What changed in this filing

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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-01 · 32 added, 31 removed, 338 unchanged (16% of the section changed)

2 unchanged sentences

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act").

Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022, solely as a result of the material weakness described below.

Notwithstanding the foregoing, there were no changes to previously issued financial statements and management did not identify any misstatements in our financial statements as a result of this material weakness.

Our principal executive officer and principal financial officer believe that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with United States Generally Accepted Accounting Principles ("US GAAP").

Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Management's Report on Internal Control Over Financial Reporting

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In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 framework).

Based on our assessment under the framework in Internal Control—Integrated Framework issued by COSO, and solely due to the material weakness described below, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Based on our assessment under the framework in Internal Control—Integrated Framework issued by COSO, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Our auditors, Ernst & Young LLP, an independent registered public accounting firm, have audited and reported on our consolidated financial statements and on the effectiveness of our internal control over financial reporting.

Ernst & Young LLP has issued a report expressing an adverse opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2022.

Their reports are contained herein.

Material Weakness

Miller Dealerships ("LHM") and entities comprising the Finance and Insurance product provider, Total Care Auto, Powered by Landcar ("TCA") were acquired on December 17, 2021 and represent approximately 34% of the Company’s total revenues for the year ended December 31, 2022.

LHM and TCA were not included in the Company's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021, as the Securities and Exchange Commission ("SEC") rules provide companies one year to assess controls at an acquired entity.

Additionally, prior to being acquired by the Company, LHM and TCA were not required to file reports with the SEC.

Accordingly, during the year ended December 31, 2022, we performed our first comprehensive assessment of the design and effectiveness of internal controls at LHM and TCA.

As a result of deficiencies in information technology general controls ("ITGCs") identified at LHM and TCA that constitute a material weakness, we determined that the Company’s internal control over financial reporting was not effective as of December 31, 2022.

During 2023, we acquired substantially all of the assets, including all real property and businesses of the Jim Koons Dealerships ("Koons") pursuant to a Purchase and Sale Agreement with various entities that comprise the Jim Koons automotive dealerships group (the "Koons acquisition").

The Koons acquisition comprised 20 new vehicle dealerships and six collision centers.

As permitted by the Securities and Exchange Commission, the scope of our Section 404 evaluation for the fiscal year ended December 31, 2023, does not include an evaluation of the internal control over financial reporting of these acquired operations.

The results of this acquisition are included in our consolidated financial statements from the date of acquisition and represented approximately $1.65 billion of consolidated total assets as of December 31, 2023, and approximately $168.2 million of consolidated revenues for the year then ended.

Remediation of Previously Reported Material Weakness

As previously disclosed in Item 9A, Controls and Procedures, in our Annual Report on Form 10-K for the year ended December 31, 2022, as a result of deficiencies in information technology general controls ("ITGCs") identified at The Larry H.

Miller Dealerships (“LHM”) and the entities comprising the Finance and Insurance product provider Total Care Auto, Powered by Landcar (“TCA”) that constitute a material weakness, we determined that the Company’s internal control over financial reporting was not effective as of December 31, 2022.

Specifically, the material weakness is due to control deficiencies in the design of the user access reviews for segregation of duties ("SOD") configurations and appropriate administrative access for certain key applications at LHM and TCA.

The ineffective ITGCs limited the level of assurance over the completeness and accuracy of information used in certain automated and manual business process controls.

Remediation Efforts

Management has and will continue to evaluate the design of user access controls and SOD configurations for key applications at LHM and TCA.

Where needed, access rights and assigned job responsibilities are being changed to resolve

instances of inappropriate or excessive user access capabilities, and SOD conflicts.

Additionally, key applications at LHM and TCA will follow the same standards of the Company’s legacy ITGC environment.

We expect that the material weakness will be fully remediated in 2023, once the remediated controls have operated for a sufficient period for management to conclude, through testing, that the controls are designed and operating effectively.

During 2023, management implemented a previously disclosed remediation plan that included the evaluation of the design of user access controls and SOD configurations for key applications at LHM and TCA.

Where needed, access rights and assigned job responsibilities were changed to resolve instances of inappropriate or excessive user access capabilities, and SOD conflicts.

Additionally, key applications at LHM and TCA now follow the same standards of the Company’s legacy ITGC environment.

During the fourth quarter of 2023, the Company completed the testing of operating effectiveness of the remediated controls and found them to be effective.

As a result, we have concluded that the material weakness has been remediated as of December 31, 2023.

Changes in Internal Control Over Financial Reporting

Other than the ongoing remediation efforts described above, there were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Other than the remediation efforts described above, there were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Other Information

None of the Company's directors or officers adopted , modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended December 31, 2023.

Disclosure Regarding Foreign Jurisdiction that Prevent Inspection

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Asbury Automotive Group, Inc.

Recoupment Policy

101.INS XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

10 unchanged sentences

Asbury Automotive Group, Inc.

March 1, 2023 By:

February 29, 2024 By:

Chief Executive Officer and President

1 unchanged sentence

Signature Title Date

Hult Chief Executive Officer, President and Director March 1, 2023

Hult Chief Executive Officer, President and Director February 29, 2024

/s/ Michael D.

Welch Senior Vice President and Chief Financial Officer March 1, 2023

Welch Senior Vice President and Chief Financial Officer February 29, 2024

/s/ Nathan E.

Briesemeister Vice President, Chief Accounting Officer and March 1, 2023

Briesemeister Vice President, Chief Accounting Officer and February 29, 2024

Briesemeister) Controller

/s/ Thomas J.

Reddin Director March 1, 2023

Reddin Director February 29, 2024

Reddin) Non-Executive Chairman of the Board

/s/ Joel Alsfine Director March 1, 2023

/s/ Joel Alsfine Director February 29, 2024

(Joel Alsfine)

/s/ William D.

Fay Director March 1, 2023

Fay Director February 29, 2024

/s/ Juanita T.

James Director March 1, 2023

James Director February 29, 2024

/s/ Philip F.

Maritz Director March 1, 2023

Maritz Director February 29, 2024

/s/ Maureen F.

Morrison Director March 1, 2023

Morrison Director February 29, 2024

/s/ Bridget M.

Ryan-Berman Director March 1, 2023

Ryan-Berman Director February 29, 2024

/s/ Hilliard C.

Terry, III Director March 1, 2023

Terry, III Director February 29, 2024

INDEX TO EXHIBITS

133 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97 Asbury Automotive Group, Inc.

Recoupment Policy

101.INS XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures