ASBURY AUTOMOTIVE GROUP INCABG
ASBURY AUTOMOTIVE GROUP INC Leases Disclosure
LEASES
__________________________
We lease real estate and equipment primarily under operating lease agreements. For leases with terms in excess of 12 months, we record a right-of-use ("ROU") asset and lease liability based on the present value of lease payments over the lease term. Escalation clauses, lease payments dependent on existing rates/indexes, renewal options, and purchase options are included within the determination of lease payments when appropriate. We have elected the practical expedient not to separate lease and non-lease components for all leases that qualify, except for information technology assets that are embedded within service agreements (such as software license arrangements). Leases are classified as either finance or operating, with classification impacting the pattern of expense recognition in the income statement.
When available, the implicit rate is utilized to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.
Balance Sheet Presentation
| As of December 31, | ||||||||||||||||||||
| Leases | Classification | 2025 | 2024 | |||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating | Assets held for sale | $ | 1.8 | $ | 1.9 | |||||||||||||||
| Non-Current | ||||||||||||||||||||
| Operating | Operating lease right-of-use assets | 240.6 | 220.1 | |||||||||||||||||
| Finance | 8.3 | 8.4 | ||||||||||||||||||
| Total right-of-use assets | $ | 250.8 | $ | 230.4 | ||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating | Current maturities of operating leases | $ | 27.6 | $ | 28.1 | |||||||||||||||
| Operating | Liabilities held for sale | 0.4 | 0.2 | |||||||||||||||||
| Non-Current | ||||||||||||||||||||
| Operating | Operating lease liabilities | 221.6 | 200.0 | |||||||||||||||||
| Operating | Liabilities held for sale | 1.5 | 1.7 | |||||||||||||||||
| Finance | 8.3 | 8.4 | ||||||||||||||||||
| Total lease liabilities | $ | 259.3 | $ | 238.4 | ||||||||||||||||
Lease Term and Discount Rate
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted Average Lease Term - Operating Leases | 13.2 years | 12.8 years | |||||||||
| Weighted Average Lease Term - Finance Lease | 34.7 years | 35.7 years | |||||||||
| Weighted Average Discount Rate - Operating Leases | 5.2 | % | 5.0 | % | |||||||
| Weighted Average Discount Rate - Finance Lease | 4.4 | % | 4.4 | % | |||||||
Lease Costs
The following table provides certain information related to the lease costs for finance and operating leases during the years ended December 31, 2025 and 2024.
| For the Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In millions) | |||||||||||
| Finance lease cost (Interest) | $ | 0.4 | $ | 0.4 | |||||||
| Operating lease cost | 42.7 | 40.0 | |||||||||
| Short-term lease cost | 5.0 | 4.6 | |||||||||
| Variable lease cost | 1.5 | 1.1 | |||||||||
| $ | 49.6 | $ | 46.1 | ||||||||
Supplemental Cash Flow Information
The following table presents supplemental cash flow information for leases during the years ended December 31, 2025 and 2024.
| For the Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In millions) | |||||||||||
| Supplemental Cash Flow: | |||||||||||
| Cash paid for amounts included in the measurements of lease liabilities | |||||||||||
| Operating cash flows from finance lease | $ | 0.4 | $ | 0.4 | |||||||
| Operating cash flows from operating leases | $ | 42.1 | $ | 38.4 | |||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 53.1 | $ | 12.0 | |||||||
During the years ended December 31, 2025 and 2024, we obtained $53.1 million and $12.0 million, respectively, of right-of-use assets in exchange for new operating lease liabilities. The activity during the year ended December 31, 2025 was primarily as a result of a business combination.
The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities as of December 31, 2025, including leases related to liabilities associated with assets held for sale.
| Finance | Operating | ||||||||||
| (In millions) | |||||||||||
| 2025 | $ | 0.4 | $ | 40.1 | |||||||
| 2026 | 0.4 | 34.7 | |||||||||
| 2027 | 0.4 | 29.5 | |||||||||
| 2028 | 0.4 | 27.1 | |||||||||
| 2029 | 0.4 | 25.5 | |||||||||
| Thereafter | 14.8 | 197.0 | |||||||||
| Total minimum lease payments | $ | 16.9 | $ | 353.9 | |||||||
| Less: Amount of lease payments representing interest | (8.6) | (102.8) | |||||||||
| Present value of future minimum lease payments | $ | 8.3 | $ | 251.1 | |||||||
| Less: current obligations under leases (a) | — | (28.0) | |||||||||
| Long-term lease obligation (b) | $ | 8.3 | $ | 223.1 | |||||||
(a) Includes $0.4 million of operating lease liabilities classified as liabilities associated with assets held for sale.
(b) Includes $1.5 million of operating lease liabilities classified as liabilities associated with assets held for sale.
Certain of our lease agreements include financial covenants and incorporate by reference the financial covenants set forth in the 2023 Senior Credit Facility. A breach of any of these covenants could immediately give rise to certain landlord remedies under our various lease agreements, the most severe of which include the following: (i) termination of the applicable lease and/or other leases with the same or an affiliated landlord under a cross-default provision, (ii) eviction from the premises; and (iii) the landlord having a claim for various damages.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 19, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.