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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-14733

Lithia Motors, Inc.

(Exact name of registrant as specified in its charter)


Oregon			93-0572810
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
150 N. Bartlett Street	Medford,	Oregon	97501
(Address of principal executive offices)			(Zip Code)

(541) 776-6401

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock without par value	LAD	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of

1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to

such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule

405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to

submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,

or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and

“emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	Non-accelerated filer	Accelerated filer	Smaller reporting company	Emerging growth company
☒	☐	☐	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with

any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of October 24, 2025, there were 24,250,030 shares of the registrant’s common stock outstanding.

LITHIA MOTORS, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS


Item Number	Item	Page
	GLOSSARY	1

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	2
	Consolidated Balance Sheets (Unaudited) - September 30, 2025, and December 31, 2024	2
	Consolidated Statements of Operations (Unaudited) - Three and Nine Months Ended September 30, 2025 and 2024	3
	Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months Ended September 30, 2025 and 2024	4
	Consolidated Statements of Equity and Redeemable Non-controlling Interest (Unaudited) - Three and Nine Months Ended September 30, 2025 and 2024	5
	Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2025 and 2024	6
	Condensed Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 5.	Other Information	43
Item 6.	Exhibits	43

	SIGNATURE	44


		GLOSSARY	1

Table of Contents

GLOSSARY OF DEFINITIONS

The following are abbreviations and definitions of terms used within this report:


Terms		Definitions
AFS		Available-for-sale
ASC		Accounting Standards Codification
ASU		Accounting standards update
Board		Board of directors
BPS		Basis points
CAD		Canadian Dollar ($)
CPO		Certified pre-owned
DFC		Driveway Finance Corporation
EBITDA		Earnings before interest, taxes, depreciation, and amortization
EPS		Earnings per share
FASB		Financial Accounting Standards Board
GAAP		Generally accepted accounting principles
GBP		Great Britain Pound (£)
JPM		JPMorgan Chase Bank, N.A.
LAD		Lithia and Driveway
Mizuho		Mizuho Bank, Ltd.
NCI		Non-controlling interest
NM		Not meaningful
NYSE		New York Stock Exchange
PINE.L		Pinewood Technologies Group PLC
PPA		Purchase price allocation
RSU		Restricted stock units
SEC		Securities and Exchange Commission
SG&A		Selling, general, and administrative
SOFR		Secured Overnight Financing Rate
SONIA		Sterling Overnight Index Average
U.K.		United Kingdom
U.S.		United States of America
USB		US Bank National Association
YTD		Year-to-date


		CONSOLIDATED FINANCIAL STATEMENTS	2

Table of Contents


CONSOLIDATED BALANCE SHEETS
(In millions; Unaudited)	September 30, 2025	December 31, 2024
Assets
Current assets:
Cash, restricted cash, and cash equivalents	$417.1	$402.2
Accounts receivable, net of allowance for doubtful accounts of $6.7 and $2.3	1,212.8	1,237.0
Inventories, net	5,941.7	5,911.7
Other current assets	354.3	223.0
Total current assets	7,925.9	7,773.9

Property and equipment, net of accumulated depreciation of $957.9 and $825.5	4,784.0	4,629.9
Operating lease right-of-use assets	629.9	658.7
Finance receivables, net of allowance for estimated losses of $139.8 and $123.4	4,544.9	3,868.2
Goodwill	2,440.1	2,115.5
Franchise value	2,771.8	2,550.3
Other non-current assets	1,422.5	1,526.1
Total assets	$24,519.1	$23,122.6

Liabilities and equity
Current liabilities:
Floor plan notes payable	$1,964.1	$2,055.1
Floor plan notes payable: non-trade	2,904.8	2,848.0
Current maturities of long-term debt	58.1	134.0
Current maturities of non-recourse notes payable	49.8	58.1
Trade payables	336.7	333.7
Accrued liabilities	1,212.5	1,122.2
Total current liabilities	6,526.0	6,551.1

Long-term debt, less current maturities	6,965.8	6,119.3
Non-recourse notes payable, less current maturities	2,195.9	2,051.2
Deferred revenue	543.3	414.2
Deferred income taxes	530.6	397.1
Non-current operating lease liabilities	583.2	596.5
Other long-term liabilities	380.7	319.1
Total liabilities	17,725.5	16,448.5

Equity:
Preferred stock - no par value; authorized 15.0 shares; none outstanding	—	—
Common stock - no par value; authorized 125.0 shares; issued and outstanding 24.4 and 26.4	165.4	793.1
Additional paid-in capital	122.6	107.2
Accumulated other comprehensive income (loss)	86.6	(3.6)
Retained earnings	6,394.1	5,753.5
Total stockholders’ equity - Lithia Motors, Inc.	6,768.7	6,650.2
Non-controlling interest	24.9	23.9
Total equity	6,793.6	6,674.1
Total liabilities, non-controlling interest, and equity	$24,519.1	$23,122.6

See accompanying condensed notes to consolidated financial statements.


		CONSOLIDATED FINANCIAL STATEMENTS	3

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CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended September 30,		Nine Months Ended September 30,
(In millions, except per share amounts; Unaudited)	2025	2024	2025	2024
Revenues
New vehicle retail	$4,630.3	$4,430.0	$13,508.9	$12,847.9
Used vehicle retail	3,096.3	2,843.3	9,110.2	8,630.1
Used vehicle wholesale	367.0	390.9	1,081.1	1,018.1
Finance and insurance	378.6	360.4	1,116.8	1,061.9
Aftersales	1,037.1	1,012.8	3,039.6	2,876.3
Fleet and other	166.5	183.6	580.5	580.4
Total revenues	9,675.8	9,221.0	28,437.1	27,014.7
Cost of sales
New vehicle retail	4,353.6	4,123.6	12,655.3	11,925.4
Used vehicle retail	2,902.9	2,654.4	8,518.6	8,062.9
Used vehicle wholesale	371.5	393.0	1,090.6	1,020.7
Aftersales	432.6	453.0	1,283.3	1,285.1
Fleet and other	149.2	166.6	527.8	531.1
Total cost of sales	8,209.8	7,790.6	24,075.6	22,825.2
Gross profit	1,466.0	1,430.4	4,361.5	4,189.5

Finance operations income (loss)	19.1	(1.4)	51.7	4.1

Selling, general and administrative	998.0	943.6	2,965.3	2,853.0
Depreciation and amortization	65.5	63.5	194.6	183.6
Operating profit	421.6	421.9	1,253.3	1,157.0
Floor plan interest expense	(57.8)	(76.6)	(169.8)	(214.0)
Other interest expense, net	(68.3)	(64.5)	(200.5)	(189.3)
Other (expense) income, net	(13.3)	5.1	35.9	35.4
Income before income taxes	282.2	285.9	918.9	789.1
Income tax provision	(63.6)	(64.8)	(230.9)	(186.5)
Net income	218.6	221.1	688.0	602.6
Net income attributable to non-controlling interest	(1.5)	(1.2)	(5.3)	(3.8)
Net income attributable to redeemable non-controlling interest	—	(12.6)	—	(14.8)
Net income attributable to Lithia Motors, Inc.	$217.1	$207.3	$682.7	$584.0

Basic earnings per share attributable to Lithia Motors, Inc. common stockholders	$8.63	$7.75	$26.47	$21.50
Shares used in basic per share calculations	25.2	26.7	25.8	27.2

Diluted earnings per share attributable to Lithia Motors, Inc. common stockholders	$8.61	$7.73	$26.42	$21.47
Shares used in diluted per share calculations	25.2	26.8	25.8	27.2

Cash dividends paid per share	$0.55	$0.53	$1.63	$1.56

See accompanying condensed notes to consolidated financial statements.


		CONSOLIDATED FINANCIAL STATEMENTS	4

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	Three Months Ended September 30,		Nine Months Ended September 30,
(In millions; Unaudited)	2025	2024	2025	2024
Net income	$218.6	$221.1	$688.0	$602.6
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(30.2)	71.6	89.1	54.6
Unrealized gain on debt securities, net of tax provision of $(0.0), $(0.3), $(0.2), and $(0.2), respectively	0.2	1.2	0.7	0.7
Unrealized gain on cash flow hedges, net of tax provision of $—, $—, $(0.1) and $—, respectively	—	—	0.4	—
Total other comprehensive (loss) income, net of tax	(30.0)	72.8	90.2	55.3
Comprehensive income	188.6	293.9	778.2	657.9

Comprehensive income attributable to non-controlling interest	(1.5)	(1.2)	(5.3)	(3.8)
Comprehensive income attributable to redeemable non- controlling interest	—	(12.6)	—	(14.8)
Comprehensive income attributable to Lithia Motors, Inc.	$187.1	$280.1	$772.9	$639.3

See accompanying condensed notes to consolidated financial statements.


		CONSOLIDATED FINANCIAL STATEMENTS	5

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CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON- CONTROLLING INTEREST
	Three Months Ended September 30,		Nine Months Ended September 30,
(In millions; Unaudited)	2025	2024	2025	2024
Total equity, beginning balances	$7,011.0	$6,392.4	$6,674.1	$6,238.9

Common stock, beginning balances	568.8	924.0	793.1	1,100.6
Stock-based compensation	1.6	1.5	29.7	29.7
Issuance of stock in connection with employee stock purchase plans	7.6	7.4	21.0	21.2
Repurchase of common stock, including excise tax	(412.6)	(54.6)	(678.4)	(273.2)
Common stock, ending balances	165.4	878.3	165.4	878.3

Additional paid-in capital, beginning balances	110.2	79.5	107.2	79.9
Stock-based compensation	12.4	14.8	15.4	14.4
Additional paid-in capital, ending balances	122.6	94.3	122.6	94.3

Accumulated other comprehensive income (loss), beginning balances	116.6	2.6	(3.6)	20.1
Foreign currency translation adjustment	(30.2)	71.6	89.1	54.6
Unrealized gain on debt securities, net of tax provision of $(0.0), $(0.3), $(0.2), and $(0.2), respectively	0.2	1.2	0.7	0.7
Unrealized gain on cash flow hedges, net of tax provision of $—, $—, $(0.1), and $—, respectively	—	—	0.4	—
Accumulated other comprehensive income, ending balances	86.6	75.4	86.6	75.4

Retained earnings, beginning balances	6,190.9	5,361.8	5,753.5	5,013.3
Net income attributable to Lithia Motors, Inc.	217.1	207.3	682.7	584.0
Dividends paid	(13.9)	(14.2)	(42.1)	(42.4)
Retained earnings, ending balances	6,394.1	5,554.9	6,394.1	5,554.9

Non-controlling interest, beginning balances	24.5	24.5	23.9	25.0
Distribution of non-controlling interest	(1.1)	(2.2)	(4.3)	(5.3)
Net income attributable to non-controlling interest	1.5	1.2	5.3	3.8
Non-controlling interest, ending balances	24.9	23.5	24.9	23.5

Total equity, ending balances	$6,793.6	$6,626.4	$6,793.6	$6,626.4

Redeemable non-controlling interest, beginning balances	$—	$46.2	$—	$44.0
Distribution of redeemable non-controlling interest	—	(0.1)	—	(0.1)
Net income attributable to redeemable non-controlling interest	—	12.6	—	14.8
Redemption of redeemable non-controlling interest	—	(58.7)	—	(58.7)
Redeemable non-controlling interest, ending balances	$—	$—	$—	$—

See accompanying condensed notes to consolidated financial statements.


		CONSOLIDATED FINANCIAL STATEMENTS	6

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CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine Months Ended September 30,
(In millions; Unaudited)	2025	2024
Cash flows from operating activities:
Net income	$688.0	$602.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	239.5	219.7
Stock-based compensation	45.1	44.1
Net loss on disposal of other assets	3.9	3.8
Net gain on disposal of stores	(17.7)	(0.3)
Unrealized investment gain, net	(12.1)	(27.6)
Deferred income taxes	102.6	86.9
Amortization of operating lease right-of-use assets	67.2	70.6
Decrease (increase) (net of acquisitions and dispositions):
Accounts receivable, net	55.5	44.7
Inventories	44.8	(324.3)
Finance receivables	(671.3)	(524.2)
Other assets	(263.8)	(115.2)
Increase (decrease) (net of acquisitions and dispositions):
Floor plan notes payable	(151.0)	325.0
Trade payables	(7.4)	(26.7)
Accrued liabilities	52.8	(6.2)
Other long-term liabilities and deferred revenue	56.9	(9.6)
Net cash provided by operating activities	233.0	363.3
Cash flows from investing activities:
Capital expenditures	(257.7)	(271.9)
Proceeds from sales of assets	30.5	5.3
Net cash used for other investments	(12.7)	(329.1)
Cash paid for acquisitions, net of cash acquired	(417.6)	(1,247.0)
Proceeds from sales of stores	178.1	21.9
Net cash used in investing activities	(479.4)	(1,820.8)
Cash flows from financing activities:
Borrowings on floor plan notes payable, net: non-trade	73.3	280.1
Borrowings on lines of credit	11,707.1	10,325.4
Repayments on lines of credit	(11,575.1)	(9,627.0)
Principal payments on long-term debt and finance lease liabilities, scheduled	(29.6)	(29.0)
Principal payments on long-term debt and finance lease liabilities, other	(15.7)	(48.2)
Proceeds from issuance of long-term debt	741.0	279.5
Principal payments on non-recourse notes payable	(959.0)	(661.6)
Proceeds from issuance of non-recourse notes payable	1,095.3	739.0
Payment of debt issuance costs	(11.7)	(7.6)
Proceeds from issuance of common stock	21.0	21.2
Repurchase of common stock	(662.3)	(273.2)
Dividends paid	(42.1)	(42.4)
Payment of contingent consideration related to acquisitions	(9.4)	(12.0)
Other financing activity	(68.3)	(64.0)
Net cash provided by financing activities	264.5	880.2
Effect of exchange rate changes on cash, restricted cash, and cash equivalents	4.7	3.9
Increase (decrease) in cash, restricted cash, and cash equivalents	22.8	(573.4)
Cash, restricted cash, and cash equivalents at beginning of year	445.8	972.0
Cash, restricted cash, and cash equivalents at end of period	$468.6	$398.6

See accompanying condensed notes to consolidated financial statements.


		CONSOLIDATED FINANCIAL STATEMENTS	7

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
	Nine Months Ended September 30,
(In millions)	2025	2024
Reconciliation of cash, restricted cash, and cash equivalents to the consolidated balance sheets
Cash and cash equivalents	$206.5	$209.8
Restricted cash from collections on auto loans receivable and customer deposits	210.6	149.7
Cash, restricted cash, and cash equivalents	417.1	359.5
Restricted cash on deposit in reserve accounts, included in other non-current assets	51.5	39.1
Total cash, restricted cash, and cash equivalents reported in the Consolidated Statements of Cash Flows	$468.6	$398.6

Supplemental cash flow information:
Cash paid during the period for interest	$524.7	$546.5
Cash paid during the period for income taxes, net	137.9	149.8
Debt paid in connection with store disposals	40.8	13.1

Non-cash activities:
Debt assumed in connection with acquisitions	$—	$868.1
Acquisition of finance leases in connection with acquisitions	—	22.7
Right-of-use assets obtained in exchange for lease liabilities	30.8	310.7
Unsettled repurchases of common stock and excise taxes	16.1	—

See accompanying condensed notes to consolidated financial statements.


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	8

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. INTERIM FINANCIAL STATEMENTS

Basis of Presentation

These Consolidated Financial Statements contain unaudited information as of September 30, 2025, and for the

three and nine months ended September 30, 2025 and 2024. The unaudited interim financial statements have been

prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required

by accounting principles generally accepted in the United States of America for annual financial statements are not

included herein. In management’s opinion, these unaudited financial statements reflect all adjustments (which

include only normal recurring adjustments) necessary for a fair presentation of the information when read in

conjunction with our 2024 audited Consolidated Financial Statements and the related notes thereto. The financial

information as of December 31, 2024, is derived from our Annual Report on Form 10-K filed with the SEC on

February 24, 2025. The results of operations for the interim periods presented are not necessarily indicative of the

results to be expected for the full year.

Reclassifications

Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated

Financial Statements to maintain consistency and comparability between periods presented. Within our financing

operations income, we disaggregated our lease income out of our previously reported interest, fee, and lease

income to be its own separately presented line item, as well as revised the related lease depreciation and

amortization to now be reported as lease costs, reclassifying amounts previously reported net within lease income.

Correction of an Error

In the three months ended March 31, 2025, we identified an immaterial error related to interest and fee income

recognition in our previously issued financial statements for the year ended December 31, 2024.

In accordance with FASB ASC 250, Accounting Changes and Error Corrections, we corrected this error by

retrospectively restating the affected prior periods in this Form 10-Q.

The following tables summarize the impact of the correction on our Consolidated Balance Sheet and Consolidated

Statement of Operations.


	December 31, 2024
(In millions)	As Previously Reported	Adjustment	As Restated
Consolidated Balance Sheet
Other current assets	$221.3	$1.7	$223.0
Total current assets	7,772.2	1.7	7,773.9
Finance receivables, net	3,875.2	(7.0)	3,868.2
Total assets	23,127.9	(5.3)	23,122.6
Retained earnings	5,758.8	(5.3)	5,753.5
Total stockholders’ equity - Lithia Motors, Inc.	6,655.5	(5.3)	6,650.2
Total equity	6,679.4	(5.3)	6,674.1
Total liabilities, non-controlling interest, and equity	23,127.9	(5.3)	23,122.6


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	9

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	For the Three Months Ended September 30, 2024
(in millions, except per share amounts)	As Previously Reported	Adjustment	As Restated
Consolidated Statement of Operations
Financing operations income (loss)	$0.9	$(2.3)	$(1.4)
Operating profit	424.2	(2.3)	421.9
Income before income taxes	288.2	(2.3)	285.9
Income tax provision	(65.3)	0.5	(64.8)
Net income	222.9	(1.8)	221.1
Net income attributable to Lithia Motors, Inc.	209.1	(1.8)	207.3
Basic earnings per share attributable to Lithia Motors, Inc.	$7.82	$(0.07)	$7.75
Diluted earnings per share attributable to Lithia Motors, Inc.	$7.80	$(0.07)	$7.73


	For the Nine Months Ended September 30, 2024
(in millions, except per share amounts)	As Previously Reported	Adjustment	As Restated
Consolidated Statement of Operations
Financing operations income	$6.4	$(2.3)	$4.1
Operating profit	1,159.3	(2.3)	1,157.0
Income before income taxes	791.4	(2.3)	789.1
Income tax provision	(187.0)	0.5	(186.5)
Net income	604.4	(1.8)	602.6
Net income attributable to Lithia Motors, Inc.	585.8	(1.8)	584.0
Basic earnings per share attributable to Lithia Motors, Inc.	$21.57	$(0.07)	$21.50
Diluted earnings per share attributable to Lithia Motors, Inc.	$21.54	$(0.07)	$21.47

NOTE 2. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


(In millions)	September 30, 2025	December 31, 2024
Contracts in transit	$437.2	$497.4
Trade receivables	166.2	166.5
Vehicle receivables	258.7	243.7
Manufacturer receivables	338.0	306.3
Other receivables, current	19.4	25.4
	1,219.5	1,239.3
Less: Allowance for doubtful accounts	(6.7)	(2.3)
Total accounts receivable, net	$1,212.8	$1,237.0

The long-term portion of other receivables was included as a component of Other non-current assets in the

Consolidated Balance Sheets.

NOTE 3. INVENTORIES AND FLOOR PLAN NOTES PAYABLE

The components of inventories, net, consisted of the following:


(In millions)	September 30, 2025	December 31, 2024
New vehicles	$3,453.1	$3,555.3
Used vehicles	2,227.8	2,085.6
Parts and accessories	260.8	270.8
Total inventories	$5,941.7	$5,911.7

Vehicle inventory costs are generally reduced by manufacturer holdbacks and incentives, while the related floor plan

notes payable are reflective of the gross cost of the vehicle.


(In millions)	September 30, 2025	December 31, 2024
Floor plan notes payable	$1,964.1	$2,055.1
Floor plan notes payable: non-trade	2,904.8	2,848.0
Total floor plan debt	$4,868.9	$4,903.1


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10

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NOTE 4. FINANCE RECEIVABLES

Interest income on finance receivables is recognized based on the contractual terms of each receivable and is

accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with

originations are capitalized and expensed as an offset to interest income when recognized on the receivables.

The balances of finance receivables are made up of loans and finance leases secured by the related vehicles. More

than 99% of the portfolio is aged less than 60 days past due with less than 1% on non-accrual status.

Finance Receivables, net


(In millions)	September 30, 2025	December 31, 2024
Asset-backed term funding	$2,757.3	$2,604.9
Warehouse facilities	1,514.8	1,052.0
Other managed receivables	389.5	314.2
Total finance receivables	4,661.6	3,971.1
Accrued interest and fees	23.1	20.5
Less: Allowance for credit losses	(139.8)	(123.4)
Finance receivables, net	$4,544.9	$3,868.2

Finance Receivables by FICO Score


	As of September 30, 2025
	Year of Origination
($ in millions)	2025	2024	2023	2022	2021	Prior to 2021	Total
<599	$35.9	$39.2	$26.2	$14.1	$5.8	$0.6	$121.8
600-699	490.1	410.0	284.2	200.5	54.7	4.3	1,443.8
700-774	612.7	423.3	287.2	194.3	24.6	1.7	1,543.8
775+	614.8	379.4	224.8	118.4	5.7	0.5	1,343.6
Total auto loan receivables	$1,753.5	$1,251.9	$822.4	$527.3	$90.8	$7.1	4,453.0
Other finance receivables 1							208.6
Total finance receivables							$4,661.6


		As of December 31, 2024
		Year of Origination
($ in millions)	2024	2023	2022	2021	2020	Total
<599	$53.0	$39.7	$22.4	$9.9	$1.4	$126.4
600-699	534.1	406.2	298.8	90.2	8.3	1,337.6
700-774	560.2	402.5	284.9	39.5	3.2	1,290.3
775+	528.1	324.9	176.6	9.1	1.3	1,040.0
Total auto loan receivables	$1,675.4	$1,173.3	$782.7	$148.7	$14.2	3,794.3
Other finance receivables 1						176.8
Total finance receivables						$3,971.1

1Includes legacy portfolio, loans that are originated with no FICO score available, lease receivables, and deferred origination

fees.

In accordance with FASB ASC Topic 326, the allowance for credit losses on finance receivables is estimated based

on our historical write-off experience, current conditions and forecasts, as well as the value of any underlying assets

securing these receivables. Consideration is given to recent delinquency trends and recovery rates. Account

balances are charged against the allowance upon reaching 120 days past due status.


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	11

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Rollforward of Allowance for Credit Losses on Finance Receivables

Our allowance for credit losses on finance receivables represents the net credit losses expected over the remaining

contractual life of our managed receivables. The allowance for credit losses on finance receivables consisted of the

following changes during the period:


	Nine Months Ended September 30,
(In millions)	2025	2024
Allowance at beginning of period	$123.4	$106.4
Charge-offs	(120.1)	(106.8)
Recoveries	64.5	44.2
Sold loans	—	(0.3)
Provision expense	72.5	77.0
Currency translation	(0.5)	—
Allowance at end of period	$139.8	$120.5

Charge-off Activity by Year of Origination


	Nine Months Ended September 30,
(In millions)	2025	2024
2025	$6.0	$—
2024	37.1	5.3
2023	38.3	45.4
2022	26.7	39.5
2021	7.6	13.6
2020 and prior	0.4	1.2
Other finance receivables 1	4.0	1.8
Total charge-offs	$120.1	$106.8

1Includes legacy portfolio, loans that are originated with no FICO score available, and finance lease receivables.

NOTE 5. GOODWILL AND FRANCHISE VALUE

The changes in the carrying amounts of goodwill are as follows:


(In millions)	Vehicle Operations	Financing Operations	Consolidated
Balance as of December 31, 2023	$1,913.0	$17.6	$1,930.6
Adjustments to purchase price allocations 2	47.7	—	47.7
Additions through acquisitions 1	167.0	—	167.0
Reductions through disposals	(22.1)	—	(22.1)
Currency translation	(6.3)	(1.4)	(7.7)
Balance as of December 31, 2024	2,099.3	16.2	2,115.5
Additions through acquisitions3	347.9	—	347.9
Reductions through disposals	(39.2)	—	(39.2)
Currency translation	15.4	0.5	15.9
Balance as of September 30, 2025	$2,423.4	$16.7	$2,440.1

1Our purchase price allocations (PPA) for the 2023 acquisitions were finalized in 2024. As a result, we added $146.6 million

of goodwill. Preliminary PPA for a portion of our 2024 acquisitions resulted in adding $20.4 million of goodwill. Our PPA for

the remaining 2024 acquisitions are preliminary and goodwill is not yet allocated to our segments. These amounts are

included in other non-current assets until we finalize our purchase accounting. See Note 12 – Acquisitions.

2Our PPA for a portion of the 2023 acquisitions recognized in 2023 was adjusted and finalized in 2024 upon the completion of

our fair value adjustments for assumed contract liabilities, acquired loan portfolio, and contingent consideration, adding

$47.7 million of goodwill.

3Our PPA for a portion of the 2024 acquisitions were finalized in 2025. As a result, we added $347.9 million of goodwill. Our

PPA for the remainder of the 2024 acquisitions and 2025 acquisitions are preliminary and goodwill is not yet allocated to our

segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 12 –

Acquisitions.


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	12

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The changes in the carrying amounts of franchise value are as follows:


(In millions)	Franchise Value
Balance as of December 31, 2023	$2,402.2
Additions through acquisitions 1	172.5
Reductions through divestitures	(9.5)
Currency translation	(14.9)
Balance as of December 31, 2024	2,550.3
Additions through acquisitions 2	218.0
Reductions through divestitures	(16.3)
Currency translation	19.8
Balance as of September 30, 2025	$2,771.8

1Our PPA for the 2023 acquisitions were finalized in 2024. As a result, we added $172.5 million of franchise value. Our PPA

for 2024 acquisitions is preliminary and franchise value is not yet allocated. These amounts are included in other non-current

assets until we finalize our purchase accounting. See Note 12 – Acquisitions.

2Our PPA for a portion of the 2024 acquisitions were finalized in 2025. As a result, we added $218.0 million of franchise

value. Our PPA for the remainder of the 2024 acquisitions and 2025 acquisitions are preliminary and franchise value is not

yet allocated. These amounts are included in other non-current assets until we finalize our purchase accounting. See

Note 12 – Acquisitions.

NOTE 6. INVESTMENTS

Marketable Securities

As of September 30, 2025 and December 31, 2024, marketable equity securities recorded within other current

assets in the Consolidated Balance Sheets were $2.4 million and $2.2 million, respectively. Net unrealized gains

recognized during the nine months ended September 30, 2025 and 2024 on marketable equity securities held at the

reporting date were $0.2 million and $0.3 million, respectively.

Marketable debt securities accounted for as AFS, and recorded within Other current assets in the Consolidated

Balance Sheets, were as follows:


	As of September 30, 2025
					Fair Value of Securities with Contractual Maturities
(In millions)	Amortized Cost	Total Net Gains1	Total Net Losses1	Fair Value	Within 1 Year	After 1 Year through 5 Years	After 5 Years
U.S. Treasury	$21.3	$0.2	$—	$21.5	$3.7	$14.3	$3.5
Municipal securities	8.9	0.2	—	9.1	—	7.5	1.6
Corporate debt	21.7	0.3	—	22.0	5.0	12.3	4.7
Total	$51.9	$0.7	$—	$52.6	$8.7	$34.1	$9.8


	As of December 31, 2024
					Fair Value of Securities with Contractual Maturities
(In millions)	Amortized Cost	Total Net Gains1	Total Net Losses1	Fair Value	Within 1 Year	After 1 Year through 5 Years	After 5 Years
U.S. Treasury	$20.4	$—	$(0.2)	$20.2	$3.4	$13.8	$3.1
Municipal securities	10.0	—	—	10.0	1.5	7.0	1.5
Corporate debt	21.0	—	(0.1)	20.9	4.2	13.7	2.9
Total	$51.4	$—	$(0.3)	$51.1	$9.1	$34.5	$7.5

1Represents total unrealized losses for securities with net gains (losses) in accumulated other comprehensive income.

Proceeds from the maturity of AFS debt securities were $2.0 million and $8.2 million for the three and nine-months

ended September 30, 2025. There were no gross realized gains or losses on the maturity of AFS debt securities for

the three and nine-months ended September 30, 2025 and 2024.


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	13

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Equity Method Investments

Our common stock voting interests in Pinewood Technologies, PLC (PINE.L), a U.K.-based automotive dealership

management system provider, increased from 25.50% to 31.95% in July 2025. The investment is accounted for as

an equity method investment. The investment is measured at fair value based on quoted market prices, and all fair

market value changes in the investment are recorded as unrealized gains or losses as a component of Other

(expense) income, net in the Consolidated Statements of Operations. The fair value of our investment was $205.1

million and $100.0 million as of September 30, 2025 and December 31, 2024, respectively. See Note 11 – Fair

Value Measurements.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Contract Liabilities

Contract liabilities include self-insured maintenance and warranty contracts. Revenue is allocated to these

performance obligations and is recognized over time as services are provided to the customer. The amount of

revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts

performance of the contracts. Our contract liability balances were $629.0 million and $410.4 million as of

September 30, 2025, and December 31, 2024, respectively; and we recognized $50.6 million and $129.3 million of

revenue in the three and nine months ended September 30, 2025 related to our contract liability balance at

December 31, 2024. Our contract liability balance is included in Accrued liabilities and Deferred revenue on the

Consolidated Balance Sheets.

Litigation

We are party to numerous legal proceedings arising in the normal course of our business. Although we do not

anticipate that the resolution of legal proceedings arising in the normal course of business will have a material

adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with

certainty.

NOTE 8. DEBT

Credit Facilities

US Bank Syndicated Credit Facility

On August 6, 2025, we amended our existing syndicated credit facility (USB credit facility), now comprised of 20

financial institutions, including seven manufacturer-affiliated finance companies, maturing February 23, 2029. The

amendment increased the total financing commitment and the amount to which the commitment could be further

expanded.

This USB credit facility provides for a total financing commitment of $6.5 billion, which may be further expanded,

subject to lender approval and the satisfaction of other conditions, up to a total of $7.0 billion. The allocation of the

financing commitment is for up to $3.0 billion in new vehicle inventory floorplan financing, up to $900 million in used

vehicle inventory floorplan financing, up to $100 million in service loaner vehicle floorplan financing, and up to

$2.5 billion in revolving financing for general corporate purposes, including acquisitions and working capital. We

have the option to reallocate the commitments under this USB credit facility, provided that the aggregate revolving

loan commitment may not be more than 50% of the amount of the aggregate commitment, and the aggregate

service loaner vehicle floorplan commitment may not be more than the 3% of the amount of the aggregate

commitment. All borrowings from, and repayments to, our lending group are presented in the Consolidated

Statements of Cash Flows as part of "Net cash provided by financing activities”.

Our obligations under our USB credit facility are secured by a substantial amount of our assets, including our

inventory (including new and used vehicles, parts and accessories), equipment, accounts receivable (and other

rights to payment), real property, and our equity interests in certain of our subsidiaries. Under our USB credit facility,

our obligations relating to new vehicle floor plan loans are secured only by collateral owned by Lithia and its

dealerships borrowing under the new vehicle floor plan portion of the USB credit facility.

The interest rate on the USB credit facility varies based on the type of debt, with the rate of one-day SOFR plus a

credit spread adjustment of 0.10% plus a margin of 1.10% for new vehicle floor plan financing, 1.40% for used

vehicle floor plan financing, 1.20% for service loaner floor plan financing, and a variable interest rate on the


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	14

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revolving financing ranging from 1.00% to 2.00% depending on our leverage ratio. The annual interest rates

associated with our commitments are as follows:


Commitment	Annual Interest Rate at September 30, 2025
New vehicle floor plan	5.44%
Used vehicle floor plan	5.74%
Service loaner floor plan	5.54%
Revolving line of credit	5.59%

Bank of America Revolving Credit Facility

On April 1, 2025, we amended our revolving credit facility agreement with Bank of America. The amendment

extended the maturity date to February 22, 2029 and increased the commitment to £150.0 million GBP. The interest

rate on the working capital line of credit is measured based on the Sterling Overnight Index Average (SONIA) plus

1.45%.

Mizuho Warehouse Facility

On August 1, 2025, we amended our securitization facility for our auto loan portfolio (Mizuho warehouse facility),

with Mizuho Bank Ltd., as administrative agent and account bank, providing initial commitments for borrowings of up

to $1.0 billion. The Mizuho warehouse facility matures on July 30, 2027. The interest rate on the Mizuho warehouse

facility varies based on the Daily Simple SOFR rate plus 0.85%.

Non-Recourse Notes Payable

In 2025, we issued $1.1 billion in non-recourse notes payable related to asset-backed term funding transactions.

Below is a summary of outstanding non-recourse notes payable issued:


($ in millions)	Balance as of September 30, 2025	Initial Principal Amount	Issuance Date	Interest Rate Range	Final Distribution Date
LAD Auto Receivables Trust 2021-1 Class A-D	$14.6	$344.4	11/24/21	3.99% to 3.99%	Various dates through Nov 2029
LAD Auto Receivables Trust 2022-1 Class A-C	40.6	298.1	08/17/22	5.21% to 6.85%	Various dates through Apr 2030
LAD Auto Receivables Trust 2023-1 Class A-D	92.5	479.7	02/14/23	5.48% to 7.30%	Various dates through Jun 2030
LAD Auto Receivables Trust 2023-2 Class A-D	141.7	556.7	05/24/23	5.42% to 6.30%	Various dates through Feb 2031
LAD Auto Receivables Trust 2023-3 Class A-D	135.6	415.4	08/23/23	5.95% to 6.92%	Various dates through Dec 2030
LAD Auto Receivables Trust 2023-4 Class A-D	157.4	421.2	11/15/23	6.10% to 7.37%	Various dates through Apr 2031
LAD Auto Receivables Trust 2024-1 Class A-D	144.1	329.4	02/14/24	5.17% to 6.15%	Various dates through Jun 2031
LAD Auto Receivables Trust 2024-2 Class A-D	220.1	$409.6	06/20/24	5.46% to 6.37%	Various dates through Oct 2031
LAD Auto Receivables Trust 2024-3 Class A-D	388.1	$614.9	11/15/24	4.52% to 5.18%	Various dates through Feb 2032
LAD Auto Receivables Trust 2025-1 Class A-D	$417.9	$564.0	02/12/25	4.60% to 5.52%	Various dates through May 2032
LAD Auto Receivables Trust 2025-2 Class A-D	493.1	$531.3	08/13/25	4.25% to 5.01%	Various dates through Dec 2032
Total non-recourse notes payable	$2,245.7	$4,964.7


		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	15

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Senior Notes

On September 10, 2025, we issued $600.0 million in aggregate principal of 5.500% senior notes due 2030 to

persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act and to non-

U.S. persons outside the United States in reliance on Regulation S under the Securities Act. Interest accrues on the

notes from September 10, 2025 and is payable semiannually on April 1 and October 1. The first interest payment

will be paid on April 1, 2026. We may redeem the notes in whole or in part at any time on or after October 1, 2027.

We may also redeem up to 40% of the aggregate principal amount of the notes (including any additional notes) with

funds in an aggregate amount up to the net cash proceeds of certain equity offerings completed before October 1,

2027, at a redemption price equal to 105.500% of the principal amount thereof, plus accrued and unpaid interest, if

any, to, but excluding, the redemption date.

Below is a summary of outstanding senior notes issued:


($ in millions)	Principal Amount	Earliest Redemption Date	% Redeemable on September 30, 2025	Current Redemption Price	Maturity Date	Interest Payment Dates
4.625% Senior notes due 2027	$400.0	12/15/22	100%	101.156%	12/15/27	Jun 15, Dec 15
3.875% Senior notes due 2029	800.0	06/01/24	100%	101.938%	06/01/29	Jun 1, Dec 1
5.500% Senior notes due 2030	600.0	10/01/27	40%	105.500%	10/01/30	Apr 1, Oct 1
4.375% Senior notes due 2031	550.0	10/15/25	40%	104.375%	01/15/31	Jan 15, Jul 15
Total senior notes	$2,350.0

NOTE 9. RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

Company-Sponsored Defined Benefit Pension Plan

We maintain two company-sponsored defined benefit plans applicable to a portion of salaried past and present

team members, which are closed to future accrual.

Net Periodic (Benefit) Cost

Interest cost represents the increase in the projected benefit obligation, which is a discounted amount, due to the

passage of time. The expected return on plan assets reflects the computed amount of current-year earnings from

the investment of plan assets using an estimated long-term rate of return.

LITHIA MOTORS INC 10-Q