnerable to attack.
Further, our employees that handle PII are required to undergo specialized training on the appropriate management, use and protection of that information. Access Controls We have endeavored to implement physical access controls to prevent access to endpoints that may leave Company data vulnerable to attack.
Regular assessments and testing of our cybersecurity safeguards are conducted by independent third-party cybersecurity experts. Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks.
Regular assessments and testing of our cybersecurity safeguards are conducted by independent third-party cybersecurity experts. Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks. We use a variety of layered applications to alert us to suspicious activity.
Cybersecurity Training and Awareness Cybersecurity awareness among our employees is promoted with regular training and awareness programs. Employees who access our systems are required to undergo annual cybersecurity training and, each year, employees are required to test their understanding of our cybersecurity policies.
We conduct annual exercises and reviews of our cyber incident response plan. Cybersecurity Training and Awareness Cybersecurity awareness among our employees is promoted with regular training and phishing awareness programs. Employees who access our systems are required to undergo cybersecurity training and, each year, employees are required to test their understanding of our cybersecurity policies.
We have implemented secure protocols, including, e.g., hypertext transfer protocol secure for web traffic and secure file transfer protocol for file transfers. Processes designed to monitor cybersecurity incidents are also intended to protect our data. Our cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access.
We have implemented secure protocols, including, e.g., HTTP secure for web traffic, secure file transfer protocol for file transfers and application programming interfaces. Additionally, we have sought to implement processes designed to monitor cybersecurity and protect our data. Our cybersecurity safeguards, including those provided by third parties, are designed to monitor for unauthorized access.
These services are designed to monitor both internal and external threats. We engage several third-party consultants in connection with our risk assessment and risk management, and we have established separate processes and procedures to oversee and identify cybersecurity risks associated with third parties. Finally, we have implemented encrypted virtual private networks for remote connections.
These services are designed to monitor both internal and external threats. We engage several third-party consultants in connection with our risk assessment and risk management, and we have established separate processes and procedures to oversee and identify cybersecurity risks associated with third parties. The above cybersecurity risk management processes are integrated into the Company’s overall enterprise risk management program.
In the event of any breach or cybersecurity incident, we have an incident response plan within our SIEM that is designed to provide for action to contain the incident, mitigate the impact and restore normal operations efficiently. We conduct annual reviews of our cyber incident response plan.
Incident Identification and Response A security information and event management process (“SIEM”) has been implemented to help identify cybersecurity incidents. In the event of any breach or cybersecurity incident, we have an incident response plan within our SIEM that is designed to provide for action to contain the incident, mitigate the impact and restore normal operations efficiently.
Cybersecurity risks are understood to be significant business risks, and as such, are considered as an important component of our enterprise-wide risk management approach. 23 Impact of Risks from Cybersecurity Threats As of the date of this Form 10-K, though the Company and our service providers have experienced certain cybersecurity incidents, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company.
Impact of Risks from Cybersecurity Threats As of the date of this Form 10-K, though the Company and our service providers have experienced certain cybersecurity incidents, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, and financial condition.
The Finance/Risk Management Committee oversees the formal process to identify risks company-wide, allocate them to the appropriate committee of the Board of Directors, and ensure that risk mitigation activities are being followed.
The Finance/Risk Management Committee oversees the formal process to identify risks company-wide, allocate them to the appropriate committee of the Board of Directors, and ensure that risk mitigation activities are being followed. At each of its meetings, the Finance/Risk Management Committee receives presentations from our CIO on cybersecurity and information security risk, as well as our cybersecurity initiatives.
Our CIO and various members of the IT and Security team, meet regularly with members of management to address key security and privacy issues. Our CIO has more than 25 years of infrastructure and cybersecurity experience.
The CIO is supported by the IT and Security team. Our CIO and various members of the IT and Security team meet regularly to address key security and privacy issues.
Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks.
The Company has an established review and escalation process for assessing cybersecurity occurrences, and if necessary, escalating cybersecurity incidents to members of our senior management team and Board of Directors. Our internal audit department additionally conducts regular audits to assess management’s processes and controls employed to identify and manage material cybersecurity risks.
Removed
We use a variety of layered applications to alert us to suspicious activity. 22 Incident Identification and Response A security information and event management process (“SIEM”) has been implemented to help promptly identify cybersecurity incidents.
Added
Our IT and Security team manages our incident response plan, which establishes a comprehensive system and process for tracking and logging cybersecurity occurrences, reviewing the occurrences to determine whether remediation or escalation is appropriate, and escalating certain occurrences to the Company’s Chief Information Officer (the “CIO”) for further review and assessment.
Removed
The above cybersecurity risk management processes are integrated into the Company’s overall enterprise risk management program.
Added
Cybersecurity risks are understood to be significant business risks, and as such, are considered as an important component of our enterprise-wide risk management approach.
Removed
At each of its meetings, the Finance/Risk Management Committee receives presentations from our Chief Information Officer (the “CIO”) on cybersecurity and information security risk, as well as our cybersecurity initiatives.
Added
Our CIO reports to our Chief Financial Officer and has more than 26 years of infrastructure and cybersecurity experience, having served in various technology leadership roles at the Company since joining in 1999.
Removed
The Audit Committee oversees compliance with cybersecurity policies with guidance from members of management, including the Vice President of Internal Audit, who informs the Audit Committee on the audit results of cybersecurity controls.
Removed
We also have formed a cyber event incident team, composed of our CIO, Chief Financial Officer, Corporate Controller, Chief Legal Officer and vice president of Internal Audit, who, upon the occurrence of a cybersecurity incident, convene to assess the materiality of the event as well as the appropriate remediation and escalation procedures, including escalation to our Chief Executive Officer, the Finance/Risk Management Committee, the Audit Committee and the Board of Directors.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we had 259 dealerships as shown below by region and by whether the associated real estate is leased or owned: Dealerships Region Owned Leased United States 113 32 United Kingdom 66 48 Total 179 80 Item 3. Legal Proceedings For discussion of our legal proceedings, refer to Note 18.
Biggest changeAs of December 31, 2025, we had 254 dealerships as shown below by segment and by whether the associated real estate is leased or owned: Dealerships Segment Owned Leased United States 118 27 United Kingdom 63 46 Total 181 73 Item 3. Legal Proceedings For discussion of our legal proceedings, refer to Note 17.
Item 2. Properties We lease our corporate headquarters, located at 730 Town and Country Blvd, Suite 500, Houston, Texas. We own our regional headquarters in the U.K.
Item 2. Properties We lease our corporate headquarters, located at 730 Town and Country Blvd, Suite 500, Houston, Texas. We lease our regional headquarters in the U.K.
Commitments and Contingencies within our Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not Applicable. 24 PART II
Commitments and Contingencies within our Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not Applicable. 25 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to shares of common stock repurchased by us during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2024 — October 31, 2024 23,200 $ 349.30 23,200 $ 166.7 November 1, 2024 — November 30, 2024 5,790 $ 399.22 5,790 $ 497.7 December 1, 2024 — December 31, 2024 51,310 $ 420.35 51,310 $ 476.1 Total 80,300 80,300 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to shares of common stock repurchased by us during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2025 — October 31, 2025 273,174 $ 417.31 273,174 $ 112.3 November 1, 2025 — November 30, 2025 348,748 $ 391.62 348,748 $ 433.2 December 1, 2025 — December 31, 2025 133,870 $ 406.80 133,870 $ 378.7 Total 755,792 755,792 (1) Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit and at a prescribed cost limit per share.
Performance Graph The following graph and table compares the performance of our common stock to the S&P 500 Index and to an industry peer group for our last five fiscal years. The members of the peer group are Asbury Automotive Group, Inc., AutoNation, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc. and Sonic Automotive, Inc.
Performance Graph The following graph and table compare the performance of our common stock to the S&P 500 Index and to an industry peer group for our last five fiscal years. The members of the peer group are Asbury Automotive Group, Inc., AutoNation, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc. and Sonic Automotive, Inc.
On November 12 , 2024, our Board of Directors increased the Company’s share repurchase authorization to $500.0 million. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 trading plans or in privately negotiated transactions.
On November 11 , 2025, our Board of Directors increased the Company’s share repurchase authorization to $500.0 million. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 trading plans or in privately negotiated transactions.
As of December 31, 2024, we had $476.1 million available under our current share repurchase authorization. Our share repurchase authorization does not have an expiration date. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information on share repurchases.
As of December 31, 2025, we had $378.7 million available under our current share repurchase authorization. Our share repurchase authorization does not have an expiration date. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information on share repurchases.
Item 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “GPI.” There were 33 holders of record of our common stock as of February 7, 2025.
Item 5. Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “GPI.” There were 32 holders of record of our common stock as of February 6, 2026.
The graph assumes that the value of the investment in our common stock, the S&P 500 Index and the peer group was $100 on the last trading day of December 2019, and that all dividends were reinvested. 25 Base Period Indexed Returns for the Years Ended Company /Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Group 1 Automotive, Inc. $ 100.00 $ 131.92 $ 197.92 $ 184.34 $ 313.70 $ 436.25 S&P 500 Index — Total Return $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Peer Group $ 100.00 $ 146.65 $ 205.17 $ 189.46 $ 268.62 $ 285.44 26
The graph assumes that the value of the investment in our common stock, the S&P 500 Index and the peer group was $100 on the last trading day of December 2020, and that all dividends were reinvested. 26 Base Period Indexed Returns for the Years Ended Company /Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Group 1 Automotive, Inc. $ 100.00 $ 150.03 $ 139.74 $ 237.80 $ 330.70 $ 309.98 S&P 500 Index — Total Return $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 Peer Group $ 100.00 $ 139.90 $ 129.19 $ 183.17 $ 194.64 $ 202.49 Item 6. [Reserved] 27

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReported Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 9,972.4 $ 8,774.6 $ 1,197.8 13.7 % $ 59.6 13.0 % Used vehicle retail sales 6,179.9 5,693.5 486.3 8.5 % 49.9 7.7 % Used vehicle wholesale sales 462.4 441.4 21.0 4.7 % 4.1 3.8 % Total used 6,642.3 6,135.0 507.3 8.3 % 54.0 7.4 % Parts and service sales 2,491.0 2,222.3 268.7 12.1 % 13.6 11.5 % F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 % Total revenues $ 19,934.3 $ 17,873.7 $ 2,060.6 11.5 % $ 130.1 10.8 % Gross profit: New vehicle retail sales $ 717.9 $ 767.0 $ (49.1) (6.4) % $ 4.7 (7.0) % Used vehicle retail sales 330.0 300.9 29.1 9.7 % 2.5 8.8 % Used vehicle wholesale sales (3.3) (3.8) 0.5 12.7 % (0.1) 15.4 % Total used 326.7 297.2 29.6 9.9 % 2.4 9.1 % Parts and service sales 1,367.7 1,214.2 153.5 12.6 % 7.7 12.0 % F&I, net 828.7 741.9 86.8 11.7 % 3.0 11.3 % Total gross profit $ 3,241.0 $ 3,020.3 $ 220.7 7.3 % $ 17.9 6.7 % Gross margin: New vehicle retail sales 7.2 % 8.7 % (1.5) % Used vehicle retail sales 5.3 % 5.3 % 0.1 % Used vehicle wholesale sales (0.7) % (0.9) % 0.1 % Total used 4.9 % 4.8 % 0.1 % Parts and service sales 54.9 % 54.6 % 0.3 % Total gross margin 16.3 % 16.9 % (0.6) % Units sold: Retail new vehicles sold 203,677 175,566 28,111 16.0 % Retail used vehicles sold 209,687 187,656 22,031 11.7 % Wholesale used vehicles sold 52,600 43,763 8,837 20.2 % Total used 262,287 231,419 30,868 13.3 % Average sales price per unit sold: New vehicle retail $ 49,817 $ 50,325 $ (508) (1.0) % $ 296 (1.6) % Used vehicle retail $ 29,472 $ 30,340 $ (868) (2.9) % $ 238 (3.6) % Gross profit per unit sold: New vehicle retail sales $ 3,525 $ 4,369 $ (844) (19.3) % $ 23 (19.9) % Used vehicle retail sales $ 1,574 $ 1,604 $ (30) (1.9) % $ 12 (2.6) % Used vehicle wholesale sales $ (63) $ (86) $ 24 27.4 % $ (2) 29.7 % Total used $ 1,246 $ 1,284 $ (38) (3.0) % $ 9 (3.7) % F&I PRU $ 2,005 $ 2,043 $ (38) (1.9) % $ 7 (2.2) % Other: SG&A expenses $ 2,179.2 $ 1,926.8 $ 252.4 13.1 % $ 14.6 12.3 % SG&A as % gross profit 67.2 % 63.8 % 3.4 % Floorplan expense: Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 % $ 0.6 68.4 % Less: floorplan assistance (1) 88.4 71.2 17.2 24.2 % 0.1 24.1 % Net floorplan expense $ 20.1 $ (7.1) $ 27.2 $ 0.5 (1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Consolidated Statements of Operations. 30 Same Store Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 8,785.0 $ 8,507.7 $ 277.4 3.3 % $ 40.8 2.8 % Used vehicle retail sales 5,454.4 5,499.0 (44.6) (0.8) % 32.7 (1.4) % Used vehicle wholesale sales 398.9 422.5 (23.6) (5.6) % 2.7 (6.2) % Total used 5,853.3 5,921.5 (68.2) (1.2) % 35.4 (1.7) % Parts and service sales 2,242.2 2,143.0 99.2 4.6 % 8.6 4.2 % F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 % Total revenues $ 17,633.7 $ 17,288.8 $ 344.9 2.0 % $ 86.6 1.5 % Gross profit: New vehicle retail sales $ 617.4 $ 745.3 $ (127.9) (17.2) % $ 2.9 (17.6) % Used vehicle retail sales 290.0 291.4 (1.4) (0.5) % 1.6 (1.0) % Used vehicle wholesale sales (3.3) (3.6) 0.3 7.8 % (0.1) 10.8 % Total used 286.7 287.8 (1.1) (0.4) % 1.5 (0.9) % Parts and service sales 1,222.0 1,169.8 52.2 4.5 % 4.9 4.0 % F&I, net 753.2 716.6 36.6 5.1 % 1.9 4.8 % Total gross profit $ 2,879.3 $ 2,919.5 $ (40.2) (1.4) % $ 11.2 (1.8) % Gross margin: New vehicle retail sales 7.0 % 8.8 % (1.7) % Used vehicle retail sales 5.3 % 5.3 % — % Used vehicle wholesale sales (0.8) % (0.9) % — % Total used 4.9 % 4.9 % — % Parts and service sales 54.5 % 54.6 % (0.1) % Total gross margin 16.3 % 16.9 % (0.6) % Units sold: Retail new vehicles sold 175,397 170,119 5,278 3.1 % Retail used vehicles sold 185,494 180,946 4,548 2.5 % Wholesale used vehicles sold 45,410 42,141 3,269 7.8 % Total used 230,904 223,087 7,817 3.5 % Average sales price per unit sold: New vehicle retail $ 50,586 $ 50,368 $ 218 0.4 % $ 234 — % Used vehicle retail $ 29,405 $ 30,390 $ (986) (3.2) % $ 176 (3.8) % Gross profit per unit sold: New vehicle retail sales $ 3,520 $ 4,381 $ (861) (19.7) % $ 17 (20.0) % Used vehicle retail sales $ 1,563 $ 1,611 $ (47) (2.9) % $ 8 (3.5) % Used vehicle wholesale sales $ (74) $ (86) $ 12 14.4 % $ (2) 17.3 % Total used $ 1,242 $ 1,290 $ (49) (3.8) % $ 6 (4.3) % F&I PRU $ 2,087 $ 2,041 $ 46 2.2 % $ 5 2.0 % Other: SG&A expenses $ 1,960.4 $ 1,873.6 $ 86.8 4.6 % $ 8.9 4.2 % SG&A as % gross profit 68.1 % 64.2 % 3.9 % 31 Reported Operating Data — U.S.
Biggest changeReported Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2025 2024 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 10,989.9 $ 9,972.4 $ 1,017.5 10.2 % $ 65.9 9.5 % Used vehicle retail sales 7,195.0 6,179.9 1,015.1 16.4 % 65.1 15.4 % Used vehicle wholesale sales 607.3 462.4 144.9 31.3 % 7.1 29.8 % Total used 7,802.3 6,642.3 1,160.0 17.5 % 72.2 16.4 % Parts and service sales 2,844.6 2,491.0 353.6 14.2 % 17.3 13.5 % F&I, net 934.6 828.7 105.9 12.8 % 3.9 12.3 % Total revenues $ 22,571.4 $ 19,934.3 $ 2,637.1 13.2 % $ 159.1 12.4 % Gross profit: New vehicle retail sales $ 755.4 $ 717.9 $ 37.5 5.2 % $ 5.3 4.5 % Used vehicle retail sales 347.2 330.0 17.1 5.2 % 2.5 4.4 % Used vehicle wholesale sales (0.9) (3.3) 2.4 72.6 % (0.3) 81.9 % Total used 346.2 326.7 19.5 6.0 % 2.2 5.3 % Parts and service sales 1,585.6 1,367.7 217.9 15.9 % 9.9 15.2 % F&I, net 934.6 828.7 105.9 12.8 % 3.9 12.3 % Total gross profit $ 3,621.8 $ 3,241.0 $ 380.8 11.8 % $ 21.2 11.1 % Gross margin: New vehicle retail sales 6.9 % 7.2 % (0.3) % Used vehicle retail sales 4.8 % 5.3 % (0.5) % Used vehicle wholesale sales (0.1) % (0.7) % 0.6 % Total used 4.4 % 4.9 % (0.5) % Parts and service sales 55.7 % 54.9 % 0.8 % Total gross margin 16.0 % 16.3 % (0.2) % Units sold: Retail new vehicles sold 224,166 203,677 20,489 10.1 % Retail used vehicles sold 234,906 209,687 25,219 12.0 % Wholesale used vehicles sold 64,955 52,600 12,355 23.5 % Total used 299,861 262,287 37,574 14.3 % Average sales price per unit sold: New vehicle retail $ 50,990 $ 49,817 $ 1,172 2.4 % $ 302 1.7 % Used vehicle retail $ 30,657 $ 29,472 $ 1,185 4.0 % $ 278 3.1 % Gross profit per unit sold: New vehicle retail sales $ 3,370 $ 3,525 $ (155) (4.4) % $ 24 (5.1) % Used vehicle retail sales $ 1,478 $ 1,574 $ (96) (6.1) % $ 11 (6.8) % Used vehicle wholesale sales $ (14) $ (63) $ 49 77.8 % $ (5) 85.3 % Total used $ 1,155 $ 1,246 $ (91) (7.3) % $ 7 (7.9) % F&I PRU $ 2,036 $ 2,005 $ 31 1.6 % $ 8 1.1 % Other: SG&A expenses $ 2,545.5 $ 2,179.2 $ 366.3 16.8 % $ 18.1 16.0 % SG&A as % gross profit 70.3 % 67.2 % 3.0 % Floorplan expense: Floorplan interest expense $ 101.5 $ 108.5 $ (7.0) (6.5) % $ 0.7 (7.1) % Less: floorplan assistance (1) 91.0 88.4 2.6 3.0 % — 3.0 % Net floorplan expense $ 10.5 $ 20.1 $ (9.6) $ 0.7 (1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Consolidated Statements of Operations. 32 Same Store Operating Data — Consolidated (In millions, except unit data) For the Years Ended December 31, 2025 2024 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 10,052.0 $ 9,772.2 $ 279.8 2.9 % $ 53.5 2.3 % Used vehicle retail sales 6,351.5 6,031.9 319.7 5.3 % 52.9 4.4 % Used vehicle wholesale sales 510.5 447.3 63.2 14.1 % 5.4 12.9 % Total used 6,862.0 6,479.2 382.8 5.9 % 58.3 5.0 % Parts and service sales 2,593.3 2,422.3 171.0 7.1 % 13.8 6.5 % F&I, net 875.3 813.0 62.3 7.7 % 3.2 7.3 % Total revenues $ 20,382.7 $ 19,486.8 $ 896.0 4.6 % $ 128.7 3.9 % Gross profit: New vehicle retail sales $ 667.9 $ 703.5 $ (35.6) (5.1) % $ 4.3 (5.7) % Used vehicle retail sales 311.1 321.4 (10.3) (3.2) % 2.1 (3.9) % Used vehicle wholesale sales 1.7 (2.9) 4.6 NM (0.3) NM Total used 312.8 318.5 (5.7) (1.8) % 1.8 (2.4) % Parts and service sales 1,441.9 1,331.5 110.4 8.3 % 7.9 7.7 % F&I, net 875.3 813.0 62.3 7.7 % 3.2 7.3 % Total gross profit $ 3,297.9 $ 3,166.5 $ 131.4 4.1 % $ 17.1 3.6 % Gross margin: New vehicle retail sales 6.6 % 7.2 % (0.6) % Used vehicle retail sales 4.9 % 5.3 % (0.4) % Used vehicle wholesale sales 0.3 % (0.7) % 1.0 % Total used 4.6 % 4.9 % (0.4) % Parts and service sales 55.6 % 55.0 % 0.6 % Total gross margin 16.2 % 16.2 % (0.1) % Units sold: Retail new vehicles sold 201,060 198,603 2,457 1.2 % Retail used vehicles sold 208,955 203,448 5,507 2.7 % Wholesale used vehicles sold 56,153 50,413 5,740 11.4 % Total used 265,108 253,861 11,247 4.4 % Average sales price per unit sold: New vehicle retail $ 51,322 $ 50,059 $ 1,263 2.5 % $ 270 2.0 % Used vehicle retail $ 30,423 $ 29,648 $ 775 2.6 % $ 253 1.8 % Gross profit per unit sold: New vehicle retail sales $ 3,322 $ 3,542 $ (220) (6.2) % $ 21 (6.8) % Used vehicle retail sales $ 1,489 $ 1,580 $ (91) (5.8) % $ 10 (6.4) % Used vehicle wholesale sales $ 30 $ (58) $ 88 NM $ (5) NM Total used $ 1,180 $ 1,255 $ (75) (6.0) % $ 7 (6.5) % F&I PRU $ 2,135 $ 2,022 $ 113 5.6 % $ 8 5.2 % Other: SG&A expenses $ 2,298.1 $ 2,157.7 $ 140.4 6.5 % $ 14.6 5.8 % SG&A as % gross profit 69.7 % 68.1 % 1.5 % NM — Not Meaningful 33 Reported Operating Data — U.S.
The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles due to their net presentation within revenues as only the sales commission is reported in revenues for dealerships operating under an agency arrangement.
The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues as only the sales commission is reported in revenues for dealerships operating under an agency arrangement.
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in parts and service same store revenues, as discussed above. F&I same store gross profit, on a constant currency basis, underperformed the Prior Year, as described above in F&I same store revenues.
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in parts and service same store revenues, as discussed above. F&I same store gross profit, on a constant currency basis, outperformed the Prior Year, as described above in F&I same store revenues.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions. 28 Results of Operations The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of our intangibles, including fair value assumptions. 30 Results of Operations The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership.
Management’s Discussion and Analysis of Financial Condition and Results of Operations to this Form 10-K, we believe we have sufficient liquidity and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants. Refer to Note 14. Floorplan Notes Payable and Note 15.
Management’s Discussion and Analysis of Financial Condition and Results of Operations to this Form 10-K, we believe we have sufficient liquidity and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants. Refer to Note 13. Floorplan Notes Payable and Note 14.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. 29 The following tables summarize our operating results on a reported basis and on a same store basis for the Current Year, as compared to the Prior Year.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. 31 The following tables summarize our operating results on a reported basis and on a same store basis for the Current Year, as compared to the Prior Year.
We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows. Refer to Note 14.
We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows. Refer to Note 13.
Certain of our mortgage agreements contain cross-default provisions that, in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default. As of December 31, 2024, we were in compliance with the requirements of the financial covenants under our debt agreements.
Certain of our mortgage agreements contain cross-default provisions that, in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default. As of December 31, 2025, we were in compliance with the requirements of the financial covenants under our debt agreements.
Business — General for an overview of our operations. Additionally, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2023 compared to fiscal year 2022.
Business — General for an overview of our operations. Additionally, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2024 compared to fiscal year 2023.
Historically, various facets of our business have been directly or indirectly impacted by a variety of supply/demand factors, including vehicle inventories, consumer confidence, consumer transportation preferences, discretionary spending levels, availability and affordability of consumer credit, new vehicle introductions and innovations, manufacturer incentives, weather patterns, fuel prices, inflation and interest rates.
Historically, various facets of our business have been directly or indirectly impacted by a variety of supply/demand factors, including vehicle inventories, government trade policies, consumer confidence, consumer transportation preferences, discretionary spending levels, availability and affordability of consumer credit, new vehicle introductions and innovations, manufacturer incentives, weather patterns, fuel prices, inflation and interest rates.
Consolidated Selected Comparisons — Year Ended December 31, 2024 compared to 2023 The following table (in millions) and discussion of our results of operations are on a consolidated basis, unless otherwise noted.
Consolidated Selected Comparisons — Year Ended December 31, 2025 compared to 2024 The following table (in millions) and discussion of our results of operations are on a consolidated basis, unless otherwise noted.
All computations have been calculated using unrounded amounts for all periods presented. Retail new vehicle units sold include new vehicle agency units sold under agency arrangements with certain manufacturers in the U.K.
All computations have been calculated using unrounded amounts for all periods presented. Retail new and used vehicle units sold include new and used vehicle agency units sold under agency arrangements with certain manufacturers in the U.K.
No goodwill impairments were recorded on any reporting units during the Prior Year. T he quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units.
No goodwill impairments were recorded on any reporting units during the Prior Year. T he quantitative goodwill impairment test is dependent on management estimates and assumptions used to determine the fair value of our reporting units. Refer to Note 12.
Below are the accounting policies and estimates that have been determined to be critical to our business operations and the understanding of our results of operations. Goodwill and Intangible Franchise Rights We are organized into two geographic regions, the U.S. region and the U.K. region. Each region represents a reporting unit for the purpose of assessing goodwill for impairment.
Below are the accounting policies and estimates that have been determined to be critical to our business operations and the understanding of our results of operations. Goodwill and Intangible Franchise Rights We are organized into two geographic segments, the U.S. segment and the U.K. segment. Each segment represents a reporting unit for the purpose of assessing goodwill for impairment.
The following table summarizes the commitment of our credit facilities as of December 31, 2024 (in millions): As of December 31, 2024 Total Commitment Outstanding Available U.S.
The following table summarizes the commitment of our credit facilities as of December 31, 2025 (in millions): As of December 31, 2025 Total Commitment Outstanding Available U.S.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of goodwill, including management’s use of estimates and assumptions. During the Current Year, impairment charges of $28.2 million were recorded for intangible franchise rights. In the Prior Year, impairment charges of $25.1 million were recorded for intangible franchise rights.
Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements for further discussion of goodwill, including management’s use of estimates and assumptions. During the Current Year, non-cash impairment charges of $91.1 million were recorded for intangible franchise rights. In the Prior Year, impairment charges of $28.2 million were recorded for intangible franchise rights.
W e have invested in improvements to our U.K. customer contact center, streamlining operations to make scheduling appointments easier for customers, resulting in an increase in parts and service activity driving an increase in revenues as compared to the Prior Year.
We have invested in improvements to our U.K. customer contact center, streamlining operations to make scheduling appointments easier for customers, resulting in an increase in customer pay parts and service activity driving an increase in revenues as compared to the Prior Year.
We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments. For the Current Year, $245.1 million was used to purchase property and equipment.
We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments. For the Current Year, $270.0 million was used to purchase property and equipment.
Region — Year Ended December 31, 2024 compared to 2023 Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues.
Segment — Year Ended December 31, 2025 compared to 2024 Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues.
The remaining available balance can be used for vehicle inventory financing. (2) The outstanding balance of $106.8 million is related to outstanding letters of credit of $11.8 million and $95.0 million in USD borrowings.
The remaining available balance can be used for vehicle inventory financing. (2) The outstanding balance of $975.8 million is related to outstanding letters of credit of $11.8 million and $964.0 million in USD borrowings.
Covenants Our Revolving Credit Facility, indentures governing our 4.00% and 6.375% Senior Notes and certain mortgage term loans contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and to merge or consolidate with other entities.
Debt within our Notes to Consolidated Financial Statements for further information. 44 Covenants Our Revolving Credit Facility, indentures governing our 4.00% and 6.375% Senior Notes and certain mortgage term loans contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and merge or consolidate with other entities.
We are required to maintain the ratios detailed in the following table: As of December 31, 2024 Required Actual Total adjusted leverage ratio 2.79 Fixed charge coverage ratio > 1.20 3.56 Based on our position as of December 31, 2024, and our outlook as discussed within Item 7.
We are required to maintain the ratios detailed in the following table: As of December 31, 2025 Required Actual Total adjusted leverage ratio 3.14 Fixed charge coverage ratio > 1.20 3.28 Based on our position as of December 31, 2025, and our outlook as discussed within Item 7.
During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $161.5 million and $198.2 million, respectively. The year-over-year tax expense decrease was primarily due to lower pre-tax book income. The 2024 effective tax rate of 24.5% was lower than the 2023 effective tax rate of 24.8%.
During the Current Year and Prior Year, we recorded a tax provision from continuing operations of $126.2 million and $161.5 million, respectively. The year-over-year tax expense decrease was primarily due to lower pre-tax book income. The 2025 effective tax rate o f 28.0% was higher than the 2024 effective tax rate of 24.5%.
For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Depreciation and amortization expense $ 113.1 $ 92.0 $ 21.1 22.9 % Asset impairments $ 33.0 $ 32.9 $ 0.1 0.3 % Restructuring charges $ 16.7 $ — $ 16.7 100.0 % Other operating (income) expense $ (10.0) $ — $ (10.0) (100.0) % Floorplan interest expense $ 108.5 $ 64.1 $ 44.4 69.3 % Other interest expense, net $ 141.3 $ 99.8 $ 41.5 41.6 % Provision for income taxes $ 161.5 $ 198.2 $ (36.7) (18.5) % Depreciation and Amortization Expense Depreciation and amortization expense for the Current Year was higher compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. and U.K. regions, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
For the Years Ended December 31, 2025 2024 Increase/ (Decrease) % Change Depreciation and amortization expense $ 121.1 $ 113.1 $ 8.0 7.1 % Asset impairments $ 192.8 $ 33.0 $ 159.8 484.7 % Restructuring charges $ 28.4 $ 16.7 $ 11.7 70.3 % Floorplan interest expense $ 101.5 $ 108.5 $ (7.0) (6.5) % Other interest expense, net $ 182.9 $ 141.3 $ 41.5 29.4 % Provision for income taxes $ 126.2 $ 161.5 $ (35.3) (21.9) % Depreciation and Amortization Expense Depreciation and amortization expense for the Current Year was higher compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. and U.K. segments, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
In 2024, we elected to perform a quantitative test on the U.K. reporting unit and a qualitative test on the U.S. reporting unit. Based on the tests performed for the U.S. and U.K. reporting units in the fourth quarter of 2024, no im pairments of goodwill were recorded during the Current Year.
For our October 31, 2025 annual goodwill impairment test, we elected to perform a quantitative test on the U.K. reporting unit and a qualitative test on the U.S. reporting unit. Based on the tests performed for the U.S. and U.K. reporting units in the fourth quarter of 2025, no further impairments of goodwill were recorded during the Current Year.
GAAP basis to the corresponding adjusted amounts (in millions): Years Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities: $ 586.3 $ 190.2 Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 133.3 504.6 Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity (36.6) 25.2 Adjusted net cash provided by operating activities $ 683.0 $ 720.0 CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities: $ (1,282.6) $ (366.1) Change in cash paid for acquisitions, associated with Floorplan notes payable 50.3 66.3 Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (31.9) (48.8) Adjusted net cash used in investing activities $ (1,264.2) $ (348.6) CASH FLOWS FROM FINANCING ACTIVITIES: Net cash provided by financing activities: $ 681.1 $ 185.2 Change in Floorplan notes payable, excluding floorplan offset (115.2) (547.3) Adjusted net cash provided by (used in) financing activities $ 565.9 $ (362.1) Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2024 compared to 2023 For the Current Year, net cash provided by operating activities increased by $396.1 million as compared to the Prior Year.
GAAP basis to the corresponding adjusted amounts (in millions): Years Ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by operating activities: $ 694.5 $ 586.3 Change in Floorplan notes payable — credit facility and other, excluding floorplan offset and net acquisitions and dispositions 6.7 133.3 Change in Floorplan notes payable — manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity (2.0) (36.6) Adjusted net cash provided by operating activities $ 699.2 $ 683.0 CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities: $ (671.3) $ (1,282.6) Change in cash paid for acquisitions, associated with Floorplan notes payable 51.2 50.3 Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (27.6) (31.9) Adjusted net cash used in investing activities $ (647.7) $ (1,264.2) CASH FLOWS FROM FINANCING ACTIVITIES: Net cash (used in) provided by financing activities: $ (31.1) $ 681.1 Change in Floorplan notes payable, excluding floorplan offset (28.4) (115.2) Adjusted net cash (used in) provided by financing activities $ (59.4) $ 565.9 Sources and Uses of Liquidity from Operating Activities — Year Ended December 31, 2025 compared to 2024 For the Current Year, net cash provided by operating activities increased by $108.2 million as compared to the Prior Year.
In addition, we have outstanding debt instruments, including our 4.00% and 6.375% Senior Notes, as well as real estate related and other debt instruments. Refer to Note 15. Debt within our Notes to Consolidated Financial Statements for further information.
In addition, we have outstanding debt instruments, including our 4.00% and 6.375% Senior Notes, as well as real estate related and other debt instruments. Refer to Note 14.
Used vehicle wholesale same store gross profit outperformed the Prior Year, driven by an increase in same store gross profit per unit sold, coupled with an increase in same store units sold. Parts and service same store gross profit outperformed the Prior Year, as described above for parts and service same store revenues.
Used vehicle wholesale same store gross profit outperformed the Prior Year, driven by an increase in same store gross profit per unit sold, coupled with an increase in same store units sold.
Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements for further discussion of the CDK Incident. Floorplan Interest Expense Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or other benchmark rates.
Refer to Note 4. Restructuring within our Notes to Consolidated Financial Statements for further discussion of our restructuring plans. 41 Floorplan Interest Expense Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or other benchmark rates.
On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $36.9 million.
On an adjusted basis for the same period, adjusted net cash provided by operating activities increased by $16.2 million.
We ended the Current Year with a U.K. new vehicle inventory supply of 45 days, three days lower than the Prior Year. Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year, driven by lower used vehicle retail pricing, partially offset by more units sold.
We ended the Current Year with a U.K. new vehicle inventory supply of 52 days, seven days higher than the Prior Year. Used vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold and higher prices.
Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2024 compared to 2023 For the Current Year, net cash provided by financing activities increased by $495.9 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $928.1 million.
Sources and Uses of Liquidity from Financing Activities — Year Ended December 31, 2025 compared to 2024 For the Current Year, net cash used in financing activities increased by $712.2 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in financing activities increased by $625.4 million.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rat e has fluctuated from £1 to $1.273 at December 31, 2023, to £1 to $1.254 at December 31, 2024, or a slight decrease in the value of the GBP of 1.5%.
The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.254 at December 31, 2024, to £1 to $1.346 at December 31, 2025, or an increase in the value of the GBP of 7.3%.
The remaining available balance can be used for Ford new vehicle inventory financing. (4) The remaining available balance as of December 31, 2024, can be used for General Motors new and rental vehicle inventory financing.
(4) The remaining available balance as of December 31, 2025, includes no immediately available funds. The remaining available balance can be used for General Motors new and loaner vehicle inventory financing.
The available borrowings may be limited from time to time, based on certain debt covenant calculations, and as a result, the outstanding balance plus available borrowings may not equal the total commitment. (3) The available balance as of December 31, 2024, includes $2.0 million of immediately available funds.
The available borrowings may be limited from time to time, based on certain debt covenant calculations, and as a result, the outstanding balance plus available borrowings may not equal the total commitment. (3) The available balance as of December 31, 2025, includes no immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing.
The increase in net cash provided by financing activities on an adjusted basis was primarily driven by a $586.4 million increase in net borrowings of other debt, including real estate-related debt, the issuance of $500.0 million of 6.375% Senior Notes, and increases in net borrowings on our U.S.
The increase in net cash used in financing activities on an adjusted basis was primarily driven by a $654.3 million increase in net repayments of other debt, including real estate-related debt, the issuance of $500 million of 6.375% Senior Notes in the Prior Year, an increase in share repurchases of $393.2 million, and an increase in net repayments on our U.S.
(5) The outstanding balance excludes $590.1 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and rental vehicle financing not associated with any of our U.S. credit facilities. 42 We have other credit facilities in the U.S. and the U.K. with third-party financial institutions, most of which are affiliated with the automobile manufacturers that provide financing for portions of our new, used and loaner vehicle inventories.
We have other credit facilities in the U.S. and the U.K. with third-party financial institutions, most of which are affiliated with the automobile manufacturers that provide financing for portions of our new, used and loaner vehicle inventories.
Total same store gross profit in the U.S. during the Current Yea r decreased $27.7 million, or 1.1%, as compared to the Prior Year, driven by downward pressure on new vehicle margins, partially offset by increases from parts and service, F&I and used vehicle gross profit.
Total same store gross profit in the U.K. during the Current Year increased $25.6 million, or 4.7%, as compared to the Prior Year. On a constant currency basis, total same store gross profit increased 1.6%, driven by increases in parts and service, F&I and used vehicle wholesale, partially offset by downward pressure on new and used vehicle retail margins.
For further discussion, please refer to Note 16. Income Taxes within our Notes to Consolidated Financial Statements. Liquidity and Capital Resources Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S. Floorplan Line and FMCC Facility levels (refer to Note 14.
Liquidity and Capital Resources Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S. Floorplan Line and FMCC Facility levels (refer to Note 13.
We ended the Current Year with a U.S. new vehicle inventory supply of 43 days, 7 days higher than the Prior Year. Used vehicle retail same store revenues slightly underperformed the Prior Year, driven by lower pricing, partially offset by more units sold . Used vehicle supply improved as a result of higher new vehicle supply.
We ended the Current Year with a U.S. new vehicle inventory supply of 44 days, one day higher than the Prior Year. Used vehicle retail same store revenues outperformed the Prior Year, driven by higher pricing, coupled with more units sold.
Leases within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments. Restructuring Charges During the Current Year, we incurred $16.7 million of restructuring charges.
Property and Equipment, Net within our Notes to Consolidated Financial Statements for further discussion of our assessment for impairments. Restructuring Charges During the Current Year, we recognized $28.4 million of restructuring charges, compared to $16.7 million in the Prior Year.
Revenues Total revenues in the U.S. during the Current Year increased $958.7 million, or 6.5%, as compared to the same period in the Prior Year, driven by the acquisition of stores and higher same store revenues. Total same store revenues in the U.S. during the Current Year increased $319.8 million, or 2.2%, as compared to the Prior Year.
Segment — Year Ended December 31, 2025 compared to 2024 Revenues Total revenues in the U.S. during the Current Year increased $853.9 million, or 5.4%, as compared to the same period in the Prior Year, driven by higher same store revenues and the acquisition of stores.
Parts and service same store revenues outperformed the Prior Year, driven by increases in customer pay and warranty revenues, partially offset by decreases in wholesale and collision revenues.
Used vehicle wholesale same store revenues outperformed the Prior Year, driven by more units sold, coupled with higher pricing. Parts and service same store revenues outperformed the Prior Year, driven by increases in customer pay, warranty and wholesale revenues, partially offset by a decrease in collision revenues.
Revenues Total revenues in the U.K. during the Curren t Year increased $1.1 billion, or 36.0%, as compared to the Prior Year, primarily driven by the acquisition of stores and changes in foreign currency exchange rates.
Revenues Total revenues in the U.K. during the Current Year increased $1.8 billion, or 42.8%, as compared to the Prior Year, primarily driven by the acquisition of stores.
Restructuring charges primarily consist of planned workforce realignment, strategic closing of certain facilities and systems integrations, among other efforts to increase operational efficiency and profitability in connection with the integration of the Inchcape Retail acquisition with our U.K. business. Refer to Note 5.
Restructuring charges primarily consist of planned workforce realignment, strategic closing of certain facilities and systems integrations, among other efforts to increase operational efficiency and profitability related to the integration of Inchcape Retail with its existing U.K. operations. The Company anticipates implementing further restructuring plans in the U.K. in future periods to further optimize our operations and reduce costs.
As of December 31, 2024, we had $476.1 million available under our current share repurchase authorization. During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $1.88 per share, which resulted in $24.7 million paid to common shareholders and $0.5 million to unvested RSA holders.
During the Current Year, our Board of Directors approved quarterly cash dividends per share on all shares of our common stock totaling $2.00 per share, which resulted in $25.3 million paid to common shareholders and $0.3 million to unvested RSA holders.
As our intangible franchise rights are tested for impairment at the dealership level, any impairments are specific to the performance and outlook of the respective dealership. Refer to Note 13.
As our intangible franchise rights are tested for impairment at the dealership level, any impairments are specific to the performance and outlook of the respective dealership. We will continue to monitor the challenging macroeconomic and industry conditions in the U.K.
T otal same store gross profit in the U.K. during the Current Year decreased $12.5 million, or 3.1%, as compared to the Prior Year. On a constant currency basis, total same store gross profit decreased 5.8%, driven by downward pressures on margins across all lines of business.
Total same store revenues in the U.K. during the Current Year increased $181.0 million, or 4.5%, as compared to the Prior Year, driven by outperformances across all lines of business except new vehicle retail. On a constant currency basis, same store revenues increased 1.3%, driven by outperformances across all lines of business except new vehicle retail.
Used vehicle wholesale same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by a decrease in wholesale used vehicle units sold. Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by i ncreases in customer pay, warranty and wholesale revenues reflecting increased business activity.
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by an increase in customer pay and wholesale revenues, partially offset by a decrease in warranty revenues.
Gross Profit Total gross profit in the U.K. during t he Current Year increased $150.0 million, or 36.6%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.
Gross Profit Total gross profit in the U.K. during the Current Year increased $251.8 million, or 45.0%, as compared to the Prior Year, primarily driven by the acquisition of stores, changes in foreign currency exchange rates and improved same store performance.
The tax rate decrease was primarily due to the mix of earnings and an increase in tax credits. We believe that it is more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences.
We believe that it is more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences. For further discussion, please refer to Note 15. Income Taxes within our Notes to Consolidated Financial Statements.
F&I same store revenues outperformed the Prior Year, primarily driven by higher same store new and used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold.
F&I same store revenues outperformed the Prior Year, primarily driven by improved penetration rates across most product offerings, coupled with higher same store new and used vehicle units sold and improved income per contract from financing, vehicle service contracts (“VSC”), hazard and dent product offerings.
Financial Instruments and Fair Value Measurements within our Notes to the Consolidated Financial Statements for additional discussion of the de-designation of the mortgage interest rate swap. Provision for Income Taxes Provision for income taxes from continuing operations during the Current Year decreased $36.7 million, or 18.5%, as compared to the Prior Year.
Debt within our Notes to Consolidated Financial Statements for additional discussion of our debt. Provision for Income Taxes Provision for income taxes from continuing operations during the Current Year decreased $35.3 million, or 21.9%, as compared to the Prior Year.
F&I, net same store revenues, on a constant currency basis, underperformed the Prior Year, driven by decreases in income per contract for retail finance fees and service contracts.
F&I, net same store revenues, on a constant currency basis, outperformed the Prior Year, driven by higher income per contract from our retail finance fees, improved penetration rates on finance and VSC fees and higher used vehicle retail unit sales.
Floorplan line of $108.5 million (representing the net cash activity in our floorplan offset account). These increases were partially offset by a $249.6 million increase in net repayments on the Acquisition Line.
Floorplan line of $203.0 million (representing the net cash activity in our floorplan offset account). This was partially offset by a $1.1 billion increase in net borrowings on the Acquisition Line.
OEM incentives have increased in the Current Year, leading to the improved new vehicle F&I penetration. Gross Profit Total gross profit in the U.S. during the Current Year increased $70.7 million, or 2.7%, as compared to the Prior Year, driven by the acquisition of stores, partially offset by lower same store gross profit.
Total same store gross profit in the U.S. during the Current Year increased $105.7 million, or 4.0%, as compared to the Prior Year, driven by increases in parts and service, F&I and used vehicle wholesale, partially offset by decreases in new and used vehicle retail gross profit.
In addition, our ability to expediently adjust our cost structure in response to changes in new vehicle sales volumes also tempers any negative impact of such sales volume changes.
In addition, our ability to expediently adjust our cost structure in response to changes in new vehicle sales volumes also tempers any negative impact of such sales volume changes. Recent Events Changes in trade policy, tariffs and other governmental actions during the Current Year introduced additional uncertainty for the automotive industry.
Debt within our Notes to Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of December 31, 2024. Share Repurchases and Dividends From time to time, our Board of Directors authorizes the repurchase of shares of our common stock up to a certain monetary limit.
Debt within our Notes to Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of December 31, 2025.
(In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 1,862.3 $ 1,341.0 $ 521.3 38.9 % $ 59.6 34.4 % Used vehicle retail sales 1,629.2 1,234.8 394.4 31.9 % 49.9 27.9 % Used vehicle wholesale sales 138.6 127.1 11.5 9.1 % 4.1 5.8 % Total used 1,767.8 1,361.9 405.9 29.8 % 54.0 25.8 % Parts and service sales 438.3 289.0 149.3 51.7 % 13.6 47.0 % F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 % Total revenues $ 4,161.5 $ 3,059.5 $ 1,102.0 36.0 % $ 130.1 31.8 % Gross profit: New vehicle retail sales $ 146.0 $ 120.8 $ 25.2 20.9 % $ 4.7 16.9 % Used vehicle retail sales 80.8 60.2 20.6 34.3 % 2.5 30.0 % Used vehicle wholesale sales (7.8) (6.3) (1.5) (23.4) % (0.1) (21.7) % Total used 73.0 53.9 19.1 35.5 % 2.4 31.0 % Parts and service sales 248.0 167.8 80.2 47.8 % 7.7 43.2 % F&I, net 93.0 67.6 25.4 37.6 % 3.0 33.2 % Total gross profit $ 560.1 $ 410.1 $ 150.0 36.6 % $ 17.9 32.2 % Gross margin: New vehicle retail sales 7.8 % 9.0 % (1.2) % Used vehicle retail sales 5.0 % 4.9 % 0.1 % Used vehicle wholesale sales (5.6) % (5.0) % (0.7) % Total used 4.1 % 4.0 % 0.2 % Parts and service sales 56.6 % 58.1 % (1.5) % Total gross margin 13.5 % 13.4 % 0.1 % Units sold: Retail new vehicles sold 46,015 32,757 13,258 40.5 % Retail used vehicles sold 56,717 42,039 14,678 34.9 % Wholesale used vehicles sold 15,377 12,307 3,070 24.9 % Total used 72,094 54,346 17,748 32.7 % Average sales price per unit sold: New vehicle retail $ 43,765 $ 42,488 $ 1,277 3.0 % $ 1,401 (0.3) % Used vehicle retail $ 28,725 $ 29,373 $ (648) (2.2) % $ 880 (5.2) % Gross profit per unit sold: New vehicle retail sales $ 3,174 $ 3,689 $ (515) (14.0) % $ 103 (16.8) % Used vehicle retail sales $ 1,425 $ 1,432 $ (7) (0.5) % $ 45 (3.6) % Used vehicle wholesale sales $ (508) $ (514) $ 6 1.3 % $ (7) 2.6 % Total used $ 1,013 $ 991 $ 22 2.2 % $ 34 (1.2) % F&I PRU $ 906 $ 904 $ 2 0.2 % $ 29 (3.0) % Other: SG&A expenses $ 475.2 $ 303.9 $ 171.3 56.4 % $ 14.6 51.5 % SG&A as % gross profit 84.8 % 74.1 % 10.7 % 36 Same Store Operating Data — U.K.
(In millions, except unit data) For the Years Ended December 31, 2025 2024 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change Revenues: New vehicle retail sales $ 2,461.2 $ 1,862.3 $ 598.9 32.2 % $ 65.9 28.6 % Used vehicle retail sales 2,436.3 1,629.2 807.1 49.5 % 65.1 45.5 % Used vehicle wholesale sales 249.8 138.6 111.2 80.2 % 7.1 75.1 % Total used 2,686.0 1,767.8 918.2 51.9 % 72.2 47.9 % Parts and service sales 646.3 438.3 207.9 47.4 % 17.3 43.5 % F&I, net 151.1 93.0 58.0 62.4 % 3.9 58.2 % Total revenues $ 5,944.6 $ 4,161.5 $ 1,783.1 42.8 % $ 159.1 39.0 % Gross profit: New vehicle retail sales $ 200.0 $ 146.0 $ 54.0 36.9 % $ 5.3 33.3 % Used vehicle retail sales 101.1 80.8 20.3 25.1 % 2.5 22.0 % Used vehicle wholesale sales (7.6) (7.8) 0.2 2.0 % (0.3) 5.9 % Total used 93.4 73.0 20.4 28.0 % 2.2 25.0 % Parts and service sales 367.4 248.0 119.4 48.1 % 9.9 44.2 % F&I, net 151.1 93.0 58.0 62.4 % 3.9 58.2 % Total gross profit $ 811.9 $ 560.1 $ 251.8 45.0 % $ 21.2 41.2 % Gross margin: New vehicle retail sales 8.1 % 7.8 % 0.3 % Used vehicle retail sales 4.1 % 5.0 % (0.8) % Used vehicle wholesale sales (3.1) % (5.6) % 2.6 % Total used 3.5 % 4.1 % (0.7) % Parts and service sales 56.9 % 56.6 % 0.3 % Total gross margin 13.7 % 13.5 % 0.2 % Units sold: Retail new vehicles sold 61,905 46,015 15,890 34.5 % Retail used vehicles sold 79,396 56,717 22,679 40.0 % Wholesale used vehicles sold 25,337 15,377 9,960 64.8 % Total used 104,733 72,094 32,639 45.3 % Average sales price per unit sold: New vehicle retail $ 46,143 $ 43,765 $ 2,378 5.4 % $ 1,233 2.6 % Used vehicle retail $ 30,768 $ 28,725 $ 2,042 7.1 % $ 822 4.2 % Gross profit per unit sold: New vehicle retail sales $ 3,231 $ 3,174 $ 57 1.8 % $ 86 (0.9) % Used vehicle retail sales $ 1,273 $ 1,425 $ (152) (10.6) % $ 31 (12.8) % Used vehicle wholesale sales $ (302) $ (508) $ 206 40.5 % $ (12) 42.9 % Total used $ 892 $ 1,013 $ (121) (11.9) % $ 21 (14.0) % F&I PRU $ 1,069 $ 906 $ 163 18.1 % $ 27 15.0 % Other: SG&A expenses $ 681.4 $ 475.2 $ 206.2 43.4 % $ 18.1 39.6 % SG&A as % gross profit 83.9 % 84.8 % (0.9) % 38 Same Store Operating Data — U.K.
The increases on a total same store basis were primarily driven by fees associated with the Inchcape Acqui sition, coupled with increased employee related costs, demonstration and loaner car expenses and advertising costs, offset by lower facilities costs compared to the Prior Year.
On a constant currency basis, total same store SG&A expenses increased 1.7%. These increases on a total same store basis were primarily driven by higher employee related costs, vehicle delivery and facility costs, offset by lower professional and legal fees, compared to the Prior Year.
Other Interest Expense, Net Other interest expense, net consists of interest charges primarily on our $750.0 million 4.00% Senior Notes due August 2028 (“4.00% Senior Notes”), $500.0 million 6.375% Senior Notes due January 2030 (“6.375% Senior Notes”), real estate related debt and other debt, partially offset by interest income.
Other Interest Expense, Net Other interest expense, net consists of interest charges primarily on our 4.00% Senior Notes, 6.375% Senior Notes, real estate related debt and other debt, partially offset by interest income. For the Current Year, other interest expense, net, increased $41.5 million, or 29.4%, as compared to the Prior Year.
During the Prior Year, we recorded total property and equipment and ROU asset impairment charges of $6.8 million in the U.S. region. During the Current Year, we recognized $4.8 million in intangible asset impairment associated with assets held for sale. Refer to Note 13. Intangible Franchise Rights and Goodwill, Note 11. Property and Equipment, Net and Note 12.
For previously impaired assets held for sale, we recognized a gain of $2.3 million during the Current Year, compared to an additional asset impairment of $4.8 million in the Prior Year. Refer to Note 12. Intangible Franchise Rights and Goodwill and Note 10.
Total same store SG&A expenses in the U.S. during the Current Year increased $65.3 million or 4.2% as compared to the Prior Year, primarily driven by increased employee related costs, outside services, advertising expenses, loaner car and related expenses, and fees associated with the Inchcape Acquisition.
Total same store SG&A expenses in the U.S. during the Current Year increased $118.3 million or 6.9% as compared to the Prior Year, primarily driven by increased employee related costs, third-party services, unfavorable legal settlements and higher facility related expenses. 37 Reported Operating Data — U.K.
(In millions, except unit data) For the Years Ended December 31, 2024 2023 Increase/(Decrease) % Change Revenues: New vehicle retail sales $ 8,110.1 $ 7,433.6 $ 676.6 9.1 % Used vehicle retail sales 4,550.7 4,458.7 92.0 2.1 % Used vehicle wholesale sales 323.8 314.4 9.4 3.0 % Total used 4,874.5 4,773.1 101.4 2.1 % Parts and service sales 2,052.7 1,933.3 119.4 6.2 % F&I, net 735.6 674.3 61.3 9.1 % Total revenues $ 15,772.9 $ 14,814.2 $ 958.7 6.5 % Gross profit: New vehicle retail sales $ 571.8 $ 646.1 $ (74.3) (11.5) % Used vehicle retail sales 249.2 240.8 8.5 3.5 % Used vehicle wholesale sales 4.5 2.6 2.0 76.7 % Total used 253.7 243.3 10.4 4.3 % Parts and service sales 1,119.7 1,046.4 73.3 7.0 % F&I, net 735.6 674.3 61.3 9.1 % Total gross profit $ 2,680.9 $ 2,610.1 $ 70.7 2.7 % Gross margin: New vehicle retail sales 7.1 % 8.7 % (1.6) % Used vehicle retail sales 5.5 % 5.4 % 0.1 % Used vehicle wholesale sales 1.4 % 0.8 % 0.6 % Total used 5.2 % 5.1 % 0.1 % Parts and service sales 54.5 % 54.1 % 0.4 % Total gross margin 17.0 % 17.6 % (0.6) % Units sold: Retail new vehicles sold 157,662 142,809 14,853 10.4 % Retail used vehicles sold 152,970 145,617 7,353 5.0 % Wholesale used vehicles sold 37,223 31,456 5,767 18.3 % Total used 190,193 177,073 13,120 7.4 % Average sales price per unit sold: New vehicle retail $ 51,440 $ 52,052 $ (613) (1.2) % Used vehicle retail $ 29,749 $ 30,619 $ (871) (2.8) % Gross profit per unit sold: New vehicle retail sales $ 3,627 $ 4,524 $ (897) (19.8) % Used vehicle retail sales $ 1,629 $ 1,653 $ (24) (1.5) % Used vehicle wholesale sales $ 121 $ 81 $ 40 49.3 % Total used $ 1,334 $ 1,374 $ (40) (2.9) % F&I PRU $ 2,368 $ 2,338 $ 30 1.3 % Other: SG&A expenses $ 1,704.0 $ 1,622.9 $ 81.1 5.0 % SG&A as % gross profit 63.6 % 62.2 % 1.4 % 32 Same Store Operating Data — U.S.
(In millions, except unit data) For the Years Ended December 31, 2025 2024 Increase/(Decrease) % Change Revenues: New vehicle retail sales $ 8,528.7 $ 8,110.1 $ 418.6 5.2 % Used vehicle retail sales 4,758.7 4,550.7 208.0 4.6 % Used vehicle wholesale sales 357.5 323.8 33.7 10.4 % Total used 5,116.2 4,874.5 241.8 5.0 % Parts and service sales 2,198.3 2,052.7 145.7 7.1 % F&I, net 783.5 735.6 47.9 6.5 % Total revenues $ 16,626.8 $ 15,772.9 $ 853.9 5.4 % Gross profit: New vehicle retail sales $ 555.4 $ 571.8 $ (16.4) (2.9) % Used vehicle retail sales 246.1 249.2 (3.1) (1.3) % Used vehicle wholesale sales 6.7 4.5 2.2 49.6 % Total used 252.8 253.7 (0.9) (0.4) % Parts and service sales 1,218.2 1,119.7 98.5 8.8 % F&I, net 783.5 735.6 47.9 6.5 % Total gross profit $ 2,809.9 $ 2,680.9 $ 129.0 4.8 % Gross margin: New vehicle retail sales 6.5 % 7.1 % (0.5) % Used vehicle retail sales 5.2 % 5.5 % (0.3) % Used vehicle wholesale sales 1.9 % 1.4 % 0.5 % Total used 4.9 % 5.2 % (0.3) % Parts and service sales 55.4 % 54.5 % 0.9 % Total gross margin 16.9 % 17.0 % (0.1) % Units sold: Retail new vehicles sold 162,261 157,662 4,599 2.9 % Retail used vehicles sold 155,510 152,970 2,540 1.7 % Wholesale used vehicles sold 39,618 37,223 2,395 6.4 % Total used 195,128 190,193 4,935 2.6 % Average sales price per unit sold: New vehicle retail $ 52,562 $ 51,440 $ 1,122 2.2 % Used vehicle retail $ 30,601 $ 29,749 $ 852 2.9 % Gross profit per unit sold: New vehicle retail sales $ 3,423 $ 3,627 $ (204) (5.6) % Used vehicle retail sales $ 1,582 $ 1,629 $ (47) (2.9) % Used vehicle wholesale sales $ 170 $ 121 $ 49 40.5 % Total used $ 1,296 $ 1,334 $ (38) (2.9) % F&I PRU $ 2,466 $ 2,368 $ 98 4.1 % Other: SG&A expenses $ 1,864.1 $ 1,704.0 $ 160.1 9.4 % SG&A as % gross profit 66.3 % 63.6 % 2.8 % 34 Same Store Operating Data — U.S.
Refer to Note 8 . Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps.
For the Current Year, floorplan interest expense decreased $7.0 million, or 6.5%, as compared to the Prior Year, driven primarily by decreased floorplan interest rates compared to the Prior Year. Refer to Note 7 . Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements for additional discussion of interest rate swaps.
Total SG&A expenses in the U.K. during the Curre nt Year increased $171.3 million, or 56.4%, as compared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $21.6 million, or 7.1%, as compared to the Prior Year. On a constant currency basis, total same store SG& A expenses increased 4.2%.
Total SG&A expenses in the U.K. during the Current Year increased $206.2 million, or 43.4%, as c ompared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $22.1 million, or 4.9%, as compared to the Prior Year partially due to changes in foreign currency exchange rates.
Total same store gross margin in the U.K. decreased 52 basis points, driven by margin declines across all lines of business attributable to the factors as described above under gross profit. 38 SG&A Expenses SG&A as a percentage of gross profit increased by 1,074 and 787 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Total same store gross margin in the U.K. remained flat for the Current Year as compared to the Prior Year. 40 SG&A Expenses SG&A as a percentage of gross pr ofit decreased 92 basis points on an as reported basis and increased 12 basis points on a same store basis, respectively, compared to the Prior Year.
We review long-lived assets including property and equipment and ROU assets for impairment at the lowest level of identifiable cash flows whenever there is evidence that the carrying value of these assets may not be recoverable (i.e., triggering events). During the Current Year, there was no asset impairment charges associated with property and equipment and ROU assets.
During the Prior Year, we recorded impairments of intangible franchise rights of $28.2 million, all of which were recorded in the U.S. segment. We review long-lived assets including property and equipment for impairment at the lowest level of identifiable cash flows whenever triggering events suggest the carrying value of these assets may not be recoverable.
On an adjusted basis for the same period, adjusted net cash used in investing activities increased by $915.7 million, primarily due to a $926.8 million increase in acquisition activity, and a $59.7 million increase in purchases of property and equipment, including real estate, partially offset by a $52.8 million increase in proceeds from disposition of franchises and property and equipment.
On an adjusted basis for the same period, adjusted net cash used in investing activities decreased by $616.5 million, primarily due to a $731.0 million decrease in acquisition activity, partially offset by a $79.9 million decrease in proceeds from disposition of franchises and property and equipment and a $24.9 million increase in purchases of property and equipment, including real estate. 43 Capital Expenditures Our capital expenditures include costs to extend the useful lives of current dealership facilities, improve the customer experience, as well as to start or expand operations.
We anticipate we will generate sufficient cash flows from operations, coupled with cash on hand and available borrowing capacity under our credit facilities, to fund our working capital requirements, service our debt and meet any other recurring operating expenditures. 40 Available Liquidity Resources We had the following sources of liquidity available (in millions): December 31, 2024 Cash and cash equivalents $ 34.4 Floorplan offset accounts 288.2 Available capacity under Acquisition Line 893.2 Total liquidity $ 1,215.8 Cash Flows We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility.
Available Liquidity Resources We had the following sources of liquidity available (in millions): December 31, 2025 Cash and cash equivalents $ 32.5 Floorplan offset accounts 504.2 Available capacity under Acquisition Line 346.3 Total liquidity $ 883.0 42 Cash Flows We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility.
Floorplan Line (1) $ 1,500.0 $ 1,042.4 $ 457.6 Acquisition Line (2) 1,000.0 106.8 893.2 Total Revolving Credit Facility 2,500.0 1,149.3 1,350.7 FMCC facility (3) 300.0 200.0 100.0 GM Financial Facility (4) 348.1 189.5 158.6 Total U.S. credit facilities (5) $ 3,148.1 $ 1,538.8 $ 1,609.3 (1) The available balance at December 31, 2024, includes $286.3 million of immediately available funds.
Floorplan Line (1) $ 1,750.0 $ 884.2 $ 865.8 Acquisition Line (2) 1,750.0 975.8 346.3 Total Revolving Credit Facility 3,500.0 1,860.0 1,212.1 FMCC facility (3) 200.0 188.7 11.3 GM Financial Facility (4) 376.7 201.4 175.3 Total U.S. credit facilities (5) $ 4,076.7 $ 2,250.1 $ 1,398.7 (1) The available balance at December 31, 2025, includes $504.2 million of immediately available funds.
The increase in other interest expense, net during the Current Year was primarily attributable to the issuance of the 6.375% Senior Notes during the Current Year, additional real estate related and other debt in our U.S. and U.K. regions, primarily due to acquisition activity.
The increase in other interest expense, net during the Current Year was primarily attributable to the full year of interest expense on the 6.375% Senior Notes issued in 2024, as w ell as interest expense attributable to the Acquisition Line and other debt. Refer to Note 14.
F&I same store gross profit outperformed the Prior Year, as described above for F&I same store revenues. Total same store gross margin in the U.S. decreased 58 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail.
F&I same store gross profit outperformed the Prior Year, as described above for F&I same store revenues. Total same store gross margin in the U.S. remained flat for the Current Year as compared to the Prior Year.
This underperformance was partially offset by improvement in parts and service and used vehicle gross margins. 34 SG&A Expenses SG&A as a percentage of gross profit increased 139 basis points and increased 332 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
SG&A Expenses SG&A as a percentage of gross profit increased 278 basis points and increased 182 basis points on an as reported and same store basis, respectively, compared to the Prior Year. 36 Total SG&A expenses in the U.S. during the Current Year increased $160.1 million, or 9.4%, as compared to the Prior Year.
Recent Accounting Pronouncements Refer to Note 1. Basis of Presentation, Consolidation and Summary of Accounting Policies within our Notes to Consolidated Financial Statements. Critical Accounting Policies and Accounting Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions.
We will continue to monitor the impact of the Trump Administration’s policies and the response of U.S. trading partners on our results of operations in future periods. 29 Critical Accounting Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions.
Used vehicle retail same store gross profit outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold, partially offset by lower same store gross profit per unit sold, as described above for used vehicle retail same store revenues.
Used vehicle retail same store gross profit underperformed the Prior Year, primarily driven by lower same store gross profit per unit sold, partially offset by higher same store used vehicle retail units sold. Gross profit per unit sold continues to face pressure from affordability concerns of consumers due to rising vehicle acquisition costs and relatively high consumer interest rates.
On November 12 , 2024 , our Board of Directors increased the share repurchase authorization to $500.0 million. For the Current Year, 518,465 shares were repurchased, at an average price of $311.67 per share, for a total of $161.6 million, excluding excise taxes of $1.4 million.
For the Current Year, 1,343,229 shares were repurchased, at an average price of $413.05 per share, for a total of $554.8 million, excluding excise taxes of $4.9 million. As of December 31, 2025, we had $378.7 million available under our current share repurchase authorization.
As a result, during the Current Year, the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment. On January 29, 2025, the Federal Reserve held rates unchanged.
On December 10, 2025, the Federal Reserve lowered interest rates by 25 basis points in an effort to stimulate the labor market and economic activity, following earlier reductions in September and October. On December 18, 2025, the Bank of England lowered interest rates by 25 basis points, following earlier reductions in February, May, and August 2025.
Impairment of Assets During the Current Year and the Prior Year, we recorded no goodwill impairments. During the Current Year and Prior Year we recorded impairments of franchise rights of $28.2 million and $25.1 million for franchise agreements in the U.S. region, respectively.
Impairment of Assets During the Current Year, we recorded goodwill impairments of $93.0 million, compared to none in the Prior Year. During the Current Year, we recorded total impairments of intangible franchise rights of $91.1 million, consisting of $27.8 million in the U.K. segment , excluding impairments associated with restructuring charges, and $63.3 million in the U.S. segment.
This increase was driven by higher revenues across all business lines except used vehicle retail sales. New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset by lower pricing.
Total same store revenues in the U.S. during the Current Year increased $714.9 million, or 4.6%, as compared to the Prior Year, driven by higher revenues across all business lines. New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, coupled with higher pricing. This outperformance reflects the resiliency of demand.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on variable-rate borrowings outstanding of $2.9 billion and $2.4 billion during the Current Year and Prior Year, respectively, a 100 basis point change in interest rates would have resulted in an approximate $19.9 million and a $14.4 million change to our annual interest expense, respectively, after consideration of the average interest rate swaps in effect during the periods. 43 To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.
Biggest changeBased on variable-rate borrowings outstanding of $3.6 billion and $2.9 billion during the Current Year and Prior Year, respectively, a 100 basis point change in interest rates would have resulted in an approximate $27.2 million and a $19.9 million change to our annual interest expense, respectively, after consideration of the average interest rate swaps in effect during the periods.
Our exposure to fluctuating foreign currency exchange rates relates to the effects of translating financial statements of those subsidiaries into our reporting currency, which we do not hedge against based on our investment strategy in these foreign operations.
Our exposure to fluctuating foreign currency exchange rates relates to the effects of translating financial statements of those subsidiaries into our reporting currency, which we do not hedge against based on our foreign currency strategy in these foreign operations.
In addition, our exposure to changes in interest rates with respect to our variable-rate floorplan borrowings is partially mitigated by manufacturers’ interest assistance, which in some cases is influenced by changes in market-based variable interest rates. We reflect interest assistance as a reduction of new vehicle inventory cost until the associated vehicle is sold.
In addition, our exposure to changes in interest rates with respect to our variable-rate floorplan borrowings is partially mitigated by manufacturers’ interest assistance, which in some cases is influenced by changes in market-based variable interest rates. We reflect interest assistance as a reduction of new vehicle inventory costs until the associated vehicle is sold.
The following quantitative and qualitative information is provided regarding our foreign currency exchange rates and financial instruments to which we are a party at December 31, 2024, and from which we may incur future gains or losses from changes in market interest rates and/or foreign currency exchange rates.
The following quantitative and qualitative information is provided regarding our foreign currency exchange rates and financial instruments to which we are a party at December 31, 2025, and from which we may incur future gains or losses from changes in market interest rates and/or foreign currency exchange rates.
A 10% devaluation in average foreign currency exchange rates for GBP to USD would have resulted in a $378.3 million and $278.1 million decrease to our revenues for the Current Year and Prior Year, respectively. For additional information about our market sensitive financial instruments, see Note 8. Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements.
A 10% devaluation in average foreign currency exchange rates for GBP to USD would have resulted in a $540.4 million and $378.3 million decrease to our revenues for the Current Year and Prior Year, respectively. For additional information about our market sensitive financial instruments, see Note 7. Financial Instruments and Fair Value Measurements within our Notes to Consolidated Financial Statements.
During the Current Year and Prior Year, we recognized $88.4 million and $71.2 million, respectively, of interest assistance as a reduction of new vehicle cost of sales. Foreign Currency Exchange Rates The functional currency of our U.K. subsidiaries is the GBP.
During the Current Year and Prior Year, we recognized $91.0 million and $88.4 million, respectively, of interest assistance as a reduction of new vehicle cost of sales. 45 Foreign Currency Exchange Rates The functional currency of our U.K. subsidiaries is the GBP.
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To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.

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