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ACQUISITIONS AND DIVESTITURES | 9 Months Ended
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Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Herb Chambers Acquisition On July 21, 2025, we completed the acquisition of The Herb Chambers Companies (collectively, the "Businesses"). The Herb Chambers acquisition continues Asbury's geographic expansion into the northeast region of the United States. As a result of the Herb Chambers acquisition, we acquired substantially all of the assets including the real property related thereto, for a total preliminary purchase price of approximately $1.78 billion paid in cash. The acquisition was financed by borrowings under our new vehicle floor plan and used vehicle floor plan facilities, revolving credit facility and borrowings under a real estate facility. The Businesses comprise 33 dealerships, 52 franchises and three collision centers. The Businesses will form part of our Dealerships segment. The sources of the preliminary purchase consideration are as follows:
| (In millions)
New vehicle floor plan facility | $ | 292.0 |
Used vehicle floor plan facility | 300.0 |
Revolving credit facility | 645.4 |
Real estate facility | 546.5 |
Preliminary purchase price | $ | 1,783.9 |
Under the acquisition method of accounting, the tangible and intangible assets acquired and liabilities assumed are recorded at their estimated fair value based on information currently available. The following table summarizes the amounts recorded based on preliminary estimates of fair value:
Summary of Assets Acquired and Liabilities Assumed |
| (In millions)
Assets |
Inventories, net | $ | 388.5 |
Other current assets | 60.3 |
Total current assets | 448.8 |
Property and equipment, net | 614.8 |
Goodwill | 290.1 |
Intangible franchise rights | 463.2 |
Operating lease right-of-use assets | 39.8 |
Total assets acquired | $ | 1,856.7 |
Liabilities |
Operating lease liabilities | (39.8) |
Other liabilities | (33.0) |
Total liabilities assumed | (72.8) |
Net assets acquired | $ | 1,783.9 |
The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management, including the books and records of the Businesses. Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The areas of acquisition accounting that are not yet finalized primarily relate to the following significant items: (i) finalizing the valuation of inventory, land, land improvements, buildings and non-real property and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, and (ii) finalizing the valuation of manufacturer franchise rights (including key assumptions, inputs and estimates). As the initial acquisition accounting is based on our preliminary assessments, actual values may differ (possibly materially) when final information becomes available that differs from our current estimates. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period. Approximately $463.2 million of the purchase price was assigned to the indefinite lived franchise rights intangible assets related to the dealer agreements applicable to each new vehicle dealership. In addition, goodwill of $290.1 million was recognized and is primarily attributable to the anticipated synergies that Asbury expects to derive from the Herb Chambers acquisition as well as the acquired assembled workforce of the Businesses. The Company recorded $14.7 million of acquisition related costs during the nine months ended September 30, 2025. These costs are included in selling, general, and administrative expenses in the condensed consolidated statements of income. Goodwill and manufacturer franchise rights associated with our Dealerships segment acquisitions are deductible for federal and state income tax purposes ratably over a 15-year period. The Company's consolidated statements of income included revenue and net income attributable to the Businesses from July 21, 2025 through September 30, 2025 of $523.4 million and $17.9 million, respectively. The following represents the unaudited pro forma information as if the Herb Chambers acquisition had been included in the consolidated results of the Company since January 1, 2024:
| For the Three Months Ended September 30,
| 2025 |  | 2024
| (In millions)
| (Unaudited)
Pro forma revenue | $ | 5,441.6 |  |  | $ | 4,924.1 |
Pro forma net income | $ | 146.1 |  |  | $ | 128.5 |
| For the Nine Months Ended September 30,
| 2025 |  | 2024
| (In millions)
| (Unaudited)
Pro forma revenue | $ | 15,248.2 |  |  | $ | 14,758.7 |
Pro forma net income | $ | 439.3 |  |  | $ | 297.3 |
The above pro forma financial information adjusts the revenue and net income related to the Herb Chambers acquisition primarily for depreciation, rent and interest expense, assuming that the fair value adjustments and indebtedness incurred in connection with the Herb Chambers acquisition had occurred on January 1, 2024. They have also been adjusted to reflect the $14.7 million of acquisition related costs incurred during the nine months ended September 30, 2025, as having occurred on January 1, 2024. The pro forma information also assumes that the July 2025 divestiture of two Lexus and two General Motors dealerships occurred on January 1, 2024. The pro forma net income for the nine months ended September 30, 2025 and 2024 includes $26.0 million and $135.4 million, respectively, of asset impairments recorded by the Company. There were no acquisitions during the three and nine months ended September 30, 2024. Divestitures During the nine months ended September 30, 2025, we sold two Toyota franchises (two dealership locations) in San Diego, California, and Los Angeles, California, one Nissan franchise (one dealership location) and one Chrysler Jeep Dodge Ram franchise (one dealership location) in Denver, Colorado, one Volvo franchise (one dealership location) in Greenville, South Carolina, and six franchises in Salt Lake City, Utah, comprising two Lexus franchises (two dealership locations), one Chevrolet franchise (one dealership location), two Chrysler Jeep Dodge Ram franchises (two dealership locations) and one Ford franchise (one dealership location). The Company recorded a pre-tax gain totaling $45.8 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures, net. During the nine months ended September 30, 2024, we sold one Lexus franchise (one dealership location) in Wilmington, Delaware due to OEM requirements in connection with the Koons acquisition, one Nissan franchise (one dealership location) in Denver, Colorado, and one Nissan franchise (one dealership location) in Atlanta, Georgia. The Company recorded a pre-tax gain totaling $8.6 million, which is presented in our accompanying condensed consolidated statement of income as a gain on dealership divestitures, net.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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